You don’t pay enough tax

You are going to be $2,495 short this year. And that goes for everyone in your house. And in your street. And in the whole country. $2,495 is my unofficial estimate, but it is as reliable a number as any you are likely to see. The Federal Government has estimated how much their expenditure will exceed their tax take, and the Bureau of Statistics has estimated how many of us there are to feel the pain of this profligacy. Earlier in the year we mused on how much $900 (the “economic stimulus”) costs. Now we know – we have been sold a pup.

But that’s not all. Added to the prior excesses, we are all in debt to the tune of $6,208. Each. And by the end of 2013 the rosy budget estimate is that we will be on the hook for $12,269. Each. And we are just talking about government debt here. Government doesn’t come cheap. Someone once observed that we should be thankful that we don’t get as much government as we pay for. Those were the days. Now we get way more government than we pay for – and the more we get, the less able we are to pay. The less we pay, the more we surrender our freedom.

This surrender of freedom idea was tried on a grand scale in the 20th century. It didn’t work – not even economically. Because government expenditure is a burden, it is a drag on an economy. Governments don’t make things. They, well – govern. They “regulate”, they “keep under control”. The proper function of government is to provide a safe environment for people to go about their business. People going about their business is what we call an economy. As John Talbott put it this week “Stimulus (packages) around the world are a mistake, because if government could create jobs we wouldn’t need private enterprise”.

So we are in a bind. We have let government get too big. It has happened by stealth, as deficit spending has hidden the true cost. Here is an idea, then: write out a cheque to the ATO for $2,495 x the number of occupants in your household. Or better still, $6,208 x the number of occupants in your household. Why if we all did that we would clear the debt, and maybe then we would made sure it didn’t happen again.

Have a good weekend!