More GST revenue can pay for cuts to income and company tax rates, for example. This shift provides a structurally more stable tax revenue base, and sharpens incentives to work and invest.

Go to fluffing hell.

[–] thatKamGuy@sh.itjust.works 8 points 6 days ago (1 children)

Exactly; increasing the GST would be downright regressive, harming the most vulnerable and will fail to stimulate the economy in any way, shape or form.

Doing so just to pass a tax cut for high-income earners will just further exacerbate the wealth divide we are currently experiencing; wealthy people need to be taxed more, not less - to cover our budgetary deficits, broaden our safety nets and invest in public infrastructure like housing, renewable energy, and faster public transport.

Giving those that have enough even more, is just going to have them park those funds in property, rent-seeking and extracting more wealth from the under-class.

It is so counter-intuitive, I can only think that this was proposed by someone with a fetish for public self-destruction.

[–] Zagorath@aussie.zone 2 points 6 days ago

I could maybe accept increasing the GST if it came with a significant narrowing. Any talk of broadening the GST is a complete non-starter for me. But if you changed it such that like 90% of people's necessary daily/weekly/monthly expenses were exempt, including Internet & electricity bills, most clothing, all necessary (including socially necessary) health and sanitation products (soap, shampoo, household cleaning products, toilet paper, etc.), and low-emission transportation. Then maybe I'd be ok with an increase to 15% on the products that are left.

But for some reason every time they talk about GST, it's always about broadening it. Ridiculous.

[–] MHLoppy@fedia.io 1 points 6 days ago

I unfortunately can't find the article that discussed the idea, but someone (an economist? a think tank?) brought up the idea of raising/broadening GST, but then then just giving everyone a flat amount back. In their modeling it halved the net revenue from the GST change (though it was still a good chunk of money), but made it financially neutral for people at lower incomes.

Edit: Again drawing from uni-assignment-land, I really like the PBO's discussion of Australia's tax mix: https://www.pbo.gov.au/about-budgets/budget-insights/budget-explainers/tax-mix/characteristics-different-taxes

Chapter 3 in the PDF has a great discussion about tradeoffs of different taxes, with both Figure 3-1 (near the start) and Table 3-1 (at the end) having some great insights if you're not well-versed in those design tradeoffs (i.e., almost everyone). Here's a copy of that first chart for easier reference: https://fedia.io/media/a9/3c/a93ca8c1bc7fea26f47b9063d55a175d04c0a846d69a4a66d240808675841e34.webp

Of course efficiency (which this figure shows) doesn't mean equity (which the chapter also discusses), hence ideas like the flat offset to balance it out.