Thursday, 5 June 2014

Why is the Australian right so keen on ideas that didn't work in the US either?

John Quiggin in Australian right a dumping ground for failed US ideas looks at the Commission of Audit and decides that its ideas are a rehash of work from decades ago or concepts that haven't worked in the US either. He also makes an interesting point:
Second, since revenue is equal to expenditure [2] in the long term, Australians receive from government, on average, the same as they contribute, whether the benefits take the form of cash transfers or publicly provided services. Assuming that total tax payments are proportional to income, and that everyone gets about the same benefit (both of these are pretty good approximations), people receiving more than the arithmetic mean income will mostly be net contributors, and those below will mostly be net recipients. And, since the distribution of income is skewed to the right, the mean is greater than the median, which means that, when everything is taken into account, most people will be net beneficiaries from the tax-expenditure system. The minority of net contributors (that is, high income earners) are of course precisely the people who benefit most from the social order as a whole.

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