This week saw the great tax spat. It began with the Labor Party in difficulty over the merest hint of a slight suggestion that it could it possibly leave itself open to looking at increasing some taxes at some it indeterminate period in the future. This was followed by an utter denial by Labour leader Kim Beazley that Labor would increase any tax ever. And that was followed by Prime Minister John Howard matching the promise with one of his own that the coalition would never increase taxes – – to be later qualified, it would seem, as not increasing any core taxes. This was accompanied with that the bombastic claims by Howard that his tax cuts that came with the GST were greater as a percentage of GDP than those given by President Bush in the United States.
It was only so much humbug by two political parties that over the past several decades have engaged in a charade of allowing inflation to silently increase taxes for them and then to grandstand with false generosity by making much of winding back the silent tax rises by calling them tax cuts.
The present government has engaged in even worse humbug by imposing higher indirect taxes in the form of a GST and pretending to more than compensate by giving “cuts” in income taxes. However, the figures presented in the Budget papers and other figures give the lie to this pseudo-generosity.
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