Tuesday, February 16, 2010

Tanner and Joyce on Q&A

I only caught up with Q&A online today.

A couple of standouts.

Barnaby Joyce referring to the "cyclical angel descending from heaven and making everything better." It elicited a stiffled "what the?" from Lindsay Tanner - but did reflect the ways that Barnaby can conjure with language to create memorable images.

An interesting answer by Lindsay Tanner to a question on flat rate tax. The questioner was running the line that a flat tax was better because our higher tax rates on higher incomes act as a disincentive to further effort.

Lindsay's reply was that he saw no evidence that at the higher brackets the financial return was necessarily the primary incentive. Actually, he could take the incentive argument further. In theory at least a person who has $1 will value an extra $1 more than a person who has $100 will value an extra $1. If there were merit in the incentive argument you wouldn't chose a flat tax, you'd choose a regressive (as opposed to a progressive) tax.

We do know that the "other Henry" tax review (by Henry Ergas) that got buried in Malcolm Turnbull's office did propose a flat tax. That will create some amusement.

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