Ideas@TheCentre
The language of tax and spend
Making the price of a product appear cheaper than the reality is a common marketing technique. How often have you heard that something will cost you just a dollar a day? Politicians have learned the same craft. In ‘selling’ his flood tax, Wayne Swan said it will cost a typical taxpayer no more than a cup of coffee per week.
It is not unusual for commentators to put newsworthy events into perspective by relating them to more familiar objects and experiences. One such ‘numéraire’ is the volume of water in Sydney Harbour, another is the land mass of various European countries. Both were used to give perspective to the recent Queensland floods.
But a cup of coffee as the numéraire for taxation? Perhaps I am just naive, but aren’t we entitled to hope for better from our governments than the tricks of commercial marketing? There is a general point here: politicians whose base instinct is to tax and spend have developed a language that is well suited to their purpose. Another popular numéraire is the number of nurses, hospital beds or teachers, as in ‘we can’t cut this tax because the money it raises pays for X nurses.’
Then there is the practice of talking about tax and spending changes as if they were equivalent. In recent federal budgets, tax increases have been counted as ‘savings,’ the same as spending cuts. In the United States, President Obama said he didn’t want to ‘spend’ money on preserving his predecessor’s tax cuts for the ‘rich,’ adding for good measure that they didn’t ‘need’ the cuts anyway – as if he has the right to decide what anyone ‘needs.’ This kind of language betrays an attitude that government has first claim on your income, and will determine in its generosity how much of it you can keep.
For the record, if your taxable income is $80,000, the flood tax will cost you $150; at $100,000, it will cost you $250; at $150,000, it will cost you $750; and so on. But if you have 50,000 cups of coffee a year, surely you can afford to give up 250 cups so the government can put that money to better use.
A final suggestion: if anyone really wants to trivialise the flood tax, why stop at a cup of coffee per week. It would be as accurate to say ‘less than 50 cents per day.’ And what will 50 cents buy these days – not even a banana!
Robert Carling is a Senior Fellow at The Centre for Independent Studies.
