Tax/welfare churn

Humphreys, J. (2009), Ending the Churn: A Tax/Welfare Swap, CIS Policy Monograph 100, Centre for Independent Studies, Sydney.

The Australian welfare system—including health, education and handouts—costs more than $250 billion per year. Some of this is redistribution from the relatively rich to the relatively poor. However, about half of the welfare is pointless ‘churn,’ where the same person both pays taxes and receives welfare benefits.

Some of this churn is ‘cash churn’ where people both pay tax and receive cash from the government. But the bigger problem is ‘services churn’ where middle- and high-income earners pay tax and receive government-subsidised health and schooling services. By removing middle-class welfare in exchange for income tax cuts, the government could reduce tax and welfare by about $80 billion without leaving anybody worse off.

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Real marginal tax rates

Humphreys, J. (2009), “Revealing Australia’s Real Income Tax Rates“, Policy, 25:2 (Winter 2009), Centre for Independent Studies, Sydney.

This article combines the nominal tax rates with the Medicare Levy and the Low-Income Tax Offset to show the real marginal tax rates as experienced by Australian taxpayers. The results are unnecessarily complicated, partly regressive, and economically inefficient.

Revenue-neutral carbon tax for New Zealand

Humphreys, J. and Malpass, L. (2009), Emissions Tax: The Least Worst Option, CIS Issue Analysis 113, Centre for Independent Studies, Sydney.

Following warnings from mainstream scientists, politicians around the world have rushed to implement a range of taxes, regulations, subsidies and schemes to save humanity from the impending dangers of warmer winters and higher waters. But while the climate change science debate has focused minds for the past few decades, the climate change policy debate has sadly not enjoyed the same attention. Not all policy responses are equal. Before taking action, it is incumbent on our political leaders to carefully consider the benefits and costs of different policy options.

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Over-regulating charity

Humphreys, J. (2009), In Defence of Civil Society: The Virtue of Prescribed Private Funds, CIS Issue Analysis 107, Centre for Independent Studies, Sydney.

In 2008 Australians donated about $13 billion to welfare, health, education, foreign aid, and other philanthropic sectors. Unfortunately, the government is suggesting new regulations that will limit the flexibility of charitable funds and decrease the quality and quantity of philanthropy. This would be bad policy at any time, but given the current economic situation it is especially important that we protect civil society.

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Declaring independence

Chapter in: Saunders, P. Humphreys, J. Dubossarsky, E. and Samild. S. (2008), Declaring Dependence, Declaring Independence: Three Essays on the Future of the Welfare State, CIS Occasional Paper 111, Centre for Independent Studies, Sydney.

This short book looks at a couple of different approaches for returning greater freedom to responsible adults in Australia. The first proposal, by Dubossarsky & Samild, outlines a system where people can “declare dependence” on the state if they are in need, which would come with a series of associated restrictions on their behaviour. The second proposal, by Humphreys, looks at the reverse idea where certain people would have the opportunity to “declare independence” if they can show that they are a net contributor to society.