Policy and taxes

The comments to John Quiggin's blog on simplifying taxes reinforce how taxation is becomes a tool of social policy.

There were some snide comments about the 2% tax on revenue proposed by Pauline Hanson. Let's say if they manage to get around the problem of not taxing financial transactions by banks, the end result would be very large businesses, which benefit from lower costs by avoiding tax cascading. However, the end result would be very much like the old Australia, where Australia becomes a workers paradise, in contrast to UK - a nation of shopkeepers. I can imagine the government of the day then pandering to the workers instead of chanting industrial reform.