Nanny State Taxes: Soaking the Poor in 2012
Nanny State taxes raised $13 billion in 2010-11.
This is greater than the combined revenue forecast of $11 billion to be collected from the government's Clean Energy Future Package (carbon tax) and the Minerals Resource Rent Tax (mining tax) in their first year of operation.
In 2012, Nanny State taxes on consumer products include: Excises upon alcohol and tobacco products and the GST on processed foods.
Nanny State taxes disproportionately affect those on lower incomes. The poorest twenty per cent of households (by income) pay three times as much in Nanny State taxes as those in the top twenty per cent.
Nanny State taxes have long been used by Australian governments not only as a general revenue source, but to reduce consumption of commodities perceived to be harmful on health, social or moral grounds.
With the Gillard government hoping to deliver a surplus budget outcome in 2012?13, it is likely that the government will resort to increasing Nanny State tax rates in a quick grab for revenue.
In line with the recommendations of the Henry Review and National Preventative Health Taskforce, the government has signalled additional Nanny State taxes in the pipeline for future implementation. Groups purporting to represent the interests of low?income earners have been silent about recent Nanny State tax increases and, in some cases, expressed support for these tax increases.
Nanny State taxes encourage consumers to switch to other harmful products, and create illicit ‘shadow markets' for the taxed products.
The hypothetical imposition of a ‘fat tax' levy on top of the existing GST would cost taxpayers between $67 and $268 million per annum, with low?income taxpayers again disproportionately affected.
The imposition of Nanny State taxes also hurts small businesses that rely on the sale of consumer products such as alcohol, processed foods and tobacco to raise earnings.