Increasing GST will hit poor the hardest
In Australia we have income tax, better described as an earning tax, and a host of indirect taxes, stamp duty, State and local government rates, excise on fuel plus 10 per cent GST on some goods and services.
The unpalatable truth is Australia is in fiscal trouble, with more than $400 billion in Federal debt, $1.8 trillion in personal debt, GDP set to fall and a decline in gross income per capita.
Families have grown used to the abundant middle-class welfare during the boom time, now the Government needs to roll back the spending but fears the political backlash.
Their answer is to widen the GST per cent rate or give it a larger base to draw from rather than raising income tax.
Simply, the GST is a consumption tax which hits the lower end of the socio-economic scale hardest as they spend most of their income with little left over to save or invest.
One thing for sure, the rich with influence will not be shouldering their fair share of the load in correcting the budget imbalance.
Increasing the higher marginal tax rates would be far better and fairer solution for 80 per cent of Australians.