The Theory of Progressive Taxation

Australia's Economy in its International Context

“…Thus "metallic money is a cause of industrial disturbance and panic, and by retiring instead of expanding in times of stringency it adds to and intensifies the disturbances produced by other causes." 43 A standard of value that operates in this way is certainly not conducive to industrial stability. Yet there are many who think that a simple return to the gold standard would solve the present currency problem, Apart from the impracticability of such a step in the immediate future, and even though the gold standard is greatly to be preferred to the present paper standard, its adoption would still leave us with a commodity money of quite uncertain value.…”

“…42 Again the adoption of progressive taxation in Australia has falsified the fears of the alarmists, for neither has the institution of private property been weakened, nor has capital been driven out of the country. 43 The truth is that, although the current burden of taxation always appears heavy, people have a way of getting used to it, much as they grow accustomed to a new price level after a period of inflation, or adjust themselves to an increasing tariff. "It is quite possible," writes Mr. D. H. Robertson, "that as a result of a prolonged high level of taxation business men as a class should revise their conceptions of what constitutes a reasonable rate of reward for enterprise, and it is not impossible that … something of the kind has already happened."…”

“…See 21st Report of Commonwealth Grants Commission, App the Special Grants now constitute a substantially larger proportion of the revenue of the claimant States than they did before the introduction of uniform taxation, having increased from little more than one-fifth to about two-fifths of the revenue from state taxation and reimbursement grants combined. 43 The accompanying table illustrates for the year 1952-53 the differences between these various principles. Column 1 shows the actual allocation of tax reimbursement grants in 1952-53, in which year the allocation was based half on state tax proceeds prior to the introduction of uniform taxation and half on "adjusted population".…”

“…Such a course would be much easier if the reimbursement grants had been based even partially on the derivation principle. 43 See 21st Report of Commonwealth Grants Commission, app. 8 and 10.…”

Book Review

“…Seligman was a founder and president of the American Economic Association and also an editor and contributor to the Political Science Quarterly. In this influential journal, Seligman advanced the case for progressive income taxation and promoted the new science of public finance (Seligman 1893(Seligman , 1894. But Seligman was more than just a disinterested, cloistered academic on the Morningside Heights campus.…”