Hate him if you will but Trump is right on tax cuts

Donald Trump holds up a document during an event to sign the Tax Cut and Reform Bill in the Oval Office. Picture: AFP

Ever since Donald Trump was elected, journalists in various media have not stopped churning out bizarre and emotive, anti-Trump coverage. Trump is portrayed as the antichrist, the devil reincarnate, and every time he says anything, looks at someone sideways, or sends a tweet, millions of people across the globe spontaneously combust.

It seems apparent that a serious contagion — a debilitating mental illness — has spread.

The symptoms appear seconds after exposure, via the media, to Trump. First, a frown passes across the face, then corners of the mouth turn down, the shoulders slump and the victim heads straight to the nearest electronic device. Here they read biased articles and, via social media, engage in furious arguments with people on the internet for hours on end.

The arguments play in the minds of the victim long after they log off. Sleepless nights follow, there are feelings of anger and ­despair, depression even. The final stage of the disease can be observed when the victim succumbs to delusion and fashions themselves a decorative over­garment out of pink material, shaped like a vagina, writes a ­deranged and incoherent phrase on a placard, and marches the streets with other victims, screeching nonsensically.

Some examples, seen above the crowds — “Hands off my pussy”, “We are not ovary acting”, “Build a uterine wall”, “Get f..ked you f..king f..ker” and “I’ll grab myself on the pussy”.

The spread of the illness has proved highly entertaining — not for the victims, obviously, but for those sitting at home watching. Over the past year the hysteria has been a marvellous distraction for all, and last month, in the midst of it all, Trump slashed taxes, in defiance of all predictions, and in the way he promised. Like it or not, Australia is going to have to follow suit. We must cut taxes, too, for people and business entities. Government will have to shrink and make do with less. Our standard of living depends on it.

Never underestimate the ­impact of ignorance as the driver of class envy. Many people simply don’t understand that a business owner who wants to take money out of the business has to pay tax on that money at personal tax rates, so cutting tax for businesses doesn’t really help “the rich” at all.

The business groups could focus on educating people about this and, while they are at it, do a few other things that are long overdue. They could swear off all business welfare, for good, and put their own organisations in the ­income tax-paying category.

Most employer groups are registered industrial organisations (unions) and, as such, are income tax exempt. All unions should pay income tax and so too should charities and churches. We need a system where everyone contributes, there are no rorts, no exemptions, no welfare, no grants and no concessions. If we did that, we could have a low tax rate that applies to all organisations, equally.

Our Productivity Commission is required to report annually on business welfare and its effect. A report titled the Trade & Assistance Review 2015-16 contains the commission’s latest estimates of Australian government assistance to the business sector.

In 2015-16, the Australian government handed out $15 billion in gross terms of business welfare. This assistance took the form of “direct government grants and subsidies to particular firms or ­industries”. It also included ­“import tariffs, regulatory restrictions on competition, tax concessions, concessional finance, pro­vision of subsidised services by government agencies, government procurement preferences, and guaranteed prices”.

About 45 per cent of the $15bn was spent on tariff assistance, “which has an adverse distortionary effect on an economy wide basis”. Tariffs on imports “raise the costs of intermediate inputs by around $6 billion per year and ­inflate consumer prices”. Tariffs “advantage a few at a cost to many” and “unilaterally eliminating Australia’s remaining tariffs is long overdue”. The report says Australia has “endured 20 years of unnecessary economic distortion, administration and compliance costs. It is time to follow the advice of the commission in 1996, which was to complete the job and reduce all tariffs to zero.”

When it comes to business taxation, the answer is very simple. We broaden the base, make all ­organisations pay, eliminate the welfare and tax churn, and provide lower rates for all. These concepts are not hard to grasp and shouldn’t be too hard to sell. And to back it all up, that “buffoon” Trump has done the heavy lifting already, so all our government needs to do is ride on his coat-tails.