It must be the most revered word ever uttered by a politician: "fair". All the people want is a "fair go"; a "fair wage"; "fair prices"; their "fair share"; a "fair deal"; ad infinitum. They use it every day to justify anything they please to cheers from the people. One policy where it is used without fail, which (almost) no one questions, is the progressive tax system.

Somehow a free society, one where individual property rights are vehemently protected, people are free to keep what they labour for, what they save, what they buy (i.e. their own property), is "unfair". Unsurprisingly, Professor Peter Whiteford from the University of New South Wales in last Friday's Australian Financial Review (AFR) reported that we now have the most progressive tax system in the whole of the OECD:

“Australia had the most progressive tax system in the Organisation of Economic Co-operation and Development, redistributing more tax from rich to poor than any other country.”

It's a good time to be poor in Australia, as the ..."poorest 25 percent receive 12 times the benefits of the richest 25 percent" while they contribute considerably less in tax (ibid). Of course, very few people are voluntarily in the bottom 25 percent. It’s the policies of government that encourages them to stay down there with generous welfare payments; minimum wage legislation; and an annual debasement of the currency of approximately 10-20%, creating a moving target that they're unlikely to ever reach. The government has effectively created a class that is solely dependant on the state for its very existence.

Here's a great quote from Lysander Spooner's No Treason No. 6: The Constitution of No Authority (1870):

"The highwayman takes solely upon himself the responsibility, danger, and crime of his own act. He does not pretend that he has any rightful claim to your money, or that he intends to use it for your own benefit. He does not pretend to be anything but a robber. He has not acquired impudence enough to profess to be merely a “protector,” and that he takes men’s money against their will, merely to enable him to “protect” those infatuated travellers, who feel perfectly able to protect themselves, or do not appreciate his peculiar system of protection. He is too sensible a man to make such professions as these. Furthermore, having taken your money, he leaves you, as you wish him to do. He does not persist in following you on the road, against your will; assuming to be your rightful “sovereign,” on account of the “protection” he affords you. He does not keep “protecting” you, by commanding you to bow down and serve him; by requiring you to do this, and forbidding you to do that; by robbing you of more money as often as he finds it for his interest or pleasure to do so; and by branding you as a rebel, a traitor, and an enemy to your country, and shooting you down without mercy, if you dispute his authority, or resist his demands. He is too much of a gentleman to be guilty of such impostures, and insults, and villainies as these. In short, he does not, in addition to robbing you, attempt to make you either his dupe or his slave.”

The only people who would lose in a truly "fair" system where people are entitled to reap the fruits of their labour are the politicians, their academic allies and the thousands of interest groups that exist solely to lobby the government for "favours". The progressive tax system along with other policies that target "fairness" or "equality" punish everyone from every income bracket, decimating productive activity by discouraging hard work and rewarding sloth and waste. If it is morally correct to forcefully take from some and give to others or to favour one party at the expense of another, where does it end? Would it not be better to just take everything anyone earns and redistribute it accordingly? The progressive economy we have is ever increasingly leading us down the road towards a command system. The whole moral compass or "fair go" justification for a progressive tax system is one big reductio ad absurdum, unless of course socialism IS the goal. One wonders if Julia Gillard ever gets elected whether or not she will take these logical steps and lead us into poverty, sorry, “equality”.

What is wrong with a system where the people who have earned money are entitled to keep it in its entirety? Surely individuals who have proven that they can best satisfy the wants and needs of consumers, who continually seek to make cheaper and better products than their competitors, can be trusted to provide benefits for "society" more than politicians who earn their stripes by conciliating pressure groups and supporting projects that will win them votes. Surely the entrepreneur who time after time risks his own money to finance products and drive down prices for everyone is better placed than a politician who never risks his own money and is always subject to bribes and corruption. Surely a system where savings and wages aren’t continually eroded is better than the constant debasement of the currency under the guise of maintaining a “steady price level” where inflation and unemployment often run rampant.

Abolish the income tax and return to sound money by taking the ability to inflate away from the Reserve Bank and the state. That is the key to achieving growth, wealth and a “fair go” for everyone, not more regulation and big government aimed at saving people from themselves.