be afraid, very afraid

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    The Real Reasons for a Carbon Tax?
    By Aaron Tyrrell, Editor, Money Morning

    We?re not a big fan of the carbon tax? in fact, we?re not a fan of it at all. So today we thought it might be fun to guess what the carbon tax money-go-round will look like.

    Nothing we?re about to say is based on any inside knowledge or government report. And this isn?t about bashing Labor or Liberal, ?warmist? or sceptic. It?s based on a chart we drew on a scrap of paper for a friend on our kitchen table.

    It looks at how the carbon tax cash cycle might work. In very simple terms. We?re talking ?how much change will you get from $3? terms. And what it could mean for your money...

    And our future.

    The Carbon Tax Cash Cycle

    Okay, let?s take a look at your finances. For the sake of the argument, let?s say:

    38% of your total income disappears in taxes
    35% of your income goes to semi-fixed living costs like food, fuel, power, insurance, rent/mortgage payments, etc.
    You blow 17% on discretionary items, clothes, snacks, magazine, movie tickets, etc.
    And you tuck 10% away for a rainy day
    Now let?s say the carbon tax comes in...

    And food, fuel and transport providers ? just to name a few ? have to fork out $20 for each tonne of carbon they emit.

    And in order to cover this cost, these companies add 10% to the cost price of their goods/services. And then recalculate their margins. And at the end of the day, you?re stuck paying 15% on top of today?s prices for your semi-fixed living costs and the same for your discretionary items.

    (That?s probably conservative.)

    So semi-fixed living costs leap to 40.25% of your income.

    Leaving you with 21.75% for discretionary spending and saving.

    But the 17% you were spending on ?luxuries? has now been bumped up to 19.55%.

    That would leave you 2.2% of your pay cheque to put away for a rainy day. We don?t know about you, but that doesn?t leave us much for saving.

    What does it mean? It means you?ll need to rely even more on government handouts? which apparently the government wants to cut.

    But somehow we?re told a carbon tax won?t harm the economy. According to Ross Gittins in The Age, he reckons:

    ?Sometimes I suspect many business people regard it as quite ethical to lie and mislead the public??

    We don?t know if individuals or business people are lying and misleading about the carbon tax. And we don?t care.

    But we do know this: it?s every person?s right ? and obligation ? to do all they can to stop the government from taking their money and the money of their shareholders.

    Strip away the emotions of the carbon tax and global warming, what you?re really left with is another excuse for the government to take more of your money and give it to someone else.

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