It is almost amusing that every time an election rolls about, the government promises substantial tax cuts. I wonder whether, if elections were held every year, we'd pay no tax at all. Wouldn't that be an attractive prospect? Perhaps not. If Oliver Wendell Holmes was right to say that taxes are what we pay for a civilized society, then the pre-election tax cut bribes may not be such a positive thing.

Attractive though the idea of having more cash in your pocket is, tax cuts come at a price. The 2007-2008 budget foreshadowed a $10 billion surplus. The government is now promising $34 billion in tax cuts. Assuming that the government doesn't intend to push the budget into a $24 billion deficit, where will the money for tax cuts come from? Sure, the government may save a few billion by wasting less money on advertising itself, but that will hardly cover the outstanding amount. In order to give the tax cuts and balance the budget the government will have to make cuts to services - health, education, aged care, child care, welfare. The enrichment of the individual (and more specifically, the wealthy individual who pays more tax) comes at the expense of impoverishment of society. The Howard government is once again showing its inability to think of the forest rather than the trees. It is concerned only with rewarding, or rather bribing, the individuals within society, without caring about how these individuals will be harmed through impoverishment of society as a whole. A few extra bucks in your pocket is great, until you can't afford to pay for basic health or dental care, until your kids can't afford tertiary education or your elderly parents can't get a half-decent standard of living on welfare. When your "social wage" declines more than the benefit you got from tax cuts, you lose out.

Milton Friedman (a neo-liberal economist and definitely not my favourite theorist!) says that there is no such thing as a free lunch. Similarly, there is no such thing as a free tax cut. We pay for the tax cuts that impoverish society and degrade essential services. We pay when our government is more concerned with electoral advantage than with the services it is supposed to be providing to the electorate. We pay when we fail to consider the future because we just want a few more bucks in our pocket in the present.