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The carbon tax is not about the warming planet but about Paul Howes, oops….the Gillard government’s plan to redistribute Australia’s wealth.  I repeat – the carbon tax is not aimed at helping with climate change, but about taking money from the “rich” and giving it the “poor” – read AWU members.

And if you think that just the top three million Australian households will pay for the carbon tax, you’re kidding yourself.  The whole Australian economy will cop it.  That includes the six million households you’re told will be better off or fully reimbursed.  The irony is that the bottom two-thirds are likely to get hit the hardest.  Not this year and definitely not in the lead up to the next federal election, but over the medium to long term.  If you think things are expensive now, just wait.  We haven’t seen anything yet.

The carbon tax will further entrench consumer conservatism.  We will see less investment here; the “rich” will employ fewer people, consume less domestically and also take their innovations offshore where their efforts won’t be taxed to oblivion.

The mainstream drone, redistribution-fetishists and most labor governments (this one definitely included) make a common mistake.  They see the economy as a single entity.  They don’t see that it is made up of individuals.  They believe that they can give the poor a dollar (well, $9.90 per week in this case) from the “rich” without affecting their behaviour.

But the crux of the problem with wealth redistribution is the impact on peoples’ behaviour, and we’re not just talking about a carbon tax.  We’re talking all taxes….all forms of government intrusion.  The fact is, when you take from one person and give to another, you take more than cash…you take opportunity and innovative spirit.

It’s easy to take entrepreneurial spirit from one person (the “rich”) and much harder – impossible if you ask me – to give it to someone else (the poor).  Money might move from taxpayer to tax receiver, but ideas don’t.  Why take a risk when you know the government will give you a handout.

What’s even worse still is that the bureaucrats redistribute our wealth to their pet projects.  The market cannot be trusted where to best place its money.  Only the bureaucracy knows best.  They should be in charge of picking winners.  They want to control everything.

It’s a sad vision of the future and one that offers little hope.

And what can we do about it?  Well, solider on is probably all we can do.  And if you feel like the Black Knight from the Monty Python and the Holy Grail movie, then you are not alone.  Small businesses in Australia are now basically left to fight without any limbs, but still we fight on, whilst the bureaucrats watch from the safety of their bunkers.

“Nowhere else have I seen such lions led by such lambs.” This original quote, whilst depicting a much more horrid situation in World War 1, feels somewhat apt.

PS – And if you think that the world will pay any attention to our new carbon tax and follow suit, you really are delusional.  Australia has no international power or authority.  Wealth and military strength are the only two things that matter on the international stage and we fare poorly on both accounts.  Other countries don’t care what we do.  They don’t want to impress us because it is not in their self-interest to do so.  And on that note, this new tax offers no incentive for us to change our behaviour and so we won’t….and its impact on the climate will be naught.

PPS – And of course I am not the only blogger out there with the same thoughts.  Some of this material was gleamed from a recent posting in Money Morning.  It is worth reading Kris’ take on things too.

“This report is republished with permission of Matusik Property Insights.”

The Black Knight « Matusik Missive.