Dr Bryce Wilkinson
The only way for the community to generate greater income is through job creation and productivity growth. This has to come overwhelmingly from the private sector.
During the last hundred years central government taxes per capita rose 20 times faster than consumer prices (from around $660 in 1910 to $13,198 in 2010 in year ended March 2011 dollars, as in the chart below). Meanwhile real GDP per capita only rose roughly 4-fold. The fact that taxes rose roughly 5 times faster than incomes as measured by GDP is reflected in the rise in taxes as a percentage of GDP from 6.3 percent of GDP in 1910 to around 30.8 percent in 2010.