Walk into any supermarket from Kiama to Cairns on a Thursday evening and watch the faces at the self-serve checkouts. Nobody is smiling. A bloke in high-vis stares at the little screen showing $148 for two plastic bags of mince, milk, bread, apples, and washing powder, and you can practically hear the gears grinding behind his eyes. On the drive home, the radio news runs a grab from a backbencher screaming that corporate profiteers and billionaires are bleeding working families dry, followed by the oldest, cheapest applause line in politics: "Tax the rich."

It feels fair. It feels simple. It feels obvious. It also gets the cause and effect completely arse-about.

After forty years on retail floors, in boardrooms, and staring at profit-and-loss statements until my eyes blurred, I have learned one iron rule about money: when a shop is losing cash at the back door, screaming at the biggest customer walking through the front door will not save the business. Yet that is the exact fairy tale modern democracies sell themselves every election cycle. The quiet, relentless squeeze on working families is not happening because a handful of billionaires are dodging personal income tax. It is happening because governments print and borrow money they do not have, quietly hollowing out the purchasing power of the dollar in your wallet while pumping up the sticker price of the assets wealthy people already own.

High earners already foot the overwhelming majority of the income tax bill across the Western world. Everyday workers are falling behind anyway because government-fuelled inflation, reckless deficit spending, and an endless conveyor belt of taxpayer-funded handouts systematically transfer real wealth from wage earners to asset owners. Worse still, it is a trap we keep voting for at every election while blaming the rich for the fallout.

Who Actually Keeps the Lights On?

Before anyone marches down the street demanding that the rich "pay their fair share", it helps to look at the ledger to see who is currently paying for the electricity, the hospitals, the roads, and the public service payroll. If you listen to television pundits or university student unions, you would think high-income earners pay nothing at all while factory workers carry the state on their backs. The actual numbers tell the opposite story.

Take the United States, supposedly the wild west of untaxed oligarchs. According to data from the Internal Revenue Service and the Tax Foundation, the top 1% of earners bring home roughly 22% of all adjusted gross income, yet they pay 40.4% of all federal income taxes. Read that again. One hundredth of the population pays more into the federal income tax pot than the bottom 90% of Americans combined. Expand the lens to the top half of earners, and they pay 97% of the entire federal income tax haul, leaving the bottom 50% paying just 3%.

Now cross the Pacific and look at Australia, where the tax net is pulled even tighter around high-income paycheques. Australia leans heavier on personal income tax than almost any comparable developed nation, drawing roughly 40% of all government tax revenue from personal income taxes, compared to an OECD average closer to 25%. Figures from the Australian Taxation Office show just how top-heavy that reliance has become: the top 11.6% of Australian taxpayers pay more than 55% of all personal income tax collected in the country.

Now, here is the serious objection you have to wrestle with, because the critics are not entirely inventing things out of thin air. Economists like Gabriel Zucman and Emmanuel Saez have built entire careers pointing out that true billionaires do not earn normal weekly salaries like a plumber or a cardiologist. Their wealth sits in massive, concentrated share portfolios that compound over decades. Under existing tax law in both the United States and Australia, capital gains are only taxed when an asset is sold, not while it sits on paper. A tech founder whose shares jump by two billion dollars in a good year pays zero income tax on that unrealised gain unless he cashes out, and in the meantime he can borrow against those shares at preferential rates to fund his lifestyle. Measured against total paper wealth appreciation, a billionaire's effective annual tax rate can look lower than the marginal rate paid by a mid-career lawyer or specialist doctor grinding out sixty hours a week.

At the other end of the checkout line, flat consumption taxes like Australia's 10% Goods and Services Tax (or state sales taxes in America) take a much larger proportional bite out of a working family's household budget than a billionaire's. When you spend 95% of your after-tax pay just keeping food in the pantry and petrol in the Holden, a 10% consumption tax hits nearly every dollar you earn. When you make fifty million a year and spend two million, 96% of your income never touches a retail till.

Both of those points are factually true. Neither of them fixes the fiscal hole we have dug for ourselves.

Do the basic arithmetic for ten seconds. Suppose tomorrow morning you passed a law allowing the government to confiscate every spare dollar, every yacht, every share certificate, and every spare mansion owned by the entire billionaire class in your country. You would do it once, watch equity markets implode, destroy pension funds that hold those same shares, and the total cash raised would fund federal government spending for a few short months. After that, the well is bone dry. In Australia, total federal, state, and local government spending now chews through well over a trillion dollars every single year. The cash cow is already strapped to the milking machine twenty-four hours a day. The real crisis is not that the cow is holding back milk; it is that the farm managers are pouring buckets of it into the dirt faster than any herd on earth can produce it.

Inflation and Bracket Creep: The Quiet Pickpockets

If politicians had to walk up to your front door every April and ask you to write a cheque for an extra $4,000 to pay for their pet projects, half of parliament would be tarred, feathered, and run out of town before dusk. Raising statutory income tax rates is political poison. Voters notice it immediately on their payslips, and they take revenge at the ballot box.

So politicians and central bankers rely on a far slicker confidence trick. Milton Friedman nailed it half a century ago when he called inflation "taxation without legislation." You do not need to pass a controversial bill through the Senate to raid the public's savings. You simply run persistent budget deficits, sell bonds, expand the money supply, and let prices drift upward across the economy. Your savings account buys less each year, your grocery trolley shrinks, and the government quietly pays back its accumulated debts using cheaper, devalued dollars. It is daylight robbery carried out in slow motion, and because there is no line item on your pay stub labelled "Inflation Tax", most voters aim their fury at the local butcher or supermarket chain instead of the Treasury building in Canberra or Washington.

Worse still, inflation does not merely erode what you spend at the shops; it teams up with progressive tax scales to double-dip your paycheque through a mechanism known as bracket creep.

Watch how the trap springs shut. Suppose inflation runs at 5% over the year. You march into your boss's office, lay out the cost of rent and electricity, and negotiate a 5% pay rise just to stand still. On paper, your gross salary is higher. In the real world of groceries, school shoes, and petrol, your purchasing power has not moved a single millimetre. You are running on the spot.

Yet because personal income tax brackets in Australia and many other jurisdictions are not automatically indexed to inflation each year, the tax office treats that 5% inflation-adjustment raise as if you just became genuinely wealthier. Those extra nominal dollars get pushed into a higher marginal tax bracket, where the government takes a larger percentage cut than it took last year. You end up with a smaller real after-tax income for doing the exact same job, while the government collects a windfall revenue surge without ever voting for a tax hike.

The exact same sleight of hand happens if you try to get ahead by saving a few thousand dollars and investing it. Say you buy shares or a small parcel of land for $50,000, hold it for a decade while inflation quietly cuts the purchasing power of the dollar in half, and sell it for $100,000. In real terms, your $100,000 today buys the exact same basket of goods that $50,000 bought ten years ago. You made zero real profit. Does the tax office care? Not for a second. Capital gains tax is levied on the nominal dollar jump - taxing the $50,000 phantom gain that was nothing more than currency debasement. The state breaks your leg by debasing the currency, hands you a crutch, and then taxes the crutch as a capital gain.

Funny Money and the Treadmill of Stagnant Wages

To understand why Western economies feel permanently rigged against anyone who works with their hands or their brains for a weekly wage, you have to rewind the tape to August 1971.

Until that summer, the US dollar - and through the Bretton Woods architecture, the entire Western financial system - was tethered to gold at $35 an ounce. Gold was not magic, and it certainly came with headaches, but it served one indispensable function: it acted like a heavy steel leash on how much money politicians could conjure out of thin air. If a government ran wild deficits and printed too many paper dollars, foreign central banks showed up at the window demanding physical gold in exchange, draining the vault and forcing fiscal discipline.

When Richard Nixon severed that final link to gold in 1971, the leash snapped. Currencies across the globe became pure fiat paper promises, backed by nothing more solid than government decree and central bank balance sheets. What followed over the next fifty-five years was the greatest credit expansion in human history. Unshackled from physical reserves, governments discovered they could run permanent deficits without immediate crisis, while central banks learned to paper over every economic stumble with lower interest rates and quantitative easing.

On the factory floor and in the high-street shop, that structural shift birthed what economists call financialisation. Slowly at first, and then at breakneck speed, moving money around, engineering debt leverage, trading derivatives, and flipping paper assets became vastly more lucrative than designing tools, milling timber, running a retail store, or building physical things. Young graduates with sharp quantitative minds stopped going into civil engineering or manufacturing management and flooded into investment banking, private equity, and hedge funds - because that is where the newly minted credit flowed first.

Meanwhile, the person earning an hourly wage was strapped onto a treadmill that kept speeding up.

Look at OECD Real Wage figures over the past several years. If you watch the evening news or listen to a Treasurer bragging at a press conference, you will hear that nominal wages are growing at their fastest pace in over a decade. Sounds wonderful until you walk into a hardware store or pay your insurance renewal. Once you strip out consumer price inflation, real hourly wages across advanced economies have stalled or gone sharply backward. In Australia, between 2021 and 2026, real wages suffered a brutal drop of roughly 5%, wiping out years of hard-won living standard gains in the blink of an eye. You are working the same hours, dealing with more compliance paperwork, paying higher taxes through bracket creep, and taking home a paycheque that commands less real goods and services than it did five years ago.

The Great Middle-Class Trap: Your Home Is Not a Golden Ticket

Faced with a currency that melts like ice cream in January and a tax system that punishes high salaries, millions of middle-class families in Australia, Britain, Canada, and the United States have latched onto one desperate survival strategy: betting their entire financial life on the family home.

You hear it at every weekend barbecue from Perth to Sydney. A bloke leans over the tongs with a cold beer in his hand and beams because the three-bedroom brick veneer down the street just sold at auction for $1.55 million. He mentally adds $300,000 to his own net worth before the sausages are even cooked. He genuinely believes he is getting rich in his sleep.

[Private thought: Pointing out at a suburban barbecue that an owner-occupied house is a consumption good rather than a productive investment is the fastest way to ensure nobody passes you the tomato sauce.]

As anyone who has ever read a proper commercial balance sheet knows, confusing a higher nominal valuation on an illiquid fixed asset with real wealth is a classic rookie blunder. Your family home is a roof over your head, a place to raise your kids, and an emotional anchor. As a solo financial retirement plan, however, it is a trap with three nasty teeth.

First, a family home eats cash instead of paying it. A well-chosen portfolio of productive businesses pays quarterly or half-yearly dividends directly into your bank account. A commercial warehouse or a properly structured rental property pays monthly rent. The house you live in produces zero cash income. Instead, it acts like a hungry hole in the ground, draining your cash flow year after year through mortgage interest, local council rates, water charges, building insurance, non-deductible stamp duty on entry, and endless maintenance. The roof tiles crack, the hot water cylinder rusts out on a Sunday night, the fence blows down in a southerly buster, and every cent comes out of your after-tax wages.

Second, paper equity in your own home is largely Monopoly money. If your house doubles in price from $750,000 to $1.5 million over eight years, congratulations - so did every other comparable house in your suburb, the next suburb over, and the coastal town you were hoping to retire to. Unless you are prepared to downsize into a cramped unit, move two hundred kilometres inland away from your grandkids, or sign up for a high-interest reverse mortgage that eats your estate alive, you can never spend that paper gain. You cannot saw off the spare bedroom on a Tuesday morning and trade it at Woolworths for lamb chops and nappies.

Third, the hard historical data strips away the romantic myth entirely. In the landmark macroeconomic study The Rate of Return on Everything, researchers Jordà, Knoll, Kuvshinov, Schularick, and Taylor compiled 145 years of asset returns across sixteen advanced economies from 1870 to 2015. Their findings, alongside decades of equity research by Wharton finance professor Jeremy Siegel, hammer home a lesson middle-class homeowners hate hearing: once you properly account for ongoing maintenance costs, property taxes, depreciation, and hefty transaction fees, owning a single residential property significantly underperforms a diversified portfolio of productive businesses over the long haul. Worse still, putting 90% of your household wealth into one immobile structure in one postcode violates the most basic rule of risk management in commerce - zero diversification.

How the Game Actually Works: Assets Float, Wages Sink

So if working families are getting squeezed by inflation and trapped in illiquid mortgages, why does the billionaire class seem to float effortlessly higher with every passing crisis? Did they suddenly become twice as clever in 2020? No. They are simply standing closer to the tap.

Back in the early 1700s, an Irish-French banker and sharp-eyed observer named Richard Cantillon laid out a truth that modern central bankers still try to sweep under the rug. When a government or central bank injects new money and cheap credit into an economy, it does not fall evenly across the population like gentle rain watering every paddock at once. It enters at specific points in the financial plumbing and ripples outward in waves.

First in line at the money printer are big commercial banks, institutional funds, multinational corporations, government contractors, and ultra-wealthy investors with pristine collateral. They get access to the fresh, low-interest credit first - while prices in the broader economy are still anchored at yesterday's levels. Armed with cheap borrowed money, they immediately buy up scarce assets: prime real estate, blue-chip equities, private companies, and commodities. Asset prices surge first.

Only months or years later does that expanded money supply trickle down through supply chains, vendor invoices, and payroll budgets into the hands of everyday wage earners. By the time a store manager or truck driver finally sees a modest pay bump hit their bank account, the new money has already worked its way through the system. Supermarket shelves have repriced upward, rents have jumped 15%, and the entry-level house down the road has sailed another $200,000 out of reach.

Productive shares, commercial buildings, and scarce land act like corks bobbing on rising water. When the currency weakens and the tide of paper money rises, assets automatically reprice upward in nominal dollars without the owner lifting a finger. Your labour enjoys no such automatic buoyancy. Your wages are sticky, negotiated once a year across a desk against a manager watching tight operating margins, while you compete in a crowded labour market.

And speaking of crowded labour markets, no honest examination of why wages sink while housing floats can tiptoe around the immigration lever.

Politicians in Australia, Canada, and Britain have discovered an irresistible accounting trick over the past twenty years. When productivity stalls and bloated government spending weighs down economic dynamism, how do you stop the headline Gross Domestic Product number from turning negative and triggering an embarrassing recession headline? You crank the immigration tap wide open.

Look at both sides of the economic argument fairly, because serious economists disagree on the magnitudes. On one side, Harvard labour economist George Borjas has spent decades demonstrating how large, rapid waves of immigration expand the supply of available workers in competing sectors, taking the upward heat out of wage growth for local workers while every single new arrival immediately needs a bed, a rental flat, or a house - driving up rents and property values for existing landlords. On the other side, economists like Nobel laureate David Card and Giovanni Peri counter that immigrants are not merely labour supply; they are also consumers who buy groceries, entrepreneurs who start small businesses, and workers who fill genuine skill bottlenecks, arguing that the long-term downward drag on average native wages is relatively modest.

Both sets of data point to the exact same political reality on the ground. Even if the long-term drag on average wages is moderate in certain sectors, surging population growth into an economy with strict zoning laws, slow construction approvals, and choked infrastructure guarantees one outcome: housing demand explodes overnight while supply crawls at a snail's pace. High migration makes the total national GDP pie look bigger on paper - allowing the Treasurer to boast that the economy is growing - even when the slice per person (GDP per capita) shrinks, hospital emergency rooms overflow, and rents price young Australians out of their own hometowns. Existing landlords and asset owners watch their portfolios swell; young wage earners get stuck paying $700 a week for a cramped unit.

The Doom Loop and Voter Stubbornness: France as a Warning

At this point, a reasonable reader might ask: if deficit spending, currency debasement, and asset inflation are fleecing the working middle class, why do politicians keep doing it? Are they all fools?

Not at all. They are responding rationally to the incentives we hand them.

Public Choice economists James Buchanan and Gordon Tullock won Nobel recognition for stripping the halo off politicians and voters alike, treating politics not as a noble seminar on the common good, but as a marketplace of self-interest. They showed why modern democracies suffer from a structural bias toward fiscal bankruptcy. When a politician promises a concentrated, immediate, visible benefit today - a $300 energy rebate, a subsidised childcare place, an earlier retirement age, a local sports grant - the voters receiving that handout know exactly who gave it to them and reward that politician at the ballot box.

Meanwhile, the cost of that handout is dispersed thinly across millions of taxpayers and buried in future bond issuance, higher interest payments, and silent currency inflation three years down the track.

If you want to see where this democratic doom loop leads when pushed to its logical extreme, do not look at a textbook. Look across the water at France.

France is the living, breathing case study of what happens when an electorate refuses to give up a single state entitlement even after the underlying arithmetic has collapsed. For decades, successive French governments bought social peace by expanding the welfare state, shortening the working week, protecting generous early retirement privileges, and borrowing the difference on international bond markets.

By 2025 and 2026, the bill finally arrived on the table. French public debt surged past 116% of Gross Domestic Product and began barrelling relentlessly toward 119%, accompanied by chronic annual budget deficits topping 5% of GDP. Bond markets and credit rating agencies started flashing red warning lights across Europe, demanding higher interest yields to hold French sovereign debt.

Yet every time a prime minister in Paris attempts to nudge the retirement age upward by a couple of years or trim a fraction of public expenditure to stop the bleeding, the country erupts. From the fierce pension riots of 2023 to the massive nationwide protests and strikes in late 2026 that poured hundreds of thousands of demonstrators onto the streets and left the National Assembly paralysed without a viable budget, French unions and voters have treated basic arithmetic as an act of war. As Chatham House analysts warned in 2026, France is trapped in a tightening vice between bond markets demanding fiscal sanity and an electorate demanding free money that no longer exists.

France also exposes a second, darker fracture when rapid, poorly integrated migration collides with a tapped-out welfare state. Sociologists like Robert Putnam and Oxford economist Paul Collier, in his book Exodus, have documented a sobering truth that polite dinner-party chatter prefers to ignore: high demographic diversity without strong, shared civic assimilation erodes the underlying social trust required to sustain generous, high-tax welfare systems. People are willing to pay steep taxes to support neighbours they feel bound to by a shared culture and mutual obligation; that willingness withers when society fragments into competing, distrustful enclaves.

In France's neglected suburban housing estates - the banlieues ringing Paris, Lyon, and Marseille - decades of sluggish job creation, rigid labour laws that lock young men out of entry-level work, cultural alienation, and shrinking real state subsidies have created permanent powder kegs. When grievances ignite, they boil over into ferocious urban riots, burning schools, looting shops, and inflicting over €1.2 billion in physical destruction in a single wave of unrest in 2026 alone. Throwing borrowed money at deep demographic division buys neither social harmony nor national solvency; it simply leaves the state bankrupt when the next match is struck.

Close to Home: Australia's Addiction to Handouts, Rorts, and Election Bribes

Before any Australian reader leans back in their chair feeling smug about Europe's mess, take a hard look at our own backyard. We may have better beaches and sunnier winters, but politically we are sprinting down the exact same road - just a few laps behind.

Australian politics has degenerated into a three-year auction conducted with our own credit card. Every federal and state election brings a fresh bidding war of sugar-hit bribes designed to buy marginal seats with borrowed money. Power bill rebates handed out indiscriminately regardless of household income. Expanded childcare subsidies that providers promptly absorb into higher daily fees. Universal bulk-billing pledges thrown onto an already strained health budget. And the perennial favourite of every state premier: first-home buyer grants and stamp duty concessions that every first-year economics student knows simply push entry-level house prices up by the exact dollar amount of the grant within ninety days.

Meanwhile, the Parliamentary Budget Office projects Australia's national gross debt climbing toward 58% of GDP by the end of the decade, with annual interest payments alone devouring tens of billions of tax dollars - money that buys zero hospital beds, zero kilometres of highway, and zero naval frigates, simply servicing past political cowardice.

Where are all those billions vanishing? Not into gleaming productivity miracles. Huge chunks are disappearing into industrial-scale rorts, bureaucratic bloat, and vanity megaprojects.

Start with the National Disability Insurance Scheme. Born out of genuine compassion to support Australians living with severe and permanent disabilities, the NDIS has mutated into a runaway fiscal juggernaut exceeding $50 billion a year - outstripping the entire cost of Medicare and rivaling the national defence budget. Integrity watchdogs, parliamentary inquiries, and federal police taskforces have uncovered rorting on an industrial scale: syndicates submitting fake invoices, dodgy providers splitting cash kickbacks with participants, and taxpayer funds billed for luxury holidays, cosmetic treatments, and overpriced services. Internal integrity estimates suggest fraud and "leakage" alone siphon off roughly 8% to 10% of the scheme - between $3.7 billion and $5 billion vanishing every single year while genuinely disabled Australians fight tooth and nail for basic wheelchairs and therapy.

Then look at infrastructure megaprojects, the ultimate monument-building playground for premiers who love wearing hard hats for television cameras. Research by both the Grattan Institute and the Centre for Independent Studies shows Australian transport projects routinely blow past their original announced budgets by tens of billions of dollars. Sydney Metro ballooned from an initial price tag of $13.3 billion to more than $25 billion. WestConnex blew out by billions. Queensland's Cross River Rail followed the exact same script. Why? Because politicians announce shiny ribbon-cutting projects at press conferences before the engineering, geological surveys, or honest business cases are completed, locking taxpayers into blank-cheque construction contracts where unions and tier-one contractors name their price.

Add to that the culture of routine pork-barreling and crisis waste. During the pandemic, billions of dollars in JobKeeper wage subsidies flowed straight into the bank accounts of profitable corporations whose revenue never fell - and in some cases rose - because treasury rules were slapped together in a panic with no clawback mechanism. Outside crises, we get partisan "sports rorts" and marginal-seat commuter car parks funded against departmental advice. Taxpayer cash is treated not as a sacred trust earned by the sweat of working citizens, but as an electoral slush fund.

First, we have to dismantle middle-class welfare. Australia spends tens of billions of dollars every year churning tax money in a giant circle - taxing middle- and upper-income families heavily on their salaries, skimming off a hefty bureaucratic handling fee to pay armies of administrators, and handing a portion of that same money back through overlapping family tax benefits, childcare subsidies, and targeted rebates. Stop taking the money out of their pockets in the first place and shut down the bureaucratic merry-go-round.

Second, we have to confront the sacred cows in retirement policy. As policy groups like the Committee for Economic Development of Australia (CEDA) have repeatedly highlighted, taxpayers heavily subsidise aged care and full or part age pensions for households sitting on $2 million or $3 million family homes that remain largely exempt from the pension asset test. Meanwhile, a young couple renting a cramped flat and earning moderate wages pays the income tax that funds those subsidies so the retiree can preserve an untaxed inheritance for their adult children. No politician wants to touch it because retirees vote in blocks, yet leaving it untouched guarantees intergenerational warfare.

Third, we have to kick the bailout mentality. Breaking this cycle means voters accepting fewer government energy rebates, tighter eligibility and ruthless forensic auditing on schemes like the NDIS, smaller public-sector bureaucracies, and genuine short-term belt-tightening - in exchange for meaningful income tax cuts and a currency that stops losing its purchasing power every time a treasurer opens their briefcase.

Stopping the Blame Game

Step back from the political noise for one quiet minute and connect the four dots sitting right in front of us:

That is the machine. Every time you cheer for a "cost-of-living handout" paid for with borrowed money, you are pouring another gallon of petrol into the engine that drives your rent up and shrinks your grocery trolley. Every time you let a politician distract you with speeches about taxing billionaires while they blow $25 billion on an over-budget tunnel or lose $4 billion a year to NDIS fraudsters, you are letting the pickpocket point at a stranger across the street while his hand is still inside your coat.

You cannot tax billionaires hard enough to outrun a reckless government. The arithmetic does not work, the capital moves offshore, and the spending tap never closes.

Think back to that bloke standing at the supermarket checkout on Thursday evening, staring grimly at $148 for two plastic bags of groceries. The guy ringing up a trolley full of fillet steak three aisles over did not steal the value out of his paycheque. The people who hollowed out his dollar are sitting in air-conditioned offices in Canberra and Washington - that WE voted in, I might add -, signing off on another billion-dollar deficit and printing up another batch of promises they intend to pay back with tomorrow's inflation. Until voters are ready to punish politicians who spend borrowed cash and reward leaders who have the spine to cut waste, shrink the state, and leave the currency alone, the wealth-transfer machine will keep humming - and the rich will keep getting richer off the very policies sold to you as their punishment.

I am sorry to say, but voters voting to sacrifice and suffer to fix the system just seems unlikely. At the very least, we should thank the billionaires for doing as much as they do, not persecute them. That would make us both selfish AND stupid.