Given the way income taxes were hacked in the previous decade, mostly for the benefit of high income earners and with little regard for long-term consequences, redressing this imbalance seems only sensible now, writes Ian Verrender.

The cat finally is out of the bag.

Even senior Coalition members have begun to give an inkling as to the true causes of our economic woes and the reasons for the largely confected budget and debt crisis.

Last week, the Deputy Prime Minister, Warren Truss, provided a bit of historical perspective on this year's budget preparation in an interview with Fairfax Media, arguing that it was "completely different" to his days in the Howard cabinet.

"Those were budgets with significant revenue, there was criticism that the surpluses were too high," he said. "This time it is completely the opposite, the focus is very much on not just the debt and the current deficit, but the time bombs that are in the budget."

Bang on. For once, a politician speaking the truth!

In that frank admission, Truss correctly pointed to the genesis of our current malaise where, blinded by the unexpected temporary bounty from the mining boom, the Howard government delivered seven straight income tax cuts.

In effect, it doled out what should have been recognised as a temporary bonus from a boom via a permanent, unsustainable and ad hoc restructuring of the tax system.

Even when it was obvious the whole thing had gone too far, Kevin Rudd promised yet another cut before the 2007 election to match Howard's pork barrelling attempt to buy an election win.

Combine that with Howard's decision to forgive anyone over 60 from paying tax on superannuation income - particularly contentious given an ageing population - and the fiscal splurge delivered by Rudd after the financial crisis, and the end result was the structural deficit and debt problem with which we are now saddled.

It's worth remembering too that one of the Howard government's final flings was to briefly open a window for the exceedingly rich to tip vast amounts of wealth - and thereby avoid tax - via salary sacrifice into the superannuation system.

The combined changes from those years shifted the burden of taxation away from individuals and onto Australian companies. That was fine when corporate profits regularly outpaced even the most wildly optimistic forecasts, thereby delivering unexpected tax revenues.

This was boom time, the days of easy money and soaring markets. Commodities, stocks and property were headed in one direction - north. Capital gains tax helped swell the coffers and frenzied consumers loaded up GST takings.

Bankers, only too happy to grease the wheels of commerce with easy cash from offshore, helped inflate asset prices, particularly for housing, in the process turning Australian households into among the most heavily indebted in the developed world.

That remains the case today. If we do have a debt problem, as Prime Minister Tony Abbott and Treasurer Joe Hockey continue to harp on about, it is among ordinary Australians, not at the government level.

Australians are now borrowed to the hilt, privately owing $1.8 trillion, a debt bill that dwarfs our government gross debt of $300 billion.

When the party came to an abrupt end in 2008, company tax receipts went into reverse, capital gains tax dried up and GST takings plummeted as Australians desperately switched from rampart consumerism to a nation of savers.

Given the way income taxes were hacked in the previous decade, mostly for the benefit of high income earners and with little regard for long-term consequences, redressing that imbalance seems only sensible now.

The debt levy likely to be unveiled in this week's Budget that will target only those earning more than $150,000 has earned the universal scorn of business leaders as "poor economics" that will have minimal impact on the deficit or the national debt.

It is an odd argument. The corollary is that if that is the case, it would have minimal impact on the spending power of high income earners. In an illogical twist, however, we are told that this new deficit levy will hurt consumer confidence and damage a fragile economy.

There is no denying our economic fragility. With the investment phase of the resources boom winding down - with some predicting a capital expenditure cliff - and little chance of a return to the halcyon days of rampant consumer spending given the level of household debt, Australia's economy is expected to limp ahead in coming years.

But the structural problems inherent in our government finances need to be addressed on both sides of the ledger, through a combination of higher taxes and decreased spending.

There seemed to be few complaints from business lobby groups about the harsh measures outlined in the Commission of Audit report a fortnight ago, where savage spending cuts were directed towards lower income earners, school leavers and retirees.

Consumer confidence didn't seem to be an issue back then. Nor was there much said about the huge imbalance in the superannuation system that delivers enormous tax incentives to the wealthy but penalises the lowest income earners.

The Prime Minister and the Treasurer talk of everyone sharing the burden, and their efforts to direct some of the heavy lifting towards the wealthy should be lauded.

Their determination on that front, however, has its limits. Whispers last week of a greater tax impost on the mining industry, by altering the rebate on fuel excises, elicited a swift response. At Rio Tinto's annual general meeting in Melbourne, chairman Jan du Plessis left little room for doubt as to how the industry as a whole would respond.

Tony Abbott was elected to power with a promise to rid the nation of the mining tax which, given we now are a nation largely dependent upon the export of two raw materials to just one market, is a policy that truly is "poor economics".

It is true that BHP and Rio Tinto underpin the Australian tax system, providing a large base for national revenue. But it should be remembered that they are exploiting a resource that belongs to the nation, a resource that can never be replaced and the proceeds of which will flow largely to offshore investors.

If you are among the multitude who believed the mining tax was a dud idea, then it's time to accept the fact that you will have a government that in future years will deliver less to those who need it and will charge more from those who can afford it.

Ian Verrender is the ABC's business editor. View his full profile here.