Reform of the personal income tax system in Australia
MetadataShow full item record
This paper examines the case for reform of Australia's Personal Income Tax (PIT), argues that it is outdated, and demonstrates a growing consensus for reform. The importance of tax avoidance, particularly the use of trusts, in the Australian PIT system, and arguably its abrogation of modern-day criteria of what constitutes a 'good tax', is emphasised. Three possible 'reform' options are identified: the 'tinkering and tokenism' approach of current Government policy; moderate reform and a proposed 'significant reform option' costing around $22 billion. Essentially this comprises company and top PIT rate equalisation and a doubling of the tax-free threshold. But funding this is problematical. Two key arguments of the paper are that: (real) simplification i.e. lower compliance costs, is an important yet usually down-played objective in reform proposals; savings from reform denying PIT deductions such as work expenses are insufficient to achieve significant PIT reform. An increase in the rate of the Goods and Services Tax (GST) from 10% to 15% (with a compensation package) is therefore advocated in a revenue-neutral analysis ignoring current Government budget surpluses. The overall outcome would be a simplified, more equitable and incentive-driven PIT system that would move Australia closer to the PIT and GST policies of other OECD countries. But the political difficulties of reform mean that the Government's 'tinkering' approach is likely to continue.
This article is reproduced here with the permission of the Economic Society of Australia. For further information about submitting articles to our journals and membership, please visit our website www.ecosoc.org.au.
Showing items related by title, author, creator and subject.
An interpretive study of the role of teacher beliefs in the implementation of constructivist theory in a secondary school mathematics classroomTaylor, Peter C. (1992)This thesis addresses the internationally recognised problem of transforming classroom teaching that is underpinned by transmissionist epistemologies, especially in the field of mathematics education. A constructivist-related ...
Robertson, Mary Eileen (2006)The health industry in Canada, as well as in other industrial countries, has been in the process of reform for many years. While such reform has been attributed to fiscal necessity due to increased health costs, the ...
Steam reforming of carboxylic acids for hydrogen generation: Effects of aliphatic chain of the acids on their reaction behaviorsLi, J.; Jia, P.; Hu, X.; Dong, Dehua; Gao, G.; Geng, D.; Xiang, J.; Wang, Y.; Hu, S. (2018)The paper investigated the effects of molecular structures on the conversion of the carboxylic acids (formic acid, acetic acid, propionic acid and butyric acid) during the steam reforming reactions. In essence, molecular ...