The Centre for Independent Studies

Taxploitation

The case for income tax reform

Overview

In this new book, ten eminent authors explain why and how Australia’s system of personal income tax needs reforming.

The total tax take in Australia is around the OECD average, but tax on people’s incomes is well above average. High income taxes undermine national prosperity. The top rate is out of line with most other western countries, which have been moving to lower and flatter rates. Because the threshold at which people start to pay tax is well below subsistence, people are taxed before they have earned enough to keep body and soul together. The interaction of tax and welfare creates dispiritingly high ‘effective marginal tax rates’ which deter people on welfare from looking for work and penalize low-wage families whenever they try to increase their take-home pay.

The system is riddled with distortions and disincentive effects. There are so many special allowances, exemptions, credits, offsets and write-offs that tax law has become almost indecipherable, and gross amounts of money and time get spent trying to reduce liability to tax. Most really-high earners are paying a lower rate of tax than workers earning little more than average income. Retirement savings are viciously taxed, and because tax brackets are not indexed to inflation, the total tax-take increases year by year without anybody even realizing it. Outside of the federal government there is a mounting demand that something radical needs to be done to tackle these problems.

This book looks at the options and demonstrates that the case for radical reform is now unanswerable.

The Contributors:

Peter Burn - National Senior Adviser, Australian Industry Group
Lauchlan Chipman - Professor Emeritus, University of Wollongong and Central Queensland University
Sinclair Davidson - Associate Professor, RMIT University
Terry Dwyer - Consultant and Visiting Fellow, Australian National University
John Humphreys - Independent Policy Analyst
Barry Maley - Senior Fellow, Centre for Independent Studies
Andrew Norton - Research Fellow, Centre for Independent Studies
Alex Robson - Lecturer in Economics, Australian National University
Peter Saunders - Social Research Director, Centre for Independent Studies
Geoffrey de Q Walker - Professor Emeritus, University of Queensland, Barrister-at-law

Table of Contents

Introduction

How Highly Taxed Are We?
Peter Burn

How High Taxation Makes Us Poorer
Alex Robson

Cut Taxes To Raise More Revenue
Sinclair Davidson

Who’s Not Paying Their Fair Share Of Income Tax?
Sinclair Davidson

The Moral Case For A Flat Tax
Lauchlan Chipman

Tax Complexity And The Rule Of Law
Geoffrey de Q Walker

Tax Reform To Make Work Pay
Peter Saunders and Barry Maley

The Taxation Of Shared Family Incomes
Terry Dwyer

Rebuilding Australia’s Tax And Welfare Systems
John Humphreys

Why Politicians Aren’t Rushing To Increase Taxes
Andrew Norton

Endnotes
Index

Of interest...