How would you improve the Australian tax system?

Originally posted by Scarpa ↑

Here you go - a while ago I started a thread on "What would you support in the name of austerity" (16/05/2017) - Post #: 24730032. Since then things have worsened debt wise in Australia but here is the opening post from it in italics below, and laughable we are still debating the same issues.

Laffer curve is a joke - if you believed in that rubbish we should be running budget surpluses now given Howard’s and Costello’s give-aways all those years ago. And the US well Laffer was a failure there too - just look at their budget deficits. Laffer only works if the proceeds can be directed to productive investments, but governments haven’t done that allowing recipients of tax cuts to spend as they please and fuelled by tax concessions in the wrong areas spend on unproductive investments. The economy needs rebalancing and some tax cioncessions need to go.

From Post #: 24730032: "Here is a test. The budget papers clearly show that Howard through what he did in the last two years caused a structural deficit that was not then helped by Rudd. Revenue as a % of GDP collapsed because of the tax cuts in his last two budgets plus the moves he did in the superannuation area. Then on the spending front was the emergence of middle class welfare that locked in spending as a % of GDP to 25% - 26% going forward whilst at the same time revenue as a % of GDP collapsed to less than 22% in 2011 and is still lower than in the Howard years - i.e. what happens when you narrow the tax base and commodity prices collapse. So let us talk conflict and fairness as Australia has a revenue and spending problem IMO but much of the right doesn't want to do anything on revenue account.

The distortion of investment by such things as NG, incompetence of state Governments to release land and no real controls on foreigners buying property has seen the income to house price ratio go to around 10 times in some cities, over 5 in the rest, up from 3 times around 1990 which has resulted in Australia been indebted to the hilt and the biggest threat to economic growth IMO is a rise in interest rates and not the deficit (since 1/2 bank lending is sourced overseas so as US rates rise expect Australian rates to rise). So against this lets take a straw poll on measures to address revenue and expenditure account :

Revenue measures:
1. Remove the CGT discount applying to sales of investment properties or remove the discount in its entirety.
2. Reverse/minimise Howard's superannuation changes in his last budget that is costing some $40 billion per year.
3. Remove NG or limit is use to those who own one home or cap it at $20,000 per year regardless of how many houses you have. This measure designed to redirect investment to more productive sectors of the economy and reduce the threat of the housing bubble implosion on economic activity (tied along with banning foreigners buying Australian housing)
4. Put a 1% turnover tax in place for multinationals not paying any tax (since many don't pay anything at all), so that if company tax payments are less than 1% of turnover they pay a 1% tax on turnover. At least we get something and use the money to build regional infrastructure.
5. Remove imputation.
6. Increase the GST
7. Reverse the recent company tax cuts.
8. Maintain the current levy paid by high income earners to fund infrastructure in regional area.
9. Move more appropriately to tax trusts.
10 Sell more government assets, and for States to sell their assets in water/electricity
11. Tie road funding to implementation of toll roads
As this is a quick list add what you want.

Expenditure measures
1. Increase privatisation in areas of education, health to reduce government expenditure etc
2. Sack a few more public servants - I don't see a role for the Dept Education and Health for example when those services are provided by the State for example
3. Put a cap on the number of children government would be willing to pay for if the family is on welfare. That is say welfare payments at a family level based on two children at most
4. Remove the dole after 6 months
5. Remove CPI increases in the pension.
6. Cut Family A and family B benefit by 20%.
7. Cut politicians wages by 30%
8. Cut university funding by increasing fees paid by students.
9. Abolish the child care rebate for those earning $100,000 per year or abolish it for all
10. Reduce government medicare rebates
11. Abolish the disability pension and force those on it to go on the dole and look for work
12. Those getting the dole to work for the dole.
13. Remove the rebate for private health insurance
As this is a quick list add what you want.

So what would you do to address the budget. In terms of revenue I would do 2, 3, 4, 8 and 9. In terms of expenditure I would do 2, 3, 7 (austerity means pollies should lead from the front) and 9. Over to you - oh add to the list what you want."

Post: Post #: 24754578 "I'll add one more to the list - any religious group selling a product that competes with another product provided by the private sector be taxed. For example, Sanitarium, which owns Weet Bix doesn't pay company tax. I guess the 7th Day Adventists it hides under the guise that the profits attained are then spent on 'charitable' things, but as its products are sold in Coles it is clearly IMO competing with the private sector. Yes a fine line I know.

CBH is another of the not for profit organisations exempt from company tax that competes with other providers. Finally I would have thought with all the brouhaha here about debt reduction posters here would stake there flag to the mast, but then again actual measures compared to slogans are a lot more tougher to support and get enacted - IMO JH 1996 budget, which was tough, got through because it had spending cuts and revenue measures that targeted everyone and was considered a fair budget, despite at the time most saying they would be worse off.
https://cdn.tspace.gov.au/uploads/sites/52/2015/06/Rixson_Peter.pdf"

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great read!