pension, page-27

DDZX - I'll just take you to task re a couple of statements that you have made that don't actually have any factual basis:

Firstly re tax leakage & the sources you attribute it to:

Re CGT Discounts: Many countries have a concessional regime applying to the taxation of capital gains. EG the US has a flat rate of 15%, whilst the UK has a rate of 20%. We allow a 50% discount to individuals and trusts that have held a capital asset for over 12 mths. For someone on the top marginal rate, the tax rate applying to a discount gain is 24.25% (post deficit levy). Comparatively high.

The policy basis for concessionally taxing capital gains is to encourage investment. Taking the discount away would have a deflationary effect on the economy.

Raising superannuation as a source of tax leakage is just a stupid comment. The Govt is faced with an aging population that lives longer so offering some tax incentives for people to fund their own retirement is a no brainer.

Income splitting via trusts - I'm not sure you really know what you are talking about here. Only certain forms of income can be split. Personal exertion income can't be split. There is pretty minimal leakage here.

General tax avoidance. Most taxpayers are pretty compliant. The risks come from the cash economy, organised crime etc. Our Tax Acts have a sophisticated aray of integrity provisions built in such that the ATO only ever have to apply the General Anti Avoidance Provision ("Part IVA") as a last resort.

The likes of Glen Wheatly, Hoges etc were genuine tax dodgers that are in a minority. They were silly enough to participate in dim witted tax schemes involving offsore intermediaries that blind freddy could have driven a truck through.

Finally - if you keep taxing the "rich" and those taxpayers that drive investment and create jobs, they eventually move to another country.

The problem that we face is that our tax base is actually shrinking. An increase in the GST rate will happen within the next five years. Whether the Libs or the ALP bring it in is the only variable in the equation.