State income taxes-has the govt gone mad?

I thought this talk of States being given the opportunity to levy income tax was just the usual silly rumour/speculation that goes on in the media.

However I was just watching the ABC News and was surprised to hear from the PM thats under serious consideration. What immediately followed that confused me even more was the fact that unless I misunderstood, the news showed Treasurer Scott Morrison not speaking so favourably about such a proposal.

If they are actually considering fragmenting the income tax base I think they have lost the plot. To me it appears that the Federal govt lacks the stomach to do its job and raise revenues through the existing Federal system whether by increasing taxes or removing subsidies or cutting spending. instead it seems to be wanting to pass the buck to the States forcing them to carry the can of raising income tax.

if we are to remain one country we don’t need state income taxes that may create differentials that make business more difficult to conduct. Imagine if a company has operations in several States it would have to lodge taxes to the Feds on the one hand and different rates of income tax in respect to employees in each State.

One of the great productivity reforms was in fact to make things more uniform across Australia and here we are having the opposite occurring where States can levy income tax and we could have varying taxes across all States. It could cause the greatest shamozzle since Federation. Imagine if you work in one State you may pay Federal income tax and on top then pay a State income tax and the States income taxes can vary State to State. Bureaucracy gone mad comes to mind.

Almost sounds like an April fools joke but its not even April- sigh!!