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The Mathews Report on Business Taxation *
Author(s) -
SWAN PETER L.
Publication year - 1978
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1978.tb00312.x
Subject(s) - irrational number , equity (law) , economics , public economics , government (linguistics) , microeconomics , law , political science , linguistics , philosophy , geometry , mathematics
The controversial Mathews proposals on inflation and business taxation have been, in part, adopted by the Fraser Government. These proposals are based on the concept of (physical) capacity maintenance which the Report concludes is essential for business survival. It is shown that this conclusion is incorrect and arises only because an irrational pricing policy is assumed. Moreover, the recommendations measure, up rather poorly against conventional criteria such as equity and efficiency. Reform of both company and personal taxation is proposed so as to ensure that only real‐income and real‐interest receipts are taxed. These new proposals are robust when confronted with the usual criteria.