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A Note on Retrospectivity and the Tax System *
Author(s) -
NELLOR DAVID C. L.
Publication year - 1982
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.1475-4932.1982.tb00375.x
Subject(s) - legislation , public economics , tax reform , legitimacy , economics , value added tax , ad valorem tax , welfare , value (mathematics) , indirect tax , economic policy , market economy , law , political science , machine learning , politics , computer science
The legitimacy or otherwise of retrospective tax legislation has become a topical issue in Australian tax reform debates. This note considers the economic costs of permitting this budgetary practice. While under certain circumstances the standard welfare cost of the tax system may be reduced by retrospective announcement of tax arrangements, the costs of forming expectations. required by the possibility of retrospective tax legislation lead to a reduction in the value of economic activity.