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PUT NOT YOUR TRUST(S) IN TAX REFORM: RATHER, DO THE OPPOSITE
Author(s) -
Covick Owen
Publication year - 2004
Publication title -
economic papers: a journal of applied economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.245
H-Index - 19
eISSN - 1759-3441
pISSN - 0812-0439
DOI - 10.1111/j.1759-3441.2004.tb00370.x
Subject(s) - tax reform , public economics , law and economics , economics , business , positive economics , monetary economics
This paper argues that Australia is divided into two distinct nations as far as personal income taxation is concerned. The rift line is essentially between family‐units rather than individuals per se. It separates family‐units that derive their principal incomes from (or via) entities which they effectively control, from family‐units deriving their principal incomes from ‘arm 's‐length’ sources. The proximate causes of this state of affairs are examined, together with the economic consequences. In considering strategies for bringing the two nations closer together, it is argued that seeking to extend the treatment currently accorded to the ‘arm 's‐length’ income‐source people so as to apply it to all Australians would seem unlikely to be implementable. The opposite approach is therefore recommended for serious consideration.