One of the things Kevin Rudd did early on after being elected was to initiate a root and branch review of the Australian taxation system. The review is being chaired by Ken Henry (Secretary to the Treasurer) and is open to submissions by the general public and any other interested entity. I sent in my submission a while ago, although too late to get included in the glossy December Consultation paper Summary that recently arrived in the mail. The summary does consider the 440 other submissions received up until 14 November 2008 of which 53% were from private individuals (as opposed to businesses, associations etc).
The two things I asked them to consider were;
i) a shift in corporate tax towards the Estonian model in which profits are taxed when paid as dividends rather than when first realised in accounting terms. If we want more jobs and strong economic growth I don’t think profitable and growing companies should be deprived of internally generated surpluses. Especially given how fickly profitability can be from year to year for some businesses.
ii) an indexing system for the tax free threshold to put a lid on the growth in the cost of government. If we are going to elliminate income tax then in my book the best way to do it is by regularily increasing the tax free threshold until there is no taxable income left. Of course you probably need to boil this frog slowly.
I could have asked for a lot more reform for our tax system however I figured brevity had it’s vitues. I wait with baited breath for their next summary installment so I can see my name in the credits.
If you would like to make a submission, and I hope lots of ALS readers have strong views about taxation that they are willing to email to the review team, then it needs to be done before 1 May 2009. Check out the details on how to make a submission at the following website:-
Feel free to mention things that I put in my submission if you wish. The more submissions they get on a given issue the more that issue may be on their mind when they write their final recommendations.
To make a submission email your views to: AFTSubmissions@treasury.gov.au
Email submissions must include your name, phone number and postal address. There are no other fixed requirements in terms of format or structure.