Wednesday, September 23, 2015

Tax reform suggestions

Hmm.  Much intrigue, and quite a bit of unhappiness from industry groups that have spent money on making submissions, in the news this morning that PM Turnbull seems to have scrapped the Tax White paper process.

As the SMH notes, this is not the first time Turnbull has entered the tax debate with big ideas of his own.

Could this be a sign of Turnbull "I know best" hubris has re-emerged?  Could it herald a breath of reasonable fresh air around tax?   I like Turnbull, but I suspect it may play out as more the former than the latter.

Anyway, I think I once posted what I thought was some pretty obvious ways to raise more tax which ought to be sell-able to the Australian public:

1.  a modest increase in the GST rate to 12.5%.   This is low enough to not really be noticed, but I'm pretty sure it still raises quite a lot.  As for its expansion - I would be inclined to leave it off fresh food, but wonder whether a reduced rate could be added to education services - say 5%?  OK, that would be a hard sell to Liberal constituents, but it might be something Labor could live with;

2.  superannuation tax concessions at the high end wound back harder;

3.  a staged reduction in negative gearing.  Not too staged.  And didn't I suggest once that it be time limited, to like for the first 5 years?   Increased turnaround in investment property sales would be good for stamp duty revenue too, as well as placing properties back on the market for potential owner/occupiers.   Someone needs to point out to me the downside, as there almost certainly would be one.  

Of course, we should have a carbon tax of some description too, but I don't think even Turnbull is up for that.

Update:    How quickly I forget.  Didn't I also once suggest the obvious solution to our revenue problems - a 300% GST on tattoos and piercings?   The budget will be fixed in no time at all....

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