The Income Tax Assessment Act now comprises 1,376,875 words.
The Act, for example, has a Section 82KZBB(1)(a)(iii)(B). The section deals with record keeping for travel expenses and the like – things ordinary taxpayers have to deal with. The whole section is 1346 words long and utterly unreadable.
About the only thing holding it together is the diligence of the Australian Tax Office which puts out English translations of the Act in the form of the Tax Guide and other information sheets. It also provides the wonderful E-tax computer program which was used by more than a million taxpayers last year. Without it, the accounting profession would make even fatter gains from the unwieldy law.
The law is so bad that even the Tax Office says forget the law, you can rely on our translations.
Still, why should the system be so complicated that so many Australians need a special computer program or an expensive accountant to do our tax returns?
Last weekend parties offering tax reform in New Zealand and Germany got increased support. In Europe economists point to the higher growth rates in places with simple tax systems – mainly in Eastern Europe.
In Australia this week the new National Party federal president David Russell called for a flat tax system. Usually flat-tax proposals state that there should be no deductions. That makes them simple and appealing.
Flat tax has it difficulties. It is unfair to people whose method of earning an income requires a lot of inputs which would otherwise be deductions.
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