Business put its hand up for big tax cuts this week.
The Australian Chamber of Commerce and Industry’s blueprint for reform contains some principles and objectives of taxation policy. They were not much different from those laid out by Adam Smith in the Wealth of Nations 230 years ago.
Smith said citizens should contribute towards the support of the government in proportion to their ability to pay. Tax ought to be certain, and the time, manner and quantity ought to be clear and plain. Tax ought to be levied at the time and manner in which it is most likely to be convenient for the contributor to pay it.
Most importantly, he wrote, “Every tax ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible, over and above what it brings into the public treasury of the State.” In other words, no costly tax bureaucracies.
The ACCI principles call for similar things: fairness, efficiency, clarity and simplicity.
The ideals are obvious, but their achievement seems impossible. There are several major difficulties.
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