Like a Looney Tunes cartoon, Australia has reentered the tax wars. It’s Duck Season. Not it’s Wabbit Season. You increase your taxes. You increase your taxes. And on and on.
There will be no changes or winners, but plenty of ink flowing.
(To be fair, most of the original Looney Tunes cartoons were great, and TAFKAS’ favourite remains the 3 Little Bops).
Writing in the Australian today, former (twice unsuccessful) Labor pre-selection candidate and current Dean of the UNSW Law school, George Williams AO (Always Opinionated) wrote:
Rather than beginning with the rate and base of the tax, we need first to examine who has power to alter the GST. We need to remove the conflicting incentives that stymie every attempt at change.
This could be achieved by the commonwealth allowing the states and territories to directly amend the rate and base of the GST within an agreed range. This would reflect the character of the GST as a tax collected solely for state purposes and would make clear that the states and territories bear the political responsibility for reform.
Yeah right. Let’s dream the dream.
Why does not Australia just return to constitutional first principles and let the Commonwealth keep the GST revenues and let the States keep income tax (personal and company) revenues.
Voila! Like was envisaged with the constitution to start with. The Commonwealth can live off goods and services taxes (inc excise – tobacco and alcohol). Plenty there to fund defense and immigration and the stuff included in Section 51.
The states can set and collect income taxes to fund health, education and the rest.
Much simpler and cheaper.
Bish, bosh, bash.