commission on fiscal imbalance 合集

To quote the asprey committee taxation review

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Unformatted text preview: x has now become a totally Federal tax. Had the States retained tobacco taxes, they would over the transitional period probably have increased the tobacco tax rate. The ability to raise the rate exists because the price elasticity of demand for tobacco is low, so that tax increases will not produce a decline in revenue. The motive to raise the rate exists because of the need to reduce the social costs of smoking (see Collins and Lapsley, 1996). It does not appear that calculation of GMAs takes into account these types of tax policy options which the States would have had under the pre-IGA arrangements. This is an illustration of the effects of the increase in vertical fiscal imbalance, which is the subject of Chapter 5. Similar issues arise in relation to alcohol taxation which was significantly increased in the 2000-01 Federal Budget. Should the States notionally receive some of this revenue increase through an upward adjustment of their GMAs? It should be noted that if, as a result of a 2005 Ministerial Council review, other taxes are abolished, a further transitional period, with its attendant implications, would be established. It is not, however, clear how the abolition of further State taxes could be funded unless there was an increase in the GST rate. Since at least one, and probably several, States could be expected to veto such an increase, the abolition of further State taxes would be unlikely to proceed unless the Federal Government broke the Intergovernmental Agreement. This is, of course, not impossible. 4.2. Tax Efficiency The concept of tax efficiency relates to the requirement that the tax system should not distort more than absolutely necessary what would otherwise be efficient business decisions. To quote the Asprey Committee (Taxation Review Committee, 1975.p.16), the tax system “should not alter the relative returns from different modes of investment; it should not alter the relative attractiveness of different types of business organisations, or the relative prices of productive resources; and it should not discriminate between different types of production”. A major objective of the ANTS package was the replacement of various inefficient taxes with a broad-based, single rate consumption tax – an admirable objective. At the State level the taxes to be abolished were, in the main, a broad range of financial taxes which were seen as being discriminatory; vulnerable to avoidance, evasion and inter-State tax competition; and having high administrative and compliance costs. 128 Commission on Fiscal Imbalance Under the original ANTS proposal the following State taxes were to be abolished: ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ Financial Institutions Duty; Debits tax; Stamp duties on marketable securities; Conveyancing duties on business property; Stamp duties on credit arrangements, instalment purchase arrangements and rental (hiring) agreements; Stamp duties on leases; Stamp duties on mortgages, bonds, debentures and other loan securities; Stamp duties on cheques, bills of exchange and promissory notes; and Bed taxes. As a result of the GST revenue loss arising from the Democrat Amendments, the range of financial t...
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