Political economy of tax reform in Australia (original) (raw)
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Australian Journal of Social Issues, 2003
Data from the Community Hopes, Fears and Actions Survey are used to examine how pervasive the view is that the more privileged in society are failing to pay their fair share of tax, to understand the beliefs that underpin such perceptions, and the reforms that are needed to open dialogue with the Australian public about the issue. Support is found for five hypotheses. Economic self‐interest provides a partial explanation for perceptions of vertical inequity, but more important are disillusionment with the Australian democracy and perceptions of insufficient procedural justice from the tax office. Values about how Australian society should develop also play a part. Those looking for a more equal, caring and compassionate Australia perceive there to be a high level of vertical inequity. Such perceptions are not shared by those aspiring to an Australia that pursues competitive advantage either economically or politically.Tax authorities are brokers for social order and harmony in democ...
Targets and Taxes: Explaining the Welfare Orientations of the Australian Public
Social Policy & Administration, 2009
Australia's welfare model – targeted payments alongside low but progressive taxation – exemplifies the targeted approach, prioritizing the needs of poorer citizens within the constraints of low taxation. But does this approach match the welfare orientations of Australia's voters? Does the public hold other views about welfare, emerging out of competing interests in welfare debates? We consider results of two questions included in the Australian Survey of Social Attitudes 2005. The first question asks respondents about four welfare goals that outline competing welfare orientations: targeting poverty, expanding health and education, enforcing the welfare rules and reducing welfare. The second question asks about four taxation goals drawing on similar orientations as established for welfare: targeting tax cuts, taxing for welfare, enforcing tax rules and reducing overall tax. Asking about both enables us to tell whether voters approach tax and welfare ‘consistently’ and to see whether, in Australia's case, there is a preference for Australia's targeting model. We reach three conclusions: (1) voters hold diverse preferences about welfare and taxes, but the targeted model has a relatively strong voter base; (2) voters hold ‘pro-welfare’ orientations, choosing poverty reduction and expanding public services over both paternalism and cutting welfare, and (3) multivariate analysis indicates a level of consistency in welfare and tax orientations among voters.
2008
The policy impact of changes in the tax-benefit system on effective marginal tax rates is then assessed by applying the real tax-benefit parameters from 1982, 1996 and 2002 to the household composition and income data from a base year (2000). The findings indicate that effective marginal tax rates have increased over the long-term. Even when the impacts of tax-benefit changes are isolated from changes in the composition of the population, policy changes have been insufficient to counteract increases in effective marginal tax rates that have been caused by compositional changes.
Globalisation and the dilemmas of income taxation in Australia
Australian Journal of Political Science, 2004
One of the most striking trends in corporate taxation over the past two decades has been the sustained fall in corporate tax rates. Most of the recent literature argues that the main cause of this trend is changing policy beliefs and objectives held by domestic elites, and that the consequences are minor because tax rate cuts have been compensated by a broadening of the corporate tax base. Focusing on Australian income tax reform in the 1980s and 1990s, the article both complements and challenges the literature by establishing three empirical facts. First, corporate tax competition was the crucial driving force behind corporate tax cuts. Second, and related, Australian policymakers continued to embrace investment incentives such as generous depreciation allowances as pragmatic ways to increase the level of investment, at a particular level of taxation. However, with increasing competitive pressure on the corporate tax rate, policymakers had to trade off fewer investment incentives against a more competitive corporate tax regime. Finally, competitive corporate tax cuts put pressure on income taxation as a whole, because low corporate rates provide opportunities for high-income taxpayers to avoid taxes which the high-rate corporate tax regime had successfully prevented. Indirectly, therefore, corporate tax competition led to far-reaching rate cuts in personal income taxation. The article analyses how governments in Australia dealt with the tradeoffs created by corporate tax competition and discusses the likely consequences of continuous tax competition.
Taxation Reform and Income Distribution in Australia
Australian Economic Review, 2008
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Middle-Class Welfare and Vertical Redistribution in Australia: A Fiscal Incidence Analysis
Australian Economic Review, 2015
Middle-class welfare' has been a catch-cry in Australian political debate in recent years, the suggestion being that redistributive programs have unduly benefited the 'middle class'. However, the concept suffers from a lack of definition and the proposition from a shortage of empirical evidence and a rather selective focus. This article uses Australian Bureau of Statistics' fiscal incidence studies to track trends from 1984 to 2010. From this more comprehensive assessment of 'who gets what', we find that not only has there been no shift of net social support towards middle-income groups, but the opposite is true: vertical redistribution has been strengthened.
Trends in Fiscal Incidence and Economic Inequality in Australia
Unpublished, 2016
This paper presents a picture of the Australian welfare state through nearly three decades of economic policy change. Three kinds of trend are tracked. The first is fiscal incidence, i.e. household taxes and social expenditure in both cash and kind. The main metric is "net benefits", with household types being classified by income quintile and by age. The second is economic inequality, as measured by the distribution of "final incomes" and net worth. The third is the performance of the labour market, as measured by earned incomes and unemployment. The paper concludes with an attempt to integrate the evidence into a single picture.
Universal Welfare by 'Other Means'? Social Tax Expenditures and the Australian Dual Welfare State
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International debates about the comparative institutional structures of welfare states have focused on social expenditure and the inclusiveness of social policy. However, these debates have not accounted for the significant rise of fiscal welfare and, in particular, social tax expenditures (STEs) in our understanding of welfare regimes. The growth of STEs has been particularly significant in Australia. While there has been recognition that STEs contribute to a second tier of welfare provision in some policy domains, there has been no systematic attempt to account for them within the institutional structure of the Australian welfare state. In this article, we chart the rise of STEs, the reasons for their growth in the Australian political economy and conceive of them as forming a second institutional layer of a dual welfare state. We conclude by suggesting that this analysis has broader implications for other, particularly liberal, welfare regimes.