THE SIMPLEST TAX CHANGE OF ALL – SIMPLIFICATION
Australia’s personal tax and transfer system is like my grandparents’ farmhouse: it’s had many additions over the years, lots of them for reasons that no longer make any sense.
If you were looking for the simplest change of all to our tax and transfer system, you’d look for a way for it to do what it’s already doing, but with way less complication along the way.
So what if we could deliver much the same money to the same people, and provide them with the same incentives to work, but do all that with far fewer moving parts than the same system?
Luckily, there’s already a proposal on the table to do exactly that – one prepared by
@BenPhillips_ANU and team at the ANU.
That particular proposal would, among other things, do away with the Medicare levy and the Low Income Tax Offset, combine elements of Family Tax Benefits and Single Parenting Payments, and rationalise the taper rates for JobSeeker and Youth Allowance.
And yes, it’d do all that with only very limited impacts on individuals – leaving them with pretty much the same dollars and the same incentives they currently have.
No, the above isn’t some of the bigger changes that our personal tax system arguably needs – I’ll cover them later.
But it’s smart, and it’s simple, and people could readily understand it.
That makes it a change which is harder to demonise in our hyper partisan world.
Is it an idea whose time has come?
Simples …