Tax Policy Objectives

Tax Policies 2010

Taxpayers Australia conducted an extensive survey in recent months in order to establish tax policies for adoption by the organisation.  The policies adopted following the member survey are:

1. Consolidate the tax laws into a single Act with a re-write where necessary (for example: Division 6 ITAA36 re trust income) to simplify interpretation of the law.
2. Obtain a commitment from government to a stipulated maximum period (for example: 60 days) between announced changes to the law and the tabling of amending legislation.
3. To address a long standing distortion, implement a programme of staged reductions in the maximum marginal rate of personal tax, with an objective of alignment with the corporate rate.
4. Eliminate ‘bracket creep' by an automatic indexation of personal tax thresholds.
5. To encourage longer term investment, introduce a phased system of discounting capital gains which are subject to tax (see table below).
6. To encourage saving, apply a reduced rate of tax to investment income.
7. Simplify the requirements for taxpayers to claim deductions for amounts expended in deriving their assessable income (such as car expenses) and to access tax offsets (such as the education offset).
8. Retain the ‘classic' imputation system which provides investors, in most instances, with the full benefit of credits for company taxes paid on profits distributed as dividends.
9. The tax loss recoupment provisions to be amended to allow for losses to be carried back to earlier years to offset against profits upon which tax has previously been paid.
10. In view of the reduced concessional contribution caps available from the 2009 year, eliminate the tax on contributions to assist taxpayers to boost retirement savings.
11. Maintain the tax-free status of superannuation benefits withdrawn after 60 years of age.
12. Pursue the repeal of state taxes which were to be eliminated in exchange for the states receiving GST revenues.

Tax Policies pre-2010

1. Reduction of individual income tax rates with the top marginal rate being set at the same rate that applies to corporate taxes.
2. Elimination of bracket creep by incorporating the automatic indexation of all income thresholds.
3. Simplification of the tax laws.
4. There should be consistency of tax treatment for capital gains regardless of whether derived by an entity or individual and capital gains should be tax free after assets have been held for 20 years.
5. All taxes should be transparent.  Accordingly all inefficient indirect taxes (including payroll tax and land taxes) should be abolished and replaced with GST.
6. All tax rebates, tax offsets and credits to be refundable and all statutory deduction limits to be automatically indexed.
7. Separation of social security system and income tax system to avoid high effective marginal tax rates.
8. Federal and State budgets to be balanced each year with surplus collections to be returned to taxpayers.
9. Superannuation and retirement savings should be taxed at the point when they are received. There should be no taxes during the accumulation phase.
10. Common rules and definitions should apply across all taxation and related laws.