Australia requires more stringent corporate tax enforcement, larger taxes on big inheritances and an end to negative gearing.
These recommendations to politicians were the result of a recent Melbourne School of Government “public interactive learning lab” which brought together around 50 community members and university experts from diverse fields to tackle the issue of tax in the upcoming election.
One of the key discussions focused on Tax Crime. According to criminologist, Professor Fiona Haines, Australian tax law has a notoriously complicated regulatory structure that allows large corporations – leveraging expensive legal services and assiduous accountancy skills – to exploit tax loopholes to become legal tax avoiders, not tax evaders.
Most of us lack the resources to achieve such “efficient” tax structures, leading to unequal treatment of entities and individuals under tax law. One attendee’s lament over Australia’s tax regulation summed up this inequality: “How is it that I worked for one of the world’s largest companies who paid basically no tax last year, but I was personally taxed 40 per cent?!”
For policy makers, tax equality is particularly challenging because it is the very complexity of tax law that facilitates big corporations to get around it.
“Trying to get people to pay their fair share of tax through the use of law is like trying to drown a fish in water,” Professor Haines explained.
Audience members also raised concerns about technology making tax avoidance, or even evasion, easier for a larger group of income earners. Will these problems divert government resources towards policing digital tax evasion, rather than ensuring that high income earners are legally obliged to pay tax? The audience also suggested that simplifying tax law and bringing it up to date with new business models are essential.
Participants also completed a mini-poll and shared their thoughts on key tax debates.
If you had a chance to change one tax rule in Australia, what would the new rule be?
|18||More stringent corporate tax enforcement|
|12||Tax large inheritances over $2m|
|12||End negative gearing|
|11||Instate a financial transaction tax|
|9||Tax the monarchy|
|7||more tax, better services|
|7||Tax trusts as companies|
|6||Implement a universal basic income|
|6||Establish a democratic budget, in which people vote for binding priorities|
|3||Introduce a financial transaction tax|
|-1||Lower taxes so that people are more likely to pay their fair share|
|-10||Make Canberra a Tax haven|
If you had an "Oh I hadn't thought about that before" moment tonight, what was it about?
“We pay too low a petrol tax...”
“I didn't know Mexico didn't pay taxes on petrol.”
“The equity of introducing an inheritance tax.”
“The psychology of tax policy... What's different in high tax countries?”
“Corporations don’t make it easy for people running small businesses.”
“The question of why rent seeking is almost uniformly derided in the global economy but not in domestic economies”
“Petrol tax makes such little sense!”
“An equitable tax requires a product with inelastic consumption”
“Earned or unearned should be taxed progressively, but it must be either at the source or end, to avoid double taxation”
“Big companies are always going to find a way to avoid tax. There is a diff between tsx avoidance and tax evasion. Need to think of ways to encourage them to pay or enforce the law better.”
“The idea of tax fairness is probably the simplest phase to epitomise what is wrong with all the implementations I have experienced or read about.”
Watch all the videos from our panel of experts here:
1. Why Tax Petrol:
3. Tax Crime:
Banner image: Flickr/GotCredit