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The Mathews Report on Business Taxation

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  • PETER L. SWAN

Abstract

The controversial Mathews proposals on inflation and business taxation have been, in part, adopted by the Fraser Government. These proposals are based on the concept of (physical) capacity maintenance which the Report concludes is essential for business survival. It is shown that this conclusion is incorrect and arises only because an irrational pricing policy is assumed. Moreover, the recommendations measure, up rather poorly against conventional criteria such as equity and efficiency. Reform of both company and personal taxation is proposed so as to ensure that only real‐income and real‐interest receipts are taxed. These new proposals are robust when confronted with the usual criteria.

Suggested Citation

  • Peter L. Swan, 1978. "The Mathews Report on Business Taxation," The Economic Record, The Economic Society of Australia, vol. 54(1), pages 1-16, April.
    • Handle: RePEc:bla:ecorec:v:54:y:1978:i:1:p:1-16
    DOI: 10.1111/j.1475-4932.1978.tb00312.x
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    References listed on IDEAS

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    1. Peter L. Swan, 1976. "Income Taxes, Profit Taxes and Neutrality of Optimizing Decisions," The Economic Record, The Economic Society of Australia, vol. 52(2), pages 166-181, June.
    2. Paul A. Samuelson, 1964. "Tax Deductibility of Economic Depreciation to Insure Invariant Valuations," Journal of Political Economy, University of Chicago Press, vol. 72, pages 604-604.
    3. Stiglitz, Joseph E., 1973. "Taxation, corporate financial policy, and the cost of capital," Journal of Public Economics, Elsevier, vol. 2(1), pages 1-34, February.
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    Cited by:

    1. Peter L. Swan, 1990. "Real Rates of Return in Electricity Supply: New South Wales, Tasmania and Victoria," The Economic Record, The Economic Society of Australia, vol. 66(2), pages 93-109, June.
    2. Freebairn, John W., 1981. "Assessing Some Effects Of Inflation On The Agricultural Sector," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 25(2), pages 1-16, August.
    3. Rose, Roger N., 1980. "A Comparison Of Depreciation Methods Under Current Cost Accounting: A Comment," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(1), pages 1-3, April.

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