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The urgent need for Tax Reform in Australia in the COVID-19 World

Author

Listed:
  • Tristram Sainsbury

    (Australian National University)

  • Robert Breunig

    (Australian National University)

Abstract

The economic shock and government response to COVID-19 highlight weaknesses in Australia’s tax system. COVID-19 puts pressure on a system under strain from long-term structural forces and the tax-free and tax-reduced status of certain sources of income. Returning to a sound structural budget position cannot be accomplished through passive action that relies on ‘natural’ revenue growth from current tax sources. Discussions should focus on comprehensive reform. Reducing reliance on income (particularly labour) taxes and applying a more equal tax treatment to different individuals and income sources over time are priorities which will support improved well-being and labour market activity.

Suggested Citation

  • Tristram Sainsbury & Robert Breunig, 2020. "The urgent need for Tax Reform in Australia in the COVID-19 World," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 23(2), pages 211-229.
    • Handle: RePEc:ozl:journl:v:23:y:2020:i:2:p:211-229
    as

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    References listed on IDEAS

    as
    1. N. Gregory Mankiw & Matthew Weinzierl & Danny Yagan, 2009. "Optimal Taxation in Theory and Practice," Journal of Economic Perspectives, American Economic Association, vol. 23(4), pages 147-174, Fall.
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    4. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
    5. Summers, Lawrence H, 1981. "Capital Taxation and Accumulation in a Life Cycle Growth Model," American Economic Review, American Economic Association, vol. 71(4), pages 533-544, September.
    6. Emmanuel Saez, 2010. "Do Taxpayers Bunch at Kink Points?," American Economic Journal: Economic Policy, American Economic Association, vol. 2(3), pages 180-212, August.
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    Cited by:

    1. Sainsbury, Tristram & Breunig, Robert & Watson, Timothy, 2022. "COVID-19 Private Pension Withdrawals and Unemployment Tenures," IZA Discussion Papers 15399, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

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