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A Comparison of Alternative Tax Bases

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Author Info
John Freebairn () (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
Abstract

The revenue, efficiency, equity and operating costs properties of alternative tax bases or taxable sums are compared and contrasted. Initially the assessment is made for generic, comprehensive tax bases on income and consumption flows, wealth stocks, and on transactions. On the criteria of efficiency and equity, there are unresolved conceptual and empirical arguments in choosing between income, consumption and wealth tax bases, but general revenue raising transaction taxes are inferior. In practice, including in current Australia, the different tax bases are far from comprehensive because of the many exemptions and deductions. On all good tax design criteria, the case is made to broaden the tax bases for income, the GST, payroll and land taxes; special purpose transaction taxes to counter market failures should be redesigned; and conveyance duties and other stamp duties should be removed.

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Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2005n11.

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Length: 19 pages
Date of creation: Aug 2005
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Handle: RePEc:iae:iaewps:wp2005n11

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  1. Bruce Headey & Gary Marks & Mark Wooden, 2005. "The Structure and Distribution of Household Wealth in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 38(2), pages 159-175, 06. [Downloadable!] (restricted)
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