Australian Tax Forum

Australian Tax Forum - Volume 24

Australian Tax Forum is a prestigious quarterly journal with the objective of providing discussion on issues in tax policy, law and reform amongst tax professionals. It is an essential reference source for understanding and contributing to the development of taxation systems worldwide. Australian Tax Forum is aimed at those who want to influence the future development of tax policy. It is an important journal for tax policy makers, academics and libraries.

Subscription pricing

  • $240 Australian subscribers
  • $265 Overseas subscribers
  • $380 Online subscribers
  • $395 Overseas online subscribers

To subscribe to The Australian Tax Forum please click here

Articles from the current issue:

  • Papers from the Musgrave Memorial Colloquium on taxation and risk takingAdd to cart

    Richard Musgrave was a towering international figure in the history of public finance in the second half of the 20th century. The papers in this issue of Australian Tax Forum derive from a colloquium organised to honour his memory by acknowledging his important contribution to the analysis of the effects of income taxation and loss-offsets on incentives to take risk, a contribution which dates back to his early joint paper with Domar in 1944.

  • Musgrave on taxation: theme and variationsAdd to cart

    The important early findings of Domar and Musgrave on the effects on risk-taking of loss-offset provisions under the personal or corporate income tax have been seriously challenged in more recent analysis by Kaplow and others. This dispute, although it is still unresolved, has significant implications in other areas of tax policy such as the choice of personal tax base between income and consumption. It also has an important bearing on the estimation of the welfare cost of the corporate tax and on the policy trade-off between equity and efficiency under income taxation. Musgrave’s policy stance on these interrelated issues is generally well supported by the analysis in this paper.

  • Notes on taxation and risk takingAdd to cart

    In recent years, the literature on taxation and risk taking has focused on the argument that the distortions and incidence of capital income taxes are associated with the tax on the risk-free rate of return, and that the taxation of excess returns to risk taking may be of less economic consequence than had been thought. I review this argument and its underlying assumptions in detail and discuss the implications of different violations of the assumptions in the context of a variety of recent tax policy issues where the impact of taxation on risk and risk taking is of central importance to the analysis.

  • Risk, rents and regressivity revisitedAdd to cart

    This article seeks to survey the debate in the United States about whether the tax base should be income or consumption, and then focus on some recent arguments that have been made in favour of a consumption tax. In the author’s opinion, none of these arguments are convincing, and he would favour adopting a consumption tax in addition to, and not in lieu of, the existing income tax.

  • Revisiting tax lossesAdd to cart

    Australia, like most other countries, taxes positive and negative income asymmetrically. This asymmetric tax treatment is designed to protect government revenue. However, it distorts investment decisions towards less-risky investments and can disadvantage small businesses and firms with start-up or closing-down expenditure without other income to offset losses. Further, measures to restrict loss utilisation may add complexity to the tax system and often result in pressure for specific compensatory concessions. However, movement towards greater utilisation could require integrity measures which may, in turn, add complexity. This paper examines the economic consequences of the asymmetric tax treatment of gains and losses under company income tax. The paper compares the tax treatment of losses in Australia to that in several OECD countries and then explores possible alternative loss-utilisation arrangements for Australia. Such alternative arrangements can have broader implications for the taxation of capital income under the company tax system, including because of the integration of company and shareholder taxation under Australia’s dividend imputation system. The present Australia’s Future Tax System Review offers a suitable opportunity to consider the treatment of losses in this broader context.

  • Identifying tax losses entitled to full loss offsets in a business profits tax under the Domar-Musgrave risk modelAdd to cart

    An influential article by Evsey Domar and Richard Musgrave, published in 1944, argued that an efficient income tax ought to provide full loss offsets for losses suffered by investors subject to that tax. The basic argument was that by allowing full loss offsets, a tax system not only eliminated a bias against risky investments but also reduced the risk to private investors, making it more likely that they would make socially useful investments in risky ventures. In this context, a “loss offset” is an adjustment to a taxpayer’s income equal to the amount of the loss multiplied by the tax rate. For example, if the tax rate is 30% and the loss is $1,000, the proper loss offset is $300. The focus of the Domar-Musgrave model is on risk. One basic contention is that an income tax without full loss offsets provides an inefficient penalty to risky investments and a concomitant bias in favor of safe investments. It follows that loss offsets, for purposes of the Domar-Musgrave model, ought to be limited to losses resulting from risky investments gone sour. Domar-Musgrave defines “risk” as the probability of the actual yield on an investment being less than zero – that is, as the probability of a loss. By this definition, all losses are due to risks gone sour.

  • Revenue risk and revenue timing: a view from rational choice politicsAdd to cart

    In the paper we sketch out the relative importance of revenue risk and electoral/political risk in a series of alternative models of electoral process. The sketches canvass how the attitude of governments to electoral/political risk, and second, their intertemporal attitudes to such risk, might impact on public expenditure programs and the time profile of public expenditure and revenue.