Published on 01 Jul 04
by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
One of the principles of a good taxation system is the principle of equity. Under the principle of vertical equity a fair taxation system can be used to redistribute income
where taxpayers' personal circumstances require some level of public support. These transfer payments may be made by direct transfer, or through the taxation system.
One of the personal differences recognised through transfer payments is family structure. Sole parent families, and families that are substantially supported by a single wage earner may qualify for transfer payments of various kinds.
However family structures are changing in modern society. Government policy determines which families qualify for transfer payments, and whether those payments are through the tax system or by direct payment.
This paper discusses the transfer payments currently available to families. Some of the issues addressed include:
- are the payments appropriately targeted at families in financial need
- has the current 'Family Tax Benefit' simplified the regime when compared with previous regimes
- are the payments more effective as direct payments or through the tax system
And is the government using such payments purely as a tax relief measure, or are there other policy reasons underlying the structure of the benefits.
Current at 20 July 2011
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