Miscellaneous 2011

The Henry Review - A liberal critique

Source: Taxation In Australia Journal Article

Published Date: 1 Sep 2011


There are two principal answers to the question: “How should tax be allocated, given a particular revenue requirement?” One answer is the “ability to pay” principle. The other is the benefit theory, which says that those who benefit most from government should pay the most tax. The “ability to pay” principle has won out as the principle for allocating taxation. But what is the best practical measure of ability to pay? Income, consumption and wealth are all candidates. In this article, the author examines the Henry Review and its recommendations in the light of liberal principles.

The article discusses proposals for reform of consumption taxes (the GST), state taxes and the federal system, the complexity of tax laws, the abolition of a range of levies and tax offsets, a “standard” deduction, and capital taxation. The article concludes with some remarks on the outlook for reform in Australia.

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Miscellaneous 2011

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