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The Henry Review – A liberal critique


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.

Author profile

Adam Creighton
Adam works for the Centre for Independent Studies. - Current at 01 September 2011


This was presented at The Great Tax Debate .

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Individual sessions

The Great Tax Debate - Panel B

Author(s):  Greg SMITH,  Henry Ergas,  Adam Creighton,  Cassandra Goldie

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The Great Tax Debate - Panel A

Author(s):  Mathias Cormann,  Rob Oakeshott

Materials from this session:

A process to implement a tax reform agenda

Author(s):  Rob Oakeshott

Materials from this session:

The principles underpinning an efficient and equitable tax system

Author(s):  Mathias Cormann

Materials from this session:

The inefficiencies in and distrortions caused by our tax system

Author(s):  Henry Ergas

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Tax reform: Priorities and prospects

Author(s):  Greg SMITH

Materials from this session:

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