Income Tax Law III Group Assignment
Issue: Broaden the GST base
Part One-GST in Australia and current issue
The Goods and Services Tax (GST) was introduced into the Australian in July 2000, modeled on the European Union’s value-added tax (VAT) system. It applies a rate of 10 per cent to a broad range of goods and services. However it excludes a significant proportion of consumption in total.
Australia’s GST rate is one of the lowest among developed countries and is roughly half of the average rate among OECD countries. The average tax rate among OECD countries is around 19 per cent (Chart 1). At its base, the GST applied to a broad range of goods and services excluding fresh food, health, education, childcare etc. Generally speaking Australia’s
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While the tax rate and tax base of GST though are relatively low and narrow. “The current tax system is not going to keep up with the expenditure forecast. States haven’t got the fund to provide the services that community expects.” Mr. Tom Seymour (PwC tax managing partner). “Personal tax rates are already high in Australia and corporate tax is at the top of OECD corporate tax rates.” As a result of the limitation in reforming income tax and corporate tax, to provide more satisfactory public services, boarding the GST base and/or setting a higher GST rate is …show more content…
There are four divisions in equity: horizontal, administrative, vertical and inter-nation equity.
Vertical equity says that people in different situations should be taxed differently, which is the main argument used to against tax GST for all products. The main GST-free products are in fresh food, health, education, children, water, and sewerage and drainage service. These items can be classified into two categories: small equity aspect and big equity aspect.
Since fresh food, water, sewerage and drainage service are in big equity aspect, the rest of them are in the small aspect. This is because if the GST exemption removed, the fresh food price will raise, in which ignite regressive consequences. It will first reduce the real disposal income of fresh food producer, and then elastically deflect the purchasing power of low-income earners. Furthermore, the market will record a dead weight loss in economic term as a whole, which is a significant drawback to economy due to extending GST on fresh food
Since the dawn of time for a society to work it needs to have a level of structure that applies to everyone and is understood by everyone. Australian legal system is broad and complex. It is the nature of the encompassing laws and regulations which reflect how people, organisations and governments behave on the many different levels of operation and these are created to make sure that everyone understands their rights and obligations. There are two sources of Law in Australia: Statute Law regulated by Parliament and comprise of legislations and acts; and Judge-made Law or Common Law where decisions made by judges are based on previous cases.
There is a high level of inequality of power and wealth within the Indian society indicating a high level of power distance. The wealth of India is very unevenly distributed; only 3% of the population in 2011 fell into the middle-income segment. The upper-middle income segment is about 1% of the population and the
Employment income for residents and nonresidents -flat rate 10%. All the other income for residents is taxed at 10% and for nonresidents 20%;
Tax law changes every year. Laws are updated, loopholes are blocked and other modifications are generated. A few of these changes affect essentially each of the wage earners while others could impact primarily small businesses or higher-income taxpayers.
There are several reasons why cutting penalty rates would be a bad economic decision by the government, these reasons include ensuring that there are health and community service workers to work the hours believed to be ‘unsociable’ as well as being about to attract and retain heath sector employees. Not only is cutting penalty rates bad for the health industries, it is detrimental to the rural parts of Australia who will not be able to maintain an adequate standard of living due to them being so heavily reliant on penalty rates. It will eventually begin negatively effect the nations economy, in the long run cutting penalty rates will decrease the amount of consumer spending which will affect the local economy almost immediately but also the national economy as well in the
The United States tax system is in complete disarray. Republicans and Democrats agree that the current tax code is complex, unfair, and costly. The income tax system is so complex; the IRS publishes 480 tax forms and 280 forms to explain the 480 forms (Armey 1). The main reason the tax system is so complex is because of the special preferences such as deductions and tax credits. Complexity in the current tax system forces Americans to spend 5.4 billion hours complying with the tax code, which is more time than it takes to manufacture every car, truck and van produced in the United States (Armey 1). Time is not the only thing that is lost with the current tax system; Americans also lose great deal of money complying with the tax code. Resources that are currently wasted on record keeping, filing forms, learning the tax code, litigation, and tax avoidance. The cost of complying with the current tax code totals about $200 billion annually, or $700 for every man, woman, and child in America (Armey 1). The overwhelming consensus that the current tax system is inadequate has ignited the search for tax reform. There are numerous proposals for tax reform; one particular proposal brought forth by various conservatives is the idea of national flat rate income tax. The idea is to replace the current income tax with a single rate that everyone pays.
Tariffs are a crucial part of America’s history, as they are necessary for a society to run because the revenue gained from duties help fund a variety of things, such as education, technology, health care, defense, national debt, and the list goes on. However, taxes have been debated on whether or not it is constitutional because people claim that the taxes do not represent the people. Investing in tariffs do grant Americans benefits, but on the contrary, forcing too many duties causes economic issues, which causes anger amongst the citizens. Such is the case in the Nullification Crisis, where John Quincy Adams issued a protective tariff protecting the southern economy from British competition. While the Tariff of 1828 did accomplish its given
The current tax policy in the United States is very confusing and it is very costly for our government to administer it. It is in the best interest of our country and its citizens to revise or replace our current tax policy.
Taxation has always been a major controversy. Just like any major corporation, the government is constantly looking to raise revenue. The easiest and fairest way to do this is by taxing the people. However, how the people will be taxed is always an issue.
The health facility in Australia is complex with a mixture of funding, management and regulatory structure. Services are provided by federal, state and local government, as well as private and not-for-profit organisations. Willis and Parry, 2012 (as cited in Willis, Reynolds and Keleher, 2012) describe the Australian health system as a mix of public welfare and private market provision. In public welfare, the majority of expenditure paid for by the government. Medicare is a compulsory, universal, health insurance scheme based on the principle of equal access for all Australians. Medicare is primarily funded through taxation (income, the GST, and the progressive Medicare levy on all taxpayers). Medicare is divided into two parts. First part,
The distribution of income and wealth is a crucial factor in determining the level of inequality in an economy. Personal income is the flow of funds received in a given period of time by persons or households, and personal wealth refers to the value of net assets of a person or household, it represents the value of items owned less any debts owed by the person or household. Income and wealth are the economic resources that households use to support their consumption of goods and services. There are many benefits of inequality, however many costs as well.
Australia has had one of the most outstanding economies of the world in recent years - competitive, open and vibrant. The nation’s high economic performance stems from effective economic management and ongoing structural reform. Australia has a competitive and dynamic private sector and a skilled, flexible workforce. It also has a comprehensive economic policy framework in place. The economy is globally competitive and remains an attractive destination for investment. Australia has a sound, stable and modern institutional structure that provides certainty to businesses. For long time, Australia is a stable democratic country with strong growth, low inflation and low interest rate.(Ning)
According to the Australian Chronic Disease Prevention Alliance, there is strong and valid evidence that higher alcohol prices decrease both alcohol consumption and alcohol-related harms while lower prices increase them. It has been estimated that a price increase of 10 percent reduces overall alcohol consumption by an average of 5 percent. Alcohol taxation provides an effective lever to influence alcohol pricing, it is also a cost-effective way to minimise this issue. There has been a large decline in the importance of alcohol taxation in Australia. This not only reflects a long-run change in the consumption of alcoholic beverages but an increase in the proportion of consumed alcohol items that have relatively less taxation. At current taxation levels, drinkers at paying 45 cents for every beer they consume, 1 dollar for every spirit, and 7 cents for every glass of wine. In 2015, there were an estimated 2.31 billion dollars spent on beer in Australia, with spirits being
1. Disposable Income: There is increase in disposable income, observed in both rural and urban consumers, which is giving opportunity to many rural consumers to shift from traditional unorganized unbranded products to branded FMCG products and urban fraternity to splurge on value added and lifestyle products. The increasing salaries, along with rising trend of perks in the corporate sector at regular intervals, have increased people’s spending power. As per some research, there is a high correlation between Disposable per capita and HPC per capita.
VAT on Biscuits: The VAT of 12.5% on Biscuits. Cost of the scones may should be expanded because of the high VAT rates which may bring about switch of brands due to the profoundly aggressive market.In GST 18% has