Tuesday, September 10, 2013

Re-blogging the Henry Review

Australia's Future Tax System

Part of the reason I started this blog is to delve into areas of economics and policy outside of my own narrow field of experience. So as part of an (hopefully) ongoing series I am going to start re-blogging the Henry Tax Review; taking down a box or recommendation at a time and discussing the underlying theory, why they ended up proposing what they did and how things have changed since the report was released.

I think it is fair to say that while the review itself was a great body of work – it’s translation into actual policy has been somewhat lacking. This was probably inevitable. The Henry Review was supposed to be economic roadmap that would guide economic policy over 20 years. But I do think some core elements of it have been missed by both the politicians responsible for it and the media. The first of these posts is going to look at the Henry Review and the GST.

Let me know if you have any specific parts you think deserve a closer look!

2 comments:

  1. Hi Zac, I didn't know you were off to study. Doing an econ PhD somewhere?

    I'm interested in the Henry Review's idea to change taxes on savings - the proposed 40% allowance/rebate. The backing for this seems a bit flakey to me. From what I recall, this came from recent historical nominal returns on shares vs inflation (ie on average, 60% of capital gains are real). But of course this need not hold in the future. I support Sumner's call for no taxes on investment returns, because this constitutes tax on the returns to post-tax income. I think Stephen Kirchner has argued against CGT for similar reasons.

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  2. Yes, I have just started at Oxford!

    I agree, the changes to how we tax savings is an important (and neglected part) of the review which I plan on talking about soon !

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