More Leaks from the Henry Tax Review

Needless to say almost that I don't like any of these proposals personally except the pay as you drive road tax perhaps and I don't like the privacy implications of that.

Company Tax A lower rate might sound good, but for Australian taxpayers who receive "imputation credits" for corporation tax paid it doesn't change their inclusive tax burden and it increases the personal income tax they have to pay on dividends and reduces the franking credits that some people manage to use to offset other tax liabilities or like me even end up with a negative net tax burden.

Higher Resource Taxes Something I think makes sense nationally. but of course will reduce the value of shares in Australian resource companies...

Abolishing the Long-Term CGT Discount The discount makes sense for two reasons - it reduces the double taxation on reinvested profits - if companies pay out dividends we get the credits for the corporation tax but not if they reinvest profits; and second - with no discount we end up paying tax on purely inflationary gains in asset values.

Stamp Duties These are very inefficient transaction taxes. As a potential first time home buyer we would be exempted from the tax anyway.

Inheritance and Wealth Tax Of course, I am opposed to these on a personal basis though from the discussion in this article it's likely the exemptions would be set very high (an inheritance tax obviously would be worse news to me than an estate tax). I think they are unfair taxes as again they are double taxation. I would support a final capital gains tax being levied on estates though to cover asset value increases that weren't previously taxed. At the moment, Australians are meant to pay CGT when selling assets that they inherited using the original cost basis of their benefactor. OTOH estate taxes are probably pretty economically efficient as taxes go. They don't interfere with incentives to work or invest (at least in the short-term) and in the US at least encourage lots of donations to the public good. And those who bear the taxes are going to inherit some of the money and thus be relatively wealthy and have a low marginal utility of wealth.

Payroll Taxes I don't have a strong opinion here. Unemployment doesn't seem to be a big issue here in Australia so the taxes don't seem to be having a detrimental impact on employment.

Raising the Superannuation Access Age From 60 to 67 is a huge jump. The previous government allowed people to get their money out of super tax free from age 60. Rather than reversing that decision this government is heading to increasing the age dramatically to reduce the reduction in taxes that resulted. I think that is a bad move.

Pay as You Drive We don't drive much so I don't have a problem with this :)

In summary the goal seems to be to improve the playing field a bit for foreign investors and raise the tax burden incrementally on Australians. It is disappointing that they didn't take the opportunity to do something dramatic like a consumption tax. Of course that is unlikely politically under a supposedly left-wing government. The government of course is unlikely to take everything on board from this review. So we should expect fairly little tax reform. I'm more and more likely to vote Liberal at the next federal election (I voted Green with second preferences * to Labor at the last Federal election and Green with second preference to Liberal at the last Territory election). Of course it will make no difference to anything what any of us vote. Since time immemorial the ACT has been represented by Labor in the lower house and by one Liberal and one Labor senator in the upper house of parliament.

* Here in Australia we have preferential voting - you list candidates or parties in order of preference. If your first choice doesn't get in your vote is transferred to your second choice and so forth. Voting is also compulsory.