- see also Charities; Families; Fringe benefits; Land
Matt Grudnoff, The Australia Institute (January 2016). The largest tax concession in Australia is the capital gains tax (CGT) exemption for the main residence. Last year it cost the budget $46 billion and is predicted to cost the budget $189 billion over the next four years. Each year the cost of the CGT exemption on for the main residence costs the federal budget more than Defence, Education or Medicare.
With the government looking for budget savings that do not disproportionately impact low income households, it is appropriate to look at this very large tax concession.
Rod Campbell, Matt Grudnoff, Dave Richardson, Tom Swann, Cam Amos and Molly Johnson, The Australia Institute (June 2015). Donations to environment organisations in Australia are tax deductible as long as the organisation in question is listed on the Commonwealth Register of Environmental Organisations. This listing gives an organisation Deductible Gift Recipient (DGR) status. A parliamentary inquiry is looking into the Register, largely at the behest of the mining industry.
Rod Campbell, The Australia Institute (June 2015). The mining industry has convinced the Federal Government to hold an inquiry into the tax deductible gift status of environmental organisations who oppose mining projects.
Matt Grudnoff, The Australia Institute (April 2015). While a large number of people take advantage of negative gearing for residential investment properties in Australia, the majority of the benefits are more narrowly focused. A previous paper by the Australia Institute looked at how the benefit of negative gearing was distributed by income and aged groups. It also looked at how negative gearing and the capital gains tax discount was distorting the property market. This paper will focus on the geographic distribution of negative gearing by federal electorates.
An analysis of the data shows that taxable income and the proportion of people undertaking negative gearing are correlated. As income increases so does the number of people undertaking negative gearing. Taxable income and net rental loss are also correlated. As income rises the amount deducted because of negative gearing also rises.
Richard Denniss, The Australia Institute (April 2015). Richard Denniss, Executive Director of The Australia Institute and long-time advocate of overhaul to the super tax concessions scheme, has welcomed moves on the issue by the Australian Labor Party but says it needs to be the start, not the end of the conversation.
Matt Grudnoff, The Australia Institute (April 2015). Franking credits are worth about $30 billion per year in Australia. About $10 billion go to households and another $10 billion go to superannuation funds, trusts and charities. The remaining $10 billion go to other Australian companies.
The international evidence shows that Australia is extremely generous when it comes to franking credits. But which Australians is the government being generous to? NATSEM have modelled for The Australia Institute the amount and distribution of franking credits, revealing that they flow overwhelmingly to very high income earning households.
Reform the Research Tax Credit – Or Let It Die
Citizens for Tax Justice (December 2013). Business lobbyists are pushing Congress to enact tax “extenders” — a bill to extend several temporary tax breaks for business that expire at the end of this year. A new report from Citizens for Tax Justice examines the largest of those provisions, the federal research and experimentation tax credit, a tax subsidy that is supposed to encourage businesses to perform research that benefits society. The report explains that the research credit is riddled with problems and should be either reformed dramatically or allowed to expire.
Reforming Australia’s Hidden Welfare State: Tax Expenditures as Welfare for the Rich
Dr Benjamin Spies-Butcher and Adam Stebbing, Centre for Policy Development, (February 2009). Discusses problems with Commonwealth tax expenditures and outlines possible reforms to superannuation that could enhance fairness and transparency in government spending.
Jobs Australia’s Statement of Reform Priorities
David Thompson (September 2011). Jobs Australia’s statement of taxation reform priorities in preparation to the Tax Forum 4-5 October 2011.
In this paper Research Australia submits that imposing a cap of $2,000 on self education expenses will have a significant adverse effect on health and medical research in Australia.
US federal taxpayers choose between itemising deductions and claiming the standard deduction. Itemisers can claim deductions for state and local income and property taxes paid. (Through 2013, taxpayers may deduct state and local sales taxes paid in lieu of income taxes.) In 2011, 46.6 million taxpayers claimed the deduction for state and local taxes paid, deducting almost $470 billion from their tax returns.
Catholic Social Services Australia’s statement of taxation reform priorities in preparation to the Tax Forum 4-5 October 2011.
Miranda Stewart’s statement of taxation reform priorities in preparation to the Tax Forum 4-5 October 2011.
Community and Public Sector Union’s statement of taxation reform priorities in preparation to the Tax Forum 4-5 October 2011.
Equality Rights Alliance’s statement of taxation reform priorities in preparation to the Tax Forum 4-5 October 2011.
Anglicare Australia’s statement of taxation reform priorities in preparation to the Tax Forum 4-5 October 2011.
Uniting Care Wesley Adelaide statement of taxation reform priorities in preparation to the Tax Forum 4-5 October 2011.
Australian Council of Trade Unions’ statement of taxation reform priorities in preparation to the Tax Forum 4-5 October 2011.
Australian Council of Social Services statement of taxation reform priorities in preparation to the Tax Forum 4-5 October 2011.
Clubs Australia’s submission on possible approaches to implement the Government’s Budget announcement that it will reform the tax concessions provided to not-for-profit entities to ensure they are targeted only at those activities that directly further their altruistic purposes.
Spending in disguise
Donald Marron, Tax Policy Centre (28 June 2011)
A great deal of US Government spending is hidden in the federal tax code in the form of deductions, credits, and other preferences ‘ preferences that seem like they let taxpayers keep their own money, but are actually spending in disguise.
The review contains quantitative estimates of Australian Government assistance to industry in 2009-10, including budgetary outlays, tax concessions and import tariff. Overall $17.3 billion in assistance in gross terms was provided to Australian industry. After allowing for the cost impost of import tariffs on industries using goods as inputs, the net assistance received by industry was estimated at $9.3 billion.
Video footage of TPC’s Tax Day 2011 event, featuring a panel of experts debating controversial proposals to put the brakes on tax breaks.
A report on the beneficiaries of tax expenditures in the US, which finds that more than 90 percent of the tax savings from preferential tax rates on long-term capital gains and qualified dividends go to taxpayers in the top fifth of the income distribution, and nearly half the benefits go to people in the top one-tenth of 1 percent.
A discussion of tax expenditures in the US and how to measure them appropriately.
A research paper examining the cost of superannuation tax concessions.
Tax: A Broader Mission
Ian McAuley, University of Canberra and Centre for Policy Development (7 May 2009)
Discusses the impact of higher social security expenditure on other needs for public investment and tax revenue.
Argues for more collective risk-sharing and shared public responsibilities, supported by increased tax revenues.