Bare Minimum Conditions for GST Increase

The media continues to report on the probability of GST increases as part of the government's tax white reform green paper.

Michael Potter, research fellow for the CIS remarks that far from taxes being too low currently, they are in fact equal to the historical average.  He reminds all Australians that "The GST is not a perfect tax. All taxes are flawed - it is just that the GST is less flawed than other taxes" 

It is thus vital to stress the absolute bare minimum threshold that this reform must meet in order to win taxpayer support:

1)It must be a net tax DECREASE: If the government is serious about tax reform, it must actually be genuine tax reform and not simply a tax hike to pay for more overspending.

2)It MUST include provisions to address bracket creep. The yearly 'bracket creep' secret tax hike is one of the most unfair features of our current tax system - and a campaign priority of the Australian Taxpayers' Alliance. Without addressing bracket creep, any cuts in income tax rates are meaningless.

Other issues - exemptions, compliance costs, cuts to payroll tax vs income tax and the like - are meaningless unless these two basic conditions are met. And of course, these two conditions being met still do not mean that any reform is worth supporting. However it is the basic minimum that should form the starting point for any discussion about tax reform that includes increasing the GST.


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