A uniform income tax is a better solution…

Uniform 30% Taxation

Our proposal is for the establishment of a system of uniform taxation.

By imposing a uniform tax rate of 30%, the Government could increase the tax-free threshold of each individual tax-payer to $20,000 with the loss of very little revenue. This loss of revenue would be more than adequately compensated for by preventing the 40% and 45% from arbitraging to the 15% rate.

Had our proposal been in place at the time of the two most recent Federal Budgets the 30% rate could have been reduced downward to 27%.

Currently excess revenue raised from high income earners above the 30% bracket contributes between $10.8 billion to $12 billion. This is the equivalent of around 3.5% of all revenue.

This 3.5% of revenue is the principal cause of a Taxation Act running to over seven thousand pages. It also causes avoidance and evasion that amounts to several times the revenue gained.

The adoption of uniform taxation would also allow the Government to make simple adjustments to the uniform personal and corporate tax rate in their budget each year.

Single Personal and Corporate Rate

This proposal would also bring the personal rate for income taxation into line with the existing Company Tax rate of 30%.

As companies are essentially made up of shareholders, whom individually pay personal income tax, we believe it makes sense a have uniform rate of tax for both companies and individuals.

It would also essentially render the need for a dividend imputation system obsolete, as both Companies and Individuals would pay tax at the same uniform rate.

The abolition of the dividend imputation system would remove another layer of complexity from our tax system, without disadvantaging shareholders or Companies themselves.  

$20,000 tax-free threshold for every Australian

We advocate the abolition of the 15% rate of personal taxation, in exchange for an increase in tax-free threshold from $6,000 to $20,000.

This would mean that taxpayers currently in the 15% bracket would be no worse off under a uniform tax system as the uniform threshold would apply to every resident taxpayer in Australia, regardless of income.

Our proposal would eliminate the need for the current $1,200 Low Income Tax Offset entirely.

Tax returns for most Australians un-necessary

This proposal would also allow for the abolition of tax returns for the majority of Australians.

If were to provide a generous ‘loading’ on the tax-free threshold in exchange for the current educational and work-related deductions we could even further reduce the necessity for the submission of tax-returns.

This would be a significant improvement on the current system which imposes an often onerous burden on taxpayers.