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Australian Economists Against Corporate Tax Cut

by Mary Swire, Tax-News.com, Hong Kong

13 April 2016


A group of 50 economists has written an open letter to the Australian Prime Minister to warn against a reduction in the company tax cut.

The letter was published as a full-page newspaper advert. According to the signatories, "A serious tax reform package designed to be 'fair' should address as a priority the current generous tax concessions to the top end of town, the inequitable distribution of superannuation concessions, and the capital gains tax discount, not how to give big business large company tax cuts at the expense of services that everyday Australians rely on."

"Cutting programs which support needy Australians to give more tax benefits to companies or large income tax cuts to the wealthiest is not fair."

The letter added that "collecting more tax, more equitably, will make Australia a better place to live and work."

The letter was organized by the Australia Institute, a think tank. Ben Oquist, Executive Director of the Institute, stressed that "now is not the time to cut taxes" and argued that it would be "fiscally irresponsible to lower the company tax rate in the current budget environment."

Oquist said that cutting the company tax rate from 30 percent to 25 percent "would deliver a projected AUD27bn (USD20.7bn) windfall over ten years for the four major banks alone." He added that such a reduction "makes no economic sense and would put Australia's revenue base at a risk."

TAGS: tax | business | pensions | budget | corporation tax | Australia | tax rates | tax reform | individual income tax

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