DEMOCRATS TAXATION POLICY
Source: AD National Journal, September 1998, available in National and State Libraries
The following note and any emphasis by bolding is added, i.e., not present in the balloted policy
NOTE: The following balloted items are firm
policy, and may be read in conjunction with the election
"issue sheets" (not necessarily policy documents)
published on the Democrats' website at
http://www.democrats.org.au/policy/issue_sheets/fttaxreform.htm , http://www.democrats.org.au/policy/issue_sheets/ftincometax.htm and
Objectives of the Taxation Policy:
1. To bring about an Australian taxation system
that is characterised by fairness, progressivity, simplicity,
transparency, efficiency, ease of compliance, flexibility and
2. To bring about a tax system which will deliver:
(a) sufficiency of revenue (i.e., to fund the services needed to underpin a just society);
(b) ecological sustainability;
(c) employment for all who seek work;
(d) sustainable growth;
(e) fair distribution of wealth;
(f) International and domestic competitive viability.
Principles of the Taxation System:
1. The Australian taxation system will continue
to be broadly based and progressive, based on capacity to
pay, and shall enable special consideration for private
expenditure on defined charitable and civic responsibilities.
2. The Tax Act is to be framed in such a way as to make clear the principles upon which it is based and to enable the securing of tax payable, with the minimum need for judicial determination. It shall make provision for an independent appeal mechanism.
3. The mix of taxation between direct (income) and indirect (expenditure) sources shall be restructured to increase the proportion of direct tax (increasing income tax and/or wealth taxes) relative to indirect tax.
4. The Indirect tax system shall be restructured to allow for tax to be levied on the provision of services as well as on the production of goods and be set at different rates.
5. The direct (income) tax system shall be progressive (i.e., increase at rates which increase with income) and indexed to inflation and be restructured so as to remove the potential for contrived tax minimisation mechanisms to succeed.
6. Corporate taxation shall reflect the commitment to policies on employment, industrial and regional development and shall be constituted such as to:
(a) promote comparatively labour intensive (as distinct from capital intensive) enterprises;
(b) include the abolition of payroll tax;
(c) promote the viability of rural and regional based enterprises;
(d) promote the expansion of economic activity in the "sunrise technology/green jobs" sector.
7. Excise taxes shall be levied such that social and environmental factors are fully reflected in the costs associated with economic activity. This shall take particular account of non-renewable resources and the principle of "polluter pays" applied to environmental degradation.
8. Federal-State taxation arrangements shall be such that:
(a) the States shall be more directly accountable to their taxpayers for the level and distribution of their budget outlays;
(b) the Commonwealth shall continue to be the main Collector of taxes;
(c) the Commonwealth shall dedicate to the States the whole (or a fixed proportion) of one or more of its existing revenue streams.
9. The taxation system shall be integrated with the welfare system and structured to prevent disadvantage and penalty arising for the mismatch between the two systems.
(a) the integration must be such as to prevent poverty traps and encourage people on welfare benefits to undertake part time employment, or move into full time employment;
(b) both the welfare system and the taxation system shall use a common set of standards and parameters for calculation of benefits/tax payable.
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