Turnbull Leighs towards simplification

Malcolm Turnbull has announced a possible policy:

MALCOLM Turnbull is planning a tax assault on the Rudd Government, with new policies to streamline the system and spare thousands of PAYE taxpayers from filing returns.

Sound familiar? Here is Andrew Leigh on the issue some years ago. It is as close to a no-brainer in economic policy as you get. So you don’t need an Ergas Review to know exactly what the right thing to do is. The costs and benefits have been well and truly worked out and we should make filing tax returns optional giving back many Australians one day a year for the rest of their lives.

One thought on “Turnbull Leighs towards simplification”

  1. This really is old stuff – the ATO has been pushing it for years, even decades. The trouble is the pollies know that most people love their deductions and refunds – it gives them the illusion that they’ve managed to screw money out of the government. Howard rolled a Costello proposal to do this a few years ago (hence Turnbull’s strategy may have an internal party subtext).

    Plus at a policy rather than political level it closes off a lot of options – for example, virtually all tax proposals that rely on joint incomes in a married couple become really hard. That means no anti-churning measures to put family (including childcare) assistance back into the tax system (look at the trouble the UK had trying to do that with their Family Tax Credit) – no EITC, and the abolition of existing instruments like the DSTO.

    On balance it may or may not be worth doing but there’s no way it’s an obvious “no-brainer”.

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