LL:ART: EDITORIAL -- WANTED A FAIR TAX SYSTEM

[Communist Party of Australia]

Editorial: Wanted! A fairer tax system

The following Editorial was published in "The Guardian", newspaper
of the Communist Party of Australia in its issue of Wednesday,
June 28th, 2000. Contact address: 65 Campbell Street, Surry Hills.
Sydney. 2010 Australia. Phone: (612) 9212 6855 Fax: (612) 9281 5795.
CPA Central Committee: <[EMAIL PROTECTED]>
"The Guardian": <[EMAIL PROTECTED]>
Webpage: http://www.cpa.org.au>
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The GST moment of truth has arrived and the iniquity of the
Howard Government's tax "reforms" is going to hit with the force
of a cyclone. It will substantially cut the living standards of
those on low incomes and those receiving welfare benefits.

The full consequences of the extension of taxation to services
has yet to be realised, not to mention the increases in rents and
the price of many other items which are being relentlessly
increased by traders and suppliers making use of the introduction
of the GST to push up prices.

The labour movement -- the trade unions, community organisations,
the Labor Party -- have a responsibility and an opportunity to
bring forward a different tax system which is progressive and not
regressive and is, at the same time, efficient.

It is to be hoped that the ACTU Congress which is meeting this
week in Wollongong will seize the opportunity and at least start
the preparation of an alternative policy.

Work has to be done now so that in the run-up to the next Federal
elections a soundly based, well-worked out, fully costed,
alternative tax system is presented.

It is not simply a matter of doing away with the GST. No amount
of tinkering is going to make a tax, which by its very nature is
unfair, into something acceptable. The Howard Government has also
substantially changed other aspects of the tax system by
introducing concessions to the big end of town.

The reduction of tax on companies from 36 to 30 percent, the
halving of capital gains taxes and the removal of some state
taxes on businesses are all making the changes a happy occasion
for the big corporations. Added to this are the attacks on the
public health system, the huge subsidies being poured into the
private health funds, neglect of education and scientific
research, the relegation of the arts, etc. All of these changes
are part of the economic rationalist attack on the working people
and long held community standards and conditions.

The current tax system is by no means perfect, but it is based on
PAYE plus company taxes and is basically progressive despite the
fact that the many concessions and loopholes for businesses has
meant that the share of taxes paid by companies has steadily
declined. At least this system was formulated on the principle
that taxes should be paid according to graduated income. The GST
completely destroys that principle.

There are a number of fundamental measures which underpin a
progressive tax system.

1. The PAYE system which must be retained.
2. The tax on company profits should be maintained at the 36
percent level at the least.
3. Tax avoidance loopholes, including the possibility of using
off- shore tax havens, to be closed. Capital gains, which are
clearly a form of income, should continue to be taxed at current
rates.
4. The huge handouts and concessions to private companies,
(estimated by the "SMH" 6/12/99, to amount to $60 billion per
annum) to be pared back.
5. Tax to be levied at a set rate on all speculative financial
transactions.
6. The tax intake to be supplemented by profits from publicly-
owned enterprises. Existing publicly-owned enterprises to be
retained and expanded.
7. The sales taxes on luxury items should be retained.
8. The tax system to be simple to operate and transparent.

These simple points are but the starting place for a
comprehensively worked-out tax system.

The system of taxation is only one aspect, but an important one,
of the whole economic policy which is the responsibility of
governments to control. The choice is policies which either
favour the big corporations and work for their benefit or operate
in the interests of the working people.

The labour movement is for the working people. The Communist
Party proposes that in preparation for the next election, those
for a fairer tax system, pool their resources and ideas to
formulate a comprehensive tax and economic policy to present an
alternative to the Australian people.

--

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