IDEAS home Printed from https://ideas.repec.org/a/bla/ausecp/v37y1998i1p45-57.html
   My bibliography  Save this article

Income Tax Deductions for Work‐related Expenses: The Rationale Examined

Author

Listed:
  • Jonathan Baldry

Abstract

The Australian income tax permits taxpayers receiving wages to claim work‐related expenses (WREs) as deductions against taxable income. The rationale for the provision has never been stated. This paper examines the rationale in terms of equity and efficiency considerations. The analy sis suggests that deductibility of WREs is likely, at best, to have a neutral equity impact; at worst it will have a random impact. WRE deductibi lity is also likely to lead to distortions in both production and consumption. Taken together with the high compliance costs associated with the provision, these arguments justify abolition of WRE deductibility

Suggested Citation

  • Jonathan Baldry, 1998. "Income Tax Deductions for Work‐related Expenses: The Rationale Examined," Australian Economic Papers, Wiley Blackwell, vol. 37(1), pages 45-57, March.
    • Handle: RePEc:bla:ausecp:v:37:y:1998:i:1:p:45-57
    DOI: 10.1111/1467-8454.00005
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1467-8454.00005
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1467-8454.00005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wrede, Matthias, 1999. "A note on reliefs for traveling expenses to work," BERG Working Paper Series 30, Bamberg University, Bamberg Economic Research Group.
    2. Heuermann, Daniel F. & Assmann, Franziska & vom Berge, Philipp & Freund, Florian, 2017. "The distributional effect of commuting subsidies - Evidence from geo-referenced data and a large-scale policy reform," Regional Science and Urban Economics, Elsevier, vol. 67(C), pages 11-24.
    3. Evgenii V. Leontev & Yulia V. Leontieva & Sergey A. Shirshov & Elizaveta Yu. Linnik, 2024. "The Validity of Personal Income Tax Deductions: Analyzing Expenses for Children’s Education in Private Schools in Moscow," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 10(1), pages 84-99.
    4. Wrede, Matthias, 2001. "Should Commuting Expenses Be Tax Deductible? A Welfare Analysis," Journal of Urban Economics, Elsevier, vol. 49(1), pages 80-99, January.
    5. Wolfram Richter, 2006. "Efficiency effects of tax deductions for work-related expenses," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(6), pages 685-699, November.
    6. Homburg, Stefan, 2008. "Die Entfernungspauschale als steuertheoretische Herausforderung," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 45-53.
    7. Voßmerbäumer, Jan & Wagner, Franz W., 2013. "Steuerwirkungen betrieblicher Entgeltpolitik," arqus Discussion Papers in Quantitative Tax Research 144, arqus - Arbeitskreis Quantitative Steuerlehre.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ausecp:v:37:y:1998:i:1:p:45-57. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0004-900X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.