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Myths and Misconceptions in the Tax Mix Debate

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  • Smyth, Russell

Abstract

Recently, the Australian states supported an increase in the Goods and Services Tax (GST) as a means to increase revenue available to them. This would entail further tax mix reform in favour of taxing consumption. This paper considers the merits of tax reform, drawing on the earlier Australian debates on the topic from the 1990s and the associated academic literature. While it is argued that the benefits of tax mix reform are often overstated, if increasing the GST rate is marketed as part of a package to broaden the income tax base, it offers a vehicle to bring about tax reform.

Suggested Citation

  • Smyth, Russell, 2014. "Myths and Misconceptions in the Tax Mix Debate," MPRA Paper 59271, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:59271
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    File URL: https://mpra.ub.uni-muenchen.de/59271/1/MPRA_paper_59271.pdf
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    References listed on IDEAS

    as
    1. Engen, Eric M & Gale, William G, 1997. "Consumption Taxes and Saving: The Role of Uncertainty in Tax Reform," American Economic Review, American Economic Association, vol. 87(2), pages 114-119, May.
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    3. Graetz, Michael J & Reinganum, Jennifer F & Wilde, Louis L, 1986. "The Tax Compliance Game: Toward an Interactive Theory of Law Enforcement," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 2(1), pages 1-32, Spring.
    4. Hall, Robert E, 1988. "Intertemporal Substitution in Consumption," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 339-357, April.
    5. Boskin, Michael J, 1978. "Taxation, Saving, and the Rate of Interest," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages 3-27, April.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Tax mix switch; Broad-based consumption tax; GST;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence

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