|
|
| *Ostroff, Fair and Company>>>Australia Taxes |
GST is a less regressive tax than many think. Address the validity of this statement.? |
GST is a less regressive tax than many think. Address the validity of this statement.? Depends on what you mean by regressive vs progressive. It all depends on the denominator you use. Most people would use a person's income as the denominator - therefore, indirect consumption taxes such as the GST are by definition regressive. Ozzie makes a good point in that taxes shouldn't be assessed by themselves to determine regresssivity. They should be assessed in light of their place in the whole tax system, and the welfare system. In my opinion, they should put the GST back on food and every other GST-free item. The main reason for putting GST on food is that for every $3 the Government forgoes in revenue for having GST-free, middle to high wealth people benefit by $2, while low income folks only benefit $1. So rich people benefit way more from the zero-rating of food. They can use the extra revenue to better target income tax cuts and welfare payments. It is a progressive tax in that it broadens the tax base while allowing personal income tax to be reduced. It sounds like you need to do a little bit more reading for your assignment. Depends on whether you are evaluating the system or answering an assignment. It is totally regressive because all of the other taxes that were supposed to be abolished are still there. The exception is sales tax which used to be 2 1/2% on wholesale and is now 10% on retail. How regressive is that. Other items with higher sales tax rates such as cars had the tax removed and a new tax by another name introduced. |
| Tags |
| Mexico Taxes Ireland Taxes India Taxes Germany Taxes Canada Taxes Australia Taxes Small Business Renting & Real Estate |
Finance Categories--Copyright/IP Policy--Contact Webmaster |