This archaic apparatus only contemplated due to the convoluted complexity of a 40,000 page tax system with a loophole on every page. (Kim Beasley) Quote, unquote.

None of this would be necessary if our tax came from a single source and collected via an unavoidable single stand alone expenditure tax that would be garnered from all expenditure, national and international bank transfers and remittances; and given everyone pays a completely fair share, according to their means as money exits bank accounts?

Completely unnecessary compliance costs could be jettisoned! Given all else remains equal, the only way to actually reduce (unproductive parasitic) otherwise unavoidable business imputations?

However, given there were then no company tax per se, companies unwise enough to remain headquartered offshore? May not be able to escape their own tax office, who would no doubt be able to understand company cash flows due to the record that would come with a official compulsory expenditure tax! And the real reason for the outraged resistance?

Which given the "incentives," could be as low as 5% and still collect enough revenue?

A tax rate lower than Ireland or Singapore would have the wealthiest multinationals queuing here to add their income annual budgets and wealth (often far larger than many sovereign nations) to our GDP!

Add doable, world's lowest costing energy and they'd have the high tech manufacturing companies as their, (jostling for a place) companions along with the self funded retiree rich!

Now that's how you do GDP growth while retaining your economic sovereignty, your independence, inheritance, integrity and the farm!
Alan B.

Michael Knox,

The reason a relationship between corporate tax cuts and growth in GDP is so hard to find is that it's extremely weak, and dwarfed by other factors. Lower interest rates will boost GDP far more. So will investing in good infrastructure. So will investing in education.

Even the NDIS will boost GDP more than corporate tax cuts. Indeed it's likely to be better value for money than corporate tax cuts, even before the social benefits are included!

You refer to the Keynesian multiplier, but you seem to have failed to realise that stimulus spending only works when the economy is under capacity. When the economy is at capacity, more spending is much more inflationary. To counteract this, the government are likely to raise interest rates, which has the effect of cutting private spending. Indeed it can be counterproductive, as the economy is always stronger in some regions than in others, but interest rates are a blunt instrument, affecting the whole country, and disproportionally affecting startup businesses.

If the stimulus were driven by government spending instead of corporate tax cuts, it would be more controllable (with governments able to increase and decrease spending as required) and could be better targeted to depressed areas (where the Keynesian multiplier is higher). Plus the government would get the extra benefit of whatever it spends the money on.

Very few people would dispute that there's a relationship between corporate after tax earnings and GDP. Indeed considering it's one of the main components of GDP (along with taxes and wages) that seems pretty obvious. But the statistical correlation between the corporate tax rate and corporate after tax earnings is much weaker than you assume it to be. For although there's an obvious relationship, it's much less important than the things that make the businesses profitable in the first place. Low interest rates, good infrastructure, strong domestic demand and a highly skilled workforce are more significant considerations.

All other things being equal, lower corporate taxes boost GDP. But all other things are not equal; there are much better value ways to achieve the same result.

When it comes to the intricacies of taxation, I'm an intellectual moron.
And though I may not be smart when it comes to these things I can see when things don't make sense.

I read an article recently that said Qantas, Virgin Blue, McDonalds, William Hill and others don't pay any tax.
And it got me thinking.
Why should I be forced to pay the GST component on purchases from these businesses if they don't actually pay tax?
My receipt includes a GST expense, and one would assume the government gets that money, but it doesn't.
McDonalds spends that money on it's Ronald McDonald House charity.
Then it has McHappy day once a year where it asks every customer to donate a dollar.
Obviously everyone's been donating all year already, and this is just another rip off for me to pay their tax bill for them, while they get an opportunity to tell everyone they are doing a good thing and that they claim THEY donated the money, and not me.

And the government doesn't receive 1 cent.
1. Why should I pay a GST component if that money isn't paid to the government?
That's false advertising. It's lies. It's bs.
2. Do you really think that if you forced McDonalds to pay tax they would say "No, we can't do it we have to shut our doors."

Aren't opening McDonalds stores viable anymore why do they need growth stimulation?
Every one I walk into is owned by a franchise under a family trust.

And usually the owner owns about 5 stores and drives a $200,000 car.
So you want to give these people a tax break and therefore make everyone else pay more?

I understand corporations are 'doctor shopping' for countries and we need to give them incentive to come here but I don't think a one-size fits all approach will work.
They're going to shoot themselves in the foot just as much as achieve anything.

Given the vagaries of the global economy and tax havens, avoidance and what have you! Creating a revenue collecting model that they can't avoid, would likely improve the budget bottom line!

I say this in the knowledge around 95% of corporate Australia have offshored their operations Taking their tax liabilities with them And the rational and the numbers given by John Howard as his reason for introducing the GST.

And given globalisation it seems corporates pay between 1-4% company tax, with around 40% of our guest corporations paying no company tax to anyone?

Albeit, parting with around 7% 0f the bottom line as compliance costs. This is a multibillion gravy train that those benefiting from don't want to ever get off and can be guaranteed to come up with every half baked excuse or rationale to ensure their entirely unproductive parasitic pastime continues unabated or even expanded!?

Nor does it end there given the cost of just moving money to safe havens, also incurs bank and or money management fees. Then there are artificially created loans that are used to quarantine profits and not only avoid our tax regime but transfer profits offshore, which given a different system have no other more logical choice than stay here to multiply and invest in our best people and their better ideas!

As for Aiden's alternatives? For the life of me I can't understand why there should be an either or, when smarter folk would have every good idea on the table! Which in turn would quite massively boost productivity and the tax revenues needed to fund NDIS, education and cooperative win win enterprise! We are but one country, not a them and us!
Alan B.

A cut in the company tax rate will lead to a rise in after tax corporate earnings. A cut in the corporate tax rate will then lead to a rise in GDP.

Same old refrain trotted out each and every time.

When I went out to work in 1969, the corporate tax rate in Australia was 60%

What the real aim of business? just what level of tax would they be happy to pay?

20%? 10%? 5%? 0%? -5%? -10% ............?

Maybe its time to start bringing corporate welfare out of the closet?

Noam Chomsky said, the smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion but allow a very lively debate within that spectrum.

Why is corporate welfare a banned subject? This fits with what Noam Chomsky said. Why do we not see reports on Current Affair etc on corporate welfare cheats and how much its costing the tax payer ..... I could go on but I think you get the drift that corporate welfare is a banned subject in Australian politics and in the Australian media.