Welcome to Dr Lincoln's blog

Welcome for visiting my blog. Hope you enjoy the visit and always welcome back again. Have a nice day!


Super profit tax - good and bad, theory and practice

Comments on Christopher Findlay “Taxing Australian mining: A new way of doing business”, 10/05/2010, http://www.eastasiaforum.org/2010/05/10/taxing-australian-mining-a-new-way-of-doing-business/

There are more serious problems with the Australian government's RSPT than Findlay has implied.

Perhaps the most serious one is the retrospect application of the RSPT that is most damaging to past investments which have been based on calculations with no such a tax around.

The second most serious thing is that this is to be introduced by a Labour government that is currently riddled with so many mistakes, preoccupied with distribution as opposed to efficiency, and is try to find a political way out and use this as a means at the time of a mining boom. It is probably hardly imaginable to have a government to have this proposal to share risk when the mining industry was at a loss and depressed!

There are other serious problems that I would save time and not to discuss.

So the advantages of a tax from the point of academic purity may not necessarily be translated into a practical good.

If the RSPT is that good as Findlay argues, then why are two labour comrades state government now lobbying for the miners?

While should be guided by nice theories, one has to be realistic, practical and sensible, especially when government with particular political persuasions which are debatable is involved.

No comments:

Post a Comment