MRRT, company tax cuts and personal taxpayers

Comments on Rob Burgess “We need better taxes, not bigger taxes”, 30/03/2011, http://www.businessspectator.com.au/bs.nsf/Article/tax-reform-Bob-Brown-revenue-MRRT-mining-tax-pd20110330-FES3V?OpenDocument&src=rot

This article seems like a confused argument that may cause more confusions.

In terms of the relative position of Australian company tax rate, the article appears self defeating but refused to concede that it might be a case that it does not need to be lowered at present.

In terms of impact of mining and higher $A on the tax revenue from other businesses, the article lacks a coherent and consistent logic too.

If the tax revenue from other businesses were to fall by mining boom and high $A, then further lower the company tax rate will do nothing to keep the government budget unaffected or neutral or its integrity.

Even from equity point of view between business and labour, the argument for reducing the company tax rate only stacks up if businesses are indeed have to provide higher superannuation for employees without effectively lower employees wages or slowing the growth of them, so all taxpayers benefit from a lower company tax rate. There is no guarantee that employees will not be negatively affected or worse off in that process.

If it is to consider the future, then there is a strong point not to lower the company tax rate and instead to put the MRRT into a future fund.

To conclude, while it has been taken as a faith to lower company tax rate, the arguments in this article are not convincing.

Having said that, I find some attraction from its title.