Classic Liberals Australia (CLA) aims to achieve the following taxation regime. This outcome is however dependent on it being able to significantly reduce government expenditure, for which it has plans for doing.
- A flat 20% to 25% income tax rate– for individuals, companies and superannuation
- Tax free for adults – up to $40,000.
- Income splitting for married couples with children
- GST – NIL (It is ludicrous that government taxes one’s salaries and wages and then taxes it again when you buy something. Our economy benefits when people buy stuff – so we should not be collecting tax on our purchases.)
- CGT – None (CGT discourages trade and so results in longer term investment / ownership. A person facing a CGT liability on the sale of an asset, will be a lot more inclined not to sell. That deprives others of taking that asset, enjoying its use and improving it. If I own a house in a suburb and conclude that the market is about to change so I’d be better off selling that property and buying in another suburb – I should be free to do so without incurring a major tax liability. Similarly, if I buy the shares of company x and later decide the shares of company y offer a better expected return on investment, I should be able to sell the shares of company x and use the proceeds to buy the shares of y, without incurring a tax liability on the sale of company x’s shares.)
- Corporate tax rate: NIL on profits. Distributions (dividends and share buybacks above issue price) to be taxed at flat rate (20% to 25%)
- Payroll tax – Abolish (Payroll taxes are a disincentive to start and grow businesses and employ people. Payroll taxes penalise businesses for employing Australians – that’s ludicrous! We want businesses to employ more Australians and pay them more. )
- Franking credits – to be retained to ensure that the same money is not-taxed twice – once at company level, then at shareholder level.
- Tobacco tax – NIL
- Alcohol tax – NIL
- Luxury car tax – NIL
- Fuel tax – Yes, but not to go into the general pool of funds. It is to be used solely for roads and associated infrastructure.