Pirate Party offers modern, transparent taxation plan

Pirate Party Australia is pleased to announce the release of its tax policy.

Principles of transparency and accountability apply not just to government spending, but also government revenue, and the Pirate Party has long been frustrated that the present tax system is such a hindrance to this transparency. The current mass of complex and hidden taxes costs our nation vast amounts of time every day and effectively prevents all of us from knowing how much tax we really pay. Absurdly, over two thirds of taxpayers in Australia now have to file tax returns through a tax agent due to the complexity of our laws[1].

The Henry Review provides a powerful blueprint for improving transparency and sweeping hidden, inefficient taxes out of our system, and the Pirate Party has incorporated many of the key recommendations into its plan.

“Under our system the burden of tax will shift from savings, work, and innovation, and towards consumption. Over 90% of Australians will pay less than 30% in income tax under the Pirate Party’s plan. By raising the tax-free threshold to float at a level equivalent to the poverty line, we will remove much of the current tax-welfare churn and free low-income earners permanently from the burdens of income tax, and from the stress and costs of filing a tax return,” said Qld Senate candidate Melanie Thomas. “Under these reforms, income support and supplementary payments such as family assistance would be tax-exempt, allowing struggling families an opportunity to really get ahead”.

Company tax will be reduced by a full five percentage points to 25% under the Pirate Party’s plan — a far more significant cut than has been mooted by any other party in this election cycle. This cut will bring Australia in line with the OECD average and underpin greater competitiveness and investment. A new tax-free threshold will also apply to microbusinesses in recognition of their role in generating skills, participation, and innovation in our economy. The Pirate Party will also remove significant administrative tax burdens from businesses, and will remove all clauses which are currently used by the ATO to gag taxpayers as a means to hide mistakes.

The Pirate Party seeks to abolish more than 100 taxes, including payroll tax, GST, and all of the current concealed charges that riddle our system with distortions and poor incentives. To ensure revenue neutrality, a single cash flow tax will be introduced, informed by key recommendations within the Henry Review. A cash flow tax is a consumption tax notable for its simplicity, transparency and suitability for the digital age.

The Pirate Party does not believe religious belief is a legitimate basis for differential treatment under tax laws, and will seek to remove “advancement of religion” as a deductible activity. However, charitable exemptions will be broadened, with the key ‘deductible gift recipient status’ extended to cover all registered charities.

The Productivity Commission has long argued the vital importance of tax reform as a driver of productivity and innovation[2].

“Given the importance of tax reform to our future prosperity, it is unconscionable that the major parties have snubbed their noses at this challenge. It is clear that change in this vital area must be driven from outside the two-party system, and the Pirate Party commits itself to that goal,” Thomas concluded.

The full policy may be viewed at: https://pirateparty.org.au/wiki/Policies/Tax

[1] http://www.smh.com.au/money/tax/insight-tax-agents-20120529-1zgjg.html

[2] http://www.pc.gov.au/__data/assets/pdf_file/0009/120312/productivity-policies.pdf