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Economic Arguments for a New Consumption Tax

Published online by Cambridge University Press:  01 January 2023

John Freebairn
John Freebairn*
Affiliation:
Monash University
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Abstract

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The revenue, efficiency, distributional and simplicity effects of using a GST to replace some existing indirect taxes and to reduce income taxation are assessed. Replacing the wholesale sales tax (WST), the general revenue raising portion of petroleum excise and payroll tax with a goods and services tax (GST) promises efficiency gains and negligible net redistribution. The principal case for using a GST to fund reductions in Australia’s hybrid income tax system is to increase the productivity of saving and investment.

Type
Symposium: The Coalition Fightback Package
Information
The Economic and Labour Relations Review , Volume 3 , Issue 1 , June 1992 , pp. 14 - 35
Copyright
Copyright © The Author(s) 1992

Footnotes

*

This paper is based on a paper presented at the Consumption Tax Conference organised by the Centre for Economic Policy Research, ANU, Canberra, February 1992.

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