In today's Australian, the the drop off in taxes paid by corporations was noted by David Uren.
Last week's national accounts show company tax payments have fallen from an all-time peak of 6.2 per cent of gross domestic product in 2007 as Peter Costello delivered his last budget, to just 3.8 per cent in the June quarter.For completeness, attached are a set of charts from table 18 in the National Accounts, with the tax take presented as a proportion of nominal GDP for the quarter. Enjoy!
This is the lowest share since September 1996, when Costello delivered his first budget. It is less than during the global financial crisis and erodes all the gains in corporate taxation tapped by both governments to finance personal tax cuts, increased family benefits, higher pensions, greater education spending and much more during the past 16 years. No wonder the budget is in deficit.
One thing that always puzzles me is why GST payments are such a low percentage of GDP. Simple math: 3.4 percent x 100/10 = 34 percent of GDP. I would have thought the GST base to be higher.
ReplyDeleteGood question - I expect the answer is complicated. Off the top of my head I would guess in part the answer relates to GST exemptions on household consumption (food, health, eduacton, second hand goods, precious metals, etc.) and other special treatments (eg rental accommodation, a range of financial srvices, etc. which are GST free but include some input GST costs) - sales of businesses as a going concern are GST exempt - some other GDP items (such as savings and exports) are also GST free.
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