Required: You can structure your essay around the points you would like to highlight. Suggested points to
Question:
Required: You can structure your essay around the points you would like to highlight. Suggested points to include:
•Cue COVID-19. The crisis has only exacerbated the problems in many countries’ tax systems. Prepare an essay based on the policy topic noted above.
•The most important tools that the federal government has at its disposal are the tax system and the social security, or transfer, system.
•What does the tax system do?
•To rescue the economy and secure the welfare of the people, now and after the crisis, government must apply both tax and transfer systems, which must be agile and flexible.
•A tax system can be considered sound when it is able to fulfil its basic financing role over time. How sound is the Australian tax system?
•The main function of the tax system is to deliver stable revenues. As a result of economic “hibernation”, personal and corporate income tax and GST revenues may be much lower than expected.
•The tax system helps us respond to the crisis by permitting deductions, absorbing tax losses, and not collecting tax when income declines. This shares the economic risk faced individuals and businesses across the population.
•But using the tax system in this way does not alleviate cash flow problems for most businesses in trouble. Deferral of tax payments alleviates short-term pressure but in the longer term it may put businesses in a more difficult position, with accumulating tax arrears. The tax system already had significant uncollected debt before the crisis.
•The effect of the reduced levels of business activity and low wages
•The eroded the tax base.
•Budget deficits have ballooned, and millions of jobs are being shed, leading to a much less sustainable fiscal position.
•This is both a developed- and developing- world problem, but in many respects the developing world has been hit harder.
•How necessary is tax reform to securing a sound foundation in the aftermath of Covid-19?
•The need to secure our tax capacity with carefully planned incremental tax reform to broaden the base and close loopholes.
•Funding both crisis response and recovery is feasible if we can ensure a resilient tax system.
Expert Answer:
Even earlier than the COVID19 disaster many economies had been in a hard scenario Labour markets throughout lots of the evolved global nonetheless had now no longer completely recovered from the monet... View the full answer
