On inequality tax evasion and progressive taxes

This paper proposes a simple variation of the Allingham and Sandmo (1972) construct and integrates it to a dynamic general equilibrium framework with heterogeneous agents. We study an overlapping generations framework i n which agents must initially decide whether to evade taxes or not. In the event they decide to evade, they then have to decide the extent of income or wealth they wish to under-report. We find that in comparison with the basic approach, the ‘evade or not’ choice drastically reduced the extent of evasion in the economy. This outcome is the result of an anomaly intrinsic to the basic Allingham and Sandmo version of the model, which makes the evade-or-not extension a more suitable approach to modelling the issue. We also find that the basic model, and the model with and ‘evade-or-not’ choice have strikingly different political economy implications, , which suggest fruitful avenues of empirical research.

Influence of historical landscapes, drainage evolution and ecological traits on patterns of genetic diversity in Southeast Asian freshwater snakehead fishes

Snakehead fishes in the family Channidae are obligate freshwater fishes represented by two extant genera, the African Parachannna and the Asian Channa. These species prefer still or slow flowing water bodies, where they are top predators that exercise high levels of parental care, have the ability to breathe air, can tolerate poor water quality, and interestingly, can aestivate or traverse terrestrial habitat in response to seasonal changes in freshwater habitat availability. These attributes suggest that snakehead fishes may possess high dispersal potential, irrespective of the terrestrial barriers that would otherwise constrain the distribution of most freshwater fishes. A number of biogeographical hypotheses have been developed to account for the modern distributions of snakehead fishes across two continents, including ancient vicariance during Gondwanan break-up, or recent colonisation tracking the formation of suitable climatic conditions. Taxonomic uncertainty also surrounds some members of the Channa genus, as geographical distributions for some taxa across southern and Southeast (SE) Asia are very large, and in one case is highly disjunct. The current study adopted a molecular genetics approach to gain an understanding of the evolution of this group of fishes, and in particular how the phylogeography of two Asian species may have been influenced by contemporary versus historical levels of dispersal and vicariance. First, a molecular phylogeny was constructed based on multiple DNA loci and calibrated with fossil evidence to provide a dated chronology of divergence events among extant species, and also within species with widespread geographical distributions. The data provide strong evidence that trans-continental distribution of the Channidae arose as a result of dispersal out of Asia and into Africa in the mid–Eocene. Among Asian Channa, deep divergence among lineages indicates that the Oligocene-Miocene boundary was a time of significant species radiation, potentially associated with historical changes in climate and drainage geomorphology. Mid-Miocene divergence among lineages suggests that a taxonomic revision is warranted for two taxa. Deep intra-specific divergence (~8Mya) was also detected between C. striata lineages that occur sympatrically in the Mekong River Basin. The study then examined the phylogeography and population structure of two major taxa, Channa striata (the chevron snakehead) and the C. micropeltes (the giant snakehead), across SE Asia. Species specific microsatellite loci were developed and used in addition to a mitochondrial DNA marker (Cyt b) to screen neutral genetic variation within and among wild populations. C. striata individuals were sampled across SE Asia (n=988), with the major focus being the Mekong Basin, which is the largest drainage basin in the region. The distributions of two divergent lineages were identified and admixture analysis showed that where they co-occur they are interbreeding, indicating that after long periods of evolution in isolation, divergence has not resulted in reproductive isolation. One lineage is predominantly confined to upland areas of northern Lao PDR to the north of the Khorat Plateau, while the other, which is more closely related to individuals from southern India, has a widespread distribution across mainland SE Asian and Sumatra. The phylogeographical pattern recovered is associated with past river networks, and high diversity and divergence among all populations sampled reveal that contemporary dispersal is very low for this taxon, even where populations occur in contiguous freshwater habitats. C. micropeltes (n=280) were also sampled from across the Mekong River Basin, focusing on the lower basin where it constitutes an important wild fishery resource. In comparison with C. striata, allelic diversity and genetic divergence among populations were extremely low, suggesting very recent colonisation of the greater Mekong region. Populations were significantly structured into at least three discrete populations in the lower Mekong. Results of this study have implications for establishing effective conservation plans for managing both species, that represent economically important wild fishery resources for the region. For C. micropeltes, it is likely that a single fisheries stock in the Tonle Sap Great Lake is being exploited by multiple fisheries operations, and future management initiatives for this species in this region will need to account for this. For C. striata, conservation of natural levels of genetic variation will require management initiatives designed to promote population persistence at very localised spatial scales, as the high level of population structuring uncovered for this species indicates that significant unique diversity is present at this fine spatial scale.

An examination of tax-deductible donations made by individual Australian taxpayers in 2008-09, ACPNS Working Paper 54

Each year, The Australian Centre for Philanthropy and Nonprofit Studies (CPNS) at Queensland University of Technology (QUT) collects and analyses statistics on the amount and extent of tax-deductible donations made and claimed by Australians in their individual income tax returns to deductible gift recipients (DGRs). The information presented below is based on the amount and type of tax-deductible donations made and claimed by Australian individual taxpayers to DGRs for the period 1 July 2008 to 30 June 2009. This information has been extracted mainly from the Australian Taxation Office's (ATO) publication Taxation Statistics 2008-09. The 2008-09 report is the latest report that has been made publicly available. It represents information in tax returns for the 2008-09 year processed by the ATO as at 31 October 2010.

The certainty of tax in insolvency : where does the ATO fit?

There are several ways that the Commissioner of Taxation may indirectly obtain priority over unsecured creditors. This is contrary to the principle of pari passu, a principle endorsed by the 1988 Harmer Report as one that is a fundamental objective of the law of insolvency. As the law and practice of Australia's taxation regime evolves, the law is being drafted in a manner that is inconsistent with the principle of pari passu. The natural consequence of this development is that it places at risk the capacity of corporate and bankruptcy laws to coexist and cooperate with taxation laws. This article posits that undermining the consistency of Commonwealth legislative objectives is undesirable. The authors suggest that one means of addressing the inconsistency is to examine whether there is a clearly aligned theoretical basis for the development of these areas of law and the extent that alignment addresses these inconsistencies. This forms the basis for the recommendations made around such inconsistencies using statutory priorities as an exemplar.

Not for profit income tax exemption : is there a hole in the bucket, dear Henry?

Australia’s Future Tax System Review, headed by the then head of the Australian Treasury, and the Productivity Commission’s Research Report on the not for profit sector, both examined the state of tax concessions to Australia’s not for profit sector in the light of the High Court’s decision in Commissioner of Taxation v Word Investments Ltd. Despite being unable to quantify with any certainty the pre- or post-Word Investments cost of the tax concessions, both Reports indicated their support for continuation of the income tax exemption. However, the government acted in the 2011 Budget to target the not for profit income tax concessions more precisely, mainly on competitive neutrality grounds. This article examines the income tax exemption by applying the five taxation design principles, proposed in the Australia’s Future Tax System Review, for assessing tax expenditure. The conclusion is that the exemptions can be justified and, further, that a rationale for the exemption can be consistent with the reasoning in the Word Investments case.

Australian Tax Analysis [8th Edition]

Now in its eighth edition, Australian Tax Analysis: Cases, Commentary, Commercial Applications and Questions has a proven track record as a high level work for students of taxation law written by a team of authors with many years of experience. Taking into account the fact that the volume of material needed to be processed by today’s taxation student can be overwhelming, the well-chosen extracts and thought-provoking commentary in Australian Tax Analysis, 8th edition, provide readers with the depth of knowledge, and reasoning and analytical skills that will be required of them as practitioners. As well as the carefully selected case extracts and the helpful commentary, each chapter is supplemented by engaging practice questions, involving problem-solving, commercial decision-making, legal analysis and quantitative application. All these elements combined make Australian Tax Analysis an invaluable aid to the understanding of a subject that can be both technical and complex.

Incentivising private health insurance through the income tax regime : Capitalising on behavioural models

The Australian income tax regime is generally regarded as a mechanism by which the Federal Government raises revenue, with much of the revenue raised used to support public spending programs. A prime example of this type of spending program is health care. However, a government may also decide that the private sector should provide a greater share of the nation's health care. To achieve such a policy it can bring about change through positive regulation, or it can use the taxation regime, via tax expenditures, not to raise revenue but to steer or influence individuals in its desired direction. When used for this purpose, tax expenditures steer taxpayers towards or away from certain behaviour by either imposing costs on, or providing benefits to them. Within the context of the health sector, the Australian Federal Government deploys social steering via the tax system, with the Medicare Levy Surcharge and the 30 percent Private Health Insurance Rebate intended to steer taxpayer behaviour towards the Government’s policy goal of increasing the amount of health provision through the private sector. These steering mechanisms are complemented by the ‘Lifetime Health Cover Initiative’. This article, through the lens of behavioural economics, considers the ways in which these assorted mechanisms might have been expected to operate and whether they encourage individuals to purchase private health insurance.

Tax concessions for charities : competitive neutrality, the tax base and "public goods" choice

It is argued that concerns arise about the integrity and fairness of the taxation regime where charitable organizations, which avail themselves of the tax exemption status while undertaking commercial activities, compete directly with the for-profit sector. The appropriateness of the tax concessions granted to charitable organizations is considered in respect of income derived from commercial activities. It is principally argued that the traditional line of reasoning for imposing limitations on tax concessions focuses on an incorrect underlying inquiry. Traditionally, it is argued that limitations should be imposed because of unfair competition, lack of competitive neutrality, or an arbitrary decision relating to a lack of deserving. However, it is argued that a more appropriate question from which to base any limitations is one which considers the value attached to the integrity of the taxation regime as a whole, and the tax base specifically compared to the public good of charities. When the correct underlying question is asked, sound taxation policy ensues, as a less arbitrary approach may be adopted to limit the scope of tax concessions available to charitable organizations.

The allocation of taxing rights of ship and aircraft leasing profits under Australia's tax treaties

The Australian Federal Commissioner of Taxation recently released Draft Taxation Ruling TR 2008/D3 with the stated purpose of clarifying ‘what profits derived from the leasing of ships or aircraft fall within the ship and aircraft articles of each of Australia’s tax treaties’. In particular, TR 2008/D3 explains the taxing rights over different types of leasing profits, such as a full basis lease in respect of any transport by a ship operated in international traffic and bareboat leases which are ancillary to the lessor transport operations of ships in international traffic. This article outlines the Commissioner’s views on the application of the standard ships and aircraft articles in the tax treaties to which it is a party as well as considering the major variations on the standard adoption. In doing so, guidance is provided as to the allocation of taxing rights of ship and aircraft leasing profits under Australia’s tax treaties.