Tax Policy Simplification: An Evaluation of the Proposal for a Standard Deduction for Work Related Expenses

Australian Tax Forum, Vol 26, No 4, pp. 719-735.

18 Pages Posted: 13 Aug 2012

See all articles by Binh Tran-Nam

Binh Tran-Nam

University of New South Wales (UNSW) - School of Taxation and Business Law

Chris Evans

University of New South Wales

Date Written: August 5, 2012

Abstract

This article suggests that the proposals for a standard deduction for work related expenses and the costs of managing tax affairs of individual taxpayers, due to be introduced from 1 July 2012, are flawed from a number of perspectives. After briefly reviewing international practice and examining the proposed policy option for Australia in some detail, the authors suggest that it might not be appropriate policy to provide such deductions in the first place. The article then identifies a number of difficulties associated with the policy design of the standard deduction, focusing on three specific issues: the take up ratio of the proposed standard deduction option; the revenue impact; and the potential simplification impact of the proposed policy. In the concluding section, some modifications or alternatives to the currently proposed standard deduction are suggested. Overall, it is concluded that the proposed policy will not achieve its policy objectives, and that - in particular - it is very unlikely that there will be any significant simplification outcomes as a result of the policy proposal.

Keywords: Australian Tax, tax policy simplification, work related deductions

Suggested Citation

Tran-Nam, Binh and Evans, Christopher Charles, Tax Policy Simplification: An Evaluation of the Proposal for a Standard Deduction for Work Related Expenses (August 5, 2012). Australian Tax Forum, Vol 26, No 4, pp. 719-735., Available at SSRN: https://ssrn.com/abstract=2128387

Binh Tran-Nam

University of New South Wales (UNSW) - School of Taxation and Business Law ( email )

UNSW Sydney
Sydney, NSW 2052
Australia
61-2-9385-9561 (Phone)
61-2-9313-6658 (Fax)

HOME PAGE: http://www.asb.unsw.edu.au/schools/Pages/BinhTran-Nam.aspx

Christopher Charles Evans (Contact Author)

University of New South Wales ( email )

School of Taxation and Business Law
Australian School of Business, UNSW
Sydney, NSW 2052
Australia

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