All Things Being Equal: Small Business Structure Choice

12(1) Journal of Australasian Tax Teachers Association 136-165 (2017)

30 Pages Posted: 22 Dec 2017

See all articles by Barbara Trad

Barbara Trad

Griffith University, Students

Brett Freudenberg

Griffith University - Griffith Business School; Griffith University - Griffith Law School

Date Written: December 18, 2017

Abstract

In Australia there have been arguments about introducing new methodologies to tax small businesses. Recently Pitcher Partners submitted that a dual income tax (DIT) system should be introduced to achieve greater tax neutrality and to reduce complexity. However, what are the factors taken into account when a business structure is chosen for a small business, and how do these relate to the features of a DIT system? This article reports a pilot study that considered the factors for business structure choice, and whether a DIT system could provide such characteristics. It will be argued that for a DIT model to be successful in Australia it needs to address the taxation of retained business income and how it could apply to all business structures, including trusts.

Keywords: dual income tax, business structure, choice, small business, tax reform, Australia

JEL Classification: K34, H25, H21

Suggested Citation

Trad, Barbara and Freudenberg, Brett, All Things Being Equal: Small Business Structure Choice (December 18, 2017). 12(1) Journal of Australasian Tax Teachers Association 136-165 (2017), Available at SSRN: https://ssrn.com/abstract=3090165

Barbara Trad

Griffith University, Students ( email )

Nathan, QLD
Australia

Brett Freudenberg (Contact Author)

Griffith University - Griffith Business School ( email )

Brisbane, Queensland 4111
Australia

Griffith University - Griffith Law School ( email )

Nathan Campus, GU
Nathan 4111
Australia

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