Critically analysis whether interest income derived by an individual from a financial institution should be taxed at a low flat rate of tax by reference to the tax criteria of equity, simplicity and neutrality.

Income Tax

LAWS4221

2020

 

Research essay

Weighting: 50 per cent of the final mark for the course

Due: Monday 24 August 2020 at 12.00 pm (noon)

Word Limit: 2000 words

Question

Under Australian income tax law, income from savings such as interest paid by a financial institution to an Australian resident taxpayer is subject to tax through the income tax system and is taxed at an individual’s marginal rate of tax. A report by Varela, P., Breunig, R., and Sobeck, K. (2020), The Taxation of savings in Australia: Theory, current practice and future policy directions, Tax and Transfer Policy Institute (TTPI) Policy Report No. 01-2020, Canberra, Australia, recommends, inter alia, that savings should be taxed independently of labour income.  

Critically analysis whether interest income derived by an individual from a financial institution should be taxed at a low flat rate of tax by reference to the tax criteria of equity, simplicity and neutrality.

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Under Australian income tax law, income from savings such as interest paid by a financial institution to an Australian resident taxpayer is subject to tax through the income tax system and is taxed at an individual’s marginal rate of tax. A report by Varela, P., Breunig, R., and Sobeck, K. (2020), The Taxation of savings in Australia: Theory, current practice and future policy directions, Tax and Transfer Policy Institute (TTPI) Policy Report No. 01-2020, Canberra, Australia, recommends, inter alia, that savings should be taxed independently of labour income.  

Critically analysis whether interest income derived by an individual from a financial institution should be taxed at a low flat rate of tax by reference to the tax criteria of equity, simplicity and neutrality.