I have a short piece in the latest issue of Agenda, the ANU economic policy journal, entitled “Taxpaying Made Easy“. Simply put, I argue that we can save a lot of Australians the bother of filling out an annual tax return. In August, the ATO would simply send you a statement saying what they think you owe. If you agree with it, if you have no complex income, and if you don’t want to claim any deductions, you do nothing. Of course, if you want to claim your deductions, you’re welcome to do so, but my guess is that plenty of Australians would prefer a day watching sport to claiming their few deductions. We couldn’t save everyone from the October 31 scramble (landlords, FTB recipients, and child support payees are a few for whom it would be tricky), but we could take plenty of people out of the system.
The thing to note about this proposal is that it could also be accompanied by scrapping a whole host of deductions (as the New Zealanders did a few years ago), but you don’t have to do it that way. Moreover, simplifying tax-filing should appeal to politicians of all political stripes. Whether you think tax rates should be lower or higher, you should support lowering the compliance burden.