Abstract
Recent OECD data offer limited support for the proposition that our company tax rate could be cut substantially with little or no loss of tax revenue. Treasury‐type analysis suggests otherwise: our headline rate could be cut to 20 per cent if abolishing dividend imputation were used to finance a cut in the headline rate. But this type of exercise relies on strong assumptions, and imputation mitigates other idiosyncrasies of our tax system. Accordingly, abolition of imputation should await a cut in our top marginal personal rate along with a transition to back‐end taxation of most superannuation accounts.
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