Review of Western Australian State Taxes 1994 - Chapter Eight - Review of Local Government Taxation
AbstractThe Chapter claims that the scope of current local government taxes are extremely limited and reflects the limited responsibilities assigned to local authorities by the States. It examines how local governments may improve the efficiency of their current tax base and widen their taxation powers. It also discusses whether a move towards alternative forms of revenue- raising can be justified. The authors examine the functions of local government and its changing face, then proceed to a detailed examination of one source of local government revenue -- property tax -- which is described, with reference to examples, and analysed in terms of equity, efficiency and simplicity. The authors claim that property taxes are inequitable and raise inedita revenue. They further recommend the implementation of a system which includes a "personal taxation element" so as to achieve equity and cite two examples: local income tax and poll tax, both of which are discussed in some detail. The Chapter concludes that local government taxation must retain its property bases, for the sake of simplicity and efficiency, although it is less than satisfactory in terms of equity. To abandon it would result in the infusion of considerable complexity into the taxation system, which involve substantially increased costs. The introduction of a local income tax is also rejected on the ground of impracticality. |