State Income Taxes Would Promote Inequality and Debt

by Jim Stanford, April 5 2016

The latest “big idea” on tax policy from the Coalition government is to grant independent income tax powers to the states.  This would be accompanied by a devolution of funding responsibility for big-ticket services like health care, hospitals, and schools.  Prime Minister Turnbull argues that forcing state governments to raise the money they spend will lead to more accountability and efficiency in public service delivery.  And it’s a politically convenient response to the demands from states for more revenues: “If you need it so much, go out and raise it yourself.”

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