This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/australia-news/2018/jun/08/pink-and-blue-forms-is-gender-based-tax-really-as-crazy-as-it-sounds
The article has changed 5 times. There is an RSS feed of changes available.
| Version 2 | Version 3 |
|---|---|
| Pink and blue forms: is gender-based tax really as crazy as it sounds? | Pink and blue forms: is gender-based tax really as crazy as it sounds? |
| (about 1 month later) | |
| Should men and women pay different tax rates? | Should men and women pay different tax rates? |
| The chair of the Senate’s economics legislation committee, Liberal senator Jane Hume, posed the question this week during a public hearing on the government’s income tax plan. | The chair of the Senate’s economics legislation committee, Liberal senator Jane Hume, posed the question this week during a public hearing on the government’s income tax plan. |
| The question was asked in jest to some tax experts, to have a little dig at Labor, because Labor had started drawing attention to the fact that the government’s proposed $143bn tax cuts would benefit men more than women at a ratio of almost two to one. | The question was asked in jest to some tax experts, to have a little dig at Labor, because Labor had started drawing attention to the fact that the government’s proposed $143bn tax cuts would benefit men more than women at a ratio of almost two to one. |
| • Sign up to receive the top stories in Australia every day at noon | • Sign up to receive the top stories in Australia every day at noon |
| “Can I just clarify with all three witnesses here that no one is actually advocating for a two-tier tax system where we have one tax system for men and one tax system for women?” Hume asked the experts at the hearing. | “Can I just clarify with all three witnesses here that no one is actually advocating for a two-tier tax system where we have one tax system for men and one tax system for women?” Hume asked the experts at the hearing. |
| It wasn’t clear if she wanted a serious answer. | It wasn’t clear if she wanted a serious answer. |
| But Miranda Stewart, a tax and transfer expert from the University of Melbourne Law School, who was appearing before the committee at the time, said the panel might be interested in certain facts. | But Miranda Stewart, a tax and transfer expert from the University of Melbourne Law School, who was appearing before the committee at the time, said the panel might be interested in certain facts. |
| She told Hume some “highly regarded” Italian economists had written theoretical papers proposing a lower tax rate for women, and a higher rate for men; the implication being that the idea of a gender-based tax system mustn’t be so crazy that economists wouldn’t consider it. | She told Hume some “highly regarded” Italian economists had written theoretical papers proposing a lower tax rate for women, and a higher rate for men; the implication being that the idea of a gender-based tax system mustn’t be so crazy that economists wouldn’t consider it. |
| Plibersek says more women on frontbench would make Coalition less blind to tax bias | Plibersek says more women on frontbench would make Coalition less blind to tax bias |
| “Of course, if the committee would like to recommend such a structure, I’d be happy to endorse it,” Stewart then joked. | “Of course, if the committee would like to recommend such a structure, I’d be happy to endorse it,” Stewart then joked. |
| It’s interesting what one can learn in the economics legislation committee. | It’s interesting what one can learn in the economics legislation committee. |
| Who were the Italian economists? Professor Alberto Alesina, from Harvard University, and Professor Andrea Ichino, now at the European University Institute. One of their papers, Gender based taxation (2007), did have a serious look at the idea. | Who were the Italian economists? Professor Alberto Alesina, from Harvard University, and Professor Andrea Ichino, now at the European University Institute. One of their papers, Gender based taxation (2007), did have a serious look at the idea. |
| Their proposition was simple: Since one of the basic principles of optimal taxation is that governments should apply lower tax rates to goods that have a higher sensitivity to tax, if female labour supply is substantially more sensitive to income tax rates than male labour supply, the tax rates on income earned by women should be lower. | Their proposition was simple: Since one of the basic principles of optimal taxation is that governments should apply lower tax rates to goods that have a higher sensitivity to tax, if female labour supply is substantially more sensitive to income tax rates than male labour supply, the tax rates on income earned by women should be lower. |
| To test their idea, they looked at three very different labour markets – the US, Italy and Norway – to see what type of tax rates would be necessary to deliver optimal outcomes in each market. | To test their idea, they looked at three very different labour markets – the US, Italy and Norway – to see what type of tax rates would be necessary to deliver optimal outcomes in each market. |
| They found that female labour supply was far more sensitive to tax rates in each market, but to differing degrees (because of different tax codes, family structures and attitudes to gender issues). | They found that female labour supply was far more sensitive to tax rates in each market, but to differing degrees (because of different tax codes, family structures and attitudes to gender issues). |
| After accounting for such sensitivities, they found the tax rate for women in the US should be at least 20% lower than the male tax rate. For Italy, they said it should be 32% lower, and for Norway at least 9% lower. | After accounting for such sensitivities, they found the tax rate for women in the US should be at least 20% lower than the male tax rate. For Italy, they said it should be 32% lower, and for Norway at least 9% lower. |
| “The idea of gender based taxation is not totally new, neither in practice nor in theory,” they wrote in their paper. | “The idea of gender based taxation is not totally new, neither in practice nor in theory,” they wrote in their paper. |
| “Taxing labour income of women less than that of men satisfies criteria of optimal taxation ... [and] one could obtain more tax revenue with the same average tax rates by reducing the rates on women of a certain amount and increasing that of men by less.” | “Taxing labour income of women less than that of men satisfies criteria of optimal taxation ... [and] one could obtain more tax revenue with the same average tax rates by reducing the rates on women of a certain amount and increasing that of men by less.” |
| Tax cuts are awful for 'middle Australia'. Pretending otherwise is misleading | Greg Jericho | Tax cuts are awful for 'middle Australia'. Pretending otherwise is misleading | Greg Jericho |
| They found that married women were the main drivers of higher female tax sensitivities because they were often the secondary income earners in a household, and therefore faced much higher effective marginal tax rates. But they said that shouldn’t stop single women from enjoying lower tax rates too. | They found that married women were the main drivers of higher female tax sensitivities because they were often the secondary income earners in a household, and therefore faced much higher effective marginal tax rates. But they said that shouldn’t stop single women from enjoying lower tax rates too. |
| “Using the same tax rates for single women and married women in a sense favours single women since they are taxed at a lower rate than their labour elasticity would entail,” the paper said. | “Using the same tax rates for single women and married women in a sense favours single women since they are taxed at a lower rate than their labour elasticity would entail,” the paper said. |
| “However, arguments about affirmative action and potential discrimination apply to single women as well and therefore ... lower taxes for single women may be [in sync] with other social goals. Also single mothers are a good portion of single women and to the extent they are a category at risk of poverty (at least in the US), lowering taxes on them (including making them negative) may have other advantages and substitute for other welfare programs.” | “However, arguments about affirmative action and potential discrimination apply to single women as well and therefore ... lower taxes for single women may be [in sync] with other social goals. Also single mothers are a good portion of single women and to the extent they are a category at risk of poverty (at least in the US), lowering taxes on them (including making them negative) may have other advantages and substitute for other welfare programs.” |
| The Economist magazine noted their research in a 2007 article, discussing the benefits of reforming tax systems to get more women into the workforce, and it wasn’t critical of the idea. | The Economist magazine noted their research in a 2007 article, discussing the benefits of reforming tax systems to get more women into the workforce, and it wasn’t critical of the idea. |
| But their paper was criticised by some economists, particularly the labour economist Gilles Saint-Paul who said gender-based taxation would “clearly produce losers”. | But their paper was criticised by some economists, particularly the labour economist Gilles Saint-Paul who said gender-based taxation would “clearly produce losers”. |
| Australia's high earners will benefit most from tax reforms, says thinktank | Australia's high earners will benefit most from tax reforms, says thinktank |
| “This proposal has long been associated with a fringe of radical feminism, so it surprises me to see it coming out of mainstream economics and the academic establishment,” he said. | “This proposal has long been associated with a fringe of radical feminism, so it surprises me to see it coming out of mainstream economics and the academic establishment,” he said. |
| Stewart told the committee this week she was not advocating the introduction a two-tiered gender-based tax system in Australia, but she said the paper by Alesina and Ichino did make an important point about how tax systems affected men and women differently. | Stewart told the committee this week she was not advocating the introduction a two-tiered gender-based tax system in Australia, but she said the paper by Alesina and Ichino did make an important point about how tax systems affected men and women differently. |
| “The point being made by that research was precisely the point about workforce supply, and secondary workers being more [sensitive to tax],” she said. | “The point being made by that research was precisely the point about workforce supply, and secondary workers being more [sensitive to tax],” she said. |
| The treasurer, Scott Morrison, is having none of it though. He told Sky News the gender pay gap had nothing to do with the tax system. | The treasurer, Scott Morrison, is having none of it though. He told Sky News the gender pay gap had nothing to do with the tax system. |
| “The gender pay gap is a serious issue and to suggest that it’s got something to do with the tax system is a nonsense,” he said on Thursday. | “The gender pay gap is a serious issue and to suggest that it’s got something to do with the tax system is a nonsense,” he said on Thursday. |
| “You don’t fill out pink forms and blue forms on your tax return, I mean, it doesn’t look at what your gender is any more than it looks at whether you’re left handed or right handed, or you barrack for the Sharks or you barrack for the Tigers, it makes no difference. It’s based on what you earn.” | “You don’t fill out pink forms and blue forms on your tax return, I mean, it doesn’t look at what your gender is any more than it looks at whether you’re left handed or right handed, or you barrack for the Sharks or you barrack for the Tigers, it makes no difference. It’s based on what you earn.” |
| Tax | Tax |
| Australian economy | Australian economy |
| Australian politics | Australian politics |
| Gender pay gap | Gender pay gap |
| Scott Morrison | Scott Morrison |
| Business (Australia) | Business (Australia) |
| analysis | analysis |
| Share on Facebook | Share on Facebook |
| Share on Twitter | Share on Twitter |
| Share via Email | Share via Email |
| Share on LinkedIn | Share on LinkedIn |
| Share on Pinterest | Share on Pinterest |
| Share on WhatsApp | Share on WhatsApp |
| Share on Messenger | Share on Messenger |
| Reuse this content | Reuse this content |