The tax system needs an overhaul, not more ad hoc tinkering, insists Henry Ergas.
ALL tax systems are imperfect, but some are more imperfect than others. And the more revenue a tax system has to raise, the worse its inherent imperfections become. Nowhere is this clearer than in Europe, where tax systems have been strained to breaking point by attempts to finance large-scale income redistribution through complex systems of progressive taxation. In Australia, the problems may seem less acute, but the underlying disease is no less chronic and no less in need of attention.