For the innocuous national chat that is the discussion paper on tax, Treasury has still somehow managed to line up the ducks.
- Money's Income Tax Calculator will work out how much tax you pay – and what's left over
A good thing too because it's only doing its job – especially as there's a bonus in the occasional handy tax tip – though the surprise is what's not in its sights.
Negative gearing, where you borrow to invest and any losses are subsidised by the Tax Office, is one. It's a drain on other taxpayers and government revenue, blamed for inflated home values and encourages debt but that doesn't worry Treasury.
No siree. This is one tax break where it's prepared to declare its hand early on. "Negative gearing does not, in itself, cause a tax distortion." So there.
In fact Treasury is almost effusive about how it "ensures consistent tax treatment between debt and equity financing." No, the problem is the discount on capital gains tax. Uh-oh.
Treasury's beef is that the 50 per cent discount after holding an asset for a year pulls the tax below whatever rate you should be on.
Unsaid, even if it must be at the back of its mind, is that the biggest tax rort happens when the most money is involved: the point where the property has appreciated enough for you to be selling.
Speaking of which, Treasury has no truck with those mad economists who want to tax the capital gains on the family home, and for good measure the saving on rent. This would "not be appropriate" – Treasuryese for "you've got to be kidding".
Unfortunately you can forget about a tax break on interest from savings even though franked dividends from shares get a 30 per cent credit, no questions asked.
Think that's unfair? Too bad. The evidence is taxing savings doesn't change investor behaviour, so no point in fixing it, though Treasury is at least sensitive to the fact that "those with the lowest ability to pay [tax] tend to save more in the more heavily taxed vehicles such as bank accounts." Hmm, maybe there's hope after all.
Anyway one of the ducks lined up is super. No surprise there. Reading between Treasury's lines it's not hard to see where the Government, which intends to take something to the next election, is going.
It'll tax super earnings for those withdrawing money, probably above a threshold. This would make the system more symmetrical, and being domiciled in Canberra Treasury loves symmetry, since the tax on contributions is doubled if you earn over $300,000.
Oh, and a tax tip is to set up a DIY fund so that you can postpone capital gains until you retire and so pay no tax on them. Treasury hates that.
Then there's the GST, where the Government has tried and failed to hide its intentions.
And let me say after reading the tax paper that a higher or better still a broader GST might be a goer if Joe Hockey follows Treasury's script.
As it points out, the rich benefit far more from the GST exemptions than the poor – 3.5 times in fact. They just use different ones. For the wealthy it's education and child care; for the poor it's food, health and rent.
So here's the killer: if the exemptions were removed, the overall GST rate could be lowered and the poor would gain the most.
More likely, though, is the exemptions go and the rate rises so the government can fix the budget as well as buy votes – sorry, compensate the losers.
While the states would have to agree, dangle enough money before a Premier and problem solved.
Also in the firing line, finally, is the $1000 exemption on offshore online purchases. Treasury isn't convinced by the Productivity Commission's finding the tax would cost more than it would raise, citing "subsequent studies undertaken by stakeholders" showing other ways of collecting GST for online purchases.
Besides, it noticed other countries don't seem to have a problem.
Dividend franking comes in for some discussion and Treasury seems to note approvingly that most countries that had a similar system to ours of rebating the full company tax paid have modified it to only partial franking.
Still, Treasury will have you know it's not all about lifting taxes.
"Reducing Australia's corporate tax rate would increase Australia's appeal as a place to do business," it says.
It rates company tax as one of the worst for imposing "high long-term costs for living standards".
The other tax that sticks in its craw are stamp duties imposed by the states, alas something it can't do anything about.
Oh, if you plan on suggesting some tax concession or other I can tell you what Treasury's first line of argument will be.
It's that a concession granted here means more tax there.
