Ideas@TheCentre
Politicians’ own taxes
An idea winning some popularity around the world is that candidates for high political office should be required, either by law or by peer pressure, to disclose their latest tax returns.
Such disclosure has long been a ritual of US presidential election campaigns; it is the practice in some other countries; and recently British politicians have come under pressure to follow suit. Prime Minister David Cameron has already conceded the principle without a fight, and the only question is how far down the Westminster political hierarchy the requirement will apply.
It is probably just a matter of time before the same idea comes up in Australia. If it does, it should be resisted. There is a strong presumption of privacy in Australians’ personal tax affairs, and which has generally been well respected. Political candidates have as much right to that presumption as anyone else.
The Australian Taxation Office is well resourced to enforce compliance and detect evasion and inappropriate avoidance. Politicians are as subject to those checks as anyone else. The presumption should be that any individual taxpayer, including those running for political office, is complying with the tax law, unless the contrary is proven to be the case. Politicians are already required to disclose pecuniary interests. This is sufficient as a safeguard against potential conflicts of interest.
Requiring candidates to disclose their tax returns would be a recipe for even more trivialisation of election campaigns and yet another distraction from the issues of substance. The details of income and tax paid would be wide open to distortion and misunderstanding. They would provide ammunition to those inclined to go on the attack from their high horses of morality against individuals who legitimately arrange their affairs to minimise tax.
The pressure for disclosure tends to be part of the broader agenda of those who favour high taxation. The notion that politicians’ tax returns should be public property derives from a broader mentality that thinks of personal income itself as public property, sees the tax system as determining the residual that people are allowed to retain for private purposes, and equates tax cuts to welfare.
Robert Carling is a Senior Fellow at The Centre for Independent Studies.
