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Friday, May 11, 2012:

Abbott's selective indignation on reverse tariffs

Gavin R. Putland, of Prosper Australia, writes:

Tony Abbott is quite right: the carbon price “amounts to a reverse tariff” in that it taxes the carbon intensity of Australian products but not imported products. I've been complaining about reverse tariffs for more than four years. Welcome aboard, Mr Abbott!

What Abbott didn't say is that the carbon tax, which will raise about $8 billion a year, will be only the fourth-biggest reverse tariff in Australia's tax system.

The third-biggest, which raised about $18 billion in 2010-11, is payroll tax, which taxes the labour content of Australian products but not imported products. This discriminatory quality strengthens the claim that payroll tax, in so far as it applies to labour embodied in goods, is an unconstitutional duty of excise.

. . .

Update: Read the full letter in Crikey (published May 11, 2012; unpaywalled May 25). See also Maximalist ‘fiscal devaluations’ for Greece and Australia.

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