Never-ending tax reform and financial services

This article links a number of current tax reform topics that are relevant to financial services, including the Australian Future Tax System review and the upcoming Tax Summit in 2011, the Australian Financial Centre Forum/Financial Centre Taskforce, and Australian and OECD efforts to improve the operation of the international tax system in relation to collective investments. The focus is on the taxation of both income from capital (investment income) and labour income. The article discusses the impact of the current tax and AFTS's proposed tax system for labour income and the deleterious effects both have on domestic saving. It is pointed out that the taxation of income from capital is different from labour income. The article then discusses in detail the most obvious intersection of labour and capital income in Australia, namely, superannuation. The author comments that tax reform will be ongoing, but that constant tax change can be the enemy of the very objectives that are being sought to be achieved.