Abstract
Taxing economic rent is one key element in tax reform in Australia and sets possible directions for the future. This paper introduces readers to the ideas of Adam Smith and David Ricardo and others on rent to aid understanding of the debates about economic rent today. The discussion also includes the Petroleum Resource Rent Tax, the Australia�s Future Tax System Report and the Minerals Resource Rent Tax. The thinking of Smith and Ricardo was that rent was unearned gain. It is unearned because it arises as a consequence of the nature of the holding, an exclusive property right against the rest of the world. The amount of the rent is judged by comparison with the landholding that was just adequate enough to sustain profitable production. The rent is that difference on return. In a world of economic rent today these ideas retain their relevance. The political compromise that is the Minerals Resource Rent Tax is so far removed from these Smith and Ricardo benchmarks that taxing the unearned gains of the mining and other companies arising from the landed and other monopolies they hold remains, although warranted, a task for the future and for a government with the resolve to take on the rich and powerful. We can argue for the future by drawing on the past.
Original language | English |
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Pages (from-to) | 100 -116 |
Journal | Canberra Law Review |
Volume | 11 |
Issue number | 2 |
Publication status | Published - 2013 |