The present submission questions the Business Council of Australia’s (BCA) Commitment to increasing investment, employment and wages in the event that the outstanding tax cuts are legislated. We looked specifically at the 10 corporate CEOs who made the commitment on behalf of their companies and found some half of those paid no tax. One wonders what their commitment could possibly mean.

We then examine the logic of the tax cuts, issues to do with dividend imputation, problems with the theory, and problems in the modelling exercises as well as the evidence from cross-country data and he evidence from Australia’s own history. Much of this has been covered in earlier TAI papers but there is a new treatment of the modelling problems. However, we were able to add a new section that examines the early indicators following the Trump tax cuts.

Many of the same arguments were used by the US promoters of corporate tax cuts as were used in the Australian context. The main difference of course was that the US does not have the complications of dividend imputation. Nevertheless the early indicators are that very little is going to the workers with the bulk of the gains being spent in unproductive activities such as share buybacks and mergers and acquisitions.

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