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You can find the current article at its original source at http://www.theguardian.com/world/2014/may/01/states-should-be-given-access-to-income-tax-audit-report-says

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States should be given access to income tax, audit report says States should be given access to income tax, audit report says
(4 months later)
State governments would be given access to income tax and full responsibility to deliver a host of public services, including education and health, under a radical reworking of federal-state relations proposed by the Commission of Audit.State governments would be given access to income tax and full responsibility to deliver a host of public services, including education and health, under a radical reworking of federal-state relations proposed by the Commission of Audit.
The commission's tax reform proposal is that Canberra should allow state governments to access the federal income tax base. This would provide them with a reliable revenue stream when their own revenue raising options are limited.The commission's tax reform proposal is that Canberra should allow state governments to access the federal income tax base. This would provide them with a reliable revenue stream when their own revenue raising options are limited.
In concept, the reform works like this:In concept, the reform works like this:
Malcolm Fraser offered a comparable deal to the states in the 1970s– but the proposal was rebuffed by the premiers on the basis that it was double taxation.Malcolm Fraser offered a comparable deal to the states in the 1970s– but the proposal was rebuffed by the premiers on the basis that it was double taxation.
The Commission of Audit envisages a fundamental reworking of commonwealth/state relations and responsibilities at both the philosophical and practical level.The Commission of Audit envisages a fundamental reworking of commonwealth/state relations and responsibilities at both the philosophical and practical level.
It says government services – including health, education, housing and disability – should be delivered by the tier of government closest to the people receiving them. It says government services – including health, education, housing and disability – should be delivered by the tier of government closest to the people receiving them.
In practice that means most of the services now being funded and managed in a policy sense by the commonwealth would shift back to the states.In practice that means most of the services now being funded and managed in a policy sense by the commonwealth would shift back to the states.
"Under the principle of sovereignty, as far as practicable, each level of government should be sovereign in its own sphere," the report says. It adds that allocating the responsibility for services to one level of government, rather than across the federation, will provide "greater clarity and accountability"."Under the principle of sovereignty, as far as practicable, each level of government should be sovereign in its own sphere," the report says. It adds that allocating the responsibility for services to one level of government, rather than across the federation, will provide "greater clarity and accountability".
The tax proposal would see the federation revert back to a model of competitive rather than collaborative federalism. Each state would be given scope to vary their own surcharges, meaning states could undercut one another with their respective tax attractiveness.The tax proposal would see the federation revert back to a model of competitive rather than collaborative federalism. Each state would be given scope to vary their own surcharges, meaning states could undercut one another with their respective tax attractiveness.
The commission also says – of the long-running dispute between state premiers about the carve-up of the GST – that revenue from the consumption tax should be shared on an equal, per capita basis.The commission also says – of the long-running dispute between state premiers about the carve-up of the GST – that revenue from the consumption tax should be shared on an equal, per capita basis.
This recommendation sides with the big states, so will be controversial in the smaller states. The commission says the revenue shortfalls should be dealt with by providing additional grants to the states which are made worse off by the change.This recommendation sides with the big states, so will be controversial in the smaller states. The commission says the revenue shortfalls should be dealt with by providing additional grants to the states which are made worse off by the change.