This paper analyses the efficiency of the Australian tax system using CGETAX, a large-scale, long-run CGE model designed for tax policy analysis. This follows an analysis with CGETAX of an Australian Government proposal to reduce the corporate tax rate from 30 to 25 per cent in Murphy (2016a)...

The first part of this paper develops a theoretical model of fiscal equalisation to derive an optimal equalisation formula that has general applicability for federations. If vertical equity is achieved by the central government and horizontal equity by interstate migration, the...