Brad - A comic series of business income taxation

The links on the left provide access to the Brad comics in pdf format. Zoom in and out to size the comics for your screen or choose "two-page" view.
Overview	This short overview comic introduces the players in the ensuing five comics, the players' tax agenda, the comics' author and a few references for any exceptionally keen comic readers. The players are the Tax Minister and those in the tax policy team of the minister's Tax Department, Claudia, Brad and Sami. (1.3 Mb - annotated contents page for all the comics added to original version)
Comic 1 Redesigning the tax code	The Tax Minister wants his tax policy team to simplify the current tax code that taxes investment income. In trying to design code that is not only simple but fair and efficient, the team has to work through issues like: the difference between income and expenditure taxation; design requirements of taxing investment income to achieve fairness and efficiency; the make-up of investment income, including the difference between capital and current costs; alternative ways to specify taxable income that are principles-based yet practical expressions of investment income - ways which inevitably involve replacing changing market values in the measurement of taxable income with changing tax values determined by the Tax Minister. (8.4 Mb)
Comic 2 Explaining the full imputation system of company tax	The Tax Minister wants Brad and Sami to answer questions from a journalist on Brad's country's full imputation system of company tax, keeping the issue low key. It turns out that the interview is on TV and Brad and Sami have different views on the strengths and weaknesses of the imputation system. They also have very different views on the future of full imputation with Brad arguing for replacement with a dual income tax system and Sami for an upgrade to a system where companies' annual taxable income is always integrated with their shareholders' tax assessments. Discussions also include replacing imputation with a cash flow tax and introducing accelerated depreciation as a substitute for cutting the company tax rate. Not surprisingly, there are repercussions from this TV performance of Tax Department officials. (5.3 Mb - 2 pages added to original version)
Comic 3 Upgrading imputation to integration of taxable income	Surprisingly, after cooling down and re-watching the TV interview, the Tax Minister asks for briefing on upgrading their full imputation system to integration of taxable income. During the planning for this briefing, the tax policy team discusses their country's taxing of nominal rather than real investment income because Brad reckons that the taxing of nominal income is a reason to replace imputation with dual income taxation. After addressing that issue, Claudia proceeds to get into the weeds on integration design. Inevitably, applying integration to superannuation funds and achieving greater consistency of tax treatment across collective investment vehicles get discussed. (6.9 Mb)
Comic 4 Specifying tax values of main asset types	The Tax Minister wants see how, in a re-designed tax code, he might be setting the profile of tax values for various categories of assets; like, depreciating non-financial assets, appreciating assets subject to CGT, delayed cash flow assets, trading stock and financials. Inevitably, while preparing briefing for the Tax Minister, there is a clash of views amongst the tax policy team on issues like CGT, negative gearing, risk, losses and taxing the family home. (6.5 Mb)
Comic 5 Taxing local and foreign finanial arrangements	The Tax Minister wants more detail on the taxation of financial arrangements, including a focus on leases and rights. Extension to the international scene is also required. After being so briefed, the Tax Minister provides the tax policy team with a decision on the way forward. (7.8 Mb - changes made to dialogue on indexed bonds in original version)
Comic 6 Reviewing tax treatment of share-buy-backs, consolidation of company groups and partnerships	The Tax Minister has approval to institute a major review into the tax treatment of investment income. The tax policy team, now the secretariat to the Investment Income Tax Review, has taken the Review Committee through the issues on which the team had previously briefed the Tax Minister. Those issues are included in the Review's terms of reference. Now the team is to take the Committee through items added to the Review's terms of reference from prior consultations with business groups and other ministers: the taxing of off-market and on-market share buy-backs, consolidation of company groups and partnerships. Inevitably, tax consolidation of company groups brings with it analysis of tax loss and profit duplication down company chains, as well as of direct and indirect value shifting. (10.3 Mb - changes made to dialogue on off-market share buy-backs in original version)
Comic 7 Recommending change to the taxing of investment income	The Investment Income Tax Review has finalised its report to government with the help of the tax policy team operating as the Review's secretariat. The Chairman of the Review has met with the Tax Minister on the Review's recommendations. Brad and Sami discuss their observations on the Review Committee's last session to finalise its report. They then join Claudia in providing a detailed briefing session on the Review's recommendations for the Tax Minister and the Prime Minister. Claudia is then asked by the Tax Minister to prepare material for him to take to the government's Tax Committee for decision. The Tax Committee decides what to do with the Review's recommendations. (5.1 Mb)

The links on the left provide access to the Brad comics in pdf format. Zoom in and out to size the comics for your screen or choose "two-page" view.

Overview

This short overview comic introduces the players in the ensuing five comics, the players' tax agenda, the comics' author and a few references for any exceptionally keen comic readers. The players are the Tax Minister and those in the tax policy team of the minister's Tax Department, Claudia, Brad and Sami. (1.3 Mb - annotated contents page for all the comics added to original version)

Comic 1

Redesigning the tax code

The Tax Minister wants his tax policy team to simplify the current tax code that taxes investment income. In trying to design code that is not only simple but fair and efficient, the team has to work through issues like: the difference between income and expenditure taxation; design requirements of taxing investment income to achieve fairness and efficiency; the make-up of investment income, including the difference between capital and current costs; alternative ways to specify taxable income that are principles-based yet practical expressions of investment income - ways which inevitably involve replacing changing market values in the measurement of taxable income with changing tax values determined by the Tax Minister. (8.4 Mb)

Comic 2

Explaining the full imputation system of company tax

The Tax Minister wants Brad and Sami to answer questions from a journalist on Brad's country's full imputation system of company tax, keeping the issue low key. It turns out that the interview is on TV and Brad and Sami have different views on the strengths and weaknesses of the imputation system. They also have very different views on the future of full imputation with Brad arguing for replacement with a dual income tax system and Sami for an upgrade to a system where companies' annual taxable income is always integrated with their shareholders' tax assessments. Discussions also include replacing imputation with a cash flow tax and introducing accelerated depreciation as a substitute for cutting the company tax rate. Not surprisingly, there are repercussions from this TV performance of Tax Department officials. (5.3 Mb - 2 pages added to original version)

Comic 3

Upgrading imputation to integration of taxable income

Surprisingly, after cooling down and re-watching the TV interview, the Tax Minister asks for briefing on upgrading their full imputation system to integration of taxable income. During the planning for this briefing, the tax policy team discusses their country's taxing of nominal rather than real investment income because Brad reckons that the taxing of nominal income is a reason to replace imputation with dual income taxation. After addressing that issue, Claudia proceeds to get into the weeds on integration design. Inevitably, applying integration to superannuation funds and achieving greater consistency of tax treatment across collective investment vehicles get discussed. (6.9 Mb)

Comic 4

Specifying tax values of main asset types

The Tax Minister wants see how, in a re-designed tax code, he might be setting the profile of tax values for various categories of assets; like, depreciating non-financial assets, appreciating assets subject to CGT, delayed cash flow assets, trading stock and financials. Inevitably, while preparing briefing for the Tax Minister, there is a clash of views amongst the tax policy team on issues like CGT, negative gearing, risk, losses and taxing the family home. (6.5 Mb)

Comic 5

Taxing local and foreign finanial arrangements

The Tax Minister wants more detail on the taxation of financial arrangements, including a focus on leases and rights. Extension to the international scene is also required. After being so briefed, the Tax Minister provides the tax policy team with a decision on the way forward. (7.8 Mb - changes made to dialogue on indexed bonds in original version)

Comic 6

Reviewing tax treatment of share-buy-backs, consolidation of company groups and partnerships

The Tax Minister has approval to institute a major review into the tax treatment of investment income. The tax policy team, now the secretariat to the Investment Income Tax Review, has taken the Review Committee through the issues on which the team had previously briefed the Tax Minister. Those issues are included in the Review's terms of reference. Now the team is to take the Committee through items added to the Review's terms of reference from prior consultations with business groups and other ministers: the taxing of off-market and on-market share buy-backs, consolidation of company groups and partnerships. Inevitably, tax consolidation of company groups brings with it analysis of tax loss and profit duplication down company chains, as well as of direct and indirect value shifting. (10.3 Mb - changes made to dialogue on off-market share buy-backs in original version)

Comic 7

Recommending change to the taxing of investment income

The Investment Income Tax Review has finalised its report to government with the help of the tax policy team operating as the Review's secretariat. The Chairman of the Review has met with the Tax Minister on the Review's recommendations. Brad and Sami discuss their observations on the Review Committee's last session to finalise its report. They then join Claudia in providing a detailed briefing session on the Review's recommendations for the Tax Minister and the Prime Minister. Claudia is then asked by the Tax Minister to prepare material for him to take to the government's Tax Committee for decision. The Tax Committee decides what to do with the Review's recommendations. (5.1 Mb)