Brad - A comic book of business income taxation

Apart from Chapter 6, the chapters in the Brad book are revised and extended versions of the series of Brad comics originally made available on this website over 2021 and 2022. Chapter 6 is a completely new addition.

You may download selected (pdf) segments of the book - or all segments, or the complete book, to create your own printed book - as described below.

The links on the left provide separate access to each segment of the *Brad* book, or the complete book, in pdf format. Zoom in and out to size the pages for your screen or choose "two-page" view.

Print either single- or double-sided on A4 or A5 paper.
Cover/Preface/ References/Contents	This segment: opens with the cover of the book; introduces the main players in the ensuing eight chapters, the players' broad tax agenda, and the book's author; lists the references cited in the book; and, shows the contents across all chapters of the book. The main players are the Tax Minister and those in the tax policy team of the minister's Tax Department, Claudia, Brad and Sami. (1.8 Mb, 22 pages)
Chapter 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 of specifying 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's government. (8.8 Mb, 46 pages)
Chapter 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 upgrading imputation so that 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. (5.7 Mb, 34 pages)
Chapter 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 companies and trusts get discussed. (7.5 Mb, 38 pages)
Chapter 4 Specifying tax values of main asset types	The Tax Minister wants see how, in a re-designed tax code, his government might be setting the profile of tax values for various categories of assets; like, depreciating non-financial assets, appreciating assets subject to capital gains tax (CGT), delayed cash flow assets, trading stock and financials. Inevitably, while preparing the briefing for the Tax Minister, there is a clash of views amongst the tax policy team on issues like CGT design, negative gearing, risk, losses and taxing the family home. After the initial briefing, the Tax Minister asks for more detail on the idea of deferring tax on accruing CGT gains/losses. (7.4 Mb, 38 pages)
Chapter 5 Taxing local and foreign financial arrangements	The Tax Minister wants more detail on the taxation of financial arrangements, with particular focus on leases and rights. In preparing the brief, the team discusses other arrangements like annuities, debt, regular bonds, indexed bonds, shares, assignments and hedging - and then extension of such arrangements to the international scene where exchange rate movements need to be taken into account. After being briefed, the Tax Minister provides the tax policy team with a decision on the way forward. (8.9 Mb, 44 pages)
Chapter 6 Assessing trusts, co-operatives and life insurers	The Tax Minister is sounding more and more positive about significant changes to the taxing of investment income and has had discussions with the Prime Minister. The Tax Minister now wants more briefing on consistent treatment across investment vehicles. He keeps hearing about the need to reform the tax treatment of trusts. Items covered by the team in preparing his briefing include: the opaqueness and complexity of the law dealing with the interaction between CGT and discretionary (family) trusts; the anti-tax-deferral regime for foreign companies and trusts; "bucket" companies and unpaid present entitlements of trust beneficiaries; the relation between design for co-operatives and integration design for companies; and, scope to improve the tax treatment of holders of life insurer's investment policies and non-super annuities, on the back of recent reforms to the tax treatment of life insuers themselves. (13 Mb, 66 pages)
Chapter 7 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 prepares to take the committee through items added to the review's terms of reference from the Tax Minister's 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 dupliation of tax losses and profits down company chains, as well as of direct and indirect value shifting, outside consolidated groups. (10.9 Mb, 52 pages)
Chapter 8 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 Tax 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 endorses the Tax Minister's recommendations: some specifying immediate changes; others requiring the tax policy team's continuing involvement in consultations on major draft legislative change, as well as in additional reviews of specific issues. (6.3 Mb, 34 pages)
Index/Blurb	This segment contains the book's index, as well as its "blurb", or description of the book, set up to form the back cover of the book compiled by downloading and printing all the book's pdf segments. (1.2 Mb, 20 pages)
*The Brad* book**	This allows you to download the whole book. (71.3 Mb, 394 pages)

The links on the left provide separate access to each segment of the Brad book, or the complete book, in pdf format. Zoom in and out to size the pages for your screen or choose "two-page" view.

Print either single- or double-sided on A4 or A5 paper.

Cover/Preface/
References/Contents

This segment: opens with the cover of the book; introduces the main players in the ensuing eight chapters, the players' broad tax agenda, and the book's author; lists the references cited in the book; and, shows the contents across all chapters of the book. The main players are the Tax Minister and those in the tax policy team of the minister's Tax Department, Claudia, Brad and Sami. (1.8 Mb, 22 pages)

Chapter 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 of specifying 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's government. (8.8 Mb, 46 pages)

Chapter 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 upgrading imputation so that 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. (5.7 Mb, 34 pages)

Chapter 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 companies and trusts get discussed. (7.5 Mb, 38 pages)

Chapter 4

Specifying tax values of main asset types

The Tax Minister wants see how, in a re-designed tax code, his government might be setting the profile of tax values for various categories of assets; like, depreciating non-financial assets, appreciating assets subject to capital gains tax (CGT), delayed cash flow assets, trading stock and financials. Inevitably, while preparing the briefing for the Tax Minister, there is a clash of views amongst the tax policy team on issues like CGT design, negative gearing, risk, losses and taxing the family home. After the initial briefing, the Tax Minister asks for more detail on the idea of deferring tax on accruing CGT gains/losses. (7.4 Mb, 38 pages)

Chapter 5

Taxing local and foreign financial arrangements

The Tax Minister wants more detail on the taxation of financial arrangements, with particular focus on leases and rights. In preparing the brief, the team discusses other arrangements like annuities, debt, regular bonds, indexed bonds, shares, assignments and hedging - and then extension of such arrangements to the international scene where exchange rate movements need to be taken into account. After being briefed, the Tax Minister provides the tax policy team with a decision on the way forward. (8.9 Mb, 44 pages)

Chapter 6

Assessing trusts, co-operatives and life insurers

The Tax Minister is sounding more and more positive about significant changes to the taxing of investment income and has had discussions with the Prime Minister. The Tax Minister now wants more briefing on consistent treatment across investment vehicles. He keeps hearing about the need to reform the tax treatment of trusts. Items covered by the team in preparing his briefing include: the opaqueness and complexity of the law dealing with the interaction between CGT and discretionary (family) trusts; the anti-tax-deferral regime for foreign companies and trusts; "bucket" companies and unpaid present entitlements of trust beneficiaries; the relation between design for co-operatives and integration design for companies; and, scope to improve the tax treatment of holders of life insurer's investment policies and non-super annuities, on the back of recent reforms to the tax treatment of life insuers themselves. (13 Mb, 66 pages)

Chapter 7

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 prepares to take the committee through items added to the review's terms of reference from the Tax Minister's 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 dupliation of tax losses and profits down company chains, as well as of direct and indirect value shifting, outside consolidated groups. (10.9 Mb, 52 pages)

Chapter 8

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 Tax 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 endorses the Tax Minister's recommendations: some specifying immediate changes; others requiring the tax policy team's continuing involvement in consultations on major draft legislative change, as well as in additional reviews of specific issues. (6.3 Mb, 34 pages)

Index/Blurb

This segment contains the book's index, as well as its "blurb", or description of the book, set up to form the back cover of the book compiled by downloading and printing all the book's pdf segments. (1.2 Mb, 20 pages)

The Brad book

This allows you to download the whole book. (71.3 Mb, 394 pages)