Is the federal tax system unconstitutional?

In BMA vs. Commonwealth, four out of five Justices held that the prohibition of civil conscription applied to the provision of "medical and dental services'' and not to the rest of s.51(xxiiiA). The main reason they gave was that "medical and dental services'' were the only heads of power in s.51(xxiiiA) under which the fear of civil conscription might arise [79 CLR 261, 282, 286-7].

The High Court was not required to rule on whether the prohibition of civil conscription applies outside s.51(xxiiiA), but there are two reasons for believing that it does. First, it is absurd that there should be one rule for doctors and dentists and another for the rest of us, and equally absurd to suggest that the drafters of s.51(xxiiiA), or the electors who ratified it in the referendum of 1946, intended to protect doctors and dentists but not anyone else. Second, the Parliament only has such powers as are conferred on it by the Constitution, and nowhere does the Constitution explicitly or implicitly confer a power of civil conscription.

While concurring with the 1980 decision of the High Court in General Practitioners Society vs. Commonwealth [145 CLR 532], Justice Murphy remarked:

"The prohibition on imposing any form of civil conscription in laws with respect to the provision of medical and dental services is not confined to protecting medical or dental practitioners. It was introduced to give a specific protection in regard to the provision of medical and dental services. Even without it, the Constitution would not, in my opinion, authorize Parliament to make laws providing for civil conscription (in general, or other than in very limited circumstances).

The Constitution makes no reference to different classes of society and its terms are inconsistent with slavery, serfdom or similar vestiges of a feudal society. It contains an implication of a free society which limits Parliament's authority to impose civil conscription."

3. "Just terms''

Subsection 51(xxxi) of the Constitution requires compensation on just terms for the compulsory acquisition of property by the Commonwealth.

Does the time spent on compliance with tax laws constitute property? It would be incongruous if the Government were forbidden to take peoples' real property without compensation and yet permitted to take away part of their lives without compensation.

Be that as it may, if a proprietor is obliged to hire staff and purchase equipment in order to comply with tax laws, the equipment and the salaries and on-costs of the additional workers are effectively sequestered by the Commonwealth for a "purpose in respect of which the Parliament has power to make laws'' [s.51(xxxi)], in which case the "just terms'' provision applies.

It might be said that if employers can claim "just terms'' compensation for compliance costs, they might as well claim similar compensation for tax paid, with the result that they pay no tax! To the contrary, it may be observed that taxes go into consolidated revenue (see s.81 of the Constitution), while compliance costs, like property resumed by the Commonwealth, do not; in this respect compliance costs are analogous to resumed property rather than taxes.

4. Slavery

Unpaid tax collectors are slaves or bonded labourers of the Government. Although slavery and bonded servitude are not forbidden by the Constitution, they are forbidden by various international agreements to which Australia is a signatory.