Richard Denniss (Australia Institute) on the Wizardry of Oz Taxes: if u pay taxes,read it: because you’re worth it…
He looks at income tax rates introduced by the Hawke and Rudd governments.
A few points:
- If the government wants incentives to make low-income earners ‘get off their bums’ why cut tax for high-incomes?
- Contrary to common ‘perception’ Australia is a fairly low tax country.
- The system has become less and less progressive, which would be its ability to increase fairness, compensate inequalities and redistribute the wealth by asking the richest people to help the poor… (what a novel concept…!).
- Tax concessions: those earning less that $34,000 per annum receive almost no assistance. Those earning more than $180,000 per annum receive the most.
- The wealthiest 5% of individual accounts for 37% of concessional contribution.
- The system has become so skewed that the annual cost of providing superannuation tax concessions to high-income earners is much greater that the cost of simply paying the same individuals the age pension. (that is the ultimate ‘economics’ irony really)
So… Beyond the haberdasher style accounting of slicing and dicing views on taxes, there is a very inconvenient truth revealed by Richard’s piece:
Tax cuts have been structured to reduce the progressivity of the system and eroded the ability of government to finance services and invest in infrastructure to offset climate change: that matters.