Tim Dunlop has the best coverage of the Labor policy including a comparison with the Liberal announcement. Doing the same analysis with the Labor tax brackets as with the Liberal ones leads to this graph.
Again it is from the 2003-2004 Tax Statistics which is the most up to date publicly available data.
Again it is from the 2003-2004 Tax Statistics which is the most up to date publicly available data.I have to say, I like this proposal. I am wary of it being in 2013 and six years in the future as most governments and treasurers tend to renege on their promises. However, knocking out a tax bracket entirely is good policy. By removing the 37c bracket they have negated bracket creep for the majority of Australian income earners for the foreseeable future. Bracket creep is an issue with the Liberal Tax Brackets as they are pretty much just adjusted for inflation - rather then being a tax break.
The other thing is that this is very close to a flat tax. Something that I like the simplicity of. It also becomes very affordable to remove the 15c and 40c brackets. As they are under the current 34B windfall that suddenly appeared this year.
Knocking out the 37c bracket gives future Australian governments all manner of flexibility in adapting the tax code to people's, government's and the economy's needs.
The other thing that needs to be compared is that the Liberal Party has been in government for over a decade and has not implemented any policy like this. Their income tax policy has just been to shuffle the brackets up with inflation when it has become embarrassing at how much money the government is making from income earners.
Update I was intrigued by how many people (net) were in each bracket. Turns out they are nearly all in the 15c and 30c brackets.
There are 4.6 million income earners in the 15c bracket and 3.9 million in the 30c bracket. In comparison only 90,000 are in the 180+ bracket.
Now compare the amount of tax earnt from those 4.6 million in the 15c bracket which is 16B dollars (about the same as the yearly defence budget) with the 67 Billion from the 3.9 million in the 30c bracket.
I think it becomes good policy to remove the 15c bracket altogether and free 4.6 million Australians from having to deal with the hassle of income tax. It is very affordable too, only costing 16B.
There are 4.6 million income earners in the 15c bracket and 3.9 million in the 30c bracket. In comparison only 90,000 are in the 180+ bracket.
Now compare the amount of tax earnt from those 4.6 million in the 15c bracket which is 16B dollars (about the same as the yearly defence budget) with the 67 Billion from the 3.9 million in the 30c bracket.
I think it becomes good policy to remove the 15c bracket altogether and free 4.6 million Australians from having to deal with the hassle of income tax. It is very affordable too, only costing 16B.
