Each modelling exercise has found the biggest beneficiaries of the tax cuts will be high-income earners. The analysis also draws attention to the effect the government’s plan will have on “bracket creep” (the phenomenon where inflation pushes a worker’s salary into a higher marginal tax bracket). It shows the income tax plan will do little to unwind bracket creep’s gradual reduction of the progressivity of the tax system, despite the government’s claim that the plan will protect middle-income Australians from bracket creep. Malcolm Turnbull said that, in 2015-16, those in the top tax bracket paid 30.3% of all personal income tax collected, and under the government’s plan those in the top tax bracket would pay around 36% of all personal income tax collected in 2024-25. Turnbull read a line from the Grattan modelling that said: “The personal income tax plan doesn’t change the progressivity of the tax system much.

Source: The Guardian May 10, 2018 07:52 UTC