Australia needs to talk income tax
Australia needs to talk income tax.
Many young Australians may not pay a large share of income tax now, when their careers kick off they’ll be copping a nasty bill because of bad decisions made by earlier governments.
Half of all Federal tax comes from income tax, and is mostly paid by working age Australians. That means younger Australians will have to pay back debt from previous government’s over-spending.
And they’ll pay a disproportionate share because our tax system punishes people who work charging tax rates of up to 47.5 per cent, while people earning income of assets can be half that or less.
You can imagine it Deputy Speaker: you get through school, and maybe some tertiary education, you’ve got some debt. You persevere, get a job. Yet Year-on-year you’re paying off debt, and face a rising tax bill just when you’re trying to save to have a family and buy a home. It’s not fair.
The Productivity Commission’s 2016 tax and transfer incidence report showed total income tax paid is projected to increase substantially in real terms as average income tax rates rise.
Additionally, total expenditure funded from income tax on pensions will increase significantly in real terms due to an ageing population.
Relying on income tax may be progressive in rates, but it is unconscionably regressive in targeting the wealth poor.
Young Australians well and truly drawing the short straw.
It’s time to help young Aussies.
It’s time for serious tax reform.