Today’s Parliamentary Budget Office report on changes in average personal income tax rates paints a grim picture of Labor’s historical propensity to tax.
The PBO’s analysis (Figure 7) confirms that in the 2000s under the Coalition, average tax rates fell considerably – particularly for low and middle-income earners.
- Between 2004-05 and 2008-09, the average tax rate paid by a taxpayer in the 3rd income quintile fell by 6.67 percentage points.
Labor’s fiscal profligacy reversed this trend, with a greater tax burden.
- Between 2008-09 and 2013-14, the average tax rate paid by a taxpayer in the 3rd income quintile increased by 1.88 percentage points.
In the 2016-17 Budget, the Turnbull Government cut the marginal tax rate on incomes between $80,000 and $87,000 from 37 per cent to 32.5 per cent, preventing 500,000 taxpayers from moving into the second highest tax bracket.
- The Government has also delivered tax cuts for 3.2 million small and medium businesses which employ around 6.7 million Australians.
Now Labor threatens to repeat its woeful history. A Shorten Labor Government would hit Australian families and businesses with more than $150 billion in higher taxes.
- Labor wants to hit middle aspirational Australia with a tax tsunami.
- And unlike the Coalition, Labor has no intention to cap taxes as a share of GDP.