Analysis finds bracket creep disproportionately affects Australian workers
What happened
Analysis by the e61 Institute and Richard Holden found that bracket creep penalizes workers earning approximately $45,000 and $190,000 the most. This occurs because tax brackets do not move with inflation, causing people to be taxed at larger proportions of their income over time. The federal opposition has promised to index income tax brackets to end this feature of the Australian tax system.
From abc.net.au
Why it matters
The findings highlight how the lack of inflation adjustment in tax brackets impacts real income growth for specific income groups. The federal opposition's commitment to indexing brackets could change the structure of taxation in Australia.
From abc.net.au
Who's involved
- Richard HoldenAustralian economist who conducted the analysis on tax bracket creep
Possible ripples
Who this could reach next, traced step by step from the reporting. Possibilities worth considering, not forecasts.- Tax system reform may require changes to ABS income dataTax system reform may require changes to ABS income dataPossible
- How could the commentary on Australia's tax system affect Jim Chalmers?The commentary on Australia's tax system could challenge the credibility of government budget projectionsPossible
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The entities involved
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Michael Brennan
researcher, ORCID id # 0000-0002-5646-028X
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Richard Holden
Australian economist
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