Here’s why billionaires can face lower tax rates than people whose income primarily comes from wages.
- Lecturer in Economics, University of Canberra
Labor’s tax changes this week do not tackle tax reform, or why we desperately need it.
The promising reform is called an ‘allowance for corporate equity’. It would only tax returns above a reasonable rate of return.
The measure was sold as one that would boost single parents’ incomes. Newly-available data shows that on balance it cut them. Domestic violence might have played a part.
A leading-edge study conducted for the Retirement Incomes Review used Tax Office data to examine what happened to wages after firms paid more super.
We give the biggest concessions to those least likely to need persuasion to save well.
It would be a mistake to think that just because higher earners face higher tax rates, that’s what they pay. When it comes to income from savings it’s the other way around.
Six years of Coalition government has had little impact on the tax system. It’s not clear whether a Labor government would be any different.
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