Average tax rates on ordinary wage earners are set to reach the highest level since the GST was introduced, strengthening the case for extra tax cuts in next month’s budget.
The Conservative Party supports tax cuts for all Australians and an indexation of tax rates to stop bracket creep, where people are pushed into ever higher tax brackets as inflation rises.
The Australian reports, although inflation has been low, it has been enough to push more wage income into higher tax brackets in the absence of major across-the-board tax cuts.
The last major tax cuts a decade ago took the average tax rate on personal incomes to a record low of 15.6 per cent. Bracket creep has since raised the average rate to 19 per cent this year and it is set to reach 20 per cent over the next two years, a level surpassed only once in 1999-2000 before the GST was introduced.
Conservative Party leader Cory Bernardi says if Bill Shorten wins government in May, taxes are guaranteed to go up, to fund Labor's wasteful election promises.
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