taxes

The Case Against Tax Increases in Australia: the Growing Burden

Australia’s tax burden per person is forecast to increase by almost 12.7% over the coming five years. This tax increase is largely due to bracket creep — when average tax rates, and sometimes marginal tax rates, increase because tax thresholds aren’t indexed to wages growth.

This increased burden is being accepted or even promoted by some commentators. Some suggest that taxes need to increase to address Australia’s budget deficits, even though deficits could be addressed by limiting the growth in government spending. Australians should not be penalized with the scheduled tax increases, let alone additional tax hikes. Instead, Australia has a problem with government spending.

Instead of allowing the tax burden to increase, there are numerous proposals to control the growth in government spending. These proposals should be the starting point to address any problems with the budget balance.

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