We should keep the stage three tax cuts
A well argued piece in the AFR on why repealing the stage three tax cuts would be a terrible idea.
A few key points:
"... 94 per cent of Australian taxpayers will be paying no more than 30¢ in the dollar at this bracket. Those who characterise stage three as a tax cut for the mega-rich deliberately ignore this fact."
Flat rate income taxes are wonderful because they provide consistent incentives to earn more income. We want people earning more income and disincentivising them with higher marginal tax rates for doing so has always been stupid.
and...
"The 45 per cent tax bracket has a current threshold of $180,000, which has remained unchanged since 2008. It has not been indexed with inflation for 14 years."
If tax brackets were indexed to inflation like they should be the top tax bracket would already be at $234,000. Increasing it to $200,000 is will still mean higher income earners are paying more in real terms than they were in 2008.
and finally...
"The best and brightest are not stupid. They won’t bring their skills to Australia if they are to be clobbered with some of the highest taxes in the developed world."
While our top marginal rate is comparable with many countries, it cuts in much earlier than many comparable economies, making us an uncompetitive location for skilled migrants (especially when you factor in some to the world most expensive housing as well).