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Four myths about income tax

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Taxation Income tax Australia
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When income tax scales change, it’s inherently a question of redistribution. Any change to tax rates is a decision about who should bear less — or more — of the tax burden. And because of bracket creep, any decision not to change tax rates is also a decision to shift the tax burden.

At the very least we should be honest about the redistribution that will occur. Unfortunately, much of the discussion about the government’s tax plan has used arguments that conceal it. Those on the right conceal the fact that they want the poor to bear a greater share of the tax burden. Those on the left conceal the fact that they want the rich to bear a greater share of the tax burden.

I don’t want to express a view here about what is the “right” level of redistribution. But I do believe that this choice should be made in the light of day rather than in the shadows. And the choice should be made free of a number of received myths about income tax.

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