This report argues that the key to progressive tax reform is to strengthen the personal income tax system and puts forward a set of benchmarks and options for reform.

These will be used by ACOSS to evaluate the proposals of the Government’s Australia’s Future Tax System (AFTS) Review after its report is finalised later this year.

The paper outlines four reasons to reform the tax system:

• To raise the public revenue needed to fund the services and income support needed by Australians as the population ages
• To raise revenue more fairly than we do now, based on people’s ability to pay tax, not their ability to game the system
• To make tax less of a factor in investment and workforce participation decisions
• To create a system that people can understand and comply with

This paper was prepared by ACOSS Senior Policy Officer, Peter Davidson with the benefit of the very helpful advice from independent experts who are our economics and tax policy advisers: Julie Smith, Rick Krever, Nicholas Gruen, Rosanna Scutella, and Andrew Leigh.

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