The Australians facing the strongest disincentives to work are mostly on middle and lower incomes argues Nicholas Gruen in this CEDA report. These people are also the ones most likely to respond to the incentive provided by tax cuts. To encourage more work, tax cutting should focus on lowering the bottom (15 per cent) income tax rate, raising the tax-free threshold, and/or introducing a tax device called an "Earned Income Tax Credit" (EITC) for low-income households.