This report argues that there is an urgent need for the Australian government to conduct dynamic tax modelling as a fundamental part of their tax analysis process; following the commendable lead taken by the UK Treasury.

This briefing paper focusses on two sets of proposals designed to make the taxation of income simpler, more progressive and better able to raise public money. The proposals are united by the principle that income, regardless of source, should be taxed equally across individuals.

A progressive personal income tax regime has been a longstanding feature of Australia’s tax (and transfer) system. This paper provides a framework for considering the progressivity of our personal income tax system and the implicit policy trade-offs arising from such a system.

This paper argues that the economy is softening, the budget position is uncertain, and calls for the Morrison Government to use fiscal policy to stimulate the economy are growing. Tax cuts now could provide that stimulus, but there are big risks from locking in major tax cuts on the never-never.

This analysis of the long term impacts of bracket creep shows that taxpayers are being over compensated for bracket creep at all income levels. The Morrison Government has used bracket creep as a key reason why it needs to implement its income tax cuts package as outlined in the 2019 Budget.