Former Treasury boss Ken Henry says the reliance on income tax is an ‘intergenerational tragedy’ and company taxes need to be cut to boost competitiveness.
The government’s increasing reliance on income tax is an “intergenerational tragedy” and company taxes need to be cut to make Australia a more attractive destination for investors, former Treasury boss Ken Henry says.
But with taxes forecast to consume an increasing share of workers’ pay packets over the next four decades, Dr Henry said relying on income taxes was a drag on economic growth and living standards. These poor buggers are also going to be the ones who are facing ever-increasing average rates of income tax.Asked on Friday whether this was fair, Dr Chalmers said none of the trends identified in the report were preordained.
“People who are weighed down with HECS debt, who are going to have to repay a mountain of public debt, who are dealing with the consequences of climate change ... [and] who are facing diminishing prospects of ever being able to afford a home of their own. “What’s happened through the course of this century, thus far, is as other countries have been cutting their company tax rate ... capital inflow into the Australian economy has been declining.”
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