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The distributional effects of the tax cuts

October 21st, 2007

All the econobloggers have been waiting for someone else to dive into the analysis of the tax policies offered by the government and opposition. Finally, Andrew Leigh has got sick of waiting and produced a distributional analysis. Bottom line: as you would expect, only marginal differences, except at the top percentile of the income distribution. Labor’s education credit makes its policy very slightly more egalitarian.

I’ve been meaning to work through the MYEFO and talk about the fiscal soundness or otherwise of tax cuts on this scale, and I’ll try to get to this next week.

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  1. October 21st, 2007 at 17:33 | #1

    Election campaign article today on On Line Opinion and Leftwrites

    Dear friends,

    On the website ‘On Line Opinion’ an article of mine has been published considering progressive policy options for the election –
    including $24 million in new health funding over four years, and an increase in pensions by approx 5% of Average Weekly Earnings. (AWE)

    This stands in stark contrast to the overwhelming array of tax cuts being offered by both Labor and the Coalition. Labor has even gone so far as to outdo the conservatives – promising a ‘flatter’ tax system. It seems that the Greens remain isolated in their commitment to a broadly progressive tax system.

    It is unclear what is to happen with the ‘tax credits’ scheme previously mooted by Labor. In the article I am drawing your attention to, I promote an alternative strategy based on modest tax reform and expansion of the social wage.

    I thought you might be very interested in commentating on my ideas thorugh
    the participatory channels on the On Line Opinion website.

    A slightly edited version has also been published on the left-wing blog, ‘Leftwrites’.

    http://www.leftwrites.net/2007/10/18/a-blueprint-for-real-reform-%e2%80%93-it%e2%80%99s-time/#more-1144

    My article will also be a feature in OLO for the month of November.

    The OLO version of the article can be found at this URL:

    http://www.onlineopinion.com.au/view.asp?article=6520

    I really would welcome your comments, and I think that this is a good opportinity to get progressive political ideas ‘out there’.
    Feel free to leave comments on ‘On Line Opinion’ or ‘Leftwrites’.

    Take care – I look forward to any comments you might like to make in order
    to fuel debate.

    sincerely,

    Tristan Ewins

  2. October 21st, 2007 at 20:41 | #2

    Thanks for your plug. I’ll be interested in your thoughts on the MYEFO. Also, do you have views on the Rudd claim in tonight’s debate that Labor’s investment proposals will mute the inflationary impact of their tax cuts?

  3. October 22nd, 2007 at 06:11 | #3

    It seems that the Greens remain isolated in their commitment to a broadly progressive tax system.

    At a time when the government is pulling in a historically massive amount of money and is debt free and has more than ample spending capacity the Greens run a campaign calling for tax increases.

  4. observa
    October 22nd, 2007 at 11:17 | #4
  5. mugwump
    October 22nd, 2007 at 11:25 | #5

    RE #4: It’s phenomenal how innumerate Labor are.

    Or maybe they’re simply dim.

    Or maybe none of them have ever earnt a dollar that didn’t come from the taxpayer, so such blunders are irrelevant to them.

  6. wilful
    October 22nd, 2007 at 12:33 | #6

    mugwump, you’re hilarious. You’re out of US politics central casting. All you can do is spout attack lines and clichés. Do you ever have any original ideas about Australian politics, or do you rely on Crosby and Textor to do all your thinking for you?

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