Monday, February 11, 2008

Who benefits from the BRT's tax proposals?

Are the Business Round Table's proposed cuts to the top tax rate really as unequal as suggested in my previous post? Having sat down and done some maths, the answer is "no - in fact, they're worse". Here's their value to various income groups as calculated from Treasury's detailed model data:

(Percentage of taxpayers taken from Who pays tax... and how much?. The total value of the tax cuts differs from that in my previous post because Treasury's calculated revenue effects of changes to tax rates include a clawback to account for increased GST revenue; see the notes and caveats on those pages for the full details).

So, the government would give away over $2 billion in revenue, and more than 60% of it would go straight to the 3% of taxpayers who earn more than $100,000 a year. I can't think of a better illustration of how the BRT's policies are aimed first and foremost at making the rich richer.