In this article, originally featured in the Australian Financial Review (AFR), Grant Wardell-Johnson explains KPMG’s proposal to combat the stealthy, regressive and hidden scourge of ‘bracket creep’.
We propose linking tax bands to average full time earnings and creating four new rates of tax, including a new 45 percent rate for salaries above $160,000.
The current $18,200 tax-free threshold would be abolished and a new 15 percent rate between $0-$27,000 established. Low earners would be get a tax offset.
The public would see the tax brackets as fairer if they were linked to average full-time earnings rather than the usual solutions of linking thresholds to wage growth or price inflation.