Thursday, March 10, 2005

shafting the poor.

As I said in a post ages ago, there are significant problems with the effective marginal tax rates faced by lower income groups in Australia. That is, the high level of effective marginal tax rates can be significant disincentive to finding or increasing employment, thus creating a poverty trap.

In the OECD report on tax levels imposed on wages in member countries, released yesterday;
“By contrast, the disincentive from marginal effective net tax rates was particularly high for single-earner families with two children on average wages in the United Kingdom, Australia, Canada and the United States.”

With the Howard government pandering to the mortgage set (we won't raise interest rates, no we really won't), they passed the bill on to the lower income set. The increase of effective marginal tax rates faced by Australian single parents with two children on two thirds of average production wages was the highest in the world - 6.2 percentage points over the course of a year.

The table released by the OECD can be found here.


At 11:43 AM, Anonymous Anonymous said...



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