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Tuesday, August 25, 2015, Bhadra 10, 1422 BS, Zilqad 9, 1436 Hijr
Income tax cuts as best way to stimulate slowing economy!
Published :Tuesday, 25 August, 2015, Time : 12:00 AM View Count : 9
Aug 24: Australia's Treasurer Joe Hockey has flagged income tax cuts
for the rich as the best way to strengthen the nation's slowing economy.
Hockey told the Tax Institute and Chartered Accountants Australia and
New Zealand on Monday that Australia's current taxation system is
outdated and heavily reliant on Australia's top earners.
"Our existing taxation system is increasingly reducing the incentive for Australians to work harder," Hockey said on Monday.
"When our tax system represents a structural handbrake on growth, it is clearly time for change."
highlighted the problem of "bracket creep" as a driving factor behind
the slowing economy, saying the issue would only get worse unless it is
Bracket creep occurs when inflation pushes lower income
earners into higher tax brackets, meaning earners pay a higher level of
income tax for no tangible change in disposable income.
Hockey said bracket creep would discourage everyday Australians to work harder.
people are left in those higher tax brackets ... the incentive for hard
work is blunted -- and inflation means that without a real wage rise,
people pay a higher and higher average tax rate each year," Hockey said.
"My view is that our tax system is holding us back from reaching our end goal of a stronger economy," he said.
told the conference that tax cuts for higher earners was the best way
to relieve economic stress as it would encourage spending.
He said by
freeing up more disposable income for the almost 50 per cent of earners
that will be in the second-highest tax bracket, Australia's economy
would reap the benefits.
"In the next two year, without action,
300,000 Australians will move into the second-highest tax bracket," he
said, adding "In 10 years, if tax cuts don't happen, almost half of all
Australian tax payers will be in the top two tax brackets -- a jump from
just 27 per cent."
Australia's highest marginal tax rate is at 47
per cent, higher than other developed nations such as Singapore and New
Zealand, while the second highest bracket, which extends from 80,000
Australian dollars (58,000 U.S. dollars) up to 180,000 dollars ( 130,000
U.S. dollars), is at 37 per cent. ?Xinhua
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