Published on 01 Jul 07
by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
This paper examines the problems faced by low and middle income earners as a result of high effective marginal tax rates (‘EMTRs’). It is primarily concerned with the negative impact of these high EMTRs on workforce participation. The paper explores some of the reasons for high EMTRs, caused by the poor meshing of the tax and transfer systems, and the implications of those high EMTRs. It identifies the benefits that could be achieved through reform of the tax system, but recognises that the EMTR problem cannot be resolved without a more fundamental reform of both the tax and the welfare systems. This need for fundamental reform is illustrated through the plight of the single parent forced into the workforce as a result of recent changes to social security arrangements. The paper finally identifies an alternative approach, extensively used in some provinces of Canada, that may represent a more positive way forward.
Binh is a Professor, School of Taxation & Business Law, UNSW Australia and RMIT Asia Graduate Centre, RMIT University Vietnam, and International Fellow, Tax Administration Research Centre, Exeter University-Institute for Fiscal Studies.
- Current at
03 November 2016
Chris is a Professor, School of Taxation & Business Law, UNSW Australia, Extraordinary Professor, Department of Taxation, University of Pretoria, and Senior Research Fellow, Tax Law and Policy Research Group, Monash University.
- Current at
29 May 2019
Brian is a visiting fellow at Charles Darwin University.
Current at April 2007