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CANBERRA Cheap Wojciech Szczesny Jersey , Aug. 24 (Xinhua) -- Australia's Treasurer Joe Hockey has flagged income tax cuts for the rich as the best way to strengthen the nation's slowing economy.

Joe 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Tax Institute and Chartered Accountants Australia and New Zealand on Monday that Australia's current taxation system is outdated and heavily reliant on Australia's top earners.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."

Hockey highlighted the problem of "bracket creep" as a driving factor behind the slowing economy, saying the issue would only get worse unless it is addressed.

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.

"If 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 Cheap Tomas Rincon Jersey ," Hockey said.

"My view is that our tax system is holding us back from reaching our end goal of a stronger economy," he said.

Hockey 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 percent 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 Cheap Stephan Lichtsteiner Jersey ," 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 percent."

Australia's highest marginal tax rate is at 47 percent, higher than other developed nations such as Singapore and New Zealand, while the second highest bracket Cheap Stefano Sturaro Jersey , 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 percent.

Australia's average yearly income has crept up to 77 Cheap Sami Khedira Jersey ,000 Australian dollars (56,000 U.S. dollars), and Hockey said if nothing was done within the next two years, more Australians would continue to be affected.

Hockey said the issue would be one of the main talking points for the coalition going into next year's federal election.

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2019-01-02 03:05:18



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