Tax shake up needed for a more equitable Australia

Australia needs to move to a dual income tax system to ensure greater generational equity experts from the Tax and Transfer Policy Institute (TTPI) at The Australian National University (ANU) urge in a report released today. The report, co-authored by Professor Robert Breunig, TTPI Chair of Tax Policy and Public Finance, calls for a new system that taxes savings at a low, flat rate and which is separate to taxes on labour income. Peter Varela and Kristen Sobeck, along with Professor Breunig, outline shortand long-term reform which will also lead to a more efficient tax system. "As review after review has shown, Australia's current approach to taxing savings is a mess at best and a serious driver of intergenerational inequality at worst," Professor Breunig said. "Some savings tax arrangements are progressive, taxing higher incomes more heavily, and some are regressive. Some favour the old but are punitive for the young. "Our current tax arrangements are inefficient, inequitable and distort the flow of savings across our society and economy.