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The contribution of effective marginal tax rates to work disincentives

Andrew, Brian H. (2007). The contribution of effective marginal tax rates to work disincentives. In: Personal Income Tax Reform Symposium, Sydney, NSW, 2-3 April 2007.

Document type: Conference Paper
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Author Andrew, Brian H.
Title The contribution of effective marginal tax rates to work disincentives
Conference Name Personal Income Tax Reform Symposium
Conference Location Sydney, NSW
Conference Dates 2-3 April 2007
Publication Year 2007
Start Page 4.1
End Page 4.15
Total Pages 16
HERDC Category E5 - Conference Publication - Refereed without National or International significance (internal)
Abstract The disincentive effects caused by high Effective Marginal Tax Rates (EMTRs) are well recognized. Various attempts have been made in recent years to reduce the level of EMTRs faced by low and middle income taxpayers and the last two national budgets have significantly reduced the highest EMTRs faced by most taxpayers. This paper indicates how a tax reform package can further reduce the EMTR problem, but argues for a thorough review of the whole tax/transfer system as the best way forward. Failing that, a more creative package of incentives for workforce participation that will reward family members for entering the workforce, perhaps based on the Canadian Self-Sufficiency Project (SSP) should be considered. Sole parents who are forced into the workforce by the withdrawal of the parenting payment need an appropriate financial reward to be able to address the family social problems which can arise when the sole parent returns to the workforce and faces high EMTRs.
Additional Notes Paper 4
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Created: Fri, 12 Sep 2008, 08:35:25 CST by Administrator