I was reading the view of an economist about the broken promise.
He reckons that the tweaks are clever because one aspect is more efficient.
Encouraging people on lower incomes to work longer hours because they won't see their overtime eaten up by jumping to the next tax bracket.
disallowed/politics/federal/why-14-...lbanese-s-broken-promise-20240124-p5ezqa.htmlBut eliminating entirely the 37 per cent tax bracket between $120,000 and $180,000 never made sense.
That component would see us spend $8 billion a year to improve work incentives for a tiny fraction of the population.
Combined with the other two components, stage 3 would have seen more than $9000 a year go to every person earning more than $200,000 a year without raising their incentive to work one iota.
What the mooted redesign recognises is that this money can be reallocated to those on lower incomes (improving equality) in a way that has a bigger impact on the work incentives for a group of people who tend to be more sensitive to them (improving efficiency).
This simply delivers bigger bang for buck.
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