Kevin Rudd has confirmed that 45 percent of all income taxpayers will be worse off under the Labor Party’s aspirational tax goal.
These are taxpayers earning between $37,000 and $102,000.
The hole opens up in Labor’s tax policy because the inexperienced Mr Rudd and his Shadow Treasurer did not fully copy the Coalition tax goal. The Coalition’s goal of getting 45 percent of taxpayers onto a top rate of just 15 percent tax requires adjustment of the $37,000 threshold.
Despite now being aware of this fact, Mr Rudd is obstinately refusing to give this huge number of taxpayers the break they deserve.
"Our thresholds were announced with our policy and we propose to stick with them,” Mr Rudd said yesterday. (Kevin Rudd doorstop, 21 Oct 2007)
Unfortunately for a huge group of hardworking taxpayers, this means they will pay additional tax – for most $600.
The challenge for Mr Rudd is to now to swallow his pride and admit what is an obvious error in the Labor Party’s policy.
The Labor Party has had 11 years to formulate taxation policy. Yet, when Mr Rudd and his Shadow Treasurer announced their policy it was obvious that the vast bulk of it was Coalition policy.
The error is in the part they did not copy from the Coalition.
Last election, Mr Swan, Mr Swan proposed the abolition of benefits which left many families $600 worse off. Everyone remembers how he attempted to explain away his error by describing the payment as “not real” money.
This $600 additional tax on middle income earners will have a real effect on living standards and participation and impede the operation of a competitive tax system.