The Federal Governments inevitable budget tax cuts should be shared equally by all taxpayers, and services should be funded from closing loopholes and tax concessions used by the wealthy, the Australian Democrats said today.
Leader of the Democrats, Senator Andrew Bartlett, said, "The Government is not going to give another 'sandwich and milkshake' tax cut in an election year. Instead of another handout to the wealthy, we think its fair to give all taxpayers an equal amount.
"The Government could increase the tax-free threshold to a more realistic $10,000 at a cost of around $6 billion. This would provide almost all taxpayers with an extra $680 in their pockets, or $13 a week. Poverty traps will be reduced for those who need it most.
"Low-income Australians have the highest effective tax rates. Earning one extra dollar can cost them nearly as much again in income tax, lost benefits and higher childcare. By starting to increase the tax-free threshold from $6,000, we can cut tax for those who need it most.
"Why does the Government give with one hand but take tax with the other? A fair tax cut could start to fix this problem.
"Tax cuts in an election year are inevitable but its a bad way to fix the tax system. The personal tax system is still a mess and is skewed to favour high income earners. Average Australians are paying more than their fair share of tax because they cant use family trusts, negative gearing, capital gains concessions and salary packaging like the well-off.
"The Democrats have shown that wasteful Government expenditure and tax loopholes can be fixed, to ensure that money is available to provide the basics of affordable and high quality health, education and housing," Senator Bartlett concluded.
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