• Women are the beneficiaries of a progressive and redistributive taxation system. Taxation data shows that women are underrepresented in the highest income tax brackets and overrepresented in the lowest income tax brackets. Women are also the beneficiaries of increased spending on income support payments and social services. Unsustainable tax cuts hit publicly funded services, with the potential to reduce jobs. Women are over-represented at lower income levels, therefore changes to government benefits and services affect them disproportionally. (ATO (2018) Taxation Statistics 2015-16, Table 3; www.data.gov.au).

• Women who are the second income earner in a family are also particularly at risk of excessively high effective marginal tax rates. The effective marginal tax rate is the sum of any reductions in means tested benefits plus income tax paid on additional earnings. For example, if a parent increases her hours of work she will be liable for income tax, her Family Tax Benefit will be reduced and she will pay more in childcare. This is a disincentive to work and a drag on productivity in the economy. Australia currently has the third highest rates of female part time work in the OECD. (OECD (2018), Part-time employment rate (indicator)).

• Tax offsets for low income earners increase the effective marginal tax rate for taxpayers within the taper zone, which increases work disincentives for women and other low income taxpayers and are not available to women where the tax payable is less than the amount of the rebate. Low income families are better served by receiving the benefit on a regular basis through transfer payments or reduced PAYG payments, particularly in a low wage growth environment.

• The effect of changes in corporate tax rates are mixed. If businesses reinvest in production there may be productivity gains including increased employment, but tax gains may be returned to shareholders as profits. Industries dominated by women, including education and health care are less likely to benefit from corporate tax cuts as they rely on domestic markets. Dr Janine Dixon, Centre for Policy Studies, Victoria University, at the National Press Club 23 May 2018

 

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