Progressivity of Individuals Income Tax in Australia: Long-term Trends
Author: Paul Tilley
The progressivity of a tax can be measured in various ways. This paper surveys the main methods used previously and corresponding estimates for the progressivity of Australia’s IIT. It also presents new estimates for changes in the progressivity of Australia’s IIT since 1942 using a methodology based solely on the legislated IIT rate scale, and compares this with the estimates made using alternative methodologies. Overall, these estimates show that IIT progressivity decreased in the post-war period but has been relatively stable over the past 40 years – although with some notable shorter-term fluctuations.
Modelling Reform Packages for Property, Corporate and Household Taxes
Author: Chris Murphy
At the August 2025 Economic Reform Roundtable, the Federal Treasurer committed to “a better tax system”. In that spirit, this paper models reform packages for Australian property, corporate and household taxes to increase consumer welfare by shifting towards more efficient taxes. The design of each package is guided by recently-updated estimates for the efficiency of each tax. Each package is budget neutral and is modelled using the CGETAX model. The three packages generate large permanent gains. Annual consumer welfare is up by $43 billion and real GDP by nearly 6 per cent. Achieving those benefits requires collecting $91 billion in tax in a way that is less harmful for welfare.
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