Of necessity, tax avoidance has become a key preoccupation for much of middle Australia

While broadening the tax base might seem like a good idea, there is a real risk that the additional revenue would simply be used to fund further spending instead of for reducing income taxation.  The same is true for more controversial measures such as reintroducing inheritance taxes, and taxing the family home.

Stage Three tax cuts scheduled from the 2024–25 income year (if implemented) will provide further tax cuts by abolishing the 37 per cent marginal tax rate entirely and lowering the 32.5 per cent marginal tax rate to 30 per cent.  The marginal tax rate on all taxable income between $45,000 and $200,000 is scheduled to be 30 per cent.

The rub is that there is going to be a huge step increase in the marginal tax rate at $200,000.  Instead of the effective rate moving from 39 to 47 cents (including Medicare Levy), the new transition will now be from (the lowered) 32 cents rate to the (unchanged) 47 cents top rate.  Rising inflation will also push ever more taxpayers into this bracket.

If we are honest about it, most people on decent incomes are tax dodgers to one degree or another, though they may not admit to it.  The degree of deliberate tax planning does vary widely between individuals, and those on middle incomes and above, who pay insufficient attention to managing their tax affairs, end up costing themselves not inconsiderable sums.  Many taxpayers, when they invest in a home or in extra superannuation may not be entirely conscious that they are engaging in forms of (legal) tax avoidance, which is (in part) what they are doing.

Like politics, people have differing views about tax.  Those that are self-serving believe that "other people" should pay more ("their fair share" of tax).  Making billionaires pay more tax is always popular rhetoric.  It is a plan that, however, never seems to deliver, because there are not enough billionaires.