If you thought the discussion of aspirational voters was tedious, try aspirational tax schedules

Peter Costello is today focusing on 2012… or is it 2013?

However, Mr Howard and Mr Costello focused on the “aspirational” tax pledges both sides have made for beyond the 2010 election. Labor said that in six years, if affordable, it would reduce the tax rates to 15, 30 and 40 per cent. The 30 per cent rate would apply to incomes between $37,000 and $180,000.

Mr Costello released income thresholds that would apply to his five-year aspirational tax rates of 15 per cent, 30 per cent, 35 per cent and 40 per cent.

He used this to show middle-income earners would be worse off in six years under Labor.

Costello has played clever on this one. Last week’s Coalition tax policy included aspirational rates, but not thresholds. Then the ALP released aspirational rates and thresholds. Costello saw the gap, and quickly came out with a set of thresholds that set the second aspirational threshold at $41,000 rather than $37,000. This meant that those earning $38,000-$100,000 were $100-600 per year better off under the Coalition’s aspirational schedule than under Labor’s aspirational schedule.

Of course, it didn’t matter what Labor did, what mattered was that the Coalition had cunningly omitted thresholds from its own aspirational goals. My guess is that if the ALP had set their aspirational second threshold at $41,000, Costello would simply have set his at $45,000.

So this is what the tax debate has come down to: a question of where the second income tax threshold will be in 2013. Does anyone really think that this level of detail is appropriate when we’re talking about a six-year goal, and a gap of $2-11 per week?

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1 Response to If you thought the discussion of aspirational voters was tedious, try aspirational tax schedules

  1. Bring Back CL's blog says:

    for those who doo not understnd MYEFOs try this from Rory robertson

    **It’s clear that if nominal GDP growth can be revised by a massive 2-1/2% between May 2007 and October 2007, no-one has any real clue what Budget revenues might turn out to be in 2011 and beyond. The fact that no-one is any good at forecasting anything usually makes politicians cautious about announcing tax (and other) policies beyond Treasury’s four years’ worth of forward estimates, but right now both sides are at it, even arguing about the details.

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