Fed: CPA says income tax burden should be lowered

AAP General News (Australia)
08-07-2001
Fed: CPA says income tax burden should be lowered

CANBERRA, Aug 7 AAP - Australia's chartered practising accountants said today they
would support any lowering of income tax rates or the raising of the tax-free threshold.

"Such changes are necessary to address the bracket creep problem arising from taxpayers
being forced into higher tax brackets through inflation," CPA Australia chief executive
Greg Larsen said.

Mr Larsen said he was responding to recent comments by Treasurer Peter Costello concerning
a potential review of personal income tax rates.

"In order to address bracket creep, the top 48.5 per cent tax threshold should come
into effect at an income above the current level of $60,000 and the 30 per cent rate threshold
should also be adjusted to assist average wage earners."

Mr Larsen said many middle income earners were beginning to achieve $60,000 salaries
and it was unfair they were taxed at the highest marginal rate.

The 48.5 per cent rate - which includes the 1.5 per cent Medicare levy for higher income
earners - could be a disincentive for people to work longer hours or overtime, thus hampering
productivity, he said.

The big gap between the 30 per cent company tax rate and the top individual rate exacerbated
the risk of tax avoidance, he said.

"Reducing the rate will not eliminate tax avoidance, but it makes tax avoidance much
less attractive, thus making the tax system more equitable," he said.

AAP jph/daw/apm/bwl

KEYWORD: TAX CPAS

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