Scott Francis in his latest Eureka Report article looks at the hidden tax rise contained in the government's latest budget. He suggests that due to the phenomenon of bracket creep, the increase in average wages is providing the government about $3 billion in extra tax receipts.
Scott concludes that bracket creep is an important concept for taxpayers to understand; it sees them facing increasingly higher tax rates unless tax brackets change as incomes increase. The resulting increase in government revenue means neither side of politics has ever tried to fix the problem, which could be done by the relatively simple step of indexing tax thresholds to inflation or wage rises.
