CPD fellow Ian McAuley has analysed the proposed tax cuts announced by the Coalition in real and nominal terms.
Assuming an inflation rate
of 2.75 per cent for for the four-year
period (based on Treasury’s estimation of the inflation rate for 2007/2008), McAuley finds that the proposed "tax cuts" of $34 billion are in fact about equal to the cost of indexing current tax rates to inflation over the same
See Kenneth Davidson’s response to Ian McAuley’s findings in The Age.
Download the source data here (includes a calculator for the effect of the tax cuts at different rates of inflation)
See Ian McAuley’s article on the likely impact of the proposed cuts in New Matilda