Given its signiÖcance in practice, piecewise linear taxation has received relatively little attention in the literature. This paper o§ers a simple and transparent analysis of its main characteristics. We fully characterize optimal tax parameters for the cases in which budget sets are convex...

In this paper Peter Dawkins argues for the "wage-tax trade-off" proposed by the "Five Economists" as part of their policy package for reducing unemployment. As he explains, the trade-off involves using an earned income tax credit (EITC) scheme "as a way of increasing the incomes of low-wage...

This paper presents an analysis of the 2005-06 family tax system comprising the personal income tax, the Medicare Levy, Family Tax Benefits Parts A and B and tax offsets. The results show that most families are now taxed, in effect, on the basis of joint income. Through a succession of reforms...

While acknowledging the importance of fairness and the need to avoid creating disincentives in the design of tax reform, the Henry Review recommends a simplified Personal Income Tax and child payments withdrawn on a single family income test. This paper shows that the proposed reforms would...

The tax policy agenda in Australia for more than a decade has been largely driven by a perceived need to reduce the level of income taxation and the progression of marginal rates, financing the revenue shortfall with a broad based consumption tax. A major reform of this kind is now being...

This paper combines income and expenditure with time use data to provide a unique picture of the time paths of labour supplies, saving and full consumption for two-adult households over the life cycle. These data are used to test the life cycle model presented in the paper, at the core of which...

This paper analyses a recent proposal of the Australian Government to reform the existing Medicare system. It develops models of the physician’s behaviour and of a household’s demand for medical insurance under the proposed system, and then proceeds to characterise the equilibrium under the...

This paper is concerned with the question of how couples should be taxed. One reason for the importance of this issue is simply that the overwhelming majority of individuals live in households formed around couples, and so it could be argued that empirically, this is the single most important...

This paper presents an analysis of the Five Economists' plan for a "wage-tax trade-off", combining an EITC program with a freeze on award wage increases, as a policy package for reducing unemployment. The study identifies the changes in effective tax rates implied by the EITC program and shows...