Henry income tax reform 'was workable'

The federal government failed to implement major income tax reforms, including a lift in the tax-free threshold to $25,000, despite new data showing such plans were affordable.

An analysis by the Australian of the newly released Henry tax review costings claims that that the full package of personal tax reforms could have been adopted, even with the budget in deficit.

However, the newspaper suggested that the government refused to move on the recommendations out of fear that cutbacks to middle-class welfare and tax cuts to the rich would alienate too many voters.

The reform would have put everyone earning more than $25,000 on a flat tax rate of 35 per cent up to a level of $180,000, bringing in a higher tax rate of 45 per cent for earners above that.

According to the Australian: "The $3 billion annual cost of this would have been offset by reducing concessions on capital gains tax and negative gearing, while fringe benefits, including company cars, would have become fully taxable."

Aussies aiming to grow their personal incomes and maximise returns can choose to compare term deposits in search of the best offers. It is likely the proposed personal tax reforms will remain the subject of fervent political debate ahead of next year's tax summit.

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