Nick Gruen, Peter Saunders and all your favourites continue to debate tax churn ‘n’ burn over at Troppo Armadillo and down in Comments, clarifications etc – but there’s an interesting sleeper on the Senate Notice Paper.

Democrat Senator Andrew Murray has been on about structural tax reform for years, talking about churn – governments taking with one hand and giving with the other – and high effective marginal tax rates for low and middle incomes earners.

He’s now trying a new angle, posing an interesting question that should produce an interesting angle. He’s asking our Top Gun Treasurer if it’s possible to guarantee that the ins and outs of the tax and welfare system won’t mean that people end up paying an effective marginal tax rate higher than the current top rate:

Notice given 7 September 2006

2481 Senator Murray: To ask the Minister representing the Treasurer—Is it possible to introduce policy measures that will ensure that no Australian experiences an effective marginal tax rate above 46.5 per cent. If it is possible to do that, what steps are being taken by the Government to lower existing effective marginal tax rates, (affecting lower income Australians), towards the top rate of 46.5 per cent. If the answer is that it is not possible to ensure that no Australian experiences an effective marginal tax rate above 46.5 per cent, please explain why not.

Can it be done? Keep your dictionaries of bureaucratese at the ready to translate a non answer.

Peter Fray

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