Harvey

The Australians getting hit with up to 122 per cent tax Some Australians who are eager to take on more work are being held back by the prospect of giving up most of their additional income – and in some cases, even paying to work.

For decades Aus has cut marginal tax rates, largely on high earners, based on exaggerated claims about work disincentives.

Meanwhile, over the same period, we've set up *genuinely* punitive (at times > 100%) effective marginal tax rates on low-middle income earners.

www.smh.com.au/politics/fed...

reminds me of that quadratic someone used to project covid cases. incredible

link: crawford.anu.edu.au/content-cent...

It also complements this finding from Grattan that households pay different rates of tax on the same income based on age (for the same reasons)

This result is per-person and thus not driven by ageing—the generosity of the tax and transfer system really has tilted towards older people over time—but the ageing trend will amplify its budgetary implications

What happens when you combine growth in spending on older Australians (pensions, health, aged care) with significant growth in their concessionally taxed super + housing?

A big shift in relative generosity of net transfers and final incomes for different age cohorts

Interesting paper

people on the other site are doing "is living in denmark better than living in the us" discourse based on that one paper about wealth and mortality and all reasonable interpretations aside, if your metric of wellbeing says that living in mississippi is better than denmark then it's a stupid metric

treating data as a plural is almost as quaint and kooky as ‘fora’ and ‘stadia’

fun quirk of the discourse:

giving $x to everyone *except the poorest* via the tax system is called "targeted" and "progressive"

giving $x to everyone *including the poorest* via the payments system is called "untargeted", "regressive" and "middle class welfare"

Germany’s ‘whatever-it-takes’ spending push to end years of stagnation Europe’s largest economy could return to pre-pandemic growth trend

Germany’s ‘whatever-it-takes’ spending push to end years of stagnation - on.ft.com/3R7j4fX

Can't help wondering if doing this a few years ago might have been clever

But my "favourite" chart is this one - incomes boomed across the distribution in the years leading up to the Financial Crisis and inequality rose to a higher level. But between 2013 and 2019 income growth has been at historically low levels.

t.co/5g2cPNbnKI

When you finance redistribution through a phase-out, you concentrate the burden of taxation on middle income families with children

A tax-financed universal system allows you to reduce the burdens associated with taxation by spreading it out vertically *and* horizontally!

I really like this 2021 paper from Norway showing the elegance of universal child benefits compared to kludgy income-tested ones

Clear wins for achieving horizontal equity, boosting labour supply, smoothing consumption, reducing exclusion errors

The Accepted Manuscript version of my review of Spies-Butcher's new work 'Politics, Inequality and the Australian Welfare State After Liberalisation' is now on my blog if anyone's interested the complex process of liberalisation reforms.

www.bevansadvocate.com/p/politics-i...

New analysis of asteroid dust reveals evidence of salty water in the early Solar System

Two new studies show a briny, carbon-rich environment on the parent body of the Bennu asteroid was suitable for assembling the building blocks of life.

"This tax-and-transfer insurance effect—or the role of the state in reducing adult disadvantages that stem from childhood poverty—matters more than other oft-studied characteristics, such as parental education or marital status, in shaping the U.S. disadvantage compared with peer nations."

2024 tax expenditure statement showing super concessions estimated to reach an eye-watering $55 billion in 2024-25, billions higher than the previous estimate

Even bigger difference for the forwards too - $63 billion by 2026-27!

Seems highly contradictory that (a) huge tax concessions for super are often justified on compensatory grounds because being forced to save is welfare detracting and (b) a frequent justification of forced savings is that it's welfare enhancing

Am I missing something?

WA GST situation is crazy

Limitations of markets due to public goods and market failures are well-known, but I really like this framing by Amartya Sen that many of the most significant things in life are not suitable for marketisation

Happy 400th birthday to the world’s oldest bond 🎂

Happy 400th birthday to the world's old living bond! 🎂🎉🎊

www.ft.com/content/5122...

it's meant to be a graph but it looks like an AI tried to make an origami concertina

A thread of mystifying and hilarious data visualisations from the "Australians" books, published in 1987 by the Australian Government. (originally brought to my attention by @mikejbeggs.bsky.social )
#ausecon #chartcrimes #dataviz
1. Spikes

A few months ago I came across this 3 dimensional cylindrical bar column chart in a howard era tax paper 😬

Mean Charts On Wednesdays we calculate the median wage statistics

There have been two economic charts going semi-viral— or at least what counts as viral for ABS statistics—in the past couple of weeks.

Both claim to show a dramatic fall in living standards in Victoria and Australia. Both are wrong.

gross.substack.com/p/mean-charts

one of the best type of guys

Really interesting bit of research on actual vs publicly preferred tax rates in Norway. The gap is mainly driven by changing composition of (differentially taxed) income across the earnings distribution

www.cambridge.org/core/journal...

Incredible chart showing how age influences the amount of tax you pay for a given level of income. Difference driven in large part by super concessions/investment earnings

Regressive, expensive and without any compelling equity justification

Good to see one of the classics getting reposted

Excellent Amartya Sen passage on the key question of equality, 'Equality of What?' Almost all normative theories are based on a form of egalitarianism, they just differ on what they focus on providing equal an entitlement of