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Bowen confirms Labor stands for higher taxes.



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Sun, 1st February 2009

BOWEN CONFIRMS LABOR STANDS FOR HIGHER TAXES

The Hon Julie Bishop MP Shadow Treasurer Deputy Leader of the Opposition

The Rudd Government has again revealed itself to be an old style high taxing government that does not understand that lower taxes mean greater incentives and greater productivity which leads to increased tax revenues.

This afternoon the Assistant Treasurer Chris Bowen has made it clear that the Government does not understand the fundamental principles concerning the economic gains from reducing tax rates. ‘the alternative Treasurer needs to explain how she thinks tax cuts will increase government revenue, she is practising voodoo economics at its worst’

Assistant Treasurer Chris Bowen, Doorstop, 1/2/09

There is substantial evidence to show that tax cuts, including lower marginal tax rates across all tax brackets and cuts to corporate tax, increase productivity by providing incentives to individuals and businesses to work, invest, take risks and pursue entrepreneurial activity.

The new growth in jobs and output will expand the tax base and thus tax revenues.

It has been the experience in Australia and other OECD countries that reducing tax rates and expanding the tax base increases tax revenues. This requires reductions that are durable, credible and wide-ranging and that help reduce the distortions taxes create to incentives to work, save and innovate.

It is deeply concerning that in the middle of an economic crisis the Government does not understand such a basic economic principle.