Table 1: hypothetical 2017 national Party tax cuts, $1.5 billion
|Current tax rate||New tax rate||Revenue loss,
|Trust tax 33%||Trust tax 31.5%||$135m||$129m|
|Company tax rate 28%||27.5%||$113m||$90m|
Jim Rose models a possible $1.5 billion tax cut package in 2015. This is made possible by keeping the new spending for this year and next to $1 billion instead of $1.5 billion.
No serious participant in public policy debate could suggest that tax cuts of the size in table 1 will not have incentive effects that will lead to growth in incomes and business profits. There will be offsetting tax revenue increases that make a more ambitious tax package possible in 2017.
Using dynamic scoring, Rose calculates we could afford to do the following:
- top tax rate down 2% to 31%
- Upper Middle tax rate down 3% to 27%
- Middle tax rate down 1% to 16.5%
- Trust tax rate down 2% to 31%
- Corporate tax rate down 1% to 27%
That would see someone earning $70,000 have their tax drop by $1,000 or $20 a week.