Gender Equity in the Tax-Transfer System for Fiscal Sustainability

28 Pages Posted: 2 Aug 2016

See all articles by Patricia F. Apps

Patricia F. Apps

The University of Sydney - Faculty of Law; IZA Institute of Labor Economics

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Date Written: August 1, 2016

Abstract

In the 1980s the Australian Personal Income Tax was highly progressive and family payments were universal. The system ranked well in terms of gender equity and female labour supply incentives. During the Howard years the progressivity of the rate scale declined dramatically despite rising inequality in wages, income and wealth, and the individual as the unit of taxation for families was replaced by a system of “quasi-joint” taxation. As a result many partnered mothers as second earners now face effective marginal tax rates that are well above the top rate on personal income. At the same time, many face high child care costs in a largely privatised system. In addition, women, typically on lower pay, cannot gain equally from tax advantaged superannuation. This paper presents an analysis that highlights the counterproductive effects of the gender discrimination in these policies on female labour supply, household saving and the tax base, and argues for policies that promote gender equity for fiscal sustainability in an economy undergoing the far-reaching effects of demographic change.

Keywords: Taxation, Inequality, Gender, Household Labour Supply, Child Care

JEL Classification: D31, H21, H24, H31, J16, J22

Suggested Citation

Apps, Patricia F., Gender Equity in the Tax-Transfer System for Fiscal Sustainability (August 1, 2016). Tax and Transfer Policy Institute - Working Paper 5/2016, Available at SSRN: https://ssrn.com/abstract=2817163 or http://dx.doi.org/10.2139/ssrn.2817163

Patricia F. Apps (Contact Author)

The University of Sydney - Faculty of Law ( email )

Faculty of Law, New Law Building F10
The University of Sydney
Sydney, NSW 2006
Australia
+61 2 9351 0241 (Phone)
+61 2 9351 0200 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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