Warren Hogan, an industry professor at UTS Sydney and former ANZ chief economist, believes that Australia should create an ultra high-income tax bracket and reduce marginal tax rates for those on below-average incomes to reduce income inequality and economic growth:
…an important contrast between now and the successful growth-driven recovery after World War Two is inequality in income and wealth. Since the Reagan-Thatcher years, inequality has been rising across the advanced economies. And income inequality is a particularly strong headwind to economic growth.
The world is facing an excess of savings. Inequality drives higher saving at the expense of spending because those on high incomes have a much greater propensity to save an extra dollar of income rather than to spend it…
