Progressivity of Individuals Income Tax in Australia: Long-term Trends

The progressivity of a tax can be measured in various ways. This paper surveys the main methods used previously and corresponding estimates for the progressivity of Australia’s IIT. It also presents new estimates for changes in the progressivity of Australia’s IIT since 1942 using a methodology based solely on the legislated IIT rate scale, and compares this with the estimates made using alternative methodologies. Overall, these estimates show that IIT progressivity decreased in the post-war period but has been relatively stable over the past 40 years – although with some notable shorter-term fluctuations.