The Effects of Personal Income Taxation on Income Inequality in

This paper attempts to show that the progressive income tax system in Australia is redistributing income towards those recipients in the lower quintiles. This distribution has been occurring over the thirty year study but has been dramatically expanded over the last six years by some of the changes to the income taxation system, for example, the introduction of a rebate system to replace the deduction system. Recommendations are presented here that a more progressive system would redistribute more income and reallocate the income into those areas where it will have most benefit. This may be accomplished by changing marginal rates of tax or increasing the number of taxation steps in the scale