Government could raise taxes for high-income earners

Prime Minister Kevin Rudd has suggested the Government could look at raising taxes for high-income earners as it seeks to rein in the rapidly growing federal deficit.

Rudd claims the federal budget, to be handed down on 12 May, is the toughest to frame in a lifetime due to the ailing state of the global economy, falling tax income from company tax and the growing need for economic stimulation in the form of cash handouts and infrastructure spending.

In recent days Rudd and Treasurer Wayne Swan have suggested that personal income tax increases may have to be considered to shore up the budget, and high-income earners are likely to be in the spotlight.

“Longer term, you have to look at what can be afforded by way of additional support from those who are better off,” Rudd told radio station 3AW this morning.

“Our discipline is; don’t allow taxes to get out of control, because you don’t want to strangle an economic recovery. Within that, then of course it’s always possible for changes in the taxation mix.”

It also appears that the increased first home buyer grant, which expires on 30 June, will be canned or modified. While housing and construction lobby groups and small business organisations are keen to retain the increased grant, Rudd again repeated his assertion that all good things must come to an end.

However, there is speculation that the Government may continue with some sort of enlarged grants for newly constructed homes, a move endorsed by the Housing Industry Association.

How do you feel about the prospect of higher taxes? What would you want from Government in return? Comment below

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