Tax, Social Policy and Gender: Rethinking Equality And
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TAX, SOCIAL POLICY AND GENDER RETHINKING EQUALITY AND EFFICIENCY TAX, SOCIAL POLICY AND GENDER RETHINKING EQUALITY AND EFFICIENCY EDITED BY MIRANDA STEWART Published by ANU Press The Australian National University Acton ACT 2601, Australia Email: [email protected] This title is also available online at press.anu.edu.au National Library of Australia Cataloguing-in-Publication entry Creator: Stewart, Miranda, 1968- editor. Title: Tax, social policy and gender : rethinking equality and efficiency / Miranda Stewart. ISBN: 9781760461478 (paperback) 9781760461485 (ebook) Subjects: Taxation--Government policy--Australia. Income tax--Law and legislation--Australia. Equality before the law--Australia. Gender mainstreaming--Australia. Women--Taxation--Law and legislation--Australia. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior permission of the publisher. Cover design and layout by ANU Press This edition © 2017 ANU Press Contents List of figures . vii List of tables . xi List of acronyms . xv Contributors . xix Preface and acknowledgements . .. xxi Foreword . xxv 1 . Gender inequality in Australia’s tax-transfer system . 1 Miranda Stewart Part I: Frameworks for gender analysis 2 . Australian tax-transfer policies and taxing for gender equality: Comparative perspectives and reform options . .. 35 Kathleen Lahey 3 . Gender equity in the tax-transfer system for fiscal sustainability . 69 Patricia Apps 4 . Gender equality and a rights-based approach to tax reform . 99 Helen Hodgson and Kerrie Sadiq Part II: Work and care 5 . Taxes, transfers, family policies and paid work over the female life cycle . 133 Guyonne Kalb 6 . Paying for care in Australia’s ‘wage earners’ welfare state’: The case of child endowment . 161 Julie Smith 7 . Parents’ primary and secondary child care time adjustment to market time: Evidence from Australian mothers and fathers . .. 207 Huong Dinh and Maria Racionero Part III: Human capital, savings and retirement 8 . Gender differences in costs and returns to higher education . 227 Mathias Sinning 9 . Women and top incomes in Australia . 257 Miranda Stewart, Sarah Voitchovsky and Roger Wilkins 10 . Budgeting for women’s rights in retirement . 293 Siobhan Austen and Rhonda Sharp Part IV: Towards gender equality in the tax-transfer system 11 . Pathways and processes towards a gender equality policy . 325 Meredith Edwards and Miranda Stewart Index . 349 List of figures Figure 1.1: Commonwealth taxes, 2016–17 ($billion and percentage). 7 Figure 1.2: Commonwealth expenditures, 2016–17 ($billion and percentage). 9 Figure 1.3: Main social security and welfare payments, 2016–17 ($billion). 10 Figure 1.4: Progressive marginal and average income tax rates (%) ...12 Figure 1.5: Women’s and men’s workforce participation, 1978–2017 (%). 17 Figure 1.6: Part-time and full-time workforce participation of women, 1978–2014 (%) ............................17 Figure 1.7: Gender labour supply gap (hours worked), 2015 .......18 Figure 1.8a: EMTRs per $1 of earnings, dual earner family with two children. .20 Figure 1.8b: EMTRs per day of work, dual earner family with two children. .20 Figure 2.1: Composition of revenues, selected OECD countries, 1995–2013 ........................................45 Figure 2.2: Average total and after-tax income, by age and gender, 2013. .48 Figure 2.3: Individual and corporate shares of taxes on incomes, profits and capital gains, selected OECD countries, 2014 .....51 Figure 3.1: Rising inequality ................................73 Figure 3.2: Shift in tax burden towards the ‘middle’ ..............74 vii TAx, SoCIAL PoLICy AnD GEnDER Figure 3.3: Primary/second-earner superannuation balances by primary income ...................................93 Figure 5.1: Maternal employment rates, 2014 or latest available year (Employment rates for women (15–64-year-olds) with at least one child aged 0–14) ..........................143 Figure 5.2: Proportion of doctors who agree with the statement that their employment is restricted due to lack of access to child care. 149 Figure 7.1: Unadjusted child care and market time by parent gender ...................................213 Figure 7.2: Unadjusted child care and market time by parent gender, youngest child at preschool age ...........214 Figure 7.3: Unadjusted child care and market time by parent gender, youngest child at school age .....................214 Figure 8.1: Hourly wages by gender and education, 2014 .........236 Figure 8.2: Weekly earnings by gender and education, 2014 .......237 Figure 8.3: Annual earnings by gender and education, 2014. 238 Figure 8.4: Age–wage profiles of male workers .................246 Figure 8.5: Age–wage profiles of female workers ................247 Figure 8.6: Average debt of male university graduates ............250 Figure 8.7: Average debt of female university graduates ..........251 Figure 9.1: Income shares of top income groups in Australia, 1970–71 to 2013–14. .261 Figure 9.2: Share of women in top percentiles, Australia ..........264 Figure 9.3: Change in proportion of women in top 10 per cent since 2000, various countries ..........................266 Figure 9.4: Age composition of men and women in the top 1 per cent, 2000–01 to 2012–13 (percentage of cohort) .....268 Figure 9.5: Share of income from earnings, women in top 1 per cent, various countries ...........................272 Figure 9.6: Marginal income tax rates in Australia ..............278 viii LIST oF FIGuRES Figure 9.7: Small- and medium-enterprise business/investment structure illustration .................................280 Figure 10.1: Labour force participation rates by gender, trend .....308 Figure 10.2: Part-time work by gender and age .................309 Figure 10.3: Distribution of tax concessions for superannuation contributions across taxable income categories .............310 Figure 10.4: Distribution of male and female taxpayers across taxable income categories .............................310 Figure 10.5: Ratio of male to female average superannuation account balances, as measured in member contribution statements ........................................311 Figure 10.6: Inequality in wealth within couple households, by age. .313 Figure 10.7: Inequality in superannuation within couple households, by age. .314 ix List of tables Table 1.1: Australian gender gaps at a glance, 2017 ...............3 Table 1.2: Social security and welfare expenditure, 2016–17 ($billion). 10 Table 1.3: Income tax rates and thresholds, 2016–17 .............12 Table 2.1: UN GDI, TC version ranks, OECD tax ratios, selected countries, 1995 and 2013/2014 ..................42 Table 2.2: Gini coefficients by income measures and revenue structures, selected countries, 2014 ......................47 Table 2.3: Participation tax rates and child care costs as percentage of earned income for second-earner and lone parents, selected OECD countries, 2012 ...............................60 Table 3.1: PIT + LITO marginal tax rate scales, 2015–16 .........72 Table 3.2a: Change in ATRs and tax burdens from 2013–14 to 2023–24. 75 Table 3.2b: Change in ATRs and tax burdens from 2003–04 to 2013–14. 75 Table 3.3: Tax rates 2015–16: Single income two-child family ......82 Table 3.4: Primary income = $60,000 pa: Tax rates on second income ...................................83 Table 3.5a: Second-earner income, taxes and hours by primary income (SIH 2013–14) ...............................85 Table 3.5b: FTB-A payments by primary income: Two children aged 5 to 18 years. .85 Table 3.6: Life cycle labour supply by gender ...................88 xi TAx, SoCIAL PoLICy AnD GEnDER Table 3.7: Life-cycle median household income, earnings and saving ..................................89 Table 3.8: Second earnings and saving by primary income ........89 Table 4.1: Fiscal policy strategies for a human rights framework ....108 Table 5.1: Elasticity of hours worked estimates for households with children in 2002. 139 Table 6.1: ‘Bird’s-eye view’ timeline of Australian wage-transfer tax system ........................................183 Table 7.1: Trade-offs between market time and child care time, youngest child (0–4 years), adjusted .....................215 Table 7.2: Trade-offs between market time and child care time, youngest child (5–14 years), adjusted ....................215 Table 7.A1: Descriptive summary ...........................220 Table 8.1: Education by gender, 2014 .......................234 Table 8.2: Returns to education of male workers: OLS estimates, 2001–14 .........................................242 Table 8.3: Returns to education of female workers: OLS estimates, 2001–14 .........................................242 Table 8.4: Returns to education of male workers by level of education: OLS estimates, 2001–14 ...................243 Table 8.5: Returns to education of female workers by level of education: OLS estimates, 2001–14 ...................244 Table 8.6: Returns to education of men and women (in per cent), cross-sectional vs life-cycle model .......................248 Table 9.1: Minimum levels of total income, by year, in current $ ...265 Table 9.2: Proportion of women in top percentiles (comparative) ...266 Table 9.3: Share of total income from wages, all ages ............269 Table 9.4: Share of total income from wages, working-age population only ....................................270 Table 9.5: Share of working-age men