Higher taxes would prevent $6 billion in extra econjomic growth.
JP Morgan estimates the Coalition's lower tax burden will add 0.3 percentage points to GDP per year.
Labor's extension of the first stage of the Coalition’s tax cut plan will be stimulatory in the short term.
Higher effective tax rates can be a drag on productivity.
A higher tax burden under Labor would prevent the economy growing by $6 billion every year, compared to the Coalition's policies, but Labor's short-term cuts to low income earners could boost the slowing economy at just the right time.
Deloitte Access has estimated that the $387 billion in higher taxes under Labor over the next decade would result in about a third of a percentage point smaller contribution to the level of gross domestic product per year compared to the Coalition.
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Matthew Cranston is the United States correspondent, based in Washington. He was previously the Economics correspondent and Property editor. Connect with Matthew on Twitter. Email Matthew at mcranston@afr.com
