Former Treasury boss Ken Henry has labelled increasing income tax rates an “intergenerational tragedy” and warned company taxes need to be cut as economists urge Labor to overcome political timidity and embrace wholesale reform.

Dr Henry, who led a landmark review of the tax system in 2009, urged Treasurer Jim Chalmers to enact a more ambitious reform agenda after the latest Intergenerational Report revealed workers would bear an increasing share of the tax burden over the next 40 years.