Chris Murphy, who has modelled tax policy for the federal government and Productivity Commission, today released a research paper proposing changes to land, corporate and household taxes.

Combined, the reforms would provide $43 billion in “consumer welfare”, effectively providing each household an extra $4000 a year.

The changes would be budget-neutral – that is, not increase or decrease the amount of tax revenue collected by the government – and the boost to households would come from collecting $91 billion in ways that do less harm to the economy.

Murphy also modelled that it would lead to an increase in real wages, while at the same time improving real GDP by 6 per cent.

“At the (productivity) roundtable, the federal treasurer committed to ‘a better tax system’,” he wrote. 

“In that spirit, this paper models reform packages for Australian property, corporate and household taxes to increase consumer welfare by shifting towards more efficient taxes.”

The first package includes removing stamp duty and land taxes on investment properties, and replacing them by effectively expanding council rates into a broad-based land tax.

Murphy said that change alone accounts for $27 billion of the $43 billion benefit households would enjoy.

He also proposed reducing corporate tax for most companies, while at the same time increasing the tax bill for ultra-profitable entities in uncompetitive, oligopolistic sectors like banking and supermarkets, as well as reducing the concessions related to franking credits.

And on taxes that more directly affect households, Murphy said the government would do well to expand the GST to remove the current exemptions provided to goods and services like fresh food and private education.

He also called for the payroll tax threshold to be lowered, effectively increasing it for most small businesses.

Together, those two hikes would allow the government to cut income taxes by 11 per cent – or about $43 billion a year.

Murphy’s proposal comes weeks after Treasurer Jim Chalmers said the government would work on potential changes to the tax system following the productivity roundtable.

But Murphy said it was critical for the government to make a decision soon.

“Comprehensive tax reform stands out as a way of delivering large benefits compared to other areas of economic reform,” he wrote.

“Achieving those large benefits requires a willingness to collect $91 billion in tax revenue in a different way that is less harmful for consumer welfare. 

“As Theodore Roosevelt said: ‘In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing’.”