Despite excitement among some in the media about the benefits of indexing tax brackets to the rate of inflation, this paper shows Australians have been much better off without indexation.

Had indexation of personal income tax thresholds applied over the last 30 years a taxpayer on average weekly earnings would now be $147 a week worse off.

The average nurse would be $187 a week worse off with teachers and police worse off by $172 and $207 per week respectively.