Amazon founder Jeff Bezos has called for a major change to the way the world sees income tax, as the debate around taxing workers heats up here in Australia.After the federal budget’s modest income tax cuts that could see Aussie workers claw back an extra $250 each year, a debate has erupted around whether we’re all taxed too much on our wages.On Wednesday, the NSW Premier broke ranks with the Albanese government, saying millions of workers in his state were being “slugged” with taxes that are too high.Overnight, one of the world’s richest men, Mr Bezos, went one step further — arguing income taxes should be completely abolished for the bottom half of earners.Speaking to CNBC’s Squawk Box, the ultra-billionaire slammed the “absurd” tax system in the US, which sees the top one per cent of taxpayers pay about 40 per cent of all tax revenue and the bottom half pay three per cent, according to the Tax Foundation.“It’s kind of a tale of two economies,” Mr Bezos said. “You have a bunch of people in this country who are doing really well, but you also have a bunch of people in this country who are struggling.”MORE: ‘Not normal’: Bezos’ wedding act slammedThe Blue Origin founder said taxes for the bottom half of earners shouldn’t just be lowered but cut to “zero”.He said a nurse in Queens who makes $75,000 a year pays over $12,000 a year in taxes.“That’s $1,000 a month that could help with rent, groceries, or anything,” he said.“Does that really make sense? Some people talk about making the tax system more progressive how about we start with making the nurse in Queens not pay taxes.”He insisted that the government can “find the three per cent” of tax revenue instead of taxing lower earners.“It’s a small amount of money for the government. And really the more I thought about it, to me, it’s kind of absurd that we are doing this.“We shouldn’t be asking this nurse in Queens to send money to Washington. They should be sending her an apology. It really makes no sense.”MORE: Expensive celebrity divorces revealedWhen asked if the wealthy should pay higher taxes to make up for the three per cent, Mr Bezos – who has an estimated net worth of $272 billion according to Forbes – acknowledged it's a “perfectly valid” policy debate but argued that spending, rather than revenue, is the issue. He later hit back at claims he doesn’t pay taxes, saying he pays “billions of dollars”.“If people want me to pay more billions, then let’s have that debate but don’t pretend that that’s going to solve the problem.”“You could double the taxes I pay, and it’s not going to help that teacher in Queens, I promise you.”‘Smart approach’US venture capitalist and entrepreneur Chamath Palihapitiya praised Mr Bezos’ proposal as a “simple, elegant and very effective idea”, in a post on X.“Thank you. The important part is zeroing out taxes on the bottom half,” Mr Bezos responded to the post.“Best way to put money in someone’s pocket is to not take it out in the first place. Bottom half is only 3% of total tax revenue. But it’s very meaningful to that person. Zero it out.”Entrepreneur Anthony Pompliano called the proposal a “Great idea that would help millions of families who need it”, while venture capitalist and founder of Lux Capital, Josh Wolfe, said it was “smart and simple approach worth doing”.“Jeff Bezos with straightforward simple logic. Bottom 50% pay no taxes + costs government 3%. Yet 100% life changing for this bottom half of America,” Mr Wolfe wrote on X.However, New York City Mayor Zohran Mamdani questioned Mr Bezos’ claim that raising his taxes wouldn’t help a teacher in Queens. “I know a few teachers in Queens who would beg to differ,” Mr Mamdani wrote on X, alongside a clip of Mr Bezos’ interview. Others online were also critical of the proposal.“Every person should pay income tax. Skin in the game. Of all people, Bezos should understand incentives,” one person wrote on X.“No one is asking for everyone to pay the same amount, but if you are a working adult in America you should be paying something,” said another.Mr Bezos’ proposal is similar to those being pushed by some Democratic Senators in the US.Earlier this year, Democratic Maryland Senator Chris Van Hollen called for a new surcharge on millionaires that would scrap federal income taxes for workers making at or below a living wage of $46,000, the Washington Post reported.Democratic New Jersey Senator Cory Booker has also proposed the Keep Your Pay Act, which would abolish federal income taxes on the $75,000 of income for households filing joint tax returns.New tax breaks for Aussie workersMr Bezos’ proposal comes as the debate around taxation in Australia hit fever pitch.In the budget last week, the Australian government announced modest tax cuts for 13.3 million Aussie workers.In Australia, the top one per cent of earners paid 19.6 per cent of all net income tax in 2021-22. The 41 per cent of workers who earned less than $45,000 paid 2.3 per cent, as per analysis by The Australian Financial Review.Starting from July 1, 2027 a new $250 “Working Australians Tax Offset” (WATO) will be introduced, costing the government $6.4bn in lost revenue over the next four years, Treasurer Jim Chalmers said when announcing last week’s budget.The budget papers show the WATO will increase the effective tax-free threshold by $1785 to $19,985 for workers (or to $24,985 for workers receiving the Low-Income Tax Offset).Mr Chalmers said it would be “paid each year, ongoing and automatically in your tax return”.The government will also introduce the previously announced $1000 instant deduction for work-related expenses.From the 2026-27 income year, Australian workers will be able to claim an instant deduction instead of needing to itemise and claim work-related expenses.Mr Chalmers said the announcement built on previous tax cuts announced in the last two federal budgets, which combined will add up to $2816 a year by 2028.“Averaged out over the year, our three tax cuts, instant deduction and the new offset are the equivalent of up to $54 back in the average earner’s pocket each week,” Mr Chalmers said.‘Stung’: Minns’ extraordinary attack on taxesOn Wednesday, NSW Premier Chris Minns appeared to criticise the federal government over a lack of action on bracket creep, saying the current top marginal tax rate of 47 per cent results in workers spending half the week working for the government.Just days after Angus Taylor’s pledge to fix tax brackets, Mr Minns said families in his state were being “stung” as pay rises pushed workers into higher tax brackets.At a press conference, he was asked if he would have preferred personal income tax cuts to have been contained in the federal budget.Mr Minns said the state’s pay deals with nurses, paramedics and teachers were hurting their take home pay.“Whether it’s in this budget or it’s in the future, we do need to make sure that we’re doing everything we can to hand more money back to working Australians,” he said.“The top marginal rate of 47 per cent, as I said in parliament last week, you’re working Monday, Tuesday, and half of Wednesday for yourself, and then Wednesday, Thursday, and Friday for the government.“In a general sense, whether it’s now or in the future, we do need to make sure we’re taking urgent action when it comes to personal income taxes because at the moment, a lot of working families are getting stung.”– With NCANewsWireRead related topics:Amazon