No income tax cut proposal has been blocked by the Senate in recent history. So it is no small thing that we are even discussing the possibility that the Senate might block the Turnbull government’s proposed tax cuts in what is, after all, effectively an election year.

When Australia won the America’s cup in 1983, every dollar earned over $35,000 was income taxed at 60%. But even allowing for inflation ($110,000 today gets you the same purchasing power as $35,000 did in 1983), Australia’s income tax system has gradually become less progressive. Even a billionaire does not pay 60 cents on any dollar earned, let alone the 75% under the top marginal tax rate when Robert Menzies was prime minister. And the trend has continued in more recent times. When John Howard was prime minister, 13% of Australians paid the top marginal tax rate, today that figure is less than 4%.

The Turnbull government’s tax package continues this long-term trend with the removal of an entire tax bracket and the lifting of the top marginal tax rate threshold to $200,000.

But this time the proposed changes are more dramatic, expensive and long-term than anything that has been proposed before. The $144bn cost estimate over the next 10 years understates the full costs of the package. The expensive elements of the package are the top end tax cuts which do not kick in for another five or seven years. Their full cost will only be realised over the subsequent 10 years when they are fully implemented and will be enormous. New research from the Australia Institute this week shows that 80% of the benefit of these long-term tax cuts flow to the top 20% of income earners. The poorest 60% get no benefit.

There is no universally accepted notion of what constitutes a 'fair' tax system

These top end tax cuts also come against the backdrop of our increased understanding of the social and economic effects of rising inequality – making it all the more reasonable for the Senate to consider blocking them.

Critically these expensive top end tax cuts are expected to be legislated now, but come into force in 2024. That’s six years from now, when we have no idea how Australia’s economy will be going, no idea what China’s economy will be doing, no guarantee what wages growth will be and certainly no idea what state the federal budget will be in. That is why these top end income tax cuts – with a combined annualised cost of more than $16bn a year – are the last thing a genuine fiscal conservative would contemplate. Their size and scale even dwarf the Howard and Costello “rivers of gold” tax cuts of the previous decade.

Over many months now we have been fed a variety of statistics to soften us up for these expensive tax cuts. We have been repeatedly told that higher income earners are now shouldering a disproportionate burden of the income tax task. But criticising our progressive income tax system in this way – for collecting most of its revenue from high income earners – is like criticising our public health system for spending most of its money on the sick.

As income inequality continues to rise in Australia, it is inevitable that the proportion of income tax paid by the highest income earners continues to rise as well. The whole point of a progressive income tax system is that it collects a higher proportion of tax from the highest income earners than it does from those at the bottom. That’s not a problem, it’s a design feature.

There also appears to have been a “discovery” that the lowest income earners are paying no income tax. Given that the unemployment benefit is about $15,000 per year and the tax free threshold is $18,200 per year, the fact that the unemployed are not paying any income tax surely cannot come as a surprise to anyone paying attention to the Australian tax/transfer system. But what is surprising is the implication that those who earn the least should be paying income tax.

There is no universally accepted notion of what constitutes a “fair” tax system. Some people argue tax is the price we pay to live in a civilised society and others argue that tax is theft. While most Australians accept that we should collect enough tax to fund “high quality” services and “well-targeted” welfare support, it is more difficult to reach agreement on what “high-quality” and “well-targeted” mean.

That’s why the design of a “fair” tax system is fundamentally a political calculation, not some sort of quasi-scientific equation. Which makes the construction of the tax system a democratic challenge not an economic one.

Australia could move to a flatter tax system if the majority of us want to, just as we could abolish our universal health and public school systems and replace them with vouchers or private insurance as they do in some countries.

But Australia has long relied on a progressive income tax system to help both fund the services most of us need and reduce income inequality in ways that most of us want.

Since Alan Bond won the America’s Cup, wealth and income inequality has got worse. The richest 10 families in Australia now have the combined wealth of the poorest 1,900,000 households. And the top 0.1% have seen their share of total income more than quadruple.

Whether it is for prudent fiscal management or addressing inequality, if ever there was a time for the Senate to block parts of an income tax cut package, it is now.

• Ben Oquist is executive director of The Australia Institute