Released alongside an address to the National Press Club on Wednesday, Ms Spender pitched her proposal as a way to shift the tax burden away from income earners to assets.
Her first of a series of white papers focuses on the personal tax system and how younger workers are increasingly relied upon to bear a larger share of the tax burden as the population ages through bracket creep.
The proposal would be revenue neutral as it would be paid for by higher taxes on capital, more likely to be held by wealthier, older Australians.
"Our tax system setting needs to be rebalanced towards effort and ingenuity," Ms Spender said.
The tax system does not adequately reward hard work. It taxes people hardest when they can least afford it, and Australia's ageing population will only make things worse over time if it is not addressed now.
Part of that is down to the way the same amount of income can be taxed at different rates depending on if it was earned through wages, capital gains, superannuation, or a family trust.
A former consultant with an economics degree from Cambridge, Ms Spender's remedy included cutting the lowest marginal tax rate on wages to 13 per cent and cutting all other marginal rates by 2.5 percentage points.
That equates to a tax cut of $1643 in 2027/28 for someone earning $100,000, close to the median full-time wage.
It would be offset by reducing the capital gains tax discount from 50 per cent to 30 per cent, paring back negative gearing, introducing a minimum tax rate of 27.5 per cent on investment income, and aligning superannuation earnings thresholds with income tax thresholds.
Costing by the Parliamentary Budget Office confirmed the package would be budget neutral.
Independent economist Saul Eslake called it an incredible contribution to the public debate.
"It would be a substantial contribution to reducing intergenerational inequity," he told AAP.
Ms Spender has promised further work that will touch on the GST, resource taxes and corporate taxation.
The white paper does not address the expenditure side of the equation, although Ms Spender said spending restraint was needed, with budget deficits projected for the next decade.
What she hopes this first document will do is encourage the Labor government to raise its ambition in the upcoming May budget, which Treasurer Jim Chalmers has promised will include tax reform to tackle productivity and intergenerational equity.
Ms Spender urged Dr Chalmers not to waste the opportunity and go ahead with mooted changes to the capital gains tax discount, negative gearing and trusts, which Treasury is reportedly modelling.
"This is the opportunity to be bold. People want them to be bold," she said.
