In his first budget reply speech, Mr Taylor has conceded the Liberals and Nationals still have a long road to win back the confidence of voters, but asked Australians to "begin to believe again".
The opposition leader outlined an ambitious plan to index tax brackets in line with inflation, returning hundreds of dollars to workers that would've otherwise gone to the government as tax.
The lower two brackets - covering people earning between $18,201 and $135,000 - would be indexed from 2028-29, Mr Taylor said.
This would deliver tax relief of about $250 in the first year and more than $1000 in the the fourth, according to the coalition's forecasts.
The top two tax brackets would also be indexed from the 2031-32 financial year.
"This is generational tax reform. It's fair, simple, and honest. It will back Australians to work hard, take risks, and invest in their future. It will force government to respect your money," Mr Taylor told parliament on Thursday night.
Raising tax brackets in line with inflation each year would cost the budget billions of dollars.
But it would also end bracket creep, where pay rises push workers into higher tax brackets, even though inflation means they may not be any wealthier.
Subsequent governments have chosen not to index brackets, instead announcing a tax cut every few years.
During periods when the mining sector rakes in windfall profits, the coalition would bank 80 cents in every dollar of resource revenue into a "future generations fund" for "nation-building infrastructure", Mr Taylor said.
The opposition leader also announced a sweeping cut to Australia's migrant intake, which would be tied to the number of homes completed each year.
While Mr Taylor argued it would be rash to provide an exact immigration target two years away from the next election, he said the coalition's cut would be sizeable.
"The coalition will deliver one of the biggest cuts to immigration in Australian history," he said.
Under his plan, a limit would be placed on net overseas migration, equivalent to the number of homes built in the previous year.
Net overseas migration is the difference between the number of people arriving in Australia and the number of departures, and also includes temporary migrants like foreign students.
Tuesday's budget forecasts the figure at 295,000 for the current financial year, dropping to 225,000 in 2027/28.
That's well below the post-pandemic high of more than 550,000, when a flood of migrants re-entered the country as borders reopened, but still higher than pre-COVID levels.
In the 2024/25 financial year, about 175,000 new homes were built.
Mr Taylor also said the coalition would claw back billions of dollars in savings by cutting welfare for non-citizens.
The National Disability Insurance Scheme, Jobseeker, Youth Allowance and the Family Tax Benefit would be for Australian citizens only, he said.
The policy platform is, in part, designed to take on Pauline Hanson's One Nation, which has been surging in the polls and last week demolished the Liberal vote to win the Farrer by-election in southern NSW.
"There's much work the coalition must do to win your confidence. But with the policies I've announced tonight, and the vision I've outlined, I hope you can begin to believe again," Mr Taylor said.
One Nation leader Pauline Hanson said the by-election result had led the coalition "to finally see the light" and copy her party's policies.
"While they've been telling everyone that One Nation has no policies, they've been reading them very carefully because they're desperate for some good ideas," she said.
"The cosy two-party system protecting two tired, clueless and unpopular major parties is on borrowed time no matter how much they wish it was otherwise."
Greens deputy leader Mehreen Faruqi slammed both Labor and the coalition, accusing them of pandering to One Nation's politics.
"It is pathetic that the Liberals are willing to sink so low trying to out-racist One Nation," she said.
"Newsflash for Angus Taylor, migrants are entitled to the same safety net as everyone else."
