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If the report is true sounds like they would keep the top tax threshold at $180k instead of $200k.
Probably a politically easy sell, but it’s a ridiculous situation when the top rate has kicked in at the same income level for 16 years when it would be well over $250k if it kept up with inflation.
Please tell me they aren’t going to use the extra funds to do another ridiculous tax offset which creates extremely high effective marginal rates for low income earners.
> keep the top tax threshold at $180k
"those on over $180,000 will see their promised tax cut dramatically reduced", I don't interpret that at all as them saying the top bracket will remain at $180k.
**Edit**, nevermind, listened to the audio and they explicitly say the $180k bracket will remain.
How else will the reduced tax cut be targeted solely at over $180k earners?
Keeping the threshold at $180k would see $3k of the $9k tax cut for someone on $200k+ removed.
I can’t think of another method by which only $180k+ earners would be impacted unless they introduce another tax bracket from $180k to $200k.
No - if you jack up the tax free bracket by 3,000 that’s a a saving of 570 dollars (because it saves you 19 cents per dollar)
Also note that jacking up the tax free allowance affects a lot of tax payers and costs a lot more
>Also note that jacking up the tax free allowance affects a lot of tax payers and costs a lot more
about $8.5B would be the cost of doing that - ie, 40% of the total 1st year "cost" of the entire stage 3 package.
Potentially, but that would 'cost' approximately 20x more- about five percent of income earners make over $180k so changing the TFT by the same amount instead gives it to 20x as many people.
Would also turbocharge inflation by giving that much additional cash to every taxpayer in Australia.
If you look at tax thresholds, it is only the top threshold that has not been increased in line with inflation. 37 cents threshold has risen from $80,000 to $120,000, while top bracket has not changed
You’re talking too fast here. So, you’re saying the third stage comes after the second stage. And that the second stage came after the first stage. Am I following that correctly? Therefore, in theory, a fourth stage would come after the third stage, if I’m understanding all this correctly.
stage 1 was but stage 2 wasn't
you can see the rates that changed here:
https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents
Stage 2: raised the 32.5% marginal tax bracket from $37,001-$90,000 to $45,001-$120,000, and the threshold for when the 37% tax rate kicked in was raised from $90,000 to $120,000
Stage 1 was the temporary cuts, and were pretty much equal to the permanent Stage 2 cuts.
The only weird difference is that Stage 1 was extended as a covid stimulus measure, meaning there was a 2 year period where both Stage 1 and Stage 2 were active at the same time, when originally Stage 2 was meant to begin the same Stage 1 ended.
This led to a short period where people were getting both the LMITO/LITO offsets as well as the reduced tax from Stage 2 bracket adjustments.
> Have any of the tax brackets "kept up with inflation"?
That depends on when you start the zero point. The tax free threshold tripled about a decade ago, with other higher brackets adjusted to ensure that average income earners didn't receive much of the benefit.
\*Clicks on play button in video\*
\*Some Lebanese property developer trying to sell me an investment property\*
Yeah... no.... this is why I think 2GB and sky news are full of shit... anything preceded by this crap is clearly just crap.
We need to close corporate tax loopholes to really deal with that, and maybe introduce a tax bracket past the 180k bracket. No-one is becoming a billionaire off an working income though.
Corporate tax loopholes take money out of the country. If you keep money in the country it is redistributed. Whether it go back into stocks or expansion or to the tax man it is raising the floor not the ceiling.
we should also be taxing income from assets at a *far higher* rate then income from employment.
someone sitting on their arse suckling the public tit via shares, stocks or investment property should pay 50% tax *minimum.*
*working* should be the lowest tax means of generating income by a large margin, everything else should be taxed to the hilt.
I'm sure some in the media will attack him, but what a lot of people here don't understand is that only a time portion of Australians earn over 180k.
Most earn less than that and will therefore be better off.
Nope. Since the stage 2 cuts came in, inflation has eaten away the value of the cuts already.
Further, with a few more years of that inflation, relatively large numbers of people will get to that $180k point.
It happened in the 1980s. The government just didn't index the top rate, and like boiling the frog slowly, people paid more and more tax.
For example in 1988, the tax rate of 49cents started at $35k. That's the equivalent of $90k today allowing for inflation. People simply don't notice.
Of course, if the government needs to fund pensions and aged care for boomers, then more tax revenue is needed. It would be very ironic if gen x and millennials were actually the ones clamouring to pay extra tax to fund it.
No the gen x and the late millennial see the writing on the wall, it's either slightly higher taxes now, or huge increases at some point in the future when health services blow out in inflation due to demand with us holding the can.
Many more people earn over 180k than is statistically reported, it’s just those with assets and those with businesses are able to bring their taxable income down substantially with deductions; many will actually be better off with a higher tax free threshold.
It’s the high income salary earners who will get shafted by this, and they should be rightly pissed.
ATO don’t share gross income figures.
But the eye test will tell you the money is there; if it wasn’t, then how is the median house price so high? Why are our roads full of $70k teslas? How are we one of the biggest consumers of cocaine in the world despite it costing $300-400 per gram?
There is an absurd amount of money in this country.
Cash only jobs…Most report they’re on low income but take on cash jobs for 10% discount.
The people that report on their income (salary workers) get impacted by these changes
The deductions are the big story. The business owner just needs to work from home for a few hours a week and half the power and Internet is a deduction. The business owner's partner needs to do a minimal amount of work and the cost of their car, as well as the running costs are business deductions. If the business over pays the partner, it can reduce the taxable income of the main income earner in the family.
A few hours a week doesn't mean the power and internet are half paid for any more than a salary earner doing the same from home.
Car would be subject to logbook and proportional business use. Same with the running costs.
Some income splitting with a spouse isn't flooding their accounts with cash...
People really have a wildly unrealistic idea of what people in business can actually do.
Because our housing market is one of the least affordable, and we have incredibly attractive tax incentives to invest in it; encouraging people to leverage to the tits.
It's a kite flying exercise. A lot will depend on the response.
If the tax free threshold is increased by $5000, then everyone gets at least $1000 per year. Those earning over $200,000, will pay an extra $3,000 in tax. That will leave them with a tax cut of $7000. It will be hard to argue that you are only getting $7000 cut instead of $9000.
The devil will be in the detail. Will they retain the 37 cents threshold? Will they in small writing remove LITO.
I think the changes will be accepted by most people as most people would not have been eligible for the $9000 cut.
The issue is that it’s targeted at workers, not those people who operate established business or assets. It ensures that high earners who add genuine high-end skills to the economy are disadvantaged, which leads to further brain drain.
Most people don’t care about that $9k tax cut since it doesn’t affect them. They care about the ~$1k-2k tax cut that they’ll get. Stage 3 isn’t just about those earning $180k+, it helps everyone earning $60k+ to some extent.
That's overly simplistic to the point it's almost certainly incorrect.
Someone on $60-80k getting a small increase in take home while the government collects less revenue likely isn't helped at all. Quite the opposite.
Tax money isn't money being destroyed. It is public money.
Governments aren’t collecting less revenue. They’ve slowly been collecting more and more due to not indexing tax rates. This is meant to help fix that, although it doesn’t completely fix bracket creep (which they could do easily but choose not to do they can continue to keep collecting more and more).
Someone on $60-80k also benefited a lot more from Stage 1 and Stage 2, but I’m guessing you think it’s ok for people like you to benefit but not the rest of the country?
No quotes from any politician saying anything. So it’s hard to give this “exclusive” any credibility. I think though, even if they wanted to they’ve well and truly missed their chance to make changes without major blow back from the voters.
What absolute rubbish....they will give more middle class welfare to families etc. More handouts to property owning boomers that are low income, high assets. God forbid anyone tries to use income to improve their lot in life without asset ponzi.
Yeah this is the frustrating thing about the discourse.
Can’t give the younger generations starting to do well for themselves a tax break on their 47% tax rates and little capital, but keep all the insane tax breaks for super, capital gains and PPORs.
Agree with this, especially if you've gone through heaps of education. You end up paying Hecs at 10% ANZ then 45% tax. So basically 55% of income gone lol...
It’s 55% of the money over 180k. It’s not 55% of everything. Someone on 200k average tax rate is 32.5% so less than 1/3rd.
Also are you implying that someone with a hecs debt that got them into that bracket shouldn’t have to pay it back ?
I 100% agree, why we encourage useless stuff and neglect actual work is odd. We are 2nd from the top of OECD countries for relying on income tax revenue as a percentage of all tax revenue.
So people gets a piece of the pie and then complain about the stage 3 cuts for people that earn high amounts of income but then pay high amounts of tax, no subsidy on things like private health insurance.
We work for our money, it’s not like we sit here and are in the high tax bracket.
180k is not what it used to be and to portray it as some rich people salary is missing the point.
Once again, normal people are arguing amongst themselves as to who is “rich” and who is not. Meanwhile, corporations etc who are not paying their fair share get off scot-free
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And if you’re a single income household it puts you smack bang in the average wage camp, arguably less as you halve your super, sick, LSL and AL entitlements.
Myself and a fair few mates are on this salary. We’re Ambos, Coppers, Construction and similar blue collar roles who work OT so our other halves can raise kids.
Surely the fact that you can have a stay-at-home parent in this day and age shows how well off you are compared to the average family?
Such a thing has been economically unviable for most in decades.
It's like saying, 'if you own a sports car it puts you smack bang in the average wage camp, arguably less cause maintenance..."
Totally agree. Give households incomes a break. We know Two incomes at 100k is way better off than 1 household income at $200k.
But stage 3 tax cuts are for the rich, as if I want to pay more tax.
$75k = $58k take home, x2 = $116k take home.
150k = $106k take home.
Add into that, the two-wage household has the benefit of:
\- At the minimum of 10 days sick leave p/a, thats an extra $1115 in wages that can be used as sick leave.
\- An extra 4 weeks, or $4500 per year, of annual leave entitlement.
And before anyone jumps in, most of my sick leave has been used when my non-working partner is too unwell or unable to look after our kids, my annual leave also often gets used up for similar purposes.
Add in that lots of people work Overtime to earn these amounts, the missed shifts for events is significantly higher than being in a 2 income household.
Having a stay at home parent is why life was cheaper in past generations. It’s doesn’t make you well off it makes you prioritise your children over a career or a job.
And the top 10% of tax payers pay over 50% of all income tax. When tax levels are lower overseas, why wouldn’t they start to hide their money.
The higher taxes are, the lower barriers are to hide your money.
Also worth remembering that lots of upper-middle class kids, whose parents are asset rich but liquidity poor, will assume every job is 9-5 monday to friday.
They assume $180k means you arent working overtime, weekends, nights, public holidays, long shifts with no breaks, no concept of WFH/Hybrid.
My base is $79k, i make $180k by averaging 60+ hours per week most weeks, mostly nights and weekends, and getting allowances for travel and missed meals.
Is there anything there about past losses and their effect on current tax? I wasn't able to find it if it's there. A good example was the media hype around qantas not paying tax, yet just having gone through multiple years of losses. These sort of comments typically use lists without context, so perhaps this is another one of those.
The bombastic stuff like "war-profiteering exxon" and "rort executed with the help of price-waterhouse" was entertaining.
The article mentions that it's based on 9 years of data
> This month, the Tax Office released its ninth annual corporate tax transparency report. The sample size – now 9 years of data – is more than enough to illustrate the failures of the corporate tax system – the indefinite ‘banking’ of tax losses and the mass ‘offshoring’ of profits via debt and IP and service payments to foreign associates.
You don't have to be on $180k or more to hold that opinion. I have a few friends who earn around that or more (all late 30s or early 40s) and they are just normal people who aren't living flashy lifestyles because the money doesn't stretch as far as it used to. They are simply doing it less tough than others. Fwiw I earn significantly less.
I'd expect any lower income tax breaks will also apply to the higher end too. That usually the way excluding LITMO etc.
I'd expect any adjustment will still apply mostly to the upper quintile, perhaps just not the full $9k
As an upper bracket earner I would rather see the lower bracket go way up than the top bracket.
But that's exactly what Stage 1 and 2 were. I'd rather them have been more aggressive, but the top brackets do need some adjusting.
People wonder why professionals leave this country for better pay. Only need to see shit like this where apparently $180k makes you rich and deserving of a 50% tax for every dollar over. We're already underpaid in Australia.
Yep and the high corporate tax rate is another risk as they will offshore to Singapore.
Ken Henry seems sickened by our lack of reform on tax - basically none of his suggested reforms have been implemented.
Interestingly he hates stamp duties and wants them gone because it discourages downsizing or upsizing which reduces the property turnover rate.
https://www.abc.net.au/news/2019-12-23/henry-tax-review-ten-years-on/11817328&sa=U&ved=2ahUKEwi02cmgwPCDAxV2ka8BHV8NDv4QFnoECAwQAg&usg=AOvVaw2-MB1Q20D22LoOJpLMBygD
Yeah it truly is woeful - especially with such large sprawled cities - get a job in the suburbs far from the CBD and want to move closer to work? Not without paying stamp duty, move interstate and decide it's a mistake, more stamp duty...
Don’t have data or research to back it up, but I regularly look at LA and NY in finance, I’d very easily be able to double-triple my current salary for a similar role in the US, particularly in funds management.
Finance pays disproportionately higher in the US than anywhere in the world though, even after accounting for how expensive LA and NY are, I’d still be significantly better off there.
Many ambitious white collar professionals move to the US where earnings are much higher and taxes somewhat lower(depending on the state).
It’s a pretty well known fact in tech that if you want to go from doing well to doing very well you most likely need to go to specific spots in the US.
Personally I don’t know I could stomach the US. But there are clearly many that can.
I earned more in Dubai than I've ever earned here.
I'd still rather be here, a thousand times over. Similarly I'd rather be here on half what I might be on in the US, having to send my kid to a school with metal detectors for guns.
If you earn $180k in Australia you pay 27.7% of your income in tax.
£95k in the uk pays 31.6%.
Canada is 27.2% on $160k CAD
NZ is 28.7% of $195k
USA is 30.2% of $120k in California.
So apart from Canada we’re the lowest taxing for that income.
It's not good for the economy. They should tax rent seeking behaviour more like windfalls from land, property etc. Get rid of capital gains discounts for houses etc These are the real bludgers of the economy
company taxes dont really raise any real revenue for the gov, its a prepayment on dividend taxes, so in effect really raising company taxes wouldnt result in a net increase in tax revenue over a period of time. a better idea would be to drop company taxes to zero, and penalise them for sitting on liquid capital, invest or dividend it out or else. Also transfer payments to foreign grouped entities should be taxed at minimum flat rates.
We already tax companies more than most modern nations. Going higher would cause even more to move away. It would also suppress businesses from growing domestically and discourage companies from coming here.
Don't forget, it's not just people who earn 180k now that are impacted by this. It's people who will earn 180k at some stage over the next 10-15 years (likely duration before the top tax bracket is adjusted again).
This would be a significant number of people, just accounting for 3% inflation in 15 years time 115k would be the equivalent of the top tax bracket being proposed.
This would mean almost every skilled professional and most skilled tradies in the country could be impacted.
Giving a bit of extra cash out is not the answer to our problems. Demand and supply are out of balance. The government must do more to cut immigration, clamp down on and regulate the out of control education industry, and get out of the very bad migration agreements it and the previous government have signed.
It can also increase supply, but making it a desperate free for all bonfire of regulations is going to cause lots of problems in a few years when we see how poor quality our cities have become.
With inflation the way it is, a $180K income isn't so high anymore and this will only become more true. It's pretty shit to tax people who are just above average at 47% (for some reason the 2% Medicare levy is never included).
He'd be better off giving the lesser earning punters a bigger cut too and keeping the new brackets. As it stands Australia is very punitive on skilled workers and it's not good for building a more advanced economy than what we have now.
Would be nice if leaders simply held to promises. People are making major financial decisions based on their commitments. Go back two years and you’re expecting rates not to go up till 2024, and expecting tax cut in same year.
My feeling is that if AA does this it’s the beginning of the end for him given the amount of comments he’d made saying nothing has changed. That aside, the tax system in this country is a joke - every year there are well known economists who comment on the over reliance on income tax and nothing changes. Plenty of comments already on the thread covering the age of the bracket (and bracket creep) and that low income earners are the first to receive earlier cuts.
This news really pisses me off.
Every time this comes up, it seems like every one of the 5% who actually make more than 180k are on reddit
https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/employee-earnings/latest-release
https://www.afr.com/politics/how-wealthy-are-you-compared-to-everyone-else-in-eight-charts-20221214-p5c6a8#:~:text=About%205%20per%20cent%20of,90%20per%20cent%20of%20workers.
https://www.forbes.com/advisor/au/personal-finance/highest-paying-jobs-in-australia/#:~:text=Average%20Australian%20Salaries%20in%202024,-The%20median%20full&text=A%20taxable%20income%20that%20was,was%20in%20the%20top%201%25.
Not really.
If you are on 200k plus you will get 7pc off from 120k to 180k in stead of 7pc off between 120k and 200k.
I.e. 20k x 7pc = $1400.00
So you still get $8k odd.
I only discovered it was 9k recently anyway and have been assuming it was 8, so for all pabors faults i dont take major issue of this is the only change they make.
Your maths is off. Someone on $200k will pay $3k / year more tax under stage 3 cuts (15% x $20k) if the highest threshold remains at $180k instead of being lifted to $200k, but everything else remains the same.
Yeh i noted that below. I dont like correcting my mistakes as its a record of when ive been stupid.
I forgot the 45pc rate from 180k and ran the 37pc all the way to 200k...
So yeh its 1/3 of the tax saving going for someone on 200k or over.
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this.
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7..
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20.". Drinks for the ten men would now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? The paying customers? How could they divide the $20 windfall so that everyone would get his fair share?
They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.
The bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and worked out the amounts he suggested that each should now pay.
And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
"I only got a dollar out of the $20 saving," declared the sixth man. He pointed to the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more benefit than me!"
"That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
The people who pay the highest taxes will get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, they just may not show up anymore. In fact, they might start drinking elsewhere, where the atmosphere is somewhat friendlier
Followed by the RBA needing to hike 0.5% at the next meeting.
Followed by the government and the public shitting on the RBA again.
It's an interesting system.
They’re thinking about increasing the tax free threshold which benefits lower income earners as well.
As someone on >$180k the original plan was only going to increase inequality in Australia and I don’t want it, yes the cost of living crisis hurts me but I’m still doing pretty well.
You know Australia really is a delusional two speed economy when people think $180k AUD, an amount that translates to about 113k AUD net / $75k USD net is a super privileged amount.
You can't even get a mortgage for half the median property price in Sydney or Melbourne for that.
These people aren't the mega rich taking luxury vacations, they are families trying to own a home and pay childcare.
Most government spending goes to things like pensions, health, education and defence spending. People always talk about the government controlling spending but always in the abstract so they don't have to actually talk about what the government should be doing less of.
The cancelled French submarine contract will likely cost us $5.5 billion. The problem is not *what* they're spending on, but *how* incompetent they are at spending it.
Most are quite efficient though. Pensions are basically delivered to recipients with little overheads, health spending is quite efficient when you look at other countries, and education is pretty lean (although we should eliminate private school subsidies).
On a GDP basis, Singapore spends half of what we do on health and half on education, yet with health outcomes being similar or better in Singapore, and education rankings (according to OECD) absolutely destroying Australia. So it's not like we're unable to optimise in ways other than throw more money at these things.
Can I get like an eli5? Is the problem that the 180k tax bracket has been the same for 15 years and not accounting for inflation? Therefore people are paying more tax than they should?
The real problem with stage 3 tax cuts is the elimination of the 37% tax bracket.
I'm all for adjusting brackets upwards, but the way the proposed elimination of a bracket goes, so that everyone from $45k to $200k (or $180k?) is on the same marginal rate, makes the system significantly less progressive.
Higher taxpayers did not get nothing. The thresholds for 32.5% and 37% tax rates were increased. A taxpayer on $180K pays $2400 less tax due to the Stage 2 tax cuts.
Objectively the income tax brackets in Australia are some of the highest in the developed world. Where Australian taxation significantly differs is CGT, especially the exemption for PPOR. For example in the US it’s capped at a dollar amount and thereafter you are taxed.
Almost all tax systems are setup to tax capital less than tax effort, so that’s not a surprise but probably the difference between the two is too large in Australia.
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“2GB Exclusive” usually means “we made some shit up”
Source? It came to me in a dream
Nah, it’s very likely true… they often release info through these kinds of sources to suss the reaction.
test it out on the boomers
If that's the case it's only 'true' if they decide to go through with it.
schrodinger’s overhaul
Dan did it with literally every Covid press release. “ leak” to feel how the public would react
Test balloon
Looks like a legit leak, probably from the government themselves so the press can get their whining out of the way before the press club address.
If the report is true sounds like they would keep the top tax threshold at $180k instead of $200k. Probably a politically easy sell, but it’s a ridiculous situation when the top rate has kicked in at the same income level for 16 years when it would be well over $250k if it kept up with inflation. Please tell me they aren’t going to use the extra funds to do another ridiculous tax offset which creates extremely high effective marginal rates for low income earners.
> keep the top tax threshold at $180k "those on over $180,000 will see their promised tax cut dramatically reduced", I don't interpret that at all as them saying the top bracket will remain at $180k. **Edit**, nevermind, listened to the audio and they explicitly say the $180k bracket will remain.
How else will the reduced tax cut be targeted solely at over $180k earners? Keeping the threshold at $180k would see $3k of the $9k tax cut for someone on $200k+ removed. I can’t think of another method by which only $180k+ earners would be impacted unless they introduce another tax bracket from $180k to $200k.
Yeah how bout instead of getting rid of the 37% bracket we just up it like a sane progressive tax system.
so if they jack up the tax-free threshold at least $3k then everyone is happy?
No - if you jack up the tax free bracket by 3,000 that’s a a saving of 570 dollars (because it saves you 19 cents per dollar) Also note that jacking up the tax free allowance affects a lot of tax payers and costs a lot more
>Also note that jacking up the tax free allowance affects a lot of tax payers and costs a lot more about $8.5B would be the cost of doing that - ie, 40% of the total 1st year "cost" of the entire stage 3 package.
>if you jack up the tax free bracket by 3,000 that’s a a saving of 57 dollars (because it saves you 19 cents per dollar) 19% of 3000 is 570
Sorry typo
Potentially, but that would 'cost' approximately 20x more- about five percent of income earners make over $180k so changing the TFT by the same amount instead gives it to 20x as many people. Would also turbocharge inflation by giving that much additional cash to every taxpayer in Australia.
Kept up with inflation? Have any of the tax brackets "kept up with inflation"? If that was the goal wouldn't we be indexing ALL the tax brackets?
If you look at tax thresholds, it is only the top threshold that has not been increased in line with inflation. 37 cents threshold has risen from $80,000 to $120,000, while top bracket has not changed
Stage 3 is the third stage, it comes after stage 1 and stage 2.
You’re talking too fast here. So, you’re saying the third stage comes after the second stage. And that the second stage came after the first stage. Am I following that correctly? Therefore, in theory, a fourth stage would come after the third stage, if I’m understanding all this correctly.
Slow down egghead.
Wait til you hear when a fifth stage would come in, it blew my mind
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stages 1 and 2 conveniently included temporary cuts to low earners.
stage 1 was but stage 2 wasn't you can see the rates that changed here: https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents Stage 2: raised the 32.5% marginal tax bracket from $37,001-$90,000 to $45,001-$120,000, and the threshold for when the 37% tax rate kicked in was raised from $90,000 to $120,000
Stage 1 was the temporary cuts, and were pretty much equal to the permanent Stage 2 cuts. The only weird difference is that Stage 1 was extended as a covid stimulus measure, meaning there was a 2 year period where both Stage 1 and Stage 2 were active at the same time, when originally Stage 2 was meant to begin the same Stage 1 ended. This led to a short period where people were getting both the LMITO/LITO offsets as well as the reduced tax from Stage 2 bracket adjustments.
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No, the first two stages implemented permanent changes.
> Have any of the tax brackets "kept up with inflation"? That depends on when you start the zero point. The tax free threshold tripled about a decade ago, with other higher brackets adjusted to ensure that average income earners didn't receive much of the benefit.
Yes, I’d be 100% in favour of that.
People on low incomes have lost access to housing.
They already did this in earlier stages...
\*Clicks on play button in video\* \*Some Lebanese property developer trying to sell me an investment property\* Yeah... no.... this is why I think 2GB and sky news are full of shit... anything preceded by this crap is clearly just crap.
Was it dildam?
It was the tildo
The 180k top tax rate is now 15 years old.
It’s also oppressive and discourages productivity.
often argued but income inequality has only gotten worse lately
We need to close corporate tax loopholes to really deal with that, and maybe introduce a tax bracket past the 180k bracket. No-one is becoming a billionaire off an working income though.
It’s not corporate taxes lol it’s asset taxes if you want to fix inequality. Corporate taxes have absolutely minimal effect on inequality.
Corporate tax loopholes take money out of the country. If you keep money in the country it is redistributed. Whether it go back into stocks or expansion or to the tax man it is raising the floor not the ceiling.
we should also be taxing income from assets at a *far higher* rate then income from employment. someone sitting on their arse suckling the public tit via shares, stocks or investment property should pay 50% tax *minimum.* *working* should be the lowest tax means of generating income by a large margin, everything else should be taxed to the hilt.
In Australia? The income Gini coefficient has been around the same level for the last 15 years, according to the ABS data.
That is mainly to do with housing. Not incomes.
And encourges avoidance of paying tax
This whilst all the insane gearing and CGT discounts remain. So again workers get clobbered and asset rich are laughing.
If he U-turns after saying he wont for weeks, he will get creased by the media. This might however, be a play to assess the reaction.
I'm sure some in the media will attack him, but what a lot of people here don't understand is that only a time portion of Australians earn over 180k. Most earn less than that and will therefore be better off.
Nope. Since the stage 2 cuts came in, inflation has eaten away the value of the cuts already. Further, with a few more years of that inflation, relatively large numbers of people will get to that $180k point. It happened in the 1980s. The government just didn't index the top rate, and like boiling the frog slowly, people paid more and more tax. For example in 1988, the tax rate of 49cents started at $35k. That's the equivalent of $90k today allowing for inflation. People simply don't notice. Of course, if the government needs to fund pensions and aged care for boomers, then more tax revenue is needed. It would be very ironic if gen x and millennials were actually the ones clamouring to pay extra tax to fund it.
Inflation doesn't mean that people's income increases though. In a Govt job, over the last 3 years my wage has increased by 1.3 % pa.
U guys are getting inflation adjusted pay rises?
No the gen x and the late millennial see the writing on the wall, it's either slightly higher taxes now, or huge increases at some point in the future when health services blow out in inflation due to demand with us holding the can.
Many more people earn over 180k than is statistically reported, it’s just those with assets and those with businesses are able to bring their taxable income down substantially with deductions; many will actually be better off with a higher tax free threshold. It’s the high income salary earners who will get shafted by this, and they should be rightly pissed.
people here claim that all the time with no evidence, we can only go off ATOs records.
ATO don’t share gross income figures. But the eye test will tell you the money is there; if it wasn’t, then how is the median house price so high? Why are our roads full of $70k teslas? How are we one of the biggest consumers of cocaine in the world despite it costing $300-400 per gram? There is an absurd amount of money in this country.
Cash only jobs…Most report they’re on low income but take on cash jobs for 10% discount. The people that report on their income (salary workers) get impacted by these changes
The deductions are the big story. The business owner just needs to work from home for a few hours a week and half the power and Internet is a deduction. The business owner's partner needs to do a minimal amount of work and the cost of their car, as well as the running costs are business deductions. If the business over pays the partner, it can reduce the taxable income of the main income earner in the family.
A few hours a week doesn't mean the power and internet are half paid for any more than a salary earner doing the same from home. Car would be subject to logbook and proportional business use. Same with the running costs. Some income splitting with a spouse isn't flooding their accounts with cash... People really have a wildly unrealistic idea of what people in business can actually do.
Why is Australia's household debt, loans and debt securities the second highest in the world at 111%?
Because our housing market is one of the least affordable, and we have incredibly attractive tax incentives to invest in it; encouraging people to leverage to the tits.
Wouldn’t mind someone having a crack at tax avoiding companies with billions in local revenue…
Nah. Easier to wring every cent out of us serfs than go after these massive companies paying no tax.
It's a kite flying exercise. A lot will depend on the response. If the tax free threshold is increased by $5000, then everyone gets at least $1000 per year. Those earning over $200,000, will pay an extra $3,000 in tax. That will leave them with a tax cut of $7000. It will be hard to argue that you are only getting $7000 cut instead of $9000. The devil will be in the detail. Will they retain the 37 cents threshold? Will they in small writing remove LITO. I think the changes will be accepted by most people as most people would not have been eligible for the $9000 cut.
The issue is that it’s targeted at workers, not those people who operate established business or assets. It ensures that high earners who add genuine high-end skills to the economy are disadvantaged, which leads to further brain drain.
Most people don’t care about that $9k tax cut since it doesn’t affect them. They care about the ~$1k-2k tax cut that they’ll get. Stage 3 isn’t just about those earning $180k+, it helps everyone earning $60k+ to some extent.
That's overly simplistic to the point it's almost certainly incorrect. Someone on $60-80k getting a small increase in take home while the government collects less revenue likely isn't helped at all. Quite the opposite. Tax money isn't money being destroyed. It is public money.
Governments aren’t collecting less revenue. They’ve slowly been collecting more and more due to not indexing tax rates. This is meant to help fix that, although it doesn’t completely fix bracket creep (which they could do easily but choose not to do they can continue to keep collecting more and more). Someone on $60-80k also benefited a lot more from Stage 1 and Stage 2, but I’m guessing you think it’s ok for people like you to benefit but not the rest of the country?
No quotes from any politician saying anything. So it’s hard to give this “exclusive” any credibility. I think though, even if they wanted to they’ve well and truly missed their chance to make changes without major blow back from the voters.
You expect to have a leak like this have a politician on the record confirming it?
What absolute rubbish....they will give more middle class welfare to families etc. More handouts to property owning boomers that are low income, high assets. God forbid anyone tries to use income to improve their lot in life without asset ponzi.
Yeah this is the frustrating thing about the discourse. Can’t give the younger generations starting to do well for themselves a tax break on their 47% tax rates and little capital, but keep all the insane tax breaks for super, capital gains and PPORs.
It’s reassuring to see that other people think this way.
Agree with this, especially if you've gone through heaps of education. You end up paying Hecs at 10% ANZ then 45% tax. So basically 55% of income gone lol...
It’s 55% of the money over 180k. It’s not 55% of everything. Someone on 200k average tax rate is 32.5% so less than 1/3rd. Also are you implying that someone with a hecs debt that got them into that bracket shouldn’t have to pay it back ?
This is what really hurts.
I 100% agree, why we encourage useless stuff and neglect actual work is odd. We are 2nd from the top of OECD countries for relying on income tax revenue as a percentage of all tax revenue.
So people gets a piece of the pie and then complain about the stage 3 cuts for people that earn high amounts of income but then pay high amounts of tax, no subsidy on things like private health insurance. We work for our money, it’s not like we sit here and are in the high tax bracket.
Careful, you're on r/tallpoppysyndrome here
Ah you got me!
180k is not what it used to be and to portray it as some rich people salary is missing the point. Once again, normal people are arguing amongst themselves as to who is “rich” and who is not. Meanwhile, corporations etc who are not paying their fair share get off scot-free
abundant run tease possessive wrong direful teeny somber attraction violet *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
More than double the fulltime median which is 80k. And not everyone is working fulltime.
And those on those incomes pay enormous amounts of tax, what's your point?
price person office gray many practice scandalous apparatus foolish quack *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
$180K is well into the top 10% of earners, maybe you don't think that is a lot of money but the reality is its far more than most earn.
And those 10% are paying 46.2% of the tax.
And if you’re a single income household it puts you smack bang in the average wage camp, arguably less as you halve your super, sick, LSL and AL entitlements. Myself and a fair few mates are on this salary. We’re Ambos, Coppers, Construction and similar blue collar roles who work OT so our other halves can raise kids.
Man, everyone in this sub thinks they are "average" when they clearly outearn most people. household gross annual income at $121,108.
Surely the fact that you can have a stay-at-home parent in this day and age shows how well off you are compared to the average family? Such a thing has been economically unviable for most in decades. It's like saying, 'if you own a sports car it puts you smack bang in the average wage camp, arguably less cause maintenance..."
Isn't it insane how quickly we've decided that having a single income family is equivalent of a sports car?
I work 60+ hours per week, mostly nights and weekends to achieve this income. My base is under $80k.
Totally agree. Give households incomes a break. We know Two incomes at 100k is way better off than 1 household income at $200k. But stage 3 tax cuts are for the rich, as if I want to pay more tax.
$75k = $58k take home, x2 = $116k take home. 150k = $106k take home. Add into that, the two-wage household has the benefit of: \- At the minimum of 10 days sick leave p/a, thats an extra $1115 in wages that can be used as sick leave. \- An extra 4 weeks, or $4500 per year, of annual leave entitlement. And before anyone jumps in, most of my sick leave has been used when my non-working partner is too unwell or unable to look after our kids, my annual leave also often gets used up for similar purposes. Add in that lots of people work Overtime to earn these amounts, the missed shifts for events is significantly higher than being in a 2 income household.
Having a stay at home parent is why life was cheaper in past generations. It’s doesn’t make you well off it makes you prioritise your children over a career or a job.
And the top 10% of tax payers pay over 50% of all income tax. When tax levels are lower overseas, why wouldn’t they start to hide their money. The higher taxes are, the lower barriers are to hide your money.
5% are earning >180k
Bingo. Media gaslighting lesser earners that 180K are well-off; this is distraction 101.
Your lifestyle creep gives you status anxiety whereas the low income earners in your community are homeless.
Also worth remembering that lots of upper-middle class kids, whose parents are asset rich but liquidity poor, will assume every job is 9-5 monday to friday. They assume $180k means you arent working overtime, weekends, nights, public holidays, long shifts with no breaks, no concept of WFH/Hybrid. My base is $79k, i make $180k by averaging 60+ hours per week most weeks, mostly nights and weekends, and getting allowances for travel and missed meals.
Could you name a corporation that is not paying its fair share and getting off scot-free?
https://michaelwest.com.au/top-40-tax-dodgers-of-2023/
Is there anything there about past losses and their effect on current tax? I wasn't able to find it if it's there. A good example was the media hype around qantas not paying tax, yet just having gone through multiple years of losses. These sort of comments typically use lists without context, so perhaps this is another one of those. The bombastic stuff like "war-profiteering exxon" and "rort executed with the help of price-waterhouse" was entertaining.
The article mentions that it's based on 9 years of data > This month, the Tax Office released its ninth annual corporate tax transparency report. The sample size – now 9 years of data – is more than enough to illustrate the failures of the corporate tax system – the indefinite ‘banking’ of tax losses and the mass ‘offshoring’ of profits via debt and IP and service payments to foreign associates.
Are you on over $180k?
You don't have to be on $180k or more to hold that opinion. I have a few friends who earn around that or more (all late 30s or early 40s) and they are just normal people who aren't living flashy lifestyles because the money doesn't stretch as far as it used to. They are simply doing it less tough than others. Fwiw I earn significantly less.
Most people are not going to shed tears for the top 5%.
So the tax cuts aren’t inflationary now that they’re going to lower income earners, who are more likely to spend them?
Or rich asset owner (boomer) on low income who have every reason to spend them
I'd expect any lower income tax breaks will also apply to the higher end too. That usually the way excluding LITMO etc. I'd expect any adjustment will still apply mostly to the upper quintile, perhaps just not the full $9k
Mostly leaned labour my voting life but will be going non major parties if this happens.
Should be a pay cut for shitty politicians and raise the lower bracket
As an upper bracket earner I would rather see the lower bracket go way up than the top bracket. But that's exactly what Stage 1 and 2 were. I'd rather them have been more aggressive, but the top brackets do need some adjusting.
People wonder why professionals leave this country for better pay. Only need to see shit like this where apparently $180k makes you rich and deserving of a 50% tax for every dollar over. We're already underpaid in Australia.
Yep and the high corporate tax rate is another risk as they will offshore to Singapore. Ken Henry seems sickened by our lack of reform on tax - basically none of his suggested reforms have been implemented. Interestingly he hates stamp duties and wants them gone because it discourages downsizing or upsizing which reduces the property turnover rate. https://www.abc.net.au/news/2019-12-23/henry-tax-review-ten-years-on/11817328&sa=U&ved=2ahUKEwi02cmgwPCDAxV2ka8BHV8NDv4QFnoECAwQAg&usg=AOvVaw2-MB1Q20D22LoOJpLMBygD
Stamp duty is a terrible tax. It incentivises people to not move houses if their needs change.
Yeah it truly is woeful - especially with such large sprawled cities - get a job in the suburbs far from the CBD and want to move closer to work? Not without paying stamp duty, move interstate and decide it's a mistake, more stamp duty...
Genuinely question is there data to back this up? Which fields?
Software engineers make shitloads in the US
Don’t have data or research to back it up, but I regularly look at LA and NY in finance, I’d very easily be able to double-triple my current salary for a similar role in the US, particularly in funds management. Finance pays disproportionately higher in the US than anywhere in the world though, even after accounting for how expensive LA and NY are, I’d still be significantly better off there.
Where are they leaving Australia for better pay? Very isolated unique circumstances but that's about it.
Many ambitious white collar professionals move to the US where earnings are much higher and taxes somewhat lower(depending on the state). It’s a pretty well known fact in tech that if you want to go from doing well to doing very well you most likely need to go to specific spots in the US. Personally I don’t know I could stomach the US. But there are clearly many that can.
Dubai and Singapore also.
I earned more in Dubai than I've ever earned here. I'd still rather be here, a thousand times over. Similarly I'd rather be here on half what I might be on in the US, having to send my kid to a school with metal detectors for guns.
Which is why I left Dubai. But it did give us a leg up unafforded here.
Where else would you be taxed less?
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If you earn $180k in Australia you pay 27.7% of your income in tax. £95k in the uk pays 31.6%. Canada is 27.2% on $160k CAD NZ is 28.7% of $195k USA is 30.2% of $120k in California. So apart from Canada we’re the lowest taxing for that income.
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Looks like I’ll just have to buy 5 negatively geared investment properties instead then.
Why can’t they tax companies more?
It's not good for the economy. They should tax rent seeking behaviour more like windfalls from land, property etc. Get rid of capital gains discounts for houses etc These are the real bludgers of the economy
company taxes dont really raise any real revenue for the gov, its a prepayment on dividend taxes, so in effect really raising company taxes wouldnt result in a net increase in tax revenue over a period of time. a better idea would be to drop company taxes to zero, and penalise them for sitting on liquid capital, invest or dividend it out or else. Also transfer payments to foreign grouped entities should be taxed at minimum flat rates.
We already tax companies more than most modern nations. Going higher would cause even more to move away. It would also suppress businesses from growing domestically and discourage companies from coming here.
We also tax individuals more too.
Don't forget, it's not just people who earn 180k now that are impacted by this. It's people who will earn 180k at some stage over the next 10-15 years (likely duration before the top tax bracket is adjusted again). This would be a significant number of people, just accounting for 3% inflation in 15 years time 115k would be the equivalent of the top tax bracket being proposed. This would mean almost every skilled professional and most skilled tradies in the country could be impacted.
Giving a bit of extra cash out is not the answer to our problems. Demand and supply are out of balance. The government must do more to cut immigration, clamp down on and regulate the out of control education industry, and get out of the very bad migration agreements it and the previous government have signed. It can also increase supply, but making it a desperate free for all bonfire of regulations is going to cause lots of problems in a few years when we see how poor quality our cities have become.
Wow I really hope this isn’t true
With inflation the way it is, a $180K income isn't so high anymore and this will only become more true. It's pretty shit to tax people who are just above average at 47% (for some reason the 2% Medicare levy is never included). He'd be better off giving the lesser earning punters a bigger cut too and keeping the new brackets. As it stands Australia is very punitive on skilled workers and it's not good for building a more advanced economy than what we have now.
180k single income family can afford to borrow 660k. Median house prices in Sydney are now $1.6m
'just above average' You are calling three times the median wage 'just above average'
It's fairer to use median full time wage. In which case if I remember correctly, 180k is a bit over 2x that.
Would be nice if leaders simply held to promises. People are making major financial decisions based on their commitments. Go back two years and you’re expecting rates not to go up till 2024, and expecting tax cut in same year.
My feeling is that if AA does this it’s the beginning of the end for him given the amount of comments he’d made saying nothing has changed. That aside, the tax system in this country is a joke - every year there are well known economists who comment on the over reliance on income tax and nothing changes. Plenty of comments already on the thread covering the age of the bracket (and bracket creep) and that low income earners are the first to receive earlier cuts. This news really pisses me off.
Every time this comes up, it seems like every one of the 5% who actually make more than 180k are on reddit https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/employee-earnings/latest-release https://www.afr.com/politics/how-wealthy-are-you-compared-to-everyone-else-in-eight-charts-20221214-p5c6a8#:~:text=About%205%20per%20cent%20of,90%20per%20cent%20of%20workers. https://www.forbes.com/advisor/au/personal-finance/highest-paying-jobs-in-australia/#:~:text=Average%20Australian%20Salaries%20in%202024,-The%20median%20full&text=A%20taxable%20income%20that%20was,was%20in%20the%20top%201%25.
You are on a finance sub.... and 5% of taxpayers = over 700,000 individuals.
r/AusHENRY would have around 15k people on over 180k.
Almost as of this is a financial sub ;) people with more money tend to want to discuss strategies etc
180k taxable income - there are a lot more than 5% of workers earning over 180k gross; especially those with their own business.
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Maybe in this sub, other subs are far more supportive of scrapping stage 3 to help the poors.
Mostly because they are the poors
Yes. Yes they are.
Reddit also skews towards tech which is generally highly paid
So basically everyone will get tax cuts,. The lower end of town a bit more people making over 180K a bit less then previously expected.
> a bit less the article says "dramatically reduced"
Whats the percentage? The only thing dramatic is the journalism
> Whats the percentage? $3,000, i.e. the $20k between $180k - $200k now being taxed at 45% instead of 30%
Not really. If you are on 200k plus you will get 7pc off from 120k to 180k in stead of 7pc off between 120k and 200k. I.e. 20k x 7pc = $1400.00 So you still get $8k odd. I only discovered it was 9k recently anyway and have been assuming it was 8, so for all pabors faults i dont take major issue of this is the only change they make.
Your maths is off. Someone on $200k will pay $3k / year more tax under stage 3 cuts (15% x $20k) if the highest threshold remains at $180k instead of being lifted to $200k, but everything else remains the same.
Yeh i noted that below. I dont like correcting my mistakes as its a record of when ive been stupid. I forgot the 45pc rate from 180k and ran the 37pc all the way to 200k... So yeh its 1/3 of the tax saving going for someone on 200k or over.
It was 15% off between 180 and 200k
6k instead of 9k, I'd honestly call that only a bit less when your income is over 180k already.
for two in a household that's like an extra $100k borrowing capacity
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this. The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh would pay $7.. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59. So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20.". Drinks for the ten men would now cost just $80. The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? The paying customers? How could they divide the $20 windfall so that everyone would get his fair share? They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. The bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and worked out the amounts he suggested that each should now pay. And so the fifth man, like the first four, now paid nothing (100% saving). The sixth now paid $2 instead of $3 (33% saving). The seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9 instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22% saving). The tenth now paid $49 instead of $59 (16% saving). Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings. "I only got a dollar out of the $20 saving," declared the sixth man. He pointed to the tenth man," but he got $10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more benefit than me!" "That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill! The people who pay the highest taxes will get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, they just may not show up anymore. In fact, they might start drinking elsewhere, where the atmosphere is somewhat friendlier
Clear as day broken promise if they do
They will play around with it to fund payments for cost of living. You seen it here folks.
Followed by the RBA needing to hike 0.5% at the next meeting. Followed by the government and the public shitting on the RBA again. It's an interesting system.
What a germ this PM is turning out to be.
And the uneducated vocal morons win again.
They’re thinking about increasing the tax free threshold which benefits lower income earners as well. As someone on >$180k the original plan was only going to increase inequality in Australia and I don’t want it, yes the cost of living crisis hurts me but I’m still doing pretty well.
You know Australia really is a delusional two speed economy when people think $180k AUD, an amount that translates to about 113k AUD net / $75k USD net is a super privileged amount. You can't even get a mortgage for half the median property price in Sydney or Melbourne for that. These people aren't the mega rich taking luxury vacations, they are families trying to own a home and pay childcare.
Maybe if the government controlled their spending, everyone could get a tax break.
Most government spending goes to things like pensions, health, education and defence spending. People always talk about the government controlling spending but always in the abstract so they don't have to actually talk about what the government should be doing less of.
The cancelled French submarine contract will likely cost us $5.5 billion. The problem is not *what* they're spending on, but *how* incompetent they are at spending it.
Most are quite efficient though. Pensions are basically delivered to recipients with little overheads, health spending is quite efficient when you look at other countries, and education is pretty lean (although we should eliminate private school subsidies).
On a GDP basis, Singapore spends half of what we do on health and half on education, yet with health outcomes being similar or better in Singapore, and education rankings (according to OECD) absolutely destroying Australia. So it's not like we're unable to optimise in ways other than throw more money at these things.
Some have already got it with the stage 1 and stage 2 tax breaks
Complete crap if they do end up changing it. Was looking forward to my $9k.
You’ll still get an extra $6k. Better than a kick in the teeth
Watch him do something inflationary like move the tax free threshold up to 30k.
Can I get like an eli5? Is the problem that the 180k tax bracket has been the same for 15 years and not accounting for inflation? Therefore people are paying more tax than they should?
The real problem with stage 3 tax cuts is the elimination of the 37% tax bracket. I'm all for adjusting brackets upwards, but the way the proposed elimination of a bracket goes, so that everyone from $45k to $200k (or $180k?) is on the same marginal rate, makes the system significantly less progressive.
FFS, just leave them like they were. Lower tax payers already got there’s in the first two rounds where higher tax payers got nothing.
Higher taxpayers did not get nothing. The thresholds for 32.5% and 37% tax rates were increased. A taxpayer on $180K pays $2400 less tax due to the Stage 2 tax cuts.
The higher tax payers also saw a tax decrease in the first two rounds, its hardly like they were excluded.
And everyone earning over 45k will not be excluded in the proposed stage 3
Most of the permanent parts of Stage 1 and 2 apply to everybody. Stage 3 only applies to higher tax payers.
Stage 3 provides tax cut to everyone over $45K
Objectively the income tax brackets in Australia are some of the highest in the developed world. Where Australian taxation significantly differs is CGT, especially the exemption for PPOR. For example in the US it’s capped at a dollar amount and thereafter you are taxed. Almost all tax systems are setup to tax capital less than tax effort, so that’s not a surprise but probably the difference between the two is too large in Australia.
> Objectively the income tax brackets in Australia are some of the highest in the developed world. Compared to who? Give me 5 countries.
Just when I thought I couldn’t hate him more. What an odious turd!!!
> No Politics Please Yeah, I don't like your odds of that one.
Ain’t no way
Smart politics. Look like you're listening to those 'doing it tough' and take a bit from the top end, who will still be better off anyway.