Australian Tax Cuts will they Advance Australia Fair?
The title is enquiring into whether tax cuts will advance australia fair. This has to be the modus operandi of determining what is in the public interest in a democracy based on sharing and representation.
I have felt inspired around this subject, not for the on the surface facts but beyond that. The data below I’ve compiled in Excel from this article as the information didn’t copy across (trusting the figures see reference link below. You can check it on the original article.
My curious questions:
* Why are the categories of income not basedon the tax brackets and/or equally incremental so each category can be evaluated?
* Why are lump sum payments in the same table as tax cuts given they are different (one off, tax cuts)?
* Why deliver tax cuts of $2.60 per week for $150,000 plus when that is negligible to those on high incomes? Why not aggregate this income and fund projects, particularly in the low income area e.g. homelessness (not mentioned in the budget)
* Why a yearly tax offset with a tax return for low-middle income earners and not high income earners. Why not percentage cuts to tax brackets? Why this difference? This appears a incentive to lodge so the Tax Office has the returns to check on tax dues, not a tax cut with the intention of rendering people ‘better off’.
* Why $5.58 ($40,000) per week in 2018/19 jumps to $8.75 per week in 2024/2025? Compared to…
* Why $2.60 ($1,000,000) per week in 2018/19 jumps to $138.94 per week in 2024/2025? (is this fair?)
* Why are future 2022-25 tax cuts (percentage rate cuts) legislated today for high income earners when it is not relevant 2018 nor realised until 20122? What is the purpose of having this data? Is this to lock in future cuts for them in legislation?
* Is expanding the 32.5% tax bracket for high income earners (removing the 45% and 37% tax brackets) to be equivalent to middle income earners fair given significant differences in income, the cost of living and lifestyles?
* What did the corporate lobbiests put to the Government about tax cuts?
* Why do the high income earner tax brackets change but not low to middle income earners? This appears a significant reduction. What is the rationale?
* Are tax payers better off with fiscal policy when government spending on the whole is being cut and privatisation is occuring of public assets? * Is it better for government to use the $144 billion rather than allocate it in tax cuts as incentives and narrowing tax brackets for those on high incomes * Are the tax cuts/incentives an sign that the economy is in a downturn (sluggish) and they are seeking to pump prime the economy?| 2018-2019 | 2022-23 | 2024-2025 | ||||
| Income | Per Week | Per Year | Per Week | Per Year | Per Week | Per Year |
| $ | $ | $ | $ | $ | $ | $ |
| 20,000 | none | none | none | none | none | none |
| 40,000 | 5.58 | 290 | 8.75 | 455 | 8.75 | 455 |
| 60,000 | 10.19 | 530 | 10.38 | 540 | 10.38 | 540 |
| 80,000 | 10.19 | 530 | 10.38 | 540 | 10.38 | 540 |
| 100,000 | 9.90 | 515 | 21.63 | 1,125 | 21.63 | 1,125 |
| 150,000 | 2.60 | 135 | 38.94 | 2.025 | 64.9 | 3,375 |
| 200,000 | 2.60 | 135 | 38.94 | 2,025 | 138.94 | 7,225 |
| 1,000,000 | 2.60 | 135 | 38.94 | 2,025 | 138.94 | 7,225 |
| TAX RATES | ||||||
| 0 – $18,200 | Nil | |||||
| $18,201 – $37,000 | 19c for each $1 over $18,200 | |||||
| $37,001 – $87,000 | $3,572 plus 32.5c for each $1 over $37,000 | |||||
| $87,001 – $180,000 | $19,822 plus 37c for each $1 over $87,000 | |||||
| $180,001 and over | $54,232 plus 45c for each $1 over $180,000 | |||||
Australians must decide what tax cuts they support
AUSTRALIANS will get a cash boost after the government’s tax cuts passed the Senate. This is what it means for you.
Tax relief is on the way
THE Turnbull Government’s $144 billion income tax cuts will go ahead after the Senate today gave its approval of the package.
The government won the vote 37-34 with support from the entire crossbench except independent Tim Storer, despite objections from Labor and the Greens.
The package was sent to the House of Representatives where the government has the numbers to make it law, starting from July 1.
It means Australians earning more than $87,000 will see more in their pay packets from July 1, while low and middle income earners will get lump sum payments of up to $530 when they lodge their tax return next year.
But further tax cuts earmarked for the future, could be reversed after Labor said it would repeal most of the tax package if it wins the next election.
This means Australians will have to chose between the tax relief the coalition is offering, and the measures Labor wants to introduce.
There is wide support for cutting taxes on people earning up to $90,000 a year, but Labor opposed the package’s third stage, which benefits people earning up to $200,000 from 2024.
Treasurer Scott Morrison has said under the government’s plan high income earners will still pay more tax with six per cent of the highest income earners paying 30 per cent of the tax revenue.
Under the government’s plan, in 2024-25, a person earning $200,000 would pay around 13 times more tax than a person earning $41,000.
Ahead of the vote One Nation leader Pauline Hanson conceded it was a gamble to support the entire package, having previously argued the third and final stage was unaffordable, but said she was now more optimistic.
“Yes we are supporting the personal tax cuts … we are pleased to do so,” Senator Hanson told the ABC on Thursday.
Meanwhile, Senator Storer issued a scathing attack on the Centre Alliance party, formerly the Nick Xenophon Team, of which he was once a member, for voting with the government.
“Today, Centre Alliance turned its back on the principles central to Nick Xenophon and the party he started,” Senator Storer said.
Here’s what to expect.
COALITION’S PACKAGE
The income tax cuts will be delivered in three stages over seven years. The first stage involves giving low and middle income earners a tax offset of up to $530, which they will be able to claim when they lodge their 2018/19 tax return next year.
People earning up to $37,000 a year would get a maximum offset of $200, while people earning between $37,000 and $90,000 would get a maximum offset of $530.
Labor supports the offset as well as part of step two of the package, which also starts on July 1 and involves increasing the 32.5 per cent tax bracket from $87,000 to $90,000, saving a person earning about $90,000 about $135 in tax.
But Labor doesn’t support further tax cuts included in step two to extend the 32.5 per cent bracket to include those earning up to $120,000 from July 1, 2022.
It also doesn’t support step three of the package, which removes the 37 per cent tax bracket so that those earning up to $200,000 only pay 32.5 per cent tax from 2024.
Labor has said it would repeal all the changes except for the tax offset.
Shadow treasurer Chris Bowen said both stages two and three of the government’s tax package would be repealed if Labor won the next election.
But Labor intends to replace the tax cuts with its own package, which it says will leave those earning less than $125,000 better off than the coalition’s plan does.
The party will deliver up to $928 in tax relief through refunds paid when people do their tax returns instead of through tax cuts.
It will also keep the Budget Repair Levy for higher income earners until the Budget is “back in sustainable surplus”, which it expects to achieve in 2022/23.
Mr Bowen said 70 per cent of Australian workers were “better off under Labor’s plan”.
The vote of One Nation leader Senator Pauline Hanson and her colleague will be crucial in getting the coalition’s income tax package passed. Picture: Mick Tsikas/AAPSource:AAP
TAX CUTS MAY HURT SERVICES
The Australian Council of Social Service was critical of the tax cuts and said people would miss out because the budget won’t be able to fund necessary services.
“The tax cut package is gambling the future of our medical services, aged care services, disability services, and social security payments most of us rely upon at some stage in our lives,” chief executive Cassandra Goldie said on Thursday.
“Essential services will lose funding because tax cuts have to be paid for.”
Dr Goldie said no one could know what the economic situation would look like in 2024 when the biggest round of tax cuts go through.
“Are we fortune tellers? No, and none us know what will happen to the economy and the budget that far ahead,” she said.
“We got into trouble last time a full income tax package was passed in advance. “The GFC meant our budget was in the red for a very long time and our essential services suffered as a result.”
— With AAP
Do you think the Turnbull Government’s income tax cuts should have been passed? Comment below.
How the rich pay less tax
