Personal Tax Cuts Targeting Low and Middle Income Earners
More than Double the Low and Middle Income Tax Offset
Increase the Low and Middle Income Tax Offset from 1 July 2018 for this Current 2019 Financial Year from $530 up to a maximum $1,080 to be received on assessment. To provide an immediate benefit to assist families with financial pressures. The application of the proposed benefit is:
- Taxpayers with taxable incomes of $37,000 or less will receive a benefit of up to $255.
- Taxpayers with taxable incomes of $37,001 to $48,000 will receive a benefit of up to $1,080. Increasing at 7.5 cents per dollar after $37,000 of taxable income up to the maximum $1,080.
- Taxpayers with taxable incomes of $48,001 to $90,000will receive a benefit of up to $1,080.
- Taxpayers with taxable incomes of $90,001 to $126,000 will receive a pro rata benefit phasing out at 3 cents per dollar.
Protecting Us From Bracket Creep
Increase the upper limit of the 19% tax bracket from $37,000 to $45,000. This is a good proposal but this is proposed to apply from 1 July 2022 being the 2023 Tax Year with 4 years to wait to benefit.
Reduce the 32.5% tax rate to 30% from the 2025 Tax Year together with already legislated changes to increase the upper limit of the (now) 32.5% tax bracket from $120,000 to $200,000 and abolish the 37% tax bracket altogether. This is a great change where taxpayers earning up to $200,000 would pay no more than 30% tax plus medicare levy. This is heading in a very good direction. However, we still have to wait 6 years to benefit.
Merge the Low and Middle Income Tax Offset and the Low Income Tax Offset to form one Low Income Tax Offset from 1 July 2022 with a maximum offset of $700.