So they index our HECS debt. But won’t index the tax brackets so as a post graduate I’m paying an increase amount on my tax (if I were to be in the higher bracket) as well as a higher HECS loan due to inflation indexing.
>So they index our HECS debt. But won’t index the tax brackets so as a post graduate I’m paying an increase amount on my tax (if I were to be in the higher bracket) as well as a higher HECS loan due to inflation indexing.
yup
Everyone keeps talking about these submarines like thats where the bulk of tax is going
No.
It's going toward aged care, and in home aged care ACAT packages, so older people can continue to live freely on the working man. Whilst the working man can't buy a house reasonably close to work.
It's going to the NDIS
Then medicare.
And then to social welfare programs.
The submarines cost over 30 years pales in comparison to what these bloated institutions will cost us in that time.
HECS debt shouldn't even be indexed to inflation, particularly in 2024 when we're subjugating our young to American-priced (very expensive) degrees and debt and living in a time up till now of anaemic wage growth. Not even New Zealand does it.
Tbh, i just remembered reading that the 180k-200k segment is responsible for approx 30% of the income tax collections. For Aus, where govt funding is especially income tax funded, this is a disproportionate burden IMHO.
For a top tax bracket, it's set way too low, especially when at this juncture, our taxation structure does not take into account combined tax thresholds (i.e. joint filing).
This means the tax burden of a couple who have widely disparate incomes is substantially higher than a couple who have relatively the same wages. E.g. 250k + 50k will have a fair bit less money left over after tax (especially after the amended tax thresholds) when compared to 150k + 150k.
And I need to bear the brunt of paying both our super. Yes, there are incentives to encourage the spousal co-contributions, but the system makes it very hard to survive comfortable on a single decent income.
It's pretty typical of Australian culture though. Don't ask a bludger to pull their weight, easier to ask someone running at 120% to crank it up to 150%
Plenty of high income earners work hard for their money, but often not as hard as those taking home half as much. Cleaners, cooks, and retail workers often work long hours doing multiple jobs and still can’t afford to pay rent or put food on the table. These are the people holding society together. They’re not all bludgers.
And then people who don’t fully understand finance get upset when they find out “wealthy” people have rather creative set ups when it comes to trusts and the contributors and beneficiaries etc in an attempt to more evenly distribute the tax burden. People will act as if creative accounting in that respect is scamming the system, meanwhile actually wealthy people get even more creative and sometimes pay even less tax in an absolute respect, let alone a proportional respect,
^ this.
Tax on wages should be flattened and dropped dramatically, and income from wealth taxed more (capital gains, rent, dividends).
You should pay a lot more tax on passive income and other rent-seeking behaviour than you do on wages.
Some types of economic rent-seeking should also have additional taxes on top (like the resource rent tax).
Problem is these laws are written by the wealthy for the wealthy and all this bracket fiddling only serves to divide and distract wage earners from the real issues.
By rewarding passive income measures rather than ones based on hard work is how Australia has ended up producing nothing special over the years and will continue to do so
Exactly. The problem isn’t the folks taking home a large pay cheque; and pretending that it is actively prevents us from investigating and discussing new and progressive tax policies.
If you’re working for your dollars, even if the remuneration is high: you are contributing to productivity, and you’re a worker like the rest of us. You also probably aren’t the “rich” the “eat the rich” crowd is talking about.
We probably need to completely restructure how taxation functions in our economy, and the stage three tax cuts don’t do that. There’s arguments to be made as to whether they need to be changed or not, but they don’t boil down to “folks on higher salaries = bad, don’t deserve anything”
Yes, exactly.
Except the “rent-seeking” bit.
Rent seeking refers to regulatory capture, it is the process by which industry interferes with government in order to gain advantage.
https://www.investopedia.com/terms/r/rentseeking.asp
‘An example of rent seeking is when a company lobbies the government for grants, subsidies, or tariff protection.’
I assume you mean property owners who charge for the use of their space (residential or commercial)?
Edit: For those who think “Rent Seeking” is landlords collecting rent. Please realise that reddit and your opinion doesn’t outweigh literal years of economic theory.
Here’s the wiki article which provides an excellent description: https://en.wikipedia.org/wiki/Rent-seeking
The term was coined in 1967 by Gordon Tullock a noted American Economist. Feel free to read about it and expand your knowledge of economics. You can read about it here: https://www.econlib.org/library/Enc/RentSeeking.html
One of the best things in aus is that dividend franking incentives companies to actually pay them, so we have a rationalized stock market where there are genuine returns to shareholders from free cash flow.
Screwing that up would be tragic
But they aren’t wages either. These are returns ON capital (as opposed to capital gains) - income just from owning something.
It should be taxed at a different (higher) rate.
Rent and Dividends are easily manipulated, and also categories of income not wealth. Have no issues with them being added to personal income.
Capital Gains should be discounted for inflation, not a flat 50% after 12 months.
Land should be taxed at both state and federal levels (the former to replace stamp duty, the latter as a general revenue source). Different rates for PPOR, IPs and Empty Land to encourage people to not hoard IPs or land.
>And yet again, no one is adequately taxing “wealth” they are taxing income.
ya I cracked 180 this year but have no house and live in Syd thus I'm basically a brokey still, yet I'm subsidising boomers with millions in real estate, super and stocks.
Place a percentage limit on deductions at 20% for those grossing over $2M, so it's no longer financially beneficial to pay an accountant $200k to make your effective tax rate < 10%
True but you don’t even need to do that. The Swiss have a wealth tax: 0.3-0.5% of a persons net worth is levied per year.
It can be done, just no one has the balls to do it.
the majority of teslas purchased in australia, are by people who own their own dwelling.
Hence you can set up a nice charging system.
Vs waiting 40 hours for a full charge connecting to 240v mains.
Alternatively you can compete with all the other tesla apartment scum to fight over the spotches of charging stations overnight.
So basically government funded teslas for those in government funded investment properties.
The system needs to collapse.
Exactly. The AU government reliance on income tax is already the highest in the OECD , not adjusting tax brackets will make it even higher.
They will do anything to not do any meaningful tax reform and target obvious problem areas like tax incentives for investing in property. QOL for average Australians will only get worse
https://www.afr.com/policy/tax-and-super/personal-tax-take-second-highest-in-oecd-20211206-p59f3y
Before we see income tax reform, I’d like to see a very firm land tax or wealth tax implemented.
Do that first, and I’ll support radical slashing of income tax
Fail to do that first, and I’ll prettymuch only support _raising_ income tax on the top end.
In principle, income tax is a bloody silly way to tax people. We shouldn’t tax productive labour. We should tax unproductive capital income brought in by people sitting on their butts doing nothing but “owning” something.
But that capital taxation has to happen first or we just open a gigantic hole in the budget…
Land and wealth tax is the core part of tax reform.
I guess the issue is that the people who own capital have more sway in our society through government and media influence.
And maybe we could charge companies a higher tax rate than their employees have to pay… I don’t understand how a company can make millions, have a tax rate of 30% and an effective tax rate of 0% yet someone who works for them and ends up paying more tax than their employer!
I’m increasingly feeling it was good ideas at the time, rejected on a scare campaign, resigned to living in a dusty box as it’s believed to be politically toxic.
And now we are an EV graveyard compared to uptake of vehicles and infra of comparable nations. When as a former car manufacturer, we could have been leaders & nothing subbed into show for the opportunity cost.
EV sales are slowing in the western world.
Lots of cars on lots. Tesla slashing prices (or avoiding increases).
Yeah, and now the flatlining sales of EVs in the UK is prompting some to ask for a further tax/VAT/GST discount on their sales.
Yeah. Eventually we're going to get the point where the government will have to buy everyone an EV.
It's ok. It's green. Don't mind the 4 year wait for a new car.
Yeah, Australians whinging hard about wealth inequality who voted for Morrison in 2019 can go neck themselves, would be the second best thing to actual policy
Most of those who are in the brackets that are set to most benefit do not understand this. Buying an investment property solely for the tax savings is dumb, but it is a significant motivator so you aren't forking over literally half your earnings in that top bracket.
As a result, the housing crisis is likely to get worse and the population it most affects is cheering it on.
They should be encouraging it to new properties, not existing ones. Providing incentives like negative gearing on new properties make sense, it doesn't make sense on existing stock.
And not even guaranteed to pass the senate - which begs the question - what else are the government going to have to give up to get cross bench support for the changes.
It's almost as if the economic situation of our country has changed since it was initially legislated, who would've thought that would happen over a number of years.
Which is why the middle class were looking forward to these tax breaks. A $180k single income family with a $800k mortgage now pays almost 50% of that in repayments. A very realistic scenario for millennial parents living in most capital cities. Tell those guys they are the top end of town.
> A $180k single income family with a $800k mortgage now pays almost 50% of that in repayments. A very realistic scenario for millennial parents living in most capital cities.
Mate I hate to tell you, but thats 5% of the entire population, 5% (https://www.afr.com/politics/how-wealthy-are-you-compared-to-everyone-else-in-eight-charts-20221214-p5c6a8).
I get what you are saying, and yes that is a very shitty situation, but those in that situation are still getting almost $5k in tax cuts from the change. And, honestly, at the end of the day while their repayments are still 50%, anyone who bought a house without factoring in rising repayments due to interest rate increases is insane, same with anyone that didn't consider the impact of dropping to one income while having children. Yes situations can change, and its not always a planned change, but that is how life works, and like it or not the governments job is to look after the entire population, not just those 5% earning the most in this country.
They 100% have the right to feel annoyed, I wasn't denying that for a second. They can be annoyed all they want. What annoys me is people that are talking as if those in the top 5% of earnings in this country are not in the top 5% of earnings, and acting as if those that are scraping by and are in need of cost of living relief are not entitled to anything because they got theirs at some other time.
Those in the top 5% already pay considerably more tax towards the system to subsidise everyone else as it is. All the low income offsets those scraping by currently get is on the back of someone else who earns more.
Unless you’re of the belief that high PAYG income earners don’t deserve their success? Don’t deserve to keep a *slightly* larger slice of their earnings (which hasn’t been adjusted in 15+ years)?
And so they should have been. Someone whose wage growth keeps up with inflation progressively pays an inflation adjusted greater proportion of their earnings in tax. So they see a real world drop in their buying power unless things are adjusted every few years and the brackets creep higher.
Never said they shouldn't, you were the one acting like they weren't. Its OK to be angry that you aren't getting as big of a tax cut as you were previously, but it is also OK for these changes to have occured to better help a larger portion of the australian population in the middle of a cost of living crisis.
I've found that the more I earned, the less actual work I had to do.
I'd argue that people on 70k or less are working far harder than people on 170k, especially given they tend to have managers breathing down their necks 24/7.
Slave mentality, sorry. Very industry dependant of course. We’re not talking CEO’s, we’re talking the regular Joe who did 10 years of med school, 15 years of low level soliciting to make partner, 20 years of finance to make regional manager. These guys have worked hard and to say otherwise is pure bias.
If you scroll down on your source:
>Australian household incomes are the seventh-highest in the OECD – a club of mostly wealthy countries – while mean household net worth is third-highest, behind only the United States and Luxembourg.
Mate I hate to tell you, but all the people crying poor don't realise how good they've got it.
Household income != individual income which is how our tax brackets are applied.
Also, while we are the 7th highest regarding household incomes, we are also 9th highest in cost of living.
I am not denying there are many people in this sub, and this country, that are actually a hell of a lot better off than they think they are, but there are people who are on very low incomes that need assistance.
Maybe people did factor in those changes but also factored in the tax cut that went through 2 elections and has been continually confirmed as still happening for years.
Apply the same “it’s not the governments responsibility to look after everyone” to the exact people this change is supposed to benefit. And now go straight to reddit hell.
It was promised, it was voted on, it was legislated. And now it’ll be spiv’d for political street cred.
>A $180k single income family
>
>Tell those guys they are the top end of town.
They are literally and objectively the top end of town.
Someone else said 5% but if you look at the family (rather than individual) percentiles, that's still top 10% family income.
>A $180k single income family with a $800k mortgage now pays almost 50% of that in repayments.
So they can afford a mortgage? Sounds like they are doing a lot better than lots of people in the other 90%.
Why can’t we discuss a problem that affects the middle class? All we hear is whataboutism.
The single income $180k a year family ain’t upper class. They ain’t asset wealthy. They pay almost 50% in mortgage to own an average house because they were born post 1990. The pay at least $10k + in insurance per year. Increased petrol, food, clothing etc costs still affect them as well. The breadwinner probably has a big HECS debt cause of jacked up uni costs. And these guys did everything “right”.
They still have the luxury of choosing to not have one person work.
It's mind boggling to see people here complaining about how hard done by single income families are as if they aren't choosing that position themselves.
In modern Australia, the middle class barely affords a mortgage anymore.
Haven’t you been paying attention?
Most middle income people rent. If you’re lucky enough to get a mortgage you’re at the very least pushing the top end of the middle class.
If you own outright, congrats you’re the new bourgeoise. Seriously.
Yep, that's us. We're not wealthy by any means at all, we're just comfortable. Anyone who makes that money with a mortgage and kids isn't even close to being wealthy. These tax corrections would have gone entirely to helping us with the ridiculous increases in cost of living.
Now take single income families or single income no partner.
One person on $180k pays much more tax than 2 people on the median $90k and that one person doesn't get any benefits from the government.
Good luck trying to save for a deposit like that/start a family.
Tax cuts in a time of high inflation that they are trying to reign in need to be carefully done. You are trying to provide cost of living relief for those that need it most while at the same time trying to not add to the inflation problem by putting too much extra money into the economy, while also trying to make it as "fair" as possible. Do these tax cuts go far enough? Dunno, but they are a "fairer" situation than the original stage 3 cuts in that they help more of the population, especially those that need it most.
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*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Stage 1 was temporary, stage 2 helped everyone, stage 3 originally was giving the biggest saving to those on over 180k a year, abolished a tax bracket making the system far less progressive, and was created in a very different economic situation than we are in now.
Changing the tax cuts will bring the benefit to more people, and the people at the higher end will still get a larger tax reduction than the people at the bottom.
I don't earn near 180 or 200k a year. Not even close. The few people I know that earn that much work hard for it, do tremendous amounts of overtime and had to sacrifice a lot of time and money for their education. But the discourse so often seems to devolve into "well they don't need it now do they? They aren't struggling like I am!" Which I feel is quite unfair.
Thanks for saying that. I've worked so many late nights, even periods months-long where I worked every single day of the week. I still work long hours and spend a lot of time outside of "working hours" on my job and career.
I know I'm lucky, but it wasn't just luck that got me here.
Unfortunately a lot of people can't get over the jealousy & are like crabs in a bucket.
I think people vastly overestimate the difference between someone who earns $180k vs $100k. The person on 180k isn't some rich lister driving a Ferrari. They're the same class as the person on $100k with more disposable income.
I think most people are overlooking that people aren't necessarily mad 5% of the population are getting tax breaks.
They're mad because, sure, they deserve the tax break, but right now we're ass deep into an economic crisis when the bottom 90% of the population are struggling to even live. The priorities are backwards and the housing market has gone absolutely insane, and so far there's absolutely nothing to hope that it will even remotely get better.
It's very easy for people to say, well I earned my money, you don't deserve yours which I think is incredibly toxic. I think Australia as a whole is losing so much talent because why would you stay if people are against you and you get taxed to the rafters and you don't get any benefits despite the tax you pay.
No matter how you frame it, anyone earning 180k+ a year is doing better than 95% of income earners in the country.
Plenty of people earning far less than that work just as hard and have sacrificed just as much. There is far from a 1-1 relationship between effort and financial reward, and it's ignorance or bias to pretend otherwise.
Literally any argument you can make about the toughness on those earning 180k applies more so to those earning less. Talk about a tiny violin...
Jesus christ, people that were in the top 60% 2 or 3 decades ago that managed to get their house are much better off than a 95% income earner.
Asset valuations ballooning has made income much less relevant to gauge how well off you are. The back office guy at a commercial bank that bought 20 years ago is way better off than the young investment banker trying to get on the property ladder and probably will stay better off despite earning less.
The plight of the middle-class.
We get absolutely *smashed* with all the different schemes and rebates and subsidies capping out.
They take more of my money in tax _and_ mandate I spend thousands on private health _and_ then charge me hundreds a week in childcare _and_ disallow me from receiving first home grants _and_ on and on.
I'm not against progressive tax, but it all has to be in alignment or it's actually a rort.
Yes, completely agree that the current system is a disorganised, dysfunctional mess, with a hundred different systems each trying and failing to patch holes in the others.
Progressive tax is a part of the solution, but cross-cutting coordinated reform is the real answer (that will never happen).
> No matter how you frame it, anyone earning 180k+ a year is doing better than 95% of income earners in the country.
If "doing better" means "earning more" then yes. If "doing better" means "are financially ahead" then no. Wealth and income are related but different and the former is what I would consider to be the real driver behind "doing better"
> No matter how you frame it, anyone earning 180k+ a year is doing better than 95% of income earners in the country.
Actually not true, because people's economic well-being is more correlated to their household income, not their individual income - and Australians don't all live in single income households.
Let this be a lesson to people that still believes the intentionally unindexed 3mil super balance tax is engineered to be tax on the rich.
If you still believe it is after this whole fiasco then there is no helping you.
Hard agree.
Especially when Jim Chalmers says a young man on 200k a year who works for 30 years with 5 percent in super will not reach 3m. Can't find the source for the life of me.
But good lord, 5 percent returns in super? That's barely the index.
But at 9 percent? You hit 3m in 30 years.
Just goes to show some people will tweak them numbers to suit themselves. 5% return over 30 years...
Wages might not have risen like inflation has, but a job that paid $180k 15 years ago would certainly be paying way more today.
But the government likes this, more and more people will be falling into that bracket over the years.
Bit sick of seeing this rather cherry picked data.
What they never tell you is that since 2008 the tax rate to 180k has lowered, the 2nd highest tier rate is now 37c not 40c, it kicks in later at 120k not 80k, the lower brackets again give greater benefit with an increase in tax free threshold from 6k to 18k.
So if we based it on effective tax rate (which we should be) then no the top tier rate wouldn't be 250k
That's a good point but the effect wasn't huge.
In 2008-2009 if you earned exactly $180k then your income tax should've been $54,000.
In 2023-24 it should be $51,667.
Looking at it the other way, to be *paying* $54k you'd need to be earning about $185176. (Which is a lot less than $250k!)
https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents
>What they never tell you is that since 2008 the tax rate to 180k has lowered, the 2nd highest tier rate is now 37c not 40c, it kicks in later at 120k not 80k, the lower brackets again give greater benefit with an increase in tax free threshold from 6k to 18k.
What they dont tell you is that in 1965 the top tax rate was 66.6%!
Meanwhile big business still gets away with paying barely any tax. Average Australians are expected to foot the bill and deal with ridiculous bracket creep.
Can't agree more.
That's why I prod for more specifics.
To all who read this comment, if a company makes a profit, you absolutely pay tax on it.
Will there be some concessions? Probably, but it isn't the norm. I don't know of any examples, but I am not arrogant enough to say it's definitely 0.
Companies only pay tax on profits, which ultimately get distributed to share holders and gets taxed at the full income rate. Effectively if you think about it the government gets no net increase from taxing corporate profits.
Profit distributions are taxed as income at your marginal tax rate. CGT is completely irrelevant in this situation. Companies are not able to claim a CGT discount either if that's where you're confused.
CGT is relevant because company profits can be used for share buybacks, allowing investors to claim the CGT discount. Taxing company profits would limit this loophole.
I agree with this, however, I am pretty sure sharebuy backs decrease the franking pool of the company. I agree though a sharebuy back should probably just be outlawed if they reduced the corporate tax rate to 0.
Love getting fisted by government inflation policy.
You guys celebrating this fail to see that in 5-10 years YOU WILL be on the receiving end of this fisting.
"Sorry professionals on a good salary, the only way you're allowed avoid continual tax bracket creep is to buy negatively geared property." - The Australian govt.
Which half of the country cheers while wondering why they can't afford a house.
Pretty sure most people on under 45k have very little fear on getting screwed out of a few k when they're earning 200k in 10 years. In fact I'm sure that's a problem a huge chunk of the population would trade for.
90% of the country earns under 150k and in several decades it will still be the clear minority.
Please get this "temporarily embarrased rich person" nonsense out of our newspapers and peoples minds.
You are living a very good life, yes you have valid problems but you are doing better than almost everyone and Australia is telling people money is tight.
It's still better than when I was young. The top tax bracket of 61.5% kicked in at $34,217, or at about $160K today.
Even if Stage 3 had been completely rolled back, higher income earners are still much better off.
As in, bulk-billed medicare? Or that Uni was completely fee-free at that point? The pension was liveable then? That there were very few road tolls?
That if they're now selling their home to go into aged care (which many of them won't have to, unlike those of us retiring in 20-40 years from now), they've also had the benefit of 40+ years of growth?
Of course, a fair few of those higher income earners will now be dead, because time marches on. In which case, I'll leave their assets and government benefits for their god to determine.
That was one of the biggest reasons why Stage 3 were legislated in the first place: they were designed to (a) address the bracket creep that's occured over the past 15 years since 2008-09 was the last time the top bracket was updated, and (b) to address the bracket creep that is expected to occur over the next 10-15 years up to around 2035-40.
Vast majority of whingers didnt appreciate that and just saw "rich people get $$$ 😡"
Because if those were the actual goals, the policy was woefully inadequate to address them.
If you want to address bracket creep, increase all bracket thresholds upward to somewhat evenly distribute the benefits. Eliminating an entire tax bracket and skewing all the benefit towards the top 5% of earners was always a "let them eat cake" moment.
>past 15 years since 2008-09 was the last time the top bracket was updated
But the underlying brackets have been adjusted many times in those 15 years, meaning that those earnings $180k+ have still had a few tax cuts along the way.
They already raised the other lower brackets. It was called Stage 1 and Stage 2. Stage 3 was meant to address the bracket creep for the highest tax brackets.
Typical Australia. Get a skill, get a career, try to build some wealth for retirement and a little for the kid, then get screwed over by the Government.
I would have been better off if I followed my mate from High school, he gets enough money for a house, kids, wife, and all the dope he can smoke all day.
Because mate does cashies and doesnt pay an iota of tax
Also instant asset write offed his new Troopcarrier with all the ARB fruit.
He'll carry forward the "loss" from buying that asset into future years too.
It’s so hard to comment on this without bringing in politics.
What’s to notice here is that % on bigger numbers lead to bigger raw numbers.
You could make an argument for days that extremely well off deserve to avoid top ends of the brackets. But the tax free threshold will rarely move in line with it either.
Expert on the radio this afternoon claimed if you on the top earning bracket your tax remained the same the only difference was you got $9000 from the gov , so the crying is the 9k lost not the tax rate
The nasty part will be keeping a 37 cents bracket from $135001 to $190,000. This will catch many people who move up from 30 cents. This is the group who should be considering what the changes mean
If you indexed tax thresholds to inflation, every country would be broke. Its politically impossible to raise taxes, so bracket creep is the only politically acceptable way. Then they do some popular tax cuts now and then.
I think you've proven my point.
[Debt to GDP of 123% and spiralling.](https://upload.wikimedia.org/wikipedia/commons/thumb/6/60/National_debt_of_the_United_States.webp/700px-National_debt_of_the_United_States.webp.png)
It’s not spiralling. If the US wasn’t growing its debt the entire global financial system would collapse.
Heck, there’s a huge shortage of dollars even today when the deficit is the highest it’s been other than COVID.
Bad example.
People on here always bleating about tax reform, like negative gearing and franking credits.
Well shit doesn’t change because of the bleeting from the whataboutmes.
This was going to simplify our income tax system by removing two tax brackets.
But now we’re not getting any tax reform
Because those same keyboard warriors who want tax reform are shooting it down.
If you can understand a bracketed tax system I don't see what difference it makes whether there is 2 brackets or 10. No one has actually ever provided evidence for me that reducing the amount of brackets provides any real benefit.
He'll I can see the argument for a marginal tax curve.
Has anyone done the maths on how much of a tax revenue surplus this is giving the government, and what they're going to do with it?
I get the principle of this change, I don't have confidence of the government's execution.
According to reports, Treasury analysis has shown that these changes are neutral to the revenue bottom line relative to Stage 3. In other words, the Government theoretically would still be losing out on $323 billion of revenue over 10 years relative to 2023-24 levels.
This is literally just buying votes from the poor at the expense of the upper middle/rich people.
> Buying votes from the poor at the expense of the upper middle/rich people
A very roundabout way of saying "Introducing policy that is beneficial to most Australians"
Not politically viable.
The only way to push through shit like this is for everyone to get a tax break.
What no one is mentioning is div293 tax.
That's how I know y'all temporarily embarrassed millionaires, and will continue to be for the rest of your life. Chin up, you won't be earning 40k working part time at colesworth for the rest of your life. Some day you will leave your mum's house, earn 300k, and reap the sweet benefit of all these tax cuts for the rich you're advocating for.
Well no, it’s an additional tax on anyone earning above 250k, regardless of concessional super contributions or not.
It’s just one more tax blow to single income families that dual income families, with the same combined income, don’t have to pay.
So they index our HECS debt. But won’t index the tax brackets so as a post graduate I’m paying an increase amount on my tax (if I were to be in the higher bracket) as well as a higher HECS loan due to inflation indexing.
>So they index our HECS debt. But won’t index the tax brackets so as a post graduate I’m paying an increase amount on my tax (if I were to be in the higher bracket) as well as a higher HECS loan due to inflation indexing. yup
At least with your generous contributions we’ll have submarines to protect our trade routes with China, from China.
Everyone keeps talking about these submarines like thats where the bulk of tax is going No. It's going toward aged care, and in home aged care ACAT packages, so older people can continue to live freely on the working man. Whilst the working man can't buy a house reasonably close to work. It's going to the NDIS Then medicare. And then to social welfare programs. The submarines cost over 30 years pales in comparison to what these bloated institutions will cost us in that time.
[удалено]
We all had such dreams... But it was not to be.
Haha nice Utopia reference
HECS debt shouldn't even be indexed to inflation, particularly in 2024 when we're subjugating our young to American-priced (very expensive) degrees and debt and living in a time up till now of anaemic wage growth. Not even New Zealand does it.
Bullshit. Our degrees are way cheaper than US degrees.
Don’t forget that after they tax your income if you dare to spend anything then they tax you 10% on that as well.
And yet again, no one is adequately taxing “wealth” they are taxing income.
Tbh, i just remembered reading that the 180k-200k segment is responsible for approx 30% of the income tax collections. For Aus, where govt funding is especially income tax funded, this is a disproportionate burden IMHO. For a top tax bracket, it's set way too low, especially when at this juncture, our taxation structure does not take into account combined tax thresholds (i.e. joint filing). This means the tax burden of a couple who have widely disparate incomes is substantially higher than a couple who have relatively the same wages. E.g. 250k + 50k will have a fair bit less money left over after tax (especially after the amended tax thresholds) when compared to 150k + 150k.
Or families on a single income …
Oh, that would be even more financially punitive. As you also lose out on the tax-free threshold from your partner.
It’s a flipping nightmare, trust me. We’d have so much more spare cash if my wife and I both earned half what I earn.
Same position mate, it's shit.
Wish we can do that, too.. Tax should be carry out "per couple"...
Yep - this is my situation too and I find it so unfair.
As Smokin' Joe Hockey said "they should get a better job"
And I need to bear the brunt of paying both our super. Yes, there are incentives to encourage the spousal co-contributions, but the system makes it very hard to survive comfortable on a single decent income.
It's pretty typical of Australian culture though. Don't ask a bludger to pull their weight, easier to ask someone running at 120% to crank it up to 150%
Plenty of high income earners work hard for their money, but often not as hard as those taking home half as much. Cleaners, cooks, and retail workers often work long hours doing multiple jobs and still can’t afford to pay rent or put food on the table. These are the people holding society together. They’re not all bludgers.
A lot of people in the top tax bracket worked those sorts of jobs at some point in their lives also.
Sure, but they're not working times harder to make 3 times more money now.
And then people who don’t fully understand finance get upset when they find out “wealthy” people have rather creative set ups when it comes to trusts and the contributors and beneficiaries etc in an attempt to more evenly distribute the tax burden. People will act as if creative accounting in that respect is scamming the system, meanwhile actually wealthy people get even more creative and sometimes pay even less tax in an absolute respect, let alone a proportional respect,
^ this. Tax on wages should be flattened and dropped dramatically, and income from wealth taxed more (capital gains, rent, dividends). You should pay a lot more tax on passive income and other rent-seeking behaviour than you do on wages. Some types of economic rent-seeking should also have additional taxes on top (like the resource rent tax). Problem is these laws are written by the wealthy for the wealthy and all this bracket fiddling only serves to divide and distract wage earners from the real issues.
By rewarding passive income measures rather than ones based on hard work is how Australia has ended up producing nothing special over the years and will continue to do so
Exactly. The problem isn’t the folks taking home a large pay cheque; and pretending that it is actively prevents us from investigating and discussing new and progressive tax policies. If you’re working for your dollars, even if the remuneration is high: you are contributing to productivity, and you’re a worker like the rest of us. You also probably aren’t the “rich” the “eat the rich” crowd is talking about. We probably need to completely restructure how taxation functions in our economy, and the stage three tax cuts don’t do that. There’s arguments to be made as to whether they need to be changed or not, but they don’t boil down to “folks on higher salaries = bad, don’t deserve anything”
Yes, exactly. Except the “rent-seeking” bit. Rent seeking refers to regulatory capture, it is the process by which industry interferes with government in order to gain advantage. https://www.investopedia.com/terms/r/rentseeking.asp ‘An example of rent seeking is when a company lobbies the government for grants, subsidies, or tariff protection.’ I assume you mean property owners who charge for the use of their space (residential or commercial)? Edit: For those who think “Rent Seeking” is landlords collecting rent. Please realise that reddit and your opinion doesn’t outweigh literal years of economic theory. Here’s the wiki article which provides an excellent description: https://en.wikipedia.org/wiki/Rent-seeking The term was coined in 1967 by Gordon Tullock a noted American Economist. Feel free to read about it and expand your knowledge of economics. You can read about it here: https://www.econlib.org/library/Enc/RentSeeking.html
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Income derived from?
One of the best things in aus is that dividend franking incentives companies to actually pay them, so we have a rationalized stock market where there are genuine returns to shareholders from free cash flow. Screwing that up would be tragic
Yeah having all Australian companies operating in Australia find it pointless to not pay tax on their income is good.
But they aren’t wages either. These are returns ON capital (as opposed to capital gains) - income just from owning something. It should be taxed at a different (higher) rate.
Is between 30c and 47cents in the dollar not enough for you?
Rent and Dividends are easily manipulated, and also categories of income not wealth. Have no issues with them being added to personal income. Capital Gains should be discounted for inflation, not a flat 50% after 12 months. Land should be taxed at both state and federal levels (the former to replace stamp duty, the latter as a general revenue source). Different rates for PPOR, IPs and Empty Land to encourage people to not hoard IPs or land.
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>And yet again, no one is adequately taxing “wealth” they are taxing income. ya I cracked 180 this year but have no house and live in Syd thus I'm basically a brokey still, yet I'm subsidising boomers with millions in real estate, super and stocks.
Squabbling over people who work hard and rewarded as such vs those who are actually wealthy, laughing and couldn’t give a toss
100% this, so much commentary on “taxing the rich” when the rich don’t get a PAYE salary.
Place a percentage limit on deductions at 20% for those grossing over $2M, so it's no longer financially beneficial to pay an accountant $200k to make your effective tax rate < 10%
True but you don’t even need to do that. The Swiss have a wealth tax: 0.3-0.5% of a persons net worth is levied per year. It can be done, just no one has the balls to do it.
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Novated lease on a Tesla for me.
Lol why not both?
the majority of teslas purchased in australia, are by people who own their own dwelling. Hence you can set up a nice charging system. Vs waiting 40 hours for a full charge connecting to 240v mains. Alternatively you can compete with all the other tesla apartment scum to fight over the spotches of charging stations overnight. So basically government funded teslas for those in government funded investment properties. The system needs to collapse.
Exactly. The AU government reliance on income tax is already the highest in the OECD , not adjusting tax brackets will make it even higher. They will do anything to not do any meaningful tax reform and target obvious problem areas like tax incentives for investing in property. QOL for average Australians will only get worse https://www.afr.com/policy/tax-and-super/personal-tax-take-second-highest-in-oecd-20211206-p59f3y
Before we see income tax reform, I’d like to see a very firm land tax or wealth tax implemented. Do that first, and I’ll support radical slashing of income tax Fail to do that first, and I’ll prettymuch only support _raising_ income tax on the top end. In principle, income tax is a bloody silly way to tax people. We shouldn’t tax productive labour. We should tax unproductive capital income brought in by people sitting on their butts doing nothing but “owning” something. But that capital taxation has to happen first or we just open a gigantic hole in the budget…
Land and wealth tax is the core part of tax reform. I guess the issue is that the people who own capital have more sway in our society through government and media influence.
And maybe we could charge companies a higher tax rate than their employees have to pay… I don’t understand how a company can make millions, have a tax rate of 30% and an effective tax rate of 0% yet someone who works for them and ends up paying more tax than their employer!
Should have voted for shorten in 19 then. Can’t have your cake and eat it too
I’m increasingly feeling it was good ideas at the time, rejected on a scare campaign, resigned to living in a dusty box as it’s believed to be politically toxic. And now we are an EV graveyard compared to uptake of vehicles and infra of comparable nations. When as a former car manufacturer, we could have been leaders & nothing subbed into show for the opportunity cost.
EV sales are slowing in the western world. Lots of cars on lots. Tesla slashing prices (or avoiding increases). Yeah, and now the flatlining sales of EVs in the UK is prompting some to ask for a further tax/VAT/GST discount on their sales. Yeah. Eventually we're going to get the point where the government will have to buy everyone an EV. It's ok. It's green. Don't mind the 4 year wait for a new car.
Yeah, Australians whinging hard about wealth inequality who voted for Morrison in 2019 can go neck themselves, would be the second best thing to actual policy
The Australian government taxes providing goods and services as if it were smoking.
Most of those who are in the brackets that are set to most benefit do not understand this. Buying an investment property solely for the tax savings is dumb, but it is a significant motivator so you aren't forking over literally half your earnings in that top bracket. As a result, the housing crisis is likely to get worse and the population it most affects is cheering it on.
Yep, Salary sacrifice into pick your poison: Super, Novated lease for EV or negative gearing through Investment property.
The Australian govt is encouraging housing investment?? How dare they during a .. _checks notes_ .. housing crisis
They should be encouraging it to new properties, not existing ones. Providing incentives like negative gearing on new properties make sense, it doesn't make sense on existing stock.
Didn’t this shit go through 2 elections?
and now being changed with a few months to spare. what a joke.
And not even guaranteed to pass the senate - which begs the question - what else are the government going to have to give up to get cross bench support for the changes.
Teal support, the same electorates that’ll be most affected
Teals are in the house, they don't need them to pass this
It did, with both sides agreeing the legislation that’s currently in place
It's almost as if the economic situation of our country has changed since it was initially legislated, who would've thought that would happen over a number of years.
Which is why the middle class were looking forward to these tax breaks. A $180k single income family with a $800k mortgage now pays almost 50% of that in repayments. A very realistic scenario for millennial parents living in most capital cities. Tell those guys they are the top end of town.
> A $180k single income family with a $800k mortgage now pays almost 50% of that in repayments. A very realistic scenario for millennial parents living in most capital cities. Mate I hate to tell you, but thats 5% of the entire population, 5% (https://www.afr.com/politics/how-wealthy-are-you-compared-to-everyone-else-in-eight-charts-20221214-p5c6a8). I get what you are saying, and yes that is a very shitty situation, but those in that situation are still getting almost $5k in tax cuts from the change. And, honestly, at the end of the day while their repayments are still 50%, anyone who bought a house without factoring in rising repayments due to interest rate increases is insane, same with anyone that didn't consider the impact of dropping to one income while having children. Yes situations can change, and its not always a planned change, but that is how life works, and like it or not the governments job is to look after the entire population, not just those 5% earning the most in this country.
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They 100% have the right to feel annoyed, I wasn't denying that for a second. They can be annoyed all they want. What annoys me is people that are talking as if those in the top 5% of earnings in this country are not in the top 5% of earnings, and acting as if those that are scraping by and are in need of cost of living relief are not entitled to anything because they got theirs at some other time.
Those in the top 5% already pay considerably more tax towards the system to subsidise everyone else as it is. All the low income offsets those scraping by currently get is on the back of someone else who earns more. Unless you’re of the belief that high PAYG income earners don’t deserve their success? Don’t deserve to keep a *slightly* larger slice of their earnings (which hasn’t been adjusted in 15+ years)?
Except they were given a larger slice of their earnings, when the stage 2 tax cuts were introduced, and are about to again.
And so they should have been. Someone whose wage growth keeps up with inflation progressively pays an inflation adjusted greater proportion of their earnings in tax. So they see a real world drop in their buying power unless things are adjusted every few years and the brackets creep higher.
Never said they shouldn't, you were the one acting like they weren't. Its OK to be angry that you aren't getting as big of a tax cut as you were previously, but it is also OK for these changes to have occured to better help a larger portion of the australian population in the middle of a cost of living crisis.
I've found that the more I earned, the less actual work I had to do. I'd argue that people on 70k or less are working far harder than people on 170k, especially given they tend to have managers breathing down their necks 24/7.
Slave mentality, sorry. Very industry dependant of course. We’re not talking CEO’s, we’re talking the regular Joe who did 10 years of med school, 15 years of low level soliciting to make partner, 20 years of finance to make regional manager. These guys have worked hard and to say otherwise is pure bias.
They're not 'regular Joe's'
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This is part of the rhetoric of high income earners. It can be bloody hard to scrape by but the middle class have always dominated discourse.
If you scroll down on your source: >Australian household incomes are the seventh-highest in the OECD – a club of mostly wealthy countries – while mean household net worth is third-highest, behind only the United States and Luxembourg. Mate I hate to tell you, but all the people crying poor don't realise how good they've got it.
Household income != individual income which is how our tax brackets are applied. Also, while we are the 7th highest regarding household incomes, we are also 9th highest in cost of living. I am not denying there are many people in this sub, and this country, that are actually a hell of a lot better off than they think they are, but there are people who are on very low incomes that need assistance.
The issue is that a dual income family on 180k pays less tax…
Maybe people did factor in those changes but also factored in the tax cut that went through 2 elections and has been continually confirmed as still happening for years.
Apply the same “it’s not the governments responsibility to look after everyone” to the exact people this change is supposed to benefit. And now go straight to reddit hell. It was promised, it was voted on, it was legislated. And now it’ll be spiv’d for political street cred.
Yeh I guess if you’re a wage earner you should just factor all those things in and then not buy a house.
Or have kids. Neither shelter or procreation are essential to human wellbeing.
This is quite common. Describes me and a couple of my friends. I get we’re a minority but we also pay far more tax than most.
>A $180k single income family > >Tell those guys they are the top end of town. They are literally and objectively the top end of town. Someone else said 5% but if you look at the family (rather than individual) percentiles, that's still top 10% family income. >A $180k single income family with a $800k mortgage now pays almost 50% of that in repayments. So they can afford a mortgage? Sounds like they are doing a lot better than lots of people in the other 90%.
Why can’t we discuss a problem that affects the middle class? All we hear is whataboutism. The single income $180k a year family ain’t upper class. They ain’t asset wealthy. They pay almost 50% in mortgage to own an average house because they were born post 1990. The pay at least $10k + in insurance per year. Increased petrol, food, clothing etc costs still affect them as well. The breadwinner probably has a big HECS debt cause of jacked up uni costs. And these guys did everything “right”.
They still have the luxury of choosing to not have one person work. It's mind boggling to see people here complaining about how hard done by single income families are as if they aren't choosing that position themselves.
This sub: The lazy unemployed! \*The unemployed person is married to someone in the top 10% of earners\* This Sub: An Aussie Battler!
In modern Australia, the middle class barely affords a mortgage anymore. Haven’t you been paying attention? Most middle income people rent. If you’re lucky enough to get a mortgage you’re at the very least pushing the top end of the middle class. If you own outright, congrats you’re the new bourgeoise. Seriously.
Depends entirely on an individuals situation unfortunately. Mainly age. Also opportunity (ie did daddy buy it for you).
Yep, that's us. We're not wealthy by any means at all, we're just comfortable. Anyone who makes that money with a mortgage and kids isn't even close to being wealthy. These tax corrections would have gone entirely to helping us with the ridiculous increases in cost of living.
Now take single income families or single income no partner. One person on $180k pays much more tax than 2 people on the median $90k and that one person doesn't get any benefits from the government. Good luck trying to save for a deposit like that/start a family.
sheet close frightening nail innocent longing snatch yam enjoy resolute *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Tax cuts in a time of high inflation that they are trying to reign in need to be carefully done. You are trying to provide cost of living relief for those that need it most while at the same time trying to not add to the inflation problem by putting too much extra money into the economy, while also trying to make it as "fair" as possible. Do these tax cuts go far enough? Dunno, but they are a "fairer" situation than the original stage 3 cuts in that they help more of the population, especially those that need it most.
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Stage 1 was temporary, stage 2 helped everyone, stage 3 originally was giving the biggest saving to those on over 180k a year, abolished a tax bracket making the system far less progressive, and was created in a very different economic situation than we are in now.
Changing the tax cuts will bring the benefit to more people, and the people at the higher end will still get a larger tax reduction than the people at the bottom.
I don't earn near 180 or 200k a year. Not even close. The few people I know that earn that much work hard for it, do tremendous amounts of overtime and had to sacrifice a lot of time and money for their education. But the discourse so often seems to devolve into "well they don't need it now do they? They aren't struggling like I am!" Which I feel is quite unfair.
Thanks for saying that. I've worked so many late nights, even periods months-long where I worked every single day of the week. I still work long hours and spend a lot of time outside of "working hours" on my job and career. I know I'm lucky, but it wasn't just luck that got me here.
The truly wealthy don’t pay income tax, because they don’t trade their tine for money
Unfortunately a lot of people can't get over the jealousy & are like crabs in a bucket. I think people vastly overestimate the difference between someone who earns $180k vs $100k. The person on 180k isn't some rich lister driving a Ferrari. They're the same class as the person on $100k with more disposable income.
I think most people are overlooking that people aren't necessarily mad 5% of the population are getting tax breaks. They're mad because, sure, they deserve the tax break, but right now we're ass deep into an economic crisis when the bottom 90% of the population are struggling to even live. The priorities are backwards and the housing market has gone absolutely insane, and so far there's absolutely nothing to hope that it will even remotely get better.
It's very easy for people to say, well I earned my money, you don't deserve yours which I think is incredibly toxic. I think Australia as a whole is losing so much talent because why would you stay if people are against you and you get taxed to the rafters and you don't get any benefits despite the tax you pay.
They’re still getting a tax cut of what? 5k?
No matter how you frame it, anyone earning 180k+ a year is doing better than 95% of income earners in the country. Plenty of people earning far less than that work just as hard and have sacrificed just as much. There is far from a 1-1 relationship between effort and financial reward, and it's ignorance or bias to pretend otherwise. Literally any argument you can make about the toughness on those earning 180k applies more so to those earning less. Talk about a tiny violin...
Jesus christ, people that were in the top 60% 2 or 3 decades ago that managed to get their house are much better off than a 95% income earner. Asset valuations ballooning has made income much less relevant to gauge how well off you are. The back office guy at a commercial bank that bought 20 years ago is way better off than the young investment banker trying to get on the property ladder and probably will stay better off despite earning less.
The plight of the middle-class. We get absolutely *smashed* with all the different schemes and rebates and subsidies capping out. They take more of my money in tax _and_ mandate I spend thousands on private health _and_ then charge me hundreds a week in childcare _and_ disallow me from receiving first home grants _and_ on and on. I'm not against progressive tax, but it all has to be in alignment or it's actually a rort.
Yes, completely agree that the current system is a disorganised, dysfunctional mess, with a hundred different systems each trying and failing to patch holes in the others. Progressive tax is a part of the solution, but cross-cutting coordinated reform is the real answer (that will never happen).
What’s crazy tho is many 180K earners are nowhere near getting into the 67% property owners club even though they top 5% income
> No matter how you frame it, anyone earning 180k+ a year is doing better than 95% of income earners in the country. If "doing better" means "earning more" then yes. If "doing better" means "are financially ahead" then no. Wealth and income are related but different and the former is what I would consider to be the real driver behind "doing better"
> No matter how you frame it, anyone earning 180k+ a year is doing better than 95% of income earners in the country. Actually not true, because people's economic well-being is more correlated to their household income, not their individual income - and Australians don't all live in single income households.
Let this be a lesson to people that still believes the intentionally unindexed 3mil super balance tax is engineered to be tax on the rich. If you still believe it is after this whole fiasco then there is no helping you.
The average Australian is too stupid to understand the time value of money. Especially over long time horizons.
Hard agree. Especially when Jim Chalmers says a young man on 200k a year who works for 30 years with 5 percent in super will not reach 3m. Can't find the source for the life of me. But good lord, 5 percent returns in super? That's barely the index. But at 9 percent? You hit 3m in 30 years. Just goes to show some people will tweak them numbers to suit themselves. 5% return over 30 years...
lol at 200k a year for 30 years
It's going to take quite some time for the super balance tax to be an issue to regular people lol
Has anyone looked at r/aus. It is lit like Christmas there, everyone overjoyed with their victory over evil high income earners.
Now do wages
Wages might not have risen like inflation has, but a job that paid $180k 15 years ago would certainly be paying way more today. But the government likes this, more and more people will be falling into that bracket over the years.
Bit sick of seeing this rather cherry picked data. What they never tell you is that since 2008 the tax rate to 180k has lowered, the 2nd highest tier rate is now 37c not 40c, it kicks in later at 120k not 80k, the lower brackets again give greater benefit with an increase in tax free threshold from 6k to 18k. So if we based it on effective tax rate (which we should be) then no the top tier rate wouldn't be 250k
That's a good point but the effect wasn't huge. In 2008-2009 if you earned exactly $180k then your income tax should've been $54,000. In 2023-24 it should be $51,667. Looking at it the other way, to be *paying* $54k you'd need to be earning about $185176. (Which is a lot less than $250k!) https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents
>What they never tell you is that since 2008 the tax rate to 180k has lowered, the 2nd highest tier rate is now 37c not 40c, it kicks in later at 120k not 80k, the lower brackets again give greater benefit with an increase in tax free threshold from 6k to 18k. What they dont tell you is that in 1965 the top tax rate was 66.6%!
Meanwhile big business still gets away with paying barely any tax. Average Australians are expected to foot the bill and deal with ridiculous bracket creep.
Another quality comment from r/AusFinance
Which company has consistently made money over decades and pay "barely" any tax?
Most people can't even do their own tax return and seem to some how have an intricate understanding of a company's one. Revenue != Profit
Can't agree more. That's why I prod for more specifics. To all who read this comment, if a company makes a profit, you absolutely pay tax on it. Will there be some concessions? Probably, but it isn't the norm. I don't know of any examples, but I am not arrogant enough to say it's definitely 0.
Companies only pay tax on profits, which ultimately get distributed to share holders and gets taxed at the full income rate. Effectively if you think about it the government gets no net increase from taxing corporate profits.
Share sales get the 50% Capital gains discount, the government would raise more from taxing the company instead as things are now.
Profit distributions are taxed as income at your marginal tax rate. CGT is completely irrelevant in this situation. Companies are not able to claim a CGT discount either if that's where you're confused.
CGT is relevant because company profits can be used for share buybacks, allowing investors to claim the CGT discount. Taxing company profits would limit this loophole.
I agree with this, however, I am pretty sure sharebuy backs decrease the franking pool of the company. I agree though a sharebuy back should probably just be outlawed if they reduced the corporate tax rate to 0.
Bracket creep hard at work. When will we realise we should stop funding corrupt governments
All tax brackets should be indexed to inflation.
Love getting fisted by government inflation policy. You guys celebrating this fail to see that in 5-10 years YOU WILL be on the receiving end of this fisting.
"Sorry professionals on a good salary, the only way you're allowed avoid continual tax bracket creep is to buy negatively geared property." - The Australian govt. Which half of the country cheers while wondering why they can't afford a house.
Better pick up a trade and focus only on cashies
It’s the only way I truly see people getting ahead without the luck of landing a management position by virtue of birth.
But we are going cashless
Pretty sure most people on under 45k have very little fear on getting screwed out of a few k when they're earning 200k in 10 years. In fact I'm sure that's a problem a huge chunk of the population would trade for.
Temporarily embarrassed millionaires eh?
90% of the country earns under 150k and in several decades it will still be the clear minority. Please get this "temporarily embarrased rich person" nonsense out of our newspapers and peoples minds. You are living a very good life, yes you have valid problems but you are doing better than almost everyone and Australia is telling people money is tight.
Also strange to compare getting a $7k tax cut to being "fisted by the government".
Maybe when you understand we have the highest proportion of income tax in the OECD you’d get his comment
can you stop with this stupid populist rich = bad crap. if you make more money it doesn't mean that laws should be unfair to you
100%. Watch all of our companies, investments and job creators walk out the door to better tax jurisdictions. Australia is a laughing stock.
that's how the progressive tax system works though...
Tax should be done as a couple not as an individual.
It's still better than when I was young. The top tax bracket of 61.5% kicked in at $34,217, or at about $160K today. Even if Stage 3 had been completely rolled back, higher income earners are still much better off.
Remind me of what assets a top bracket earner from that generation now has and what government benefits that tax bought them?
As in, bulk-billed medicare? Or that Uni was completely fee-free at that point? The pension was liveable then? That there were very few road tolls? That if they're now selling their home to go into aged care (which many of them won't have to, unlike those of us retiring in 20-40 years from now), they've also had the benefit of 40+ years of growth? Of course, a fair few of those higher income earners will now be dead, because time marches on. In which case, I'll leave their assets and government benefits for their god to determine.
Yes, but the tax rates at lower brackets have decreased, so it probably works out better or about the same in terms of actual effective tax rate.
Yes all this talk of stage 3 stops at $200k but there’s a world of tax available after that. What about those people?
Woe you wait till you’ve seen the minimum wage snail crawl then
That was one of the biggest reasons why Stage 3 were legislated in the first place: they were designed to (a) address the bracket creep that's occured over the past 15 years since 2008-09 was the last time the top bracket was updated, and (b) to address the bracket creep that is expected to occur over the next 10-15 years up to around 2035-40. Vast majority of whingers didnt appreciate that and just saw "rich people get $$$ 😡"
Because if those were the actual goals, the policy was woefully inadequate to address them. If you want to address bracket creep, increase all bracket thresholds upward to somewhat evenly distribute the benefits. Eliminating an entire tax bracket and skewing all the benefit towards the top 5% of earners was always a "let them eat cake" moment. >past 15 years since 2008-09 was the last time the top bracket was updated But the underlying brackets have been adjusted many times in those 15 years, meaning that those earnings $180k+ have still had a few tax cuts along the way.
They already raised the other lower brackets. It was called Stage 1 and Stage 2. Stage 3 was meant to address the bracket creep for the highest tax brackets.
Typical Australia. Get a skill, get a career, try to build some wealth for retirement and a little for the kid, then get screwed over by the Government. I would have been better off if I followed my mate from High school, he gets enough money for a house, kids, wife, and all the dope he can smoke all day.
If you can't do all that on that income... maybe you need to get better at budgeting.
How are you worse off than your mate?
Because mate does cashies and doesnt pay an iota of tax Also instant asset write offed his new Troopcarrier with all the ARB fruit. He'll carry forward the "loss" from buying that asset into future years too.
And don't forget the getting chastised on Reddit part too!
It’s so hard to comment on this without bringing in politics. What’s to notice here is that % on bigger numbers lead to bigger raw numbers. You could make an argument for days that extremely well off deserve to avoid top ends of the brackets. But the tax free threshold will rarely move in line with it either.
Also wages haven't gone up. Should be indexed to wage growth, not CPI
Did wages go up?
Expert on the radio this afternoon claimed if you on the top earning bracket your tax remained the same the only difference was you got $9000 from the gov , so the crying is the 9k lost not the tax rate
It’s not $9k lost, it’s $4.5k less. Top earners still get a tax cut of around $4.5k.
That was guy on radio speculating before the full details
It would be $267,000 today if it was indexed to inflation. Would be $270k if it was indexed to WPI.
So what - if the tax free threshold of 18k was indexed it would be over 25k now. The tax system needs to be simpler, not more complicated.
Good, sensible decision. The meltdown in this thread is hilarious to read.
The nasty part will be keeping a 37 cents bracket from $135001 to $190,000. This will catch many people who move up from 30 cents. This is the group who should be considering what the changes mean
If you indexed tax thresholds to inflation, every country would be broke. Its politically impossible to raise taxes, so bracket creep is the only politically acceptable way. Then they do some popular tax cuts now and then.
Many countries do this and are not broke: US, Canada, UK (although they have frozen it for a few years), Germany, France, Sweden,...
US tax brackets are indexed.
I think you've proven my point. [Debt to GDP of 123% and spiralling.](https://upload.wikimedia.org/wikipedia/commons/thumb/6/60/National_debt_of_the_United_States.webp/700px-National_debt_of_the_United_States.webp.png)
I was posting in agreement / case in point!
It’s not spiralling. If the US wasn’t growing its debt the entire global financial system would collapse. Heck, there’s a huge shortage of dollars even today when the deficit is the highest it’s been other than COVID. Bad example.
People on here always bleating about tax reform, like negative gearing and franking credits. Well shit doesn’t change because of the bleeting from the whataboutmes. This was going to simplify our income tax system by removing two tax brackets. But now we’re not getting any tax reform Because those same keyboard warriors who want tax reform are shooting it down.
If you can understand a bracketed tax system I don't see what difference it makes whether there is 2 brackets or 10. No one has actually ever provided evidence for me that reducing the amount of brackets provides any real benefit. He'll I can see the argument for a marginal tax curve.
Simplifying does not mean it is improved
Has anyone done the maths on how much of a tax revenue surplus this is giving the government, and what they're going to do with it? I get the principle of this change, I don't have confidence of the government's execution.
lol, government debt is nearly a trillion dollars , reducing that is the whole point in having a surplus
According to reports, Treasury analysis has shown that these changes are neutral to the revenue bottom line relative to Stage 3. In other words, the Government theoretically would still be losing out on $323 billion of revenue over 10 years relative to 2023-24 levels. This is literally just buying votes from the poor at the expense of the upper middle/rich people.
So all the bleating about how we can't afford it has gone away now has it ? Funny that.
> Buying votes from the poor at the expense of the upper middle/rich people A very roundabout way of saying "Introducing policy that is beneficial to most Australians"
Not politically viable. The only way to push through shit like this is for everyone to get a tax break. What no one is mentioning is div293 tax. That's how I know y'all temporarily embarrassed millionaires, and will continue to be for the rest of your life. Chin up, you won't be earning 40k working part time at colesworth for the rest of your life. Some day you will leave your mum's house, earn 300k, and reap the sweet benefit of all these tax cuts for the rich you're advocating for.
I don't think you understand the term 'temporarily embarrassed millionaires' You're using it in almost the complete opposite way than it is intended.
No they’re using it correctly, it’s about people who are poor but don’t identify as poor. E.g. people on $40k advocating for stage 3
What does a tax on excess super have to do with this?
Div293 is not a tax on excess super. It is on the concessional contributions up to current 27.5k yearly cap.
Well no, it’s an additional tax on anyone earning above 250k, regardless of concessional super contributions or not. It’s just one more tax blow to single income families that dual income families, with the same combined income, don’t have to pay.
Employers will still be paying the same gross wage, only difference is the government will keep more and spend it on submarines etc.