If they pare back the promised stage 3 tax cuts would you:
Stage 3 Tax Cuts - Who Will You Vote for Now?
minijumbuk on 24/01/2024 - 07:31
Last edited 26/01/2024 - 07:18 by 2 other users
Last edited 26/01/2024 - 07:18 by 2 other users
Poll Options
- 1144Voted labor, will continue to vote labour. It's the right thing to do.
- 209Voted labor but won't anymore, breaking election promises is the wrong thing to do.
- 116Didn't vote labor but will now, he's doing the right thing.
- 445Don't vote labor and won't next time, breaking election promises is the wrong thing to do.
Comments
I personally know of people who are in this income bracket who have left Australia for more favourable financial conditions o/s. This is not a theoretical situation at all - it happens all the time. Moving from 40% tax to 0% (or 10% tax) makes a massive difference for a high income couple - often resulting in take home income doubling (or close thereto) especially when you factor high wages into the equation.
Employers in the Middle East, for instance, often pay for relocation and top-tier medical coverage.
I’m seriously thinking about it myself now too. There’s no incentive to keep earning more at this point
They shift their investments out of Australian companies and then retire offshore. A huge chunk of the $200K income earners in that tax bracket are retirees who have that income via Super because they were smart and saved money all their lives. Now the government is taxing their lifetime's work additionally to financially support those choosing the inner city welfare lifestyle. So it's a complete no-brainier for those people in that tax bracket to shift their investments outside of Australia and then follow suit.
That in turn shrinks the tax base and then low and middle income earners just get slugged with more taxes elsewhere by the government to make up for that.
Why on earth would these hypothetical retirees keep their money here at all?
You make it sound like they're selflessly keeping their money here to support the city people, but this will be the last straw that makes them reconsider their charity
I would say earning around $200K put it into their smsf or a family trust. At $200k the tax you pay isn’t worth the hassle of investing offshore.
You make it seem as if $200K is super rich. A PAYG person doesn’t spend the money on expensive accountants and lawyers. They are busy raising a family and paying a mortgage
A huge chunk of the $200K income earners in that tax bracket are retirees who have that income via Super because they were smart and saved money all their lives
If they are getting that 'income' via super post retirement then they aren't paying tax anyway? So these changes have no impact on them.
Where is the option - "Never voted Labour or Liberal as they are just as bad as each other and voting independents is the only way to drive change."
Just make sure to read into the preferences your independent party is telling you to vote for. A vote for Independent no.1 and Liberal no.2 is a vote for Liberal if there is no clear 50% majority in your electorate.
Even a vote for Independent no.1, Labor no. 6 and Liberal no.7 can be a vote for Labor if there is no clear 50% majority.
They all break promises, that isn't worst part of it for me. It is how they broke it.
*redistributed the Stage 3 in a way to have the maximum inflationary impact
*brought back the broken 37% bracket. effectively rolling back to the previous broken system locking in tax rises for middle class going forward in exchange for short term sugar hit.
*screwed over high end with yet more tax increases without thinking about addressing the real tax problems of no ability to split income, people in very high end being able to move money to trusts etc.
*went for the screw you instead of fixing their own epic levels of waste and fraud within the current systems
*didn't look to fix corporate tax problems and avoidance.basically they took a short term fix with serious long term tax creep consequences to win votes. It was the worst possible outcome.
Agree - I don't think it's fair that a couple working 5 days + 3 days pays more tax than a couple working 4 days + 4 days, especially if the one working 5 days has a higher income.
You can make that work with good tax planning, but it's ridiculous that you even have to. Should be able to file joint taxes like most countries do
Correct me if I'm wrong, as I'm not very familiar with the Australian tax system. These changes mean people earning between $45K and $120K will pay 2.5% less in tax (since their rate drops from 32.5% to 30%), and those earning between $120K and $180K will pay 7% less (with their rate dropping from 37% to 30%). For individuals earning over $180K, their tax savings will be even more substantial (7% decrease in tax up to the $200K portion).
How is this fair to lower-income earners? Shouldn't the reductions be more significant for those in the $45K to $120K bracket, and less for the $120K to $180K bracket?
Well depends on how you look at it because low income earners pay less tax to begin with.
There are brackets, so someone on 180K doesn't pay 37c for every $1 (would be $67,140 in tax), its 37c for each $1 over 120K plus the other brackets (so its $55,267.00 tax.)
0 – $18,200 Nil
$18,201 – $45,000 19c for each $1 over $18,200
$45,001 – $120,000 $5,092 plus 32.5c for each $1 over $45,000
$120,001 – $180,000 $29,467 plus 37c for each $1 over $120,000
$180,001 and over $51,667 plus 45c for each $1 over $180,000Try running some numbers in https://paycalculator.com.au/ to see the tax paid. So, modifying the brackets would mean everyone pays less, but if you already paid more you would have had a bigger cut.
Previous government voted in the tax changes in 3 parts, each a few years apart. The 3rd part is about to happen soon, and is the most controversial as it only benefits really high earners.
This new change by the current government will make the stage 3 cuts fairer to low income earners than if the gov does nothing, and the stage 3 cuts go ahead as is.
Taxes are set to get cut, they are just tweaking the numbers. The definition of fair is a difficult one. Would it be more fare if we all paid the same rate? some people think so.
Oh I get it now. So it was going to happen anyway. Thanks.
greatsummary.
most people confuse fair with equitable. "fair" would be a blanket 30% tax on all income. progressive taxation by definition isn't "fair"
as above, the math is a bit questionable there
Good leadership is about making the right call not the easy call. It would have been easier to do nothing and let Stage 3 go through as it was, but it was the right call to modify it in the face of a significantly different economy at the risk of the political fallout. I say that as someone north of 150K and "negatively" impacted by these changes.
Good job Albo, forget about the voice and screeching from the far left, forget about the screeching from the far right about broken promises, just focus on good policy for the betterment of the country.
lol when Albo said ‘We haven’t changed our position’ just a day before. It’s a lie.
And what if stage 3 would have been gone as is but also relieving the low and middle class more. That’s one way to look at it but no. This way he would met everyone’s expectations. But again, no. He’s the biggest fake I am seeing now. Lost credibility.
If the worst thing about it was that he lied, you'll get over it and so will everyone else. Without a costed and agreed proposal on the changes, the coalition would have rinsed Albo in the news cycle for months and the media would have ran with it. A leader who can change their position based on new information and facts at hand is a good leader, regardless of what they promised before.
Lol, how would tax breaks for the top end of tax brackets benefit the bottom brackets. They wouldn't have so it wouldnt have relieved the low and middle classes… does not compute?
Lol yeah. Ppl would get over everything over time…. so what's the point.. or isn't it point worthy?
For middle and low income tax relief. Let's just say this is all reversed. There's no tax relief. Which isn't a deficit to Govt. treasury. Do you think that would now (after all this drama) be worthy decision? Would people panic or no? So it isn't just Govt. decision. It's relative to something. And what's that? The decisions and promises made. Which is why this become relevant for discussion.
how would tax breaks for the top end of tax brackets benefit the bottom brackets
Let's just say the tax relieves are there now what Albo has mandated. Which means this isn't going to affect the already tax reduces for low to middle income earners. But with addition to abolishing 37% bracket. Which means the top earners (god knows the definition) up top 200K now get the promised stage 3 cut. Do u see issue by low/middle earners when there's no change to their happily accepted earnings. Of course yes. It's subjective as ppl are't happy for themselves but they don't want to see top earner getting their money back.
Albo just played game in name of reforms. And that's y the initial statement is paramount important.
@PopCounty: The LNP loves the phrase "who's going to pay for that?" in response to literally anything. Tweaking the numbers to make the change largely pay for itself fixes that problem.
There is no such thing as the "right call". It's just whichever decision will get them the most votes next election.
Easy call was to change it like they did, they are pandering to the masses. The middle class would be happy for top 10percent to pay all the taxes! They got you fooled….
By "pandering to the masses" you mean………..helping more people……………right? Pander away then.
Simple logic by simple minds, the most populous policy is not always the best! Most voters are clueless when it comes to micro and macro factors
They change the policy for the better. Why would I be mad about a broken promise if it's an improvement.
Because Dutton told me to be angry
Raised at the press club - The government is set to benefit millions from the preservation of the 37% bracket over the next few years. Wonder where those millions are coming from….
in a few short years - all of us. (bracket creep)
Don't wages actually have to grow for that to happen?
No. Even inflation effectively brings bracket creep as you effectively have less money but same tax rate. These are short term sugar hit in exchange for increased government tax levels. I.e everyone middle class and above is worse off long term.
@gromit: Do the math here, the median income is $65,000, with a projected 4% average inflation it will take 19 years for the median to hit $135k.
If you do that with the average income of $90800, it will take 11 years.
Enough with this short term sugar hit nonsense.
@Jolakot: That's missing the point. There is currently no plan to deal with bracket creep. Stage 3 was the plan.
@xt20: Total BS, the original stage 3 cuts had no plans for bracket creep either. You can only solve that with indexation, everything else is a bandaid fix.
@Jolakot: Lets do the math on someone on $120k.
In 5 years that extra $804 is gone
In 7 years instead of getting an extra $800 they have lost that and are instead paying an extra $800 a year.
In 10 years they are paying an extra almost $2k per annum under these changes for zero real wage increases.I am not saying the stage 3 changes were well thought out, it should have been indexing. But the new stage 3 is awful, sadly a lot of people that are getting that short term sugar hit don't even realise they will be worse off under these changes in just a few years and given how long it takes to make real changes to tax I don't expect we will see anything much done for the best part of another decade.
@gromit: $120k is really pushing it for middle class, even with inflation in a major city. For Melbourne I'd say 50k-70k is lower-middle, 70k-100k is middle, and 100k-120k is upper-middle.
But even then, 7 years until they're worse off? How the hell is 7 years short-term? And who uses 'just a few' to mean over half a dozen? Cut the dishonest manipulative language mate, you're better than this.
Besides, 7 years is basically the 'best part of another decade', so the government after the next government can sort it out.
@Jolakot: Treasury has forecast 28 billion over the next decade. Thats 28 billion that should have gone to Australian workers. That's 28 billion not from the 200k bracket but everything below.
This is 100% a sugar rush.
@Relapse: That's like $150 a year per adult, we spend over 2x that each year on just the bloody pension alone. Get your act together.
I stand to lose a few grand with the new tax plan but I think he's done the right thing here, speaking as a swing voter (Federal ALP/LNP/ALP and State LNP/LNP/ALP in the last 3 elections). my only concern is the effect of these cuts, overall on inflation
May I ask how you stand to lose a few grands?
ok if you really want to do this, I will pay a few more grand in tax under the new plan compared to if the legislated changes were enacted without any amendment. there.
Aha! I thought you meant compared to now. Thanks.
Who cares about the tax cuts. I have my lottery ticket, I'm going to be a millionaire tonight regardless
:)
You too?
If you want to know why all the politicians are not doing anything just look into the Wood Royal Commission.
You'll find everything you need to know there.
Enjoy.
can you give us a TL:DR?
Unfortunately not,
I can say look up Bill Heffernan, he can shed some light on the matter for you.
https://www.youtube.com/watch?v=13jindxNw28
When you fully digest this 12 minute video, it brings into focus how utterly (profanity) the entire spectacle of our political and corporate theater is.
We haven’t changed our position.
Fake Albo. Pure fake.It's definitely the right thing to do, they should have been wound back at the top end of town (which impacts my wife and i) more as far as i am concerned.
I'd always assumed there would be changes so never factored the benefits into any home finance budgeting. Until they changes are legislated i still won't.
What annoys me in this whole thing is that they would have been seriously considering changes at the last election and certainly were doing the work through the course of at least the last 12 months to look at what option they were going with yet continued to say there would be no change. Their position changed at least a year ago, probably before the election, the details just hadn't been landed on. The lack of integrity and the continued direct lieing each time he was asked i find quite despicable.
How do you know their position changed 12+ months ago?
Just because I've had some friends reach out in confusion with this, saying they're losing money, I'm putting this here:
If he's going to break a promise, should have added a better sweetener. Once he lies (and he did) its hard to take his word seriously. He gets away with this white lie, where will it end ?
You're looking at someone who should have known the basics (cash and unemployment rate) when you're aiming to become PM.
Won't be long before Penny Wong and the girl gang replaces him with someone else.
Link me to where he lied please?
As recently as last Friday Albo said that the government hadn't changed its position on the issue. Less than a week later, he's backflipped.
He's a dirty politician clinging to the last dregs of popularity. The failed referendum is another blight.
Won't be long before he overtakes Kevin 07 as AUSTRALIA'S worst PM.
What if there was no plan to change the tax cuts at that time - is there any evidence to suggest otherwise? Labor called the party members back early to discuss this change, probably among several options.
People seem to be acting like the Labor government has destroyed their lives or something with the way they are carrying on!
in this instance lower income got stage 2 and stage 3 cuts to their max plus they already get the family tax
while those we worked hard to establish themselves lose out once again
someone earning 180k is not filthy rich.
and whats the point of family tax benefits. why not lower tax rates to begin with and it would be fair to those too who are without famous
its unfair that if you work hard the govt tries it best to drag you down .Someone earning 180k is almost 3x the median income, not much to complain about.
So you're saying someone should just work for median income and not try so hard so they don't get taxed as much?
This is Australia - the land of mediocrity!
No, just to have some humility.
Probably works 3x as hard too.
Up to a point, to this day I've never worked as hard as I did at HJ as a teenager, yet earn 6x as much per hour
Bill shorten was better, would have tackled negative gearing etc
Sorry but the way Albanese looks and talks you can’t take him seriously and it’s obvious other world leaders don’t either.
Simply a way of buying votes.
Tax corporates entities not professionals and trades slogging away 50hr weeks trying to get ahead.
200k in 2024 isn’t what 200k was in 2008.
Yep, that was at least a bold "policy" that angered a group of people benefiting off the backs of taxpayers. He lost of course, just like Bob Carrs policy of taxing investment properties in 2004 was overturned immediately by his successor to satisfy the snouts of the people benefiting from it. This tax cut is just window dressing, lets see where they cut the lost "revenue" from, probably hospitals and infrastructure as usual, while keeping the second highest per capita immigration scheme going at full steam.
Shorty made the mistake of taking real policy to an election.
The actual way to do it is drop the policy half way through your term.
Voting is a waste of time, this latest "policy" is just more carrots to distract the sheep from the real causes of high cost of living, corporatism and mass immigration (both of which go hand in hand and both parties are happy to placate at the expense of citizens).
Albo's changes are an improvement, but Australia is 1 trillion in debt. We cannot afford any tax cuts. How is the government going to pay for the 25 billion in lost income per year? They don't say, but it will be by cutting programs that help the poor, as tax cuts always are.
I won't consider voting ALP unless they massively slash immigration. They are not a friend of the poor. They serve the rich elite.
Im sure they wont be cutting the aid to Ukraine or the expenses associated with supporting other operations. Its all bullcrap, neither side have any interest in serving the people. As you said immigration is the root cause of most of the problems, but if they cut it they anger their donors and mainly boomers that are enjoying the fruits of the ponzi scheme.
The immigrants are the ones paying. They're charging them thousands and they're cashed up.
LOL you do understand what a ponzi scheme is right?
Who else would you vote for that won't promise tax cuts?
I don't really see how the solution to increased debt due to tax cuts is to vote for the party that introduced the tax cuts.
So who are you voting for? or rather who is lower on your ballot out of Labor and the Libs?
I doubt the changes will pass parliament.
I can tell you right now everyone in the upper brackets is going to tax evade err "plan" harder than before if they do pass.
Negative gearing is already at record high cost and this is only going to incentives more losses 'on the books'
Why not? Surely it will get greens support.
And if the Libs weren't anti-everything then maybe they would support it too. (Labor has preformed a reverse-wedge).
Yeah agreed - looking forward to hearing the reasoning for the Coalition to block this!
A few things come up mind.
It's Inflationary
It's a tax increase - as wages go up over the years the tax cut will diminish where the original wouldn't.
It'll drive house prices up even more. Because the tax bracket creep stays the wealthy will just dump more into houses where before they might not have had to.
Greens already said that they are not happy because the top brackets still got some cuts.
Everyone voting on it is voting for a tax increase on themselves.
Great, make it harder to tax evade, it's one of the few areas where a problem caused by legislation can be solved with yet more legislation
Some one with a combined income 440k in one of the newscorpse got a half page spread saying they don't know what to do and labour lies and will be 8k worse off.
Cry me a river.
Also labour said there were no plans to cut them at the time the rate was .1% and interest rates were not supposed to kick in until 2024
New tax table, from July 1st 2024
$0-$18,200………………… Nil
$18,201-$45,000…………..16% of excess over $18,201
$45,001-$135,000………… $4,288 + 30% of excess over $45,000
$135,001-$190,000……….. $31,288 + 37% of excess over $135,000
$190,001+………………….. $51,638 + 45% of excess over $190,000Economically tax cuts is just a way for you to allocate resources as you see fit and perhaps in a more efficient way than the government does.
For those who say you don't need the stage 3 cuts in their original form, you are always at liberty to donate that extra cash to charitable causes.
wow an extra $27 / week, thanks I can finally buy that boat /s
Yes, best we hand it back to those in the top tax bracket who would actually be able to buy a boat with our help.
Works for me! Thx champ.
Don't wanna to address tax bracket creep, don't keep election promise, buy votes with a mere 840$ a year (for me). Albo is just another politician, I'm disappointed.
I'm gobsmacked that the pole voting for; "Voted labor, will continue to vote labour. It's the right thing to do"… is so HIGH!!… OMG, don't you guys ever learn??!! 🤷🏻♂️
Just out of interest, which party do you think brought in the tax cuts?
Oh, you mean the tax cuts that your mob supported?!!…Those ones?! Haha they didn't bring in these tax cuts… these are modified ones (by your mob!) 🙄
Well the libs legislated them in and labor supported (as stage 1 and 2 were bundled with stage 3). So the libs wedged labor. And now labor will modify the stage 3 cuts and wedge the libs.
I think the 'right thing to do' (I guess in the poll option) is about moving the cuts from ppl earning over $190k to lower income earners during a time of supposed 'cost of living pressures'.
What is the learning required that you speak of? Does it concern wedge politics?
Yeah, it's basically agreeing to bring in the tax cuts that liberals brought in with some modifications to have them spread over the population rather than focussed on higher earners.
Is the argument you're trying to make that stage 3 should be kept as legislated, with tax cuts flowing only to those making over $180k?
it's basically agreeing to bring in the tax cuts that liberals brought in with some modifications
main one being the re-introduction of the 37% bracket rather than a flatter 30% for a large bracket range.
Definitely undoing some of the simplification of the tax reform and the more uniform taxing for a large range of the population/earning ranges.Moving brackets around or lowering the top bracket would have been a good middle ground, but that 'tweak' undoes a portion of the tax simplification reform that stage 3 was bringing in.
@SBOB: Is your only issue that the "complexity" of the tax system continues as it has been?
I mean, I like simplicity as much as the next person but that seems like a pretty weak argument when considering the party to vote for next.
@AlanHB: The loss of the flat rate over a large salary bracket, while simplifying the tax system on PAYG earnings, also meant that there was a more even tax burden on salaries across a wider range and less 'bracket creep' over time as salaries continue to grow with inflation and tax rates rarely get reevaluated.
@SBOB: If simplicity (or even distribution over a wider range of wages, which is another way of saying "simplicity") is your main issue, wouldn't you be pushing for a singular tax rate over all tax brackets?
People earning $200K are not going to move to Singapore or HK where property prices are absurd and most likely be renting a shoe box, or upending their lives to move to the US or Middle East just to save on tax but get slogged with other expenses such as healthcare in the US & that shitty tipping policy