The result is out after the caucus meeting earlier today:
https://www.afr.com/policy/tax-and-super/what-the-tax-cuts-m…
https://www.news.com.au/finance/money/tax/winners-and-losers…
from AFR:
https://files.ozbargain.com.au/upload/476873/110049/screensh…
Are you affected with the updated stage 3 tax cuts?
Yeah, where's the I'm Poor and This Does Not Effect Me?
Actually, if you are a low income earner it is great for you.
Done.
Affect
Some numbers for what the changes may mean for different earning brackets, that i reproduced over in this post (https://www.ozbargain.com.au/comment/14882903/redir)
from a list on whirlpool. But dont we have enough 'stage 3' posts already?
Salary/Previous 'Stage 3'/New 'Stage 3' /Better/Worse Change
$45,000 $0 $804 $804
$60,000 $375 $1,179 $804
$80,000 $875 $1,679 $804
$100,000 $1,375 $2,179 $804
$120,000 $1,875 $2,679 $804
$135,000 $2,925 $3,729 $804
$140,000 $3,275 $3,729 $454
$150,000 $3,975 $3,729 -$246
$180,000 $6,075 $3,729 -$2,346
$190,000 $7,575 $4,529 -$3,046
$200,000 $9,075 $4,529 -$4,546
Easier to read table format:-
| Salary | Previous 'Stage 3' | New 'Stage 3' | Better/Worse Change |
|---|---|---|---|
| 45,000 | 0 | 804 | 804 |
| 60,000 | 375 | 1,179 | 804 |
| 80,000 | 875 | 1,679 | 804 |
| 100,000 | 1,375 | 2,179 | 804 |
| 120,000 | 1,875 | 2,679 | 804 |
| 135,000 | 2,925 | 3,729 | 804 |
| 140,000 | 3,275 | 3,729 | 454 |
| 150,000 | 3,975 | 3,729 | -246 |
| 180,000 | 6,075 | 3,729 | -2,346 |
| 190,000 | 7,575 | 4,529 | -3,046 |
| 200,000 | 9,075 | 4,529 | -4,546 |
Can you please make the salary column wider and right justify them all for further legibility. Cheers
Because you asked nicely.
| Annual Salary | Previous 'Stage 3' | New 'Stage 3' | Better/Worse Change |
|---|---|---|---|
| $45,000 | $0 | $804 | $804 |
| $60,000 | $375 | $1,179 | $804 |
| $80,000 | $875 | $1,679 | $804 |
| $100,000 | $1,375 | $2,179 | $804 |
| $120,000 | $1,875 | $2,679 | $804 |
| $135,000 | $2,925 | $3,729 | $804 |
| $140,000 | $3,275 | $3,729 | $454 |
| $150,000 | $3,975 | $3,729 | $-246 |
| $180,000 | $6,075 | $3,729 | $-2,346 |
| $190,000 | $7,575 | $4,529 | $-3,046 |
| $200,000 | $9,075 | $4,529 | $-4,546 |
@Hybroid: Nice.
I couldn't work out the table formatting markup on my mobile so gave up trying.
Your table-fu deserves respect :)
@Hybroid: Thanks. I did request right justification but centre looks as good on this occasion. Cheers.
@Hybroid: Can you please so ever kindly centre align the headings and conditionally format the negative numbers to red.
@elgrande: Markdown doesn't support colour unfortunately. Don't think you can inline HTML or CSS here.
It's been sooooo easy under Albanese
Correct, its much better then the libs.
Just 3.8% of Australians earn more than $180,000. The top 1% of Australians own more wealth than the bottom 70% combined, so yeah the wealthiest should pay most of the taxes if they want to control most of the wealth. The bottom 50% of Australians have just 3.2% of the nation's wealth. You can't get blood from a stone, if a country leaves half the population with virtually no wealth just how are they going to pay the taxes the nation needs to operate?
I think the current system suits the top 5% just fine. The top 5% are like the Barbies in Barbieland and the rest of us are the Kens.
Don’t you have to earn over 180k just to have servicing on a home loan for any house available in Mel/syd/bris? So everyone except the top 3.8% are priced out?
Actually one of the reasons for the old Stage 3 tax cuts - I felt was house prices. I was always 50/50 as I don't know what my income will be next year. But I'll make one prediction - whatever it is - I'll be homeless.
I think what you are saying is single first home buyers who wish to buy a detached house in Syd/Mel/Bris need to earn over $180k.
There are some houses in all those cities that would be serviceable on lower single incomes.
I don’t think we should set our tax rates according to detached house prices for single buyers - if anything, lowering tax rates is likely to raise house prices.
We should just create an oversupply of houses, turn it into a renter's/buyer's market. We still have plenty of coastline left to develop and WFH is just starting to become a real thing so no need for everyone to crowd around Sydney CBD for work. And we can build towers for people to live in too, which will help increase supply and lower house prices.
@AustriaBargain: In Vienna they just built thousands and thousands of apartments near the middle of town, owned by the government or not-for-profits and subject to rent controls.
It isn’t low income housing, just normal people housing. You can live there if you are rich too, if you want.
They just built plenty, so there is no under supply, so costs aren’t astronomical.
@mskeggs: Sadly wont happen here. We love the expansion of our cities taking up more and more valuable farm land (south east Melbourne prime example). Costing us more in infrastructure, farming land, travel times etc.
Or you can buy an apartment/ get help from family / group buy with friends, a few options. Not many good options if you're looking to rent, thanks to the explosive growth of AirBNB's
This has some truth, but mainly, it doesn't.
Yep
So u implying every person on single income buying a landed at least 3br property and live there with 2 empty br and large land with overgrown grass.
The top 1% of Australians own more wealth than the bottom 70% combined, so yeah the wealthiest should pay most of the taxes if they want to control most of the wealth.
Taxes are levied on taxable income not wealth.
The bottom 50% of Australians have just 3.2% of the nation's wealth.
And?
You can't get blood from a stone
This is an important point. Suggesting we should tax them little. If we already tax them little then why are they getting tax cuts?
https://www.ato.gov.au/about-ato/research-and-statistics/in-…
If we rank our 100 people by their taxable incomes:
people with the top 3 taxable incomes paid 30% of all net tax
the next 6 paid 18% of all net tax
the next 30 paid 40% of all net tax
the next 37 paid 12% of all net tax
the final 24 didn't pay any tax.
The Top 9% of taxable incomes bear 48% of the tax burden.
The bottom 61% pay just 12% of taxation.
The top end is bearing too much of the responsibility to fund Australia's needs. These cuts were supposed to go some way to remedy that.
Instead now we have progressive tax rates and regressive tax cuts.
Okay so the bottom 61% are a massive drain on the country, so we decide to gas them all, then what? Who will work in the top 3%'s factories, who will staff their boats, clean their homes, deliver their parcels, make their food, build their roads, drive their ambulances?
Calling 61% of the country a burden is ridiculous. The top 5% have the vast majority of the wealth and the bottom 50% have a tiny fraction. The rich will naturally pay the most taxes because they control the most wealth. If the bottom 5% controlled 70% of the country's wealth then we'd tax them the most instead.
Okay so the bottom 61% are a massive drain on the country, so we decide to gas them all, then what?
Please show me where I suggested wiping out deciles of lower income Australia.
Calling 61% of the country a burden is ridiculous.
The stats show otherwise.
The rich will naturally pay the most taxes because they control the most wealth. If the bottom 5% controlled 70% of the country's wealth then we'd tax them the most instead.
How many times do you have to be told that tax is not levied on Wealth?
Lower income Australia have already had Stage 1 and 2 tax cuts, they had LITO, they had LMITO. A now lose their sh!t when the ones that pay the most taxes get the most tax cuts.
@tsunamisurfer: Well the wealthiest 3% are welcome to drop their incomes down to 50k a year if they so choose, and keep their wealth tied up elsewhere. They have that freedom. I'm sure wherever they source their actual income they would be glad to lower it down to 50k. No one is standing in their way if they want to take a pay cut and live the luxurious lifestyle of someone on 50k a year income.
@tsunamisurfer: The top 3% are also welcome to do those things to save some money. Though I'm not sure I'd trust Gina Rhinehart to deliver my Maccas order without hogging down on my nuggies…
@tsunamisurfer: Shame on you. Just hand in your citizenship you unAustralian mutt. Don’t even bother celebrating today mate.
@AustriaBargain: @AustriaBargain and if and when they do, everyone will be taxed at 50% just to make up the numbers for the lost of tax revenue which they pay for to offer social services to the poor that consume the majority of those benefits.
@AustriaBargain: This is what will happen and lower income earners will complain that they are dodging tax… Well it's just smart money management… This is what happens the highest income earners just makes sure personal income is extremely low and take on (good debt) to do this… Then people still complain about landlords having to many properties but this is one of the ways to not have to government steal over 60% of your income. Just play the game. That's all we can do.
@tsunamisurfer: Yeah it was pretty naive of the LNP to think that by the time these came into effect, the lower paid would remember they already received their benefit…
We got nothing for years whilst they got what was it? An extra $1080 each year?
@Mary Poppins: well you might see that they’re only getting a mere $804 a year under this! So what’s the point right!
@tsunamisurfer: I remember a stat's professor saying, if you were to take a man's feet, and put them in a bucket of ice water, then take his head and put that in an oven, statistically - he'd be warm.
You are being a tad too literal mate.
@Tsunamisurfer, austriabargain is giving you reality. It is what it is, but to pretend is to not make any actual progress.
The other reality is that the wealthier you are, the more likely you have the means to fork strategies to avoid paying tax. This is an undisputable reality also. Meanwhile some person less than $100k probably is happy to get a $2k rebate and be done with it.
Wait? Top 3 percent should have their own factory? Where do I get this said factory??
Well said. It is the rich people who are the parasites, not the poor. The rich spend all day lazing about on 100 million dollar yachts, or travelling around the world in their private jets. When they do 'work' it is just attending a meeting. The workers create the wealth, the rich steal it from the workers.
Lets take one example, credit cards. If you, say, purchase software from a programmer who lives in America, charged in America dollar, you pay a 3% cross border fee + a 3% currency conversion fee. The programmer is also charged a fee by the credit card company (2% ?). The banks and owners of the various credit cards do virtually nothing; computers process the transactions instantly. On every transaction we make, the rich are fleecing us. An OzBargainer's goal is to get "fleeced less".
The top end is bearing too much of the responsibility to fund Australia's needs.
LOL yeah alright.
Guess what happens when you pay more tax? you have much more disposable income.
Someone on $500k pays more tax than someone on $50k, but they have a lot more money to live their lives and afford basic things like housing.
Something that people like you love to leave out is that little fact while you're on your high horse.
Guess what happens when you pay more tax? you have much more disposable income.
Doesn't paying more tax mean I have less disposable income?
who would have thought that people that earn more money, earn more money..
@redfox1200: How does it feel to work 1hr and get paid $10…or work 4 hours and get paid $25 for it. (as an example)
They probably work harder for it too. So instead of asking someone else to contribute more, why not get off the chair and do some work? And maybe make some better life decisions along the way too.
"The Top 9% of taxable incomes bear 48% of the tax burden."
GOOD!
They can afford to! Should be even more than 48%
"The bottom 61% pay just 12% of taxation."
GOOD!
Should be even less than 12%.
The Top 9% of taxable incomes bear 48% of the tax burden.
It's not a tax burden. Boohoohoo… the top 9% of income earners making over $180,000 per year have to pay tax, despite having so many avenues of reducing their taxable incomes while growing their wealth at the same time.
No one has to pay tax if they earn under $19,000 per year. Maybe those sooks who earn $250,000 and pay $84,000 in tax can voluntarily ask for a pay cut to $60,000 and pay only $10,000 in tax. That's a whopping $74,000 in tax savings!
The bottom 61% pay just 12% of taxation.
What an outrage that the people who make next to (profanity) all, aren't taxed on their (profanity) all incomes.
The top end is bearing too much of the responsibility to fund Australia's needs. These cuts were supposed to go some way to remedy that.
No it isn't lol. No one gave anyone the "responsibility to fund Australia's needs". It's pretty simple. You earn X amount of income or revenue, you pay Y amount of tax. That is the price of working/operating in Australian society, or most of the world's societies. If you don't like it, maybe the Australian government can take control of Australian natural resources and fund expenses by selling those resources and abolishing income tax, like Saudi Arabia, UAE and Oman do!
Good god, the level of entitlement for a small group of people who have one of the highest quality of life on earth…
So lets just say that there are 10 people. And one makes 200000 and pays 75000 in taxes. The rest earn 10000 and pay 1000 in taxes. The government collects 76000 to run to budget each year.
Now the following year the 200000 says WTF "im out" and takes up a 10000 job too.
What happens next? In order to not cut services to the people, the government now needs to tax all 10 of them 7600 to make budget.
Enjoy the new world mate.
@FlyingMiffy: Ah yes, the hypotheticals that reduce all of working society to a zero sum taxation game.
It makes absolutely no sense if you spend about seven seconds thinking about it. Like, how did the one person make 200k, while everyone else collectively make 90k. Is the high-paid person literally the Mint? Did they create money and then taxed themselves, since presumably, they're also the head of state since, well, they make the most money. So in that universe, they taxed themselves, so…they just paid themselves. But that person also has the gall to tax their subjects what little they earn.
I could go on but I really have to stop myself. That was fun.
One thing, though, is if that 200k being earned was either a job or a business, the other people would, in a capitalist society, either try for that job since they would also like to earn a lot of money, or see a gap in the market because whatever business that person was running was clearly very lucrative. So someone else would end up earning 200k, hence the amount of tax being paid would be back in balance.
Okay, I'm done.
@FlyingMiffy: Mate you need to follow your scenario through to the end here, there's now a $190,000 income surplus, which means that everyone else gets a 21k payrise. After the new taxes are taken out, everyone else is now $13.4k better off!
Sounds lovely, how do we make this happen?
In all seriousness, if that person was making 200k, yet they weren't replaced when they quiet, then their job was entirely superfluous and should have been cut regardless
Sounds like tall poppy syndrome.
Those on $200k will pay just over $50k tax. They don't get childcare subsidies. They didn't get any COVID-19 relief. They also have to pay significantly more to Medicare, despite being predispositioned to use it less.
Every year due to inflation there's bracket creep and while their wage may be adjusted for inflation, the government will continue to take 45% of that extra money received.
The time had come for either tax to be overhauled and brackets indexed to inflation, or for there to be some relief to the top due to bracket creep. It's understandable for those in the top bracket to be pissed that the LNP has gone back on its word. It's not about the money, it's the point of it.
@tasty-falafel: Child care subsidy is available to households earning less than $530,000 p.a. The limit has been increased from July 2023.
Agreed that the high income earners cop more than just the 47% marginal tax rate. Those earning $250,000 also get whacked with Div 293 tax on super. That limit is also not indexed - so it is slowly covering more and more people as time continues.
The top end is bearing too much of the responsibility to fund Australia's needs.
…. The top end of income earners.
The bottom 61% pay just 12% of taxation.
… The bottom end of income earners is the 37% and they pay 12% tax.
The final 24 are not income earners; to include them as 'income earners' is a bad faith argument. They are most likely retirees.
Don't forget. The top end can have their cake because the bottom end allow them to have highly paid jobs.
Imagine all the mgrs and GMs job will not be required if there are no bottom end for them to manage.
We already pay the most taxes individually. I pay as much tax as my friend’s entire income. Don’t (profanity) play and think we aren’t paying enough.
You are privileged to be a high income earner and cry like a poor person over the amount of tax you pay
Well if you don't like it go work somewhere else for less just to shove it up the few privileged enough to pay a higher tax rate.
AHH didn't think so
Stop thinking your hard done by and think you are one of the few privileged enough to help carry Australia
and if you are not using your tax accountant properly then its about time you got a new one.
Why is it that people who look upon high income earners always think there is some magical accounting loop hole they can exploit once they are on a $300k salary? If they were truly wealthy they wouldn't be declaring $300k of taxable income.
See the tradie driving around in their new Ford Raptor Ranger? They only declare an income of $35k a year but somehow can afford $80k/yr school fees for their kids and also has a Centrelink health care card and 90% rebate on their child care payments. You think the guy on the $300k salary has a health care card or that much rebate when they send their kids to daycare? No. They pay the most tax and get no benefits in return.
The rest their actual lifestyle and expenses are on the business' books. Writing off their revenue with instant $20k write-offs, deducting as expenses as possible, undeclared cash jobs and the rest is on a company tax rate of 25%. They can easily pocket $300-$400k at the end of the year, whilst a salaried employee has to declare ALL of the $300k salary, and instantly gets almost half of it taken away by the ATO before it hits their bank account.
Work 1hr, make $10 and get $10 from the government. Sweet, made $20/hr
Work 4 hours get paid $30. Sweet. Made $7.50/hr. Watch them take your $10 and give it to the guy working 1hr straight off your payslip before it even hits your bank account and there's nothing you can do about it, except try and get it back at the end of each financial year. It's not a privilege to carry someone who had the same opportunities as you (because Australia is such a great country, great education and fair society!) but didn't bother achieving anything and now relies on other people's taxes.
See the tradie driving around in their new Ford Raptor Ranger? They only declare an income of $35k a year but somehow can afford $80k/yr school fees for their kids and also has a Centrelink health care card and 90% rebate on their child care payments.
That is the epitome of the issue, very factual statement.
Dont forget, that Ford Raptor Ranger (work ute) is also used on weekend for BBQ trips and Beach Trips, all funded by the tax payer for fuel and maintenance, but on paper, its a 'necessity' for the job. When was the last time an ATO officer physically inspected business cars? never.
He/she is not privileged. Just worked hard and made tough life choices to get there. It could be you.
@FlyingMiffy: You mean they chose to lie on their tax returns and break the law for financial gain? Not paying the proper income tax on their actual earnings - avoiding the privlidge to help carry Australia (apparently).
Could be me. Maybe.
You mean they chose to lie on their tax returns and break the law for financial gain?
I think you're confused about the comment thread. FlyingMiffy is replying to Loot N Plunder who is calling Benno007 privileged.
Benno007 is complaining about paying as much in tax as their mate earns, so I'm guessing they're being honest in their tax returns.
Just worked hard and made tough life choices to get there. It could be you.
Yeah I did this too, and now I sometimes get told I'm privileged for being "born with discipline" lol.
You are free to move to another country with the same quality of living as Australia and earn as much as you do.
Do please list these mythical countries
Good for u.
Just 3.8% of Australians earn more than $180,000.
The top 5% are like the Barbies in Barbieland and the rest of us are the Kens.
As someone in this bracket I can assure you that I am certainly not "rich" by any means. I drive a 25 year old car and budget everything.
The best con by the actual rich people is convincing the 99% that they're the problem, not the actual rich.
If you're over $180k and struggle with money, maybe you need to stop living above your means? Maybe pick up uber at night or work a few more shifts, easy as.
It's not so simple…
For someone who earns over $180K, a night job with Uber or anything else, means that every dollar they earn gets taxed at 47%…
Whereas if a bum off the street decided to take up the same Uber job, their first $20K or so of income is tax-free, (plus whatever rebates after that too).
It's a disincentive for people on high incomes to take a second job 'after hours'.
@bobbified: All of those problems can be easily solved by working harder, if you get taxed at 50% then you simply need to work 2x more?
@Jolakot: Why would I if I'm working the same night job as the guy next to me but the government takes half of everything I earn?
I'm not complaining that I have to pay tax, but the way things are, it doesn't want to make me take up a second job.
@bobbified: Sounds like a work ethic issue, don't look into your neighbors bowl unless it's to check whether he has enough to eat.
@Jolakot: Work ethic, my butt. haha
I didn't get into a $180K+ job by having a shitty work ethic. I'm getting punished for working hard and actually getting somewhere.
@bobbified: If the guy next to you was also taxed 50%, then how would that make you any better off?
If instead he was taxed 80%, would that make you work harder or feel grateful for only paying 50%?
As they say, comparison is the thief of joy
As they say, comparison is the thief of joy
ha! this is coming from someone that is saying "you earn more, so you pay more". It should be fair.
I can assure u that you are richer than those on 80k.
wealthiest pay most tax
To an extent. If the marginal tax rate increases too much, there will be less incentive to earn more and the poor will end up paying more tax.
Just 3.8% of Australians earn more than $180,000
Yeah but apparently nearly half of ozbargainers earn more based on the poll.
There are people earning even $200K but is the only income of a household with 2 kids and a stay-at-home partner. They are not doing tough but not rich at all. Australia's tax system should match their welfare system using household as unit not individual based. That's fair!
This! A single income family should be able to be assessed as 2 people earning 50% of the income even if its just while kids aren't in school since the government won't need to pay a childcare subsidy.
OK I play your game.imagine a single 85k income with 2 kids….
Oh boy, compare to your eg. Your guy is much wealthier.
I'd like to remind you, just as others mentioned in the thread, the top earners shown by ATO are by no means the wealthiest people.
Truly wealthy people earn income from their capital and assets, and they can manage to largely avoid the high marginal tax by keeping majority of their income in separate entities / companies they control, where they would pay just 30% in tax (as company income tax) with no medicare levy. It is an unfair system for salary earners who have no way to escape from this tax.
Well those top earners should think about putting 130k a year of their 180k income into investment properties or whatever and live the luxurious lifestyle of 50k incomes most of us have then. They must be a bit thick in the head to choose to take 180k in income when they could do tax loopholes or whatever. Perhaps they should get a disability money managing service to help them? They could put 165k into houses and live off 15k a year like jobseeker recipients do and get a healthcare card as well. Heck, why not invest 200k a year and be bankrupt at -20k a year…
There are a lot can be done for sure.
For example, one doesn't need to put all their assets as equity of their company. They can put them as at-call loan with zero interest, then they would be able to have the money up to the amount of the value of the loan back at no tax cost, effectively just to transfer their assets to the entity for cash flow back. If one has, say, 5M assets which generate 250k income, their company pay the 30% income rate for the income, and then they pay nothing personally for the 175k cash flow (250k - 30%) for ~30yrs, with the 5M assets still under their possessing.
Additionally, they can charge the company up to 45k per year for whatever reason, like director fee, or interest. They would pay the personal income tax for this at 13% total tax rate, rather than 30% company rate.
Also many personal needs can be reported as work use and expense by one's company from before-tax money. You want to travel to the US? The company can have investment there, so this must be a business trip, no? You want a new car? Just let the company buy it. Who cares who is actually using it for what? Don't forget that novated lease is a pretty legitimate thing in Australia, then if it's your own company, why bother even leasing?
There are some more common operations like using family trust to distribute the income to partner and children to maximize the tax save. All of the above are just accounting magic. If you can afford paying some accountants maybe several thousands a year, they can make them happen for you as long as your main income is not wages or salary.
So yes, one can live a luxurious lifestyle with just 45k taxable income on record for ATO. They can live a way more luxurious lifestyle than someone earning 200k from salary.
I probably misread your reply.
But no, if you have 180k income in salary, you have to pay the tax for it. All of it is reported to ATO through STP automatically. Putting 130k into investment properties does not immune you from paying the tax for it. You have to use post-tax money for investment, and there is no tax loopholes on this for salary earners.
But if your investment is successfully, then you can get a lot of assets, and maybe you can be rich enough to use the loopholes that the truly wealthy people can afford. But before you actually get that rich, no there isn't a loophole as far as I know. If you know, please tell me.
(I know one can use negative gearing, if you count that as a loophole. But it involves some risk I don't quite like.)
Learn the difference between wealth and income. Then you might have a relevant point to make.
LNP endorsed and legislated these tax cuts for their rich counterparts.
Albo, did make the mistake going ahead with promise….but in the end has made the decision that is based on the needs of this country as a whole.
The media does a disservice to this country. It is pathetic and obviously the people complaining about this is now also the same people sooking about the 1% of the population where franking credits apparently was the end of the world.
Albo, did make the mistake going ahead with promise
If you haven't figured it out, yet, the ALP are playing 4D chess. They knew exactly what they were going to do, even when they originally voted with the LNP for these cuts.
With the way the world has changed since the original proposal was legislated back in 2018 / 2019, it make sense to do the new round of changes and help the lower income earners more. So yeah the ALP might have had a plan all along to change it, but really we won't truly know (or care).
Shows why its important to start negative gearing once you approach 180k
Here’s a thought… all the people earning over $180K could build/buy a house or put granny flat/studio on their property to be rented out (at minimum rent) to reduce tax cuts & help the housing situation? 🤷♀️
What about the rest of the options?