‘Extra dollars in pockets’
PRIME Minister Anthony Albanese plans to rob the rich to upsize tax cuts for most workers under planned changes that will deliver a worker on $100,000 an extra $2179 a year.
The Robin Hood tax strategy is emerging as Labor MPs gather in Canberra to learn of the changes which are believed to include reducing the lowest tax bracket of 19 cents in the dollar to 16 cents.
The 37 per cent tax rate will also remain in place slashing the benefits for workers earning over $150,000.
But the biggest losers are workers earning $200,000 or more who will see a planned $9075 annual tax cut slashed in half to just $4546.
A new analysis of the planned tax cuts commissioned by news. com.au based on what we know so far suggests that workers earning between $45,000 and $135,000 will secure an extra $804 a year.
But when you combine that with what they were already going to get under the original changes a worker earning $100,000 was going to get a $1375 tax cut and will now secure $2179.
Based on the parameters we currently know the Australian National University crunched the numbers and the results suggest that even workers earning $140,000 will secure an extra $454 a year under the changes.
ANU Associate Professor Ben Phillips told news.com.au that the tax changes made sense but were “brutal” for higher income earners. “One could say brutal,’’ Prof Phillips said.
“It’s a big tax increase relative to the original plan. But if I was redesigning Stage 3 it’s ended up where it should — returning bracket creep to most workers.
“The main problem was doing too much for high income earners and nothing for low income earners.
“That seems now to be addressed.”
But if you earn $150,000 you go backwards compared with what you were promised at the election and are worse off by $250 a year.
If you earn $180,000 your promised tax cut will be slashed by $2346 a year. If you earn $200,000 you will be worse off by $4546.
By lowering the 19 per cent tax rate to 16 cents in the dollar, it will deliver a tax cut to “everyone” with earnings between $19,000 and $45,000.
Mr Albanese also proposes to reduce the 32.5 per cent tax bracket to 30 cents in the dollar for earnings between $45,000 and $135,000.
He dropped a big hint about the proposed changes this week whilefusing to concede he was preparing to break a key election promise.
“If we can find ways to put extra dollars in people’s pockets, particularly those lower middle income earners who are doing it tough, then we are prepared to do so,” Mr Albanese told Sky News.
The Prime Minister’s office has repeatedly insisted there were no current plans to alter the tax cuts – a claim now proven to be false.
It has also suggested some of the speculation was “wrong” – while refusing to rule out changes.