Earn
The tax cuts and cash boosters in the works for Australians
The effectiveness of the Morrison government’s income tax cuts has been called into question, but one tax expert has outlined some of the benefits for millions of Australians.
The tax cuts and cash boosters in the works for Australians
The effectiveness of the Morrison government’s income tax cuts has been called into question, but one tax expert has outlined some of the benefits for millions of Australians.
Speaking with nestegg, senior tax counsel with The Tax Institute, Bob Deutsch, believes the flatter tax brackets will be encouraging for Australian taxpayers.
“I fully endorse anything that is simplified as long as it’s not unfair. The Stage 3 changes, I think, are a very important simplification,” he said.
“The long bracket from $45,000 to $200,000, I think it very much addresses the aspiration desires of Australians,” said Mr Deutsch.
“Millions of Australians will be sitting in that bracket from $50,000 to $150,000. For them, any future pay increase once Stage 3 is in place will not push them into a higher bracket for a long time. I think that is really the key benefit to all of this,” continued Mr Deutsch.
Are the changes fair?
The argument against the Stage 3 tax cuts has been around someone on $46,000 will have to pay the same tax as someone who is making $199,000.
However, Mr Deutsch believes this is simply untrue.
“It’s true they are paying the same marginal rate on the next dollar,” he said.
“Overall, when you add up what happens taking into account all the brackets, the person on $190,000 will be paying significantly more tax,” said Mr Deutsch.
Is this system future-proofed?
The tax profession has long been calling for genuine tax reform to deal with the complexities of the Tax Act and the inefficiencies of some heftier taxes, like stamp duty on property purchases.
Though these changes from the Morrison government don’t necessarily constitute tax reform, they represent some of the tweaks the tax profession has been calling for.
“The system is still progressive even under Stage 3. If you look at the total tax paid at each level of $10,000. It is progressive in the sense that the overall tax rate increases as you go higher and higher.”
This email address is being protected from spambots. You need JavaScript enabled to view it.
About the author
About the author
Tax refund
How expanding the GST could net Australia $500m at the 2032 Olympics
The right GST mix could see Australia pocket an additional $500 million from international travellers when it hosts the Olympics in 2032, new figures show. ...Read more
Tax refund
Low and middle income tax offset explained
Are you wondering what the low and middle income tax offset is, and whether you are eligible for it? Here’s our quick explainer to help you determine if you qualify. ...Read more
Tax refund
Remember, reaping the tax benefits of working from home requires more than just receipts
There’s more than one way to go about tax deductions when it comes to working from home. ...Read more
Tax refund
Tips to finding the best tax agent
Tax season stress is real, so we’re here to give you tips on finding the best tax agent to help you get through it without a hitch. ...Read more
Tax refund
Support a charity? Here are 4 reasons the taxman wants you to check your donations
Australians are known for being a generous bunch, but not all forms of generosity are a tax deduction, with the ATO revealing the four most common mistakes taxpayers are making when they try to claim ...Read more
Tax refund
Will you spend or save your tax refund?
When it comes to tax refunds, Australians are a little more frugal than you might expect. ...Read more
Tax refund
7 most surprising things you can and can’t claim
Depending on your area of employment, there are a range of tax deductions that could be available. The basic rule is that if you’ve incurred an expense as part of your job, you can claim it. For ins...Read more
Tax refund
Over 172k taxpayers rushed to lodge on 1 July despite warnings
Over 172,000 taxpayers jumped in early with this year’s tax returns despite multiple early lodgement warnings, prompting the ATO to issue yet another cautionary note. ...Read more
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Are property prices set to crash? Should you jump on board the fintok craze? And how to prepare for this tax time
Listen now
Tax refund
How expanding the GST could net Australia $500m at the 2032 Olympics
The right GST mix could see Australia pocket an additional $500 million from international travellers when it hosts the Olympics in 2032, new figures show. ...Read more
Tax refund
Low and middle income tax offset explained
Are you wondering what the low and middle income tax offset is, and whether you are eligible for it? Here’s our quick explainer to help you determine if you qualify. ...Read more
Tax refund
Remember, reaping the tax benefits of working from home requires more than just receipts
There’s more than one way to go about tax deductions when it comes to working from home. ...Read more
Tax refund
Tips to finding the best tax agent
Tax season stress is real, so we’re here to give you tips on finding the best tax agent to help you get through it without a hitch. ...Read more
Tax refund
Support a charity? Here are 4 reasons the taxman wants you to check your donations
Australians are known for being a generous bunch, but not all forms of generosity are a tax deduction, with the ATO revealing the four most common mistakes taxpayers are making when they try to claim ...Read more
Tax refund
Will you spend or save your tax refund?
When it comes to tax refunds, Australians are a little more frugal than you might expect. ...Read more
Tax refund
7 most surprising things you can and can’t claim
Depending on your area of employment, there are a range of tax deductions that could be available. The basic rule is that if you’ve incurred an expense as part of your job, you can claim it. For ins...Read more
Tax refund
Over 172k taxpayers rushed to lodge on 1 July despite warnings
Over 172,000 taxpayers jumped in early with this year’s tax returns despite multiple early lodgement warnings, prompting the ATO to issue yet another cautionary note. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
