For the record, I reckon that Henry is hopelessly-misguided in proposing a flattening of our personal income tax system - apart from increasing the tax-free threshold to reflect inflation over the past couple of decades, the opposite should be occurring...
Remembering that, in the financial year that I left high school (FY85), the 60% rate kicked in at a pissy $35,000 when the tax-free threshold was $4,594, we should be restoring progressivity with higher rates at higher thresholds...
I note that Howard and Costello increased that tax free income threshold to $6,000 in FY00 - when the highest marginal rate was 47% at the $60,000 income threshold...
They made subsequent regressive income tax changes - and on the eve of the 2007 election they promised further regressive changes (which were basically matched by the Labs) that would keep the tax free income threshold at a ridiculously low level and the highest marginal rate lowered to kick in a relatively low level...
FYI, some of the tax schedules for relevant tax periods are contained in this old post of mine: -
I, for one, am concerned about the increasingly-regressive nature of our taxation system on individuals and families - and the associated opportunity costs to the nation as a whole.
So, as a matter of interest, I suggest that people utilise the following tables to calculate the comparative WEATH-fare BENEFITS to middle-high income Aussies over the past decade (and quarter century)...
I suggest that people first calculate relative tax payable (for FY86, FY01, and FY10/11) on, say: -
* Diferent $25K income increments up to $150K, then jump by $50K to $250K, and then calculate the tax on $500K and $1M
* Or use the latest FY10 or FY11 thresholds for a more direct comparison
Then: -
Take a look at the current annual Newstart and Aged Pension rates...
IM(not-so)HO, the results will surprise most and alarm some - not least because the Libs are carrying on so much about the post-2007 Federal debt and deficit, despite being the proud architects of the biggest budget black holes in Australian history...
http://www.ato.gov.au/individuals/ Quote:Residents
1985–86
Taxable income/Tax on this income
$0–$4,594 = Nil
$4,595–$12,499 = 25 cents for each $1 over $4,595
$12,500–$19,499 = $1,976.26 + 30 cents for each $1 over $12,500
$19,500–$27,999 = $4,076.25 + 46 cents for each $1 over $19,500
$28,000–$34,999 = $7,986.25 + 48 cents for each $1 over $28,000
$35,000 and over = $11,346.25 + 60 cents for each $1 over $35,000
2000-01
Taxable income /Tax on this income
$1 - $6,000 = Nil
$6,001 - $20,000 = 17 cents for each $1 over $6,000
$20,001 - $50,000 = $2,380 + 30 cents for each $1 over $20,000
$50,001 - $60,000 = $11,380 + 42 cents for each $1 over $50,000
$60,001 and over = $15,580 + 47 cents for each $1 over $60,000
2009–10
Taxable income/Tax on this income
0 – $6,000 = Nil
$6,001 – $35,000 = 15c for each $1 over $6,000
$35,001 – $80,000 = $4,350 plus 30c for each $1 over $35,000
$80,001 – $180,000 = $17,850 plus 38c for each $1 over $80,000
$180,001 and over = $55,850 plus 45c for each $1 over $180,000
2010–11
Taxable income/Tax on this income
0 – $6,000 = Nil
$6,001 – $37,000 = 15c for each $1 over $6,000
$37,001 – $80,000 = $4,650 plus 30c for each $1 over $37,000
$80,001 – $180,000 = $17,550 plus 37c for each $1 over $80,000
$180,001 and over = $54,550 plus 45c for each $1 over $180,000
The above rates do not include the Medicare levy...(read Medicare levy reduction or exemption for more information).
Tax offsets reduce the tax payable. Tax offsets based on taxable income levels apply to a range of circumstances. For more information read About tax offsets.
Of course, income tax breaks have been but one of many regressive taxation and WEALTHfare measures - and many middle-high income individuals now have an effective marginal tax rate of only 15%, thanks to the effectively-exclusive Superannuation Tax Concessions scam.
The past decade has been really good for some Aussies - and not others, eh!?
On that other thread, I suggested that we should restore a semblance of progressivity, by reintroducing one or more high-end thresholds - either 60% at, say, $250K or maybe 50% at $250K and 60% at $500K (and, given that the lower thresholds are remarkably close together, why not have additional threshold/s at, say, $750K, $1M, etc.!?).
Of course, taxation is but one of many socio-economic engineering tools but I think that it is time to address both the growing income and wealth inequity and other opportunity costs - especially in terms the Federal Govt's crucial roles in providing equitable access to affordable essential services and infrastructure and ensuring long-term socio-economic stability and environmental sustainability.
Discuss. PS I note that the Labs have finally decided to increase the tax free threshold to a more reasonable level...