The Government’s income tax cuts have been passed by the Senate – How much we can save?
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30/10/2021Senate crossbenchers Jacqui Lambie and the Centre Alliance confirmed their support on Thursday morning, clearing the path for the new laws, which independent Cory Bernardi has long supported.
This year: Modest cuts for most Australians
Modest tax cuts are available to millions of Australians almost immediately.
People earning between about $21,000 and up to $126,000 in the 2018-19 financial year will receive a boost.
But the laws apply unevenly across this group.
| Income in 2018-19 | Tax cut |
| $25,000 | $255 |
| $40,000 | $580 |
| $60,000 | $1,080 |
| $90,000 | $1,215 |
| $120,000 | $315 |
There will be no increase for those on Newstart.
In four years: Boost for wealthier Australians
In 2022-23, a second phase of tax cuts arrive.
Ultimately, wealthier Australians will pay less due to a combination of changes to tax offsets and income thresholds.
Although this group mostly missed out on the benefits of stage one, in four years’ time they will be the big winners.
Those earning $120,000 or more will be $2,565 better off each year.
In six years: Boon for wealthiest Australians
Two years further down the track, the most controversial component of the package kicks in.
One whole tax threshold will be removed, leaving just four, and the tax rate for another threshold will be cut.
It will mean that once someone earns $45,000 in one year, every additional dollar they bring in that year will be taxed at the same rate — 32 per cent — up to $200,000.
This delivers massive cuts for those with an income close to $200,000.
For example, someone on $180,000 will be $8,640 better off.
References:
https://mobile.abc.net.au/news/2019-07-05/hungry-for-your-tax-cut3f-don27t-lodge-your-tax-return-too-ea/11281634?pfmredir=sm
Disclaimer
This content is intended for general information in summary form on tax and legal matters at the time of first publication and is not intended to provide, and should not be relied upon in place of appropriate professional advice. Please consult your tax, legal and accounting advisors before acting or relying on any content provided.
