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Proposed new individual tax rates

Jul 10, 2011

Following the carbon tax announcement today, here is the sweetener ... some proposed tax cuts next year.  The triple increase in the tax free threhold is deceptive as the Low Income Tax Offset (LITO) currently meant that the effective tax free threshold was $16,000 (not $6,000) ... so the increase is really only $2,200.  I really hate it when politicians try to do a play like this on numbers and rebates.

With the AWOTE being $1,288 or $66,981 per annum, I am not sure if the tax free threshold increase will really mean much as quite conveniently the marginal tax rates for the first two income levels are increasing.

Sometimes I wonder if it would have been easier to simply increase the company tax rate by a few percent and forget about this hard sell of the carbon tax which will only be in place for 3 years before they change to an Emissions Trading Scheme anyway.

Also, whatever happened to lazy Sundays?  Seems like politicians in recent years like doing their big announcements on Sundays ... can we please keep the weekends sacred and save this stuff for during the week?

 


Tax Scales

2011-12

2012-13

2015-16

 

Threshold ($)

Marginal Rate

Threshold ($)

Marginal Rate

Threshold ($)

Marginal Rate

1st Rate

      6,001

15%

     18,201

19%

     19,401

19%

2nd Rate

     37,001

30%

     37,001

32.5%

     37,001

33%

3rd Rate

     80,001

37%

     80,001

37%

     80,001

37%

4th Rate

  180,001

45%

  180,001

45%

  180,001

45%

LITO

Up to $1,500

4% withdrawal rate    on income over $30,000

Up to $445

1.5% withdrawal rate    on income over $37,000

Up to $300

1% withdrawal rate    on income over $37,000

Effective tax free threshold*

16,000

 

20,542

 

20,979

 

* Includes the effect of the tax free threshold and  the Low Income Tax Offset

** excludes medicare levy 1.5%

Soure: Federal Treasurer's website

Tags: BudgetFamilyPersonal tax

Author: Mr Taxman

Comments

"Hrmmm so assuming i ear $45,000 a year how much less tax will I pay?"

By: Stuart Hinks on Aug 04, 2011 5:30AM

"Tax saving of $303 from 1 July 2012 ... and another $83 from 1 July 2015. More info here: http://www.treasurer.gov.au/DisplayDocs.aspx?doc=pressreleases/2011/081.htm&pageID=003&min=wms&Year=&DocType=0 "

By: Mr Taxman on Aug 04, 2011 10:04PM

"What will the new threshold for the medicare levy be?"

By: Kev on Mar 02, 2012 6:38AM

"Kev - The low-income threshold amount for a single individual with no dependants will increase from $18,839 to $20,542. The phase-in threshold limit for recipients will increase from $22,163 to $24,167. Full details here - http://www.ato.gov.au/individuals/content.aspx?menuid=0&doc=/content/00309813.htm&page=4&H4"

By: Mr Taxman on Mar 05, 2012 3:21AM

"I am so happy (sarcastic) about the tax cuts compensating the increase in good and services for the carbon tax. I support a family of 4 and earn just over $82,000. My saving is $3 whole dollars. WOW!!!!! Not even the cost of a pizza."

By: Dale Foster on Mar 29, 2012 6:42AM

"Lies."

By: djcommerce on Apr 14, 2012 5:41AM

"so you can earn $395 per week for 52weeks meaning you get all that income each week, no tax is removed at all by your employer? I worked it out using the effective tax free threshold amount divide by 52 weeks."

By: Brett Hangan on Jun 21, 2012 1:27AM

"Thhat's pretty much correct Brett."

By: Mr Taxman on Jun 25, 2012 7:08AM

"What a joke! Once again we are just supporting a wellare state. Lucky there are still some of us in business to support it. "

By: Nicole Innes on Jun 27, 2012 4:46AM

"I have jsut worked out that I will personally pay $52 a year leass tax yet will pay at least an extra $180 in electricity alone not to mention the flow on effects of the CT on the businesses that will be charged extra for the services they normally require. Only the low income workers who do not want to advance in their lives have been taken care of whilst everyone else is being fleeced. We have to get rid of this Government NOW!"

By: Glen on Jul 02, 2012 8:36AM

"Does this mean that if you earn over $80k that you get the full benefit of the increase in the tax free threshold? e.g. $80k salary = an extra $12k tax free income?"

By: mal mcfarland on Jul 28, 2013 11:54PM

"Whilst the increase in the tax-free threshold benefits everyone ... unfortunately the tax rates for those over $80k have increased & the net benefit is a mere $3 per year. Hardly champagne popping time."

By: Mr Taxman on Aug 14, 2013 7:52AM

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comments-rhsLatest Comments

  • "Currently voided but that may change in the future...."

    By: Mr Taxman at Mar 24, 2017 9:03PM

    Post: Two important dates for those with HECS/HELP debts

  • "Provided you stay under the repayment threshold & you an Australian tax resident, it will continue to accumulate (adjusted for CPI each year). Currently there is no ability for the government to take..."

    By: Mr Taxman at Mar 24, 2017 9:02PM

    Post: Two important dates for those with HECS/HELP debts

  • "Yes you will get that extra tax back when you lodge your return provided you are under the repayment threshold. Consider it a forced form of saving. Please note that for some 2nd jobs, the tax being..."

    By: Mr Taxman at Mar 24, 2017 8:58PM

    Post: Two important dates for those with HECS/HELP debts

  • "Technically no as you are filling out your TFN declaration in good faith that it is accurate that you don't have a HECS debt. If you don't happen to have any extra tax being deducted & you don't make..."

    By: Mr Taxman at Mar 24, 2017 8:56PM

    Post: Two important dates for those with HECS/HELP debts

  • "It will depend on what your taxable income is - if you are over the repayment threshold level https://www.ato.gov.au/Rates/HELP,-TSL-and-SFSS-repayment-thresholds-and-rates/ then some of your extr..."

    By: Mr Taxman at Mar 24, 2017 8:53PM

    Post: Two important dates for those with HECS/HELP debts