Everyone loves tax cuts, and thanks to changes announced last week in the new budget, everyone will start cutting taxes on July 1.
But not everyone is satisfied with the new 140 billion-yuan tax relief scheme, which starts on a small scale but will eventually become very large.
Critics say this is unfair because the government has not raised unemployment benefits and high-income earners will eventually benefit more. Others argue that the new fixed tax rate-94% of Australians will pay 32.5% or less-is too complicated.
Australians usually don`t like complicated things-we just want to know how much we`re going to give the government and how much we can keep.
However, most low-and middle-income earners will not feel the benefits of tax cuts from their wages in July. Instead, they will have to wait for their annual tax returns to receive an additional 200 to 530 yuan in one-off tax rebates.
The government said that the annual income of 30000 yuan, 2018-19 tax savings of 200 yuan. Those with annual income of $50000 to $80000 can save $530, while those with the highest income can save $135.
If the tax cuts remain the same, by 2024-25, the overall tax cuts will become considerable:
1. People whose annual income is between $21000 and $37000 are now $1400;
2. The number of people between $37000 and $87000 is as high as $3740;
3. The annual income of one hundred thousand yuan is 5437 yuan, one hundred and fifty thousand yuan is 7988 yuan, and two hundred thousand yuan is 11815 yuan.
The government has created an online tax reduction calculator to show exactly how much tax cuts are worth to you. But it shows that the highest earners receive nearly 10 times more tax cuts than those with the lowest incomes.
This is a pain point for critics, some arguing that the money would be better spent on health, education, welfare and other services.
But that does not mean that high-income earners can easily escape. They still have to pay more taxes than others.
Today, no Australians are required to pay taxes on any income below 18200 yuan, and the existing tax credit means they have to earn at least 20500 yuan before they need to start paying money to the government.
It will gradually increase, so the annual taxable income is $30000, the tax amount is $2242, $40000 is $4547, and $50000 is $7797.
An Australian who earns an average of $80, 000 a year pays a tax of $17547 a year. Six-figure earners will have to pay at least 24632 yuan, and a handful of lucky people who earn 200000 a year will have to pay 63232 yuan. In addition, everyone`s taxable income is deducted from the 2% Medicare tax.
Finance Minister Morrison defended his plan last week, saying that low-income people would receive a corresponding larger tax cut, of which people earning 30000 yuan a year could cut their taxes by 8.3% by 2025. Those earning one hundred and sixty thousand yuan a year will fall 2.4%.
Both sides came up with strong arguments. Low-income and welfare recipients are undoubtedly the most in need of extra money, and they will spend all that extra income to boost economic growth. But others argue that high-income earners have already borne most of Australia`s income tax burden, and that the situation will continue.
Your personal opinion may depend on how much money you earn and how much tax you pay. But the truth is, you can`t offer big tax cuts to low-income people, because they didn`t pay much from the start.
