Australian Treasurer Josh Frydenberg said that more than a million Australians would have to pay the top tax rate within six years if the Opposition, the centre-left Labor party, wins government.
Frydenberg said Labor leader Bill Shorten also plans to lift the top marginal tax rate to 49 percent from the current 45 percent and noted that it is a “complete backflip” from Shorten’s push for a 30 percent rate back in 2005.
“At 49 cents in the dollar, Australia’s top marginal rate would be above the U.S., United Kingdom, and New Zealand and would be one of the highest rates in the world, and cut in at around 2.2 times the average full-time earnings compared to four times in Canada and eight times in the U.S.,” he wrote.
Frydenberg said that Labor’s top marginal rate change is “part of a broader Labor plan for $200 billion in new taxes on housing, savings, business, personal income, and electricity.”
“These are taxes that punish aspiration and are purely designed to redistribute wealth rather than create it. ... While Labor may seek to justify their tax increase by claiming it will raise over $7 billion for spending elsewhere, sadly, the reality is that it will dampen economic activity overall and discourage enterprise,” Frydenberg said.
Further Tax Changes
The current coalition government is planning to abolish the 37 percent tax bracket entirely in 2022-2023 so that Australians earning more than A$41,000 all the way up to the planned A$200,000 threshold—about 94 percent of taxpayers—will only have to pay 32.5 cents on the dollar.But Labor would reverse the coalition’s tax bracket abolition.
“This will put 3.7 million Australian taxpayers earning between $90,000 and $180,000 on a 37 cents in the dollar marginal tax rate rather than 32.5 cents,” Frydenberg said. “Another hit on Australian income earners.”
Shadow Treasurer Chris Bowen said that Frydenberg’s comments on Labor’s tax policies amount to a “desperate attempt by the government to try to distract the public away from the internal divisions in the Liberal Party,” The Australian reported.
“Labor’s priority on income tax cuts are in delivering bigger, better and fairer income tax cuts for 10 million low and middle Australians over the next few years,” Bowen told The Australian.
Friends Read Free