New Australia Institute modelling shows that at least $77 billion of the lost revenue from the Morrison Government’s top-end tax cut plan will benefit those earning more than $180,000, and $64 billion of that figure will go to those who earn over $200,000.
The Government has claimed that the difference between its tax cut plan and Opposition’s is $230 billion over ten years. The analysis also reveals that after the Government’s tax plan is fully implemented in 2024-25, high income earners will pay a smaller proportion of tax (4% less) and low and middle income earners will pay a larger proportion of tax.
“The Government’s income tax plan is a radical attack on Australia’s progressive tax system,” said Matt Grudnoff, senior economist at the Australia Institute.
“The Government claims this tax cut is required because the top 20% pay 60% of income tax. After the tax cut, those on high incomes will pay a smaller proportion of tax.
“When high income earners pay less of the income tax share, the other side of the coin is that those on low and middle incomes inevitably pay more.
“Instead of dismantling Australia’s progressive tax system in the name of addressing bracket creep, the Morrison Government ought to focus their attention on addressing stagnant wages – a real issue hitting the hip-pocket of everyday Australians.”