New data shows how the Stage 3 tax cuts massively favour the wealthy
77% of the benefits of the Stage 3 tax cuts will go to the richest 25%
This week the Parliamentary Budget Office has released costings on the legislated Stage 3 tax cuts that will:
- remove the $120,000 to $180,000 tax bracket
- increase the top tax bracket threshold from $180,000 to $200,000
- reduce the marginal tax rate faced by the $45,000 to $200,000 tax bracket from 32.5% to 30%.
The PBO estimates the tax cuts will cost a cumulative $243.5bn out to 2032-33. Of that amount, 6% will go to the richest 1% of income earners and 77% will go to the richest 25%.
With our progressive income tax system, the high-income earners rightly pay a larger share of taxation than do the poorest. However while those earning over $180,000 are just 3.7% of income earners and pay 31% of total income tax, they will receive 48% of the total benefits of the stage 3 tax cuts out to 2032-33.
The Stage 3 tax cuts are massively inequitable and will lock in greater inequality and less revenue to provide for necessary government services and programs.
Related research
Between the Lines Newsletter
The biggest stories and the best analysis from the team at the Australia Institute, delivered to your inbox every fortnight.
You might also like
Stage 3 Better – Revenue Summit 2023
Presented to the Australia Institute’s Revenue Summit 2023, Greg Jericho’s address, “Stage 3 Better” outlines an exciting opportunity for the government to gain electoral ground and deliver better, fairer tax cuts for more Australians.
18 Reasons why the Stage 3 tax cuts should be redesigned
Australia Institute research shows the Stage 3 income tax cuts are fiscally irresponsible, massively expensive and completely unfair.
18 Reasons why the Stage 3 tax cuts should be redesigned
Australia Institute research shows the Stage 3 income tax cuts are fiscally irresponsible, massively expensive and completely unfair. Here are 18 reasons why they should be redesigned.