With the election this weekend hopefully you’ve decided who you’ll vote for.
If not, don’t worry as there’s still time!
A central issue constantly up for discussion during this election campaign has been income tax cuts. And with good reason too.
In the short term, both party policies are looking awfully similar, offering immediate tax cuts for Australians.
Labor is declaring bigger tax reductions for lower-income earners, while the government is announcing long-term tax cuts.
Regardless of who wins, Australians earning between $50,000 and $90,000 will receive a tax refund of up to $1,080 a year.
But don’t be fooled, in the long term they do diverge…
And sadly it’s the older, hardworking Australians that are affected most (at least in Labor’s plan).
Coalition and Labor’s short-term tax plan
Parliament has already passed some tax cuts. In the next four financial years (2020–23), people earning up to $45,000 will see 19% tax rate and the 32.5% tax bracket for those earning $90,000 will extend to $120,000.
The ABC reports:
‘The Coalition also announced it would flatten tax brackets by 2024, cutting the 32.5 per cent tax bracket to 30 per cent. That means all taxpayers earning between $45,000 and $200,000 could have their tax rate reduced to 30 per cent.’
For those only thinking about the cash they will get back in their pocket — in the short term — you should consider Deloitte Access Economics’ analysis.
He says that under the Coalition’s plan the average tax rates would fall across all income levels.
With the relevant numbers being the percentage changes, not the dollars, according to Deloitte partner Chris Richardson.
People at the top-end get bigger tax cuts because they pay more dollars in tax, which seems pretty fair, because the money you make should stay in your pocket, not the government’s.
Long term, the coalition wants to slash personal income tax by around $300 billion over a decade — Labor policies would see $3 billion added to it over four years.
Labor targets retirees
But income wasn’t the only tax debate gripping the nation. Taxes on Australians’ retirement funds were also in the spotlight.
Presently Labor is targeting the many Australians who have worked hard and saved their money favouring a self-funded retirement. Leaving many critics worried that funded retirees and SMSFs will be pushed into welfare.
This sends a cruel message to every hard working Aussie (before they even get the luxury of thinking about retirement) banking on their super to not only retiree with, but to experience the lifestyle they saved for…
Prime Minister Scott Morrison was quick to remind voters that if they vote Liberal they will stop Labor’s retiree tax.
Under Labor, affected individuals will see their retirement savings taxed three times — going into super, in the fund, and then again in retirement.
Those affected would lose (on average) $2,300 a year, meanwhile individuals with a self-managed super fund would lose $12,000 a year, including pensioners with a self-managed fund set up after March 2018, and those with self-managed super funds who become pensioners after March 2018.
So you might want to consider these things before you vote this weekend.
PS: In a brand new The Australian Tribune report, Phil Anderson reveals a rather odd way to boost national wealth WITHOUT hiking taxes…click here to learn more.