Proposed tax rate changes in the recent federal budget
We find this article below a little hard to reconcile, and we think it is important to keep the proposed tax rate changes in perspective.
Ok, so they say someone earning $40k a year will see a reduction in their tax bill of only around $450, while someone earning $200k will see a $7k reduction. But …
Remember, very few earning $40k actually pay net tax! After you factor in all the Government subsidies and support received (ie. Child Care, Health Insurance Rebate, Health Care, Parenting Payment, etc), most generally pay zero net tax and in fact are usually a net recipient from the State.
So percentage wise they are receiving around a 10% tax reduction, but in fact probably something like a 100% net benefits increase of their drawings from the State.
While the person earning $200k receives around an 11% tax reduction, but they remain a net contributor to the State’s coffers.
Important to keep things in perspective don’t you think?
Read the article here.
Here is another interesting article from The Australian about who pays the tax in Australia (note you may need a paid subscription) “No, the rich don’t pay a ‘fair share’ of tax. They pay all of it”
If you want help reducing your tax burden, and building genuine wealth, start by requesting our FREE Guide “The Savvy Business Owners and Investors Guide to Choosing the Right Accountant and adviser for Today’s Economic Climate (valued at $49)“