The government has moved to address 'bracket creep' in the federal budget, saying that taxpayers earning between $80,000 and $87,000 will receive a tax cut.
The 32.5 per cent tax threshold will be increased from $80,000 to $87,000, which the government claims will keep 500,000 Australians in the middle tax bracket for longer.
As a result, fewer Australians will be exposed to the 37 per cent marginal tax rate.
"In recent years, those on low incomes have benefited from tax cuts and the carbon tax compensation that have been retained despite the carbon tax being abolished," said the government.
"Without action, the average full-time wage earner would face the second highest marginal tax rate this year and nearly half of all taxpayers would be in the top two brackets in 10 years' time."
The government said it would consider further measures to "reduce the burden of tax as fiscal settings allow".
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 22 Sep 2017ASIC permanently bans unlicensed SMSF spruikerBy Staff Reporter
- 22 Sep 2017Advisers recognised at Women in Finance AwardsBy Staff Reporter
- 21 Sep 2017Advisers not fully aware of LIF impacts: ZurichBy Staff Reporter
- 21 Sep 2017Red tape forces SMEs to cut staffBy Adam Zuchetti and Aleks Vickovich
- 21 Sep 2017Bitcoin 'dangerous and speculative', says MagellanBy Tim Stewart
- 20 Sep 2017ANZ calls for adviser transparencyBy Killian Plastow
- view all