10million WORSE off: Huge tax hit for workers earning $126,000 as scheme comes to an end
Ten million Australians could see their take-home pay packets slashed if the federal government’s extended tax offcut ends.
The government extended its $7 billion low and middle income tax offset for Australians earning $126,000 by 12 months into 2020-21 in the wake of the coronavirus pandemic.
About 3.4 million Australians will be $1080 a year worse off while another seven million will see their take-home pay reduced, according to Bankwest Curtin Economics Research Centre analysis.
The end of the low-middle income tax offset will affect women more than men, according to Bankwest Curtin Economics Research Centre’s Rebecca Cassells and Alan Duncan.
‘The withdrawal of the low and middle income tax offset from 2021-22 will disproportionately affect women, who will face an average increase in taxes paid of $502 per year from 2021-22 to 2023-24, relative to 2020-21,’ they said.
‘For men, the average annual increase in taxes paid will be lower, at around $385 per year.’
Increasing the tax rate could result in a $5.5 billion blow to the economy in 2022-23 and a $6.1 billion hit the following year, according to KPMG chief economist Brendan Rynne.
‘Every dollar that you take back in tax is a dollar that doesn’t go into consumption,’ he told the Sydney Morning Herald.
Federal treasurer Josh Frydenberg was tight-lipped on the fate of the tax offset.
More to come.