Why doesn the Howard government (Australia) raise the lowest personal income tax threshold?
Actually, for low income earners the lowest tax rates are a tad misleading, as they fail to recognise the availability of low income tax offsets and reduced Medicare Levy, plus the second lowest tax rate has fallen from 17% to 15% and the threshold for this tax rate have increased by $10,000 in the last 5 years. To allow some comparison, let’s compare the amount of tax a low income earner would have paid in 2003 to 2007. I’ll make comparisons to someone earning $10,000, $15,000, $20,000, $25,000 & $30,000 in 2003 to the tax paid in 2007, however in order to remove distortions that result from incomes rising over this time, I’ll index these amounts by AWOTE – the average income index for Australia. Over this period, incomes rose by an average 18.07%. In 2003, someone earning $10,000 would pay $530 tax, however in 2007 somone earning $11,807 would pay $271 – that is they are earning more and paying less tax. Someone earning $15,000 in 2003 would pay $1,380 tax, compared to someone in 200
