Before the last election, Labor detailed a suite of policies that Josh Frydenberg said would amount to $387 billion in “new taxes” over the next decade.
Like everything Josh Frydenberg says, this was a lie.
$230 billion of this figure came from Labor’s opposition to the Coalition’s plan to raise the 19% tax bracket threshold from $41,000 to $45,000 from 2022, then flatten tax brackets from 2024 so all taxpayers earning between $45,000 and $200,000 pay a marginal rate of 30%.
The foolishness of locking in tax cuts years in advance is now being rammed home. Labor sensibly said at the time that we should wait to see how the economy was faring to see if we could afford it.
Opposing tax cuts can hardly be described as “new taxes”.
The next largest revenue measure was $57 billion from ending taxpayer funded cash rebates for self-funded retirees with excess franking credits. This does not amount to anyone paying more tax. It just means the tax paid by companies would actually go to the government rather than being handed back as a gift to shareholders who pay no tax (pensioners excluded).
Labor also looked to raise $34bn through changes to superannuation tax concessions including lowering the high income super contribution threshold to $200,000 and lowering the annual non-concessional contributions cap to $75,000.
An end to negative gearing for existing properties – the ability to claim a tax deduction from a loss-making investment property (grandfathered so existing investors are not impacted) – and halving the capital tax gains concession from 50% to 25% for assets purchased after 1 January 2020, would have raised another $31 billion. Negative gearing deductions would still apply to new properties thus helping to encourage construction.
Labor wanted to raise $27 billion by imposing a standard minimum 30% tax rate on discretionary/family trust distributions, which are often used by wealthy Australians to minimise their tax. You would be hard pressed to find a Coalition politician who does not use this tax loophole.
Another $6.5 billion would be raised by extending Abbott’s deficit levy, effectively increasing the top marginal rate to 47%.
Capping deductions for accountants’ fees and managing tax affairs would raise another $2 billion. It is particularly galling to see very wealthy people pay accountants millions to reduce their taxable income to nothing.
These were all responsible suggestions aimed at getting rich people to pay their share – something that will never happen under a Coalition government.
You can be certain that, when we come out the other side of this crisis, it will be the little people who will be hit again with austerity measures and attacks on welfare whilst the wealthy will have all their loopholes fiercely protected.
Or we can vote Labor.
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