Announced in the May 2007 budget, the Federal treasurer announced that from 1 July every Australian taxpayer will receive an income tax cut.
For people earning between $30,000 and $40,000, it will mean an extra $1,100 per year, and $850 per year for a person on the average wage of $46,239.
He raised the threshold for low-income earners to $11,000, an increase of $1,000. Taxpayers earning more than $30,000, (an increase of $5,000) will move into the 30 cent rate. And from 1 July 2008, they will until their income exceeds; and not move into the next tax rate until their income exceeds $80,000, an increase of $5,000. Taxpayers on the 40 per cent rate move into the highest tax rate when their income exceeds $180,000, an increase of $30,000.
This will mean that over 80 per cent of taxpayers will continue to pay a top marginal tax rate of 30 per cent or less and that from 2008-09 the top tax rate will apply to only around 2 per cent of taxpayers.
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