I am currently working on a client, that has not lodged a tax return since 1996. When you prepare tax returns over a 14 year period in a single sitting, you notice some real changes to the tax rates. For instance from 1st July 2009 the Low Income Tax Offset starts to reduced at $34,000 where as 5 years ago it started reducing at $21,600
Below is an example of the tax payable on 2 amounts of income. I have calculated the Tax payable and Medicare levy and if relevant the Low Income Tax Offset paid,the two amounts are $25k and $50k for the years ended 30th June 1998 and 2008.

  • On $25k the tax payable in 1998 was $3,435 and in 2008 the tax payable is $2,475
  • On $50k the tax payable in 1998 was $14,851 and in 2008 the tax payable is $10,350

You would have to agree that there is a noticeable change in the tax rates, and I know that there other factors that need to be considered, like inflation and GST.

1 Comment

  1. Yes, indeed a significant decline, I do not know what it will lead us, but apparently neither do good.

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