The Federal Government managed to get its tax legislation through the senate and that’s good news for all taxpayers.
In the short term the tax cuts will deliver the following monetary benefits in 2019.
- Income earners of 25,000 will receive a cut of $255
- Income earners of $40,000 will receive cuts of $580
- Income earners of $60,000 will receive cuts of $1080
- Income earners of $90,000 will receive cuts of $1215
- Income earners of $120,000 will receive cuts of $315
Those who earn in excess of $126,000 will not receive an income tax cut on this occasion.Further cuts are now legislated for the years 2022-23 and 2024-25.
While the initial round of cuts offer little for larger income earners the now legislated future cuts will offer greater benefits to them.
The cuts offer further stimulus to the economy and will give wage and salary earners more money in their pocket.
It is estimated that the first round of tax cuts will inject approximately $7.5 billion dollars into the pockets of nearly ten million Australians. The Australian Financial Review has quoted CBA representative Gareth Aird as equating the tax cuts to be equivalent to two .25% interest rate cuts.
The combined effects of the interest rate and tax rate cuts should give the Australian economy a much needed shot in the arm.