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Alan’s Saturday Overview

Alan Kohler’s Saturday Overview

Alan Kohler’s Saturday Overview is a weekly report that brings a sharp focus to the key issues that matter, with exclusive insights into upcoming financial events. Read This Week's Overview »

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Question of the week

Q:What do you think of the budget pledge to abolish the 37c tax bracket by 2024-5 such that those earning 41-200k would pay 32,5c. The claim is a simplified personal tax however I reckon it reduces equitability in that it goes against the notion the more you earn the more you pay. If it is about reducing tax overall, they could have done it as has been done before… just raise the threshold for each bracket.

A: I couldn’t agree more. I don’t think it’s been recommended by any review or enquiry in the past. It’s almost tantamount to a flat tax. It means that three quarters of taxpayers will be effectively on a flat tax rate, and the 32.5 cent tax rate will go up to about $200,000. I’m generally in favour of progressive taxation, and it’s not a good idea, in my view, to abolish the 37 cent tax.