Fact sheet

Fact Check: Will $77 billion worth of Coalition tax cuts go to people on $180,000+?

Publisher
Australian Labor Party Tax cuts
Description
The Coalition says Labor's promise not to go ahead with the second and third stages of its tax plan will cost taxpayers $230 billion over a decade. Labor says the plan represents "fiscally reckless income tax cuts for the top end of town", with Opposition Leader Bill Shorten claiming that, over a decade, $77 billion of the Government's tax package would go to people earning more than $180,000 a year ' the top three per cent of earners. Mr Shorten's claim is justifiable. The $77 billion figure he cites is an underestimate according to two leading tax and economic modellers consulted by Fact Check. Their analyses, using tax and welfare models similar to Treasury's, found that, over a decade, taxpayers earning more than $180,000 a year would receive between $88 billion and $89 billion under the Coalition's tax plan. Both experts confirmed that the Coalition's tax measures would reduce the progressivity of the tax system. The Australia Institute's analysis upon which Mr Shorten's claim was based left the benchmark for "high earners" ' $180,000 ' fixed over ten years. In reality, workers wages will rise over time with inflation, such that in 10 years time, people earning $180,000 may not be considered "high earners". Taking into consideration these important caveats, it is self evident that critical elements of the Coalition's tax plan, including lifting the top tax bracket from $180,000 to $200,000 and abolishing the 37 per cent tax bracket, would, if implemented, be of significant benefit to taxpayers on higher incomes.
Verdict: Justifiable
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