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Fair go gone: stage 3 tax cuts and LMITO by occupation

Taxation Income tax Tax rates Australia

The stage 3 tax cuts will give occupations like CEOs of large corporations, surgeons, and federal politicians a $9,075 a year tax cut. While aged care workers, hairdressers, and café workers will get nothing. When the LMITO ends teachers, nurses and chefs will pay $1080 more in tax.

The stage 3 tax cuts, worth $15.7 billion per year will come into effect in July 2024, while the Low- and Middle-Income Tax Offset (LMITO), worth $7 billion per year is due to end this year. Previous analysis of the stage 3 tax cuts and the LMITO has looked at who benefits by income and who benefits by gender. It found stage 3 tax cuts mainly go to high income taxpayers and because men are more likely to have high incomes, most of the benefit goes to men. More than 50 per cent of the tax cut goes to the top 10 per cent of taxpayers. Men get twice the benefit from the tax cut when compared to women. The LMITO mainly goes to middle income earners and is evenly distributed between men and women.

This paper looks at the distribution of the tax cuts by occupation. It uses Australian Bureau of Statistics data on average incomes by occupation. It uses these average incomes by occupation to calculate the size of the tax cut going to each occupation. It calculates the amount going to people earning the average income for each occupation for both the stage 3 tax cuts and the LMITO.

Related Information

Divided nation: the Stage 3 tax cuts broken down by city and country electorates https://apo.org.au/node/322369

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