planned trust tax, according to a Senate inquiry.
The question arose on Nov. 6 during an examination of Labor’s impending 30 percent tax trust income.
Liberal Senator Andrew Bragg put it to Treasury officials that a business owner on $45,000 would pay double what a worker pays.
Treasury Chief Adviser Neena Pai replied, “I think the answer is yes, but I can point to many examples where the opposite is true.”
But the real gap is wider than double, because of the way Australia’s income tax works.
The Tax System in General
The income tax system is charged in steps.
the year the trust tax begins, a worker pays nothing on the first $18,200 they earn, then 14 cents in each dollar from $18,201 to $45,000. Higher rates apply only to income above $45,000.
low income tax offset, takes off another $325, leaving $3,427.
Medicare levyof $900 brings the total to $4,327, or about 9.6 percent of their income.
When Bragg referred to a 15 percent rate, he was quoting the rate on just one step, between $18,200 and $45,000, rather than the share of the worker’s whole income that goes in tax. That step rate is 15 percent this year, and will fall to 14 percent from July 1, 2027.
What the Trust Tax Does
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