Tax Cuts

It's budget time for the Australian government, and new tax cuts have been proposed. The tax cuts come after a big budget surplus for the last fiscal year and several years of tax reforms designed to reduce income taxes in general. This reduction has been offset to some extent via the goods and services tax. Australian income tax rates are relatively high (compared to the U.S., but there is no state income tax), with the highest tax rate being 47 percent which is applied to all income over $70,000. This threshold is being raised to $95,000 in July 2005, and $125,000 in July 2006. Most of the lower tax brackets remain relatively unchanged, so this is predominantly a tax cut for the wealthiest Australians. Surprisingly, the Howard government doesn't seem to have a problem advertising it as such. I have no idea what this means for me, because (a) I'm not one of the wealthiest Australians and (b) as a non-permanent resident, I get taxed at a higher rate anyway. Unlike Australians who don't get taxed on their first $6,000 of earnings, I get taxed 29% on the very first dollar I make.