The government does not rule out raising the GST and medical insurance tax to the highest individual tax or up to 51%
"Chinatown"-Official media of Chinese Australians
The federal and state governments have agreed to retain the plan to increase GST and medicare taxes and hope to make a final decision before the end of this year.
Although members of the Federal Cabinet, including Finance Minister Hodge, have reservations about this and have broader doubts about raising Medicare taxes and raising GST without any relevant tax reforms, the leaders' summit held in Sydney It has been agreed to advance the two plans and will meet again before Christmas this year to consider them.
"All leaders agreed to put federal and state tax reforms on the table, including GST and Medicare taxes." The meeting communiqué announced on Thursday morning said.
NSW Governor Baird proposed to increase the GST rate to 15% before the summit, while Victorian Governor Andrews and Queensland Governor Pallaszuk, with the support of Australian Capital Territory (ACT) Chief Executive Barr, tend to increase Medicare taxes.
They proposed a plan to increase the Medicare tax from 2% to 4% in eight years.
The NSW government does not support this plan, but the models they have produced show that it can easily raise the required funds.
By 2019-20, this move can raise more than 300 billion yuan each year. After compensation for low-income earners, more than 200 billion yuan will still be credited.
But economists and several federal cabinet ministers disagree with this, including the Minister of Social Services Morrison.
Because raising the Medicare tax will cause the maximum personal income tax rate to rise to 51%, this will make Australia's already uncompetitive income tax rate even more outdated.
The 51% income tax includes the current top tax rate of 45%, plus the Medicare tax rate of 4%, plus the 2017% deficit tax that lasts until 2.
Finance Minister Hodge stated cautiously on Thursday that "the overall increase in taxation does not represent tax reform" and pointed out that the overall tax burden must be reduced.
But the Prime Minister does not rule out the above tax increase option, Baird and Palaszuk will be responsible for studying the proposed plan in more detail before the meeting at the end of the year.
If the Medicare tax is raised instead of the GST, it will cause the top income tax rate to exceed 50% for the first time in ten years-experts say this is “economically unwise”.
The high personal income tax rate may dampen people’s enthusiasm for work, and Australia’s highest personal income tax rate is already the eighth highest among developed countries.
"The disadvantage of a high marginal tax rate is that it will further encourage tax evasion and may result in the inability to retain more skilled talent," said Paul Drum, director of policy at CPA Australia.
News compiled from "Smart Company"
Welcome to the news and discuss cooperation! Editor-in-chief of "Chinatown" WeChat/QQ: 28771796
Go to the "Chinatown News" Fcebook page and click like, you can know the latest Australian ๑play, ๑immigration, ๑life information anytime and anywhere ☆✿~
"Chinatown" WeChat subscription account is now available, allowing you to keep track of more updated Australian information every day
WeChat subscription account: news-ch a-com-au