National campaigned on a proposal to adjust the existing tax thresholds, but as part of coalition negotiations with ACT last year, it agreed to consider whether the “concepts” of ACT’s tax policy could be incorporated “subject to no earner being worse off than they would be under National’s plan”.
In simple terms, ACT would immediately axe the lowest tax threshold of 10.5 percent, meaning the government would collect more revenue from all income earners.
Some of that extra revenue would then be returned to low-and-middle income earners through a targeted tax credit to ensure they were not worse off.
The money left over would allow the government to reduce the higher tax rates at the top of the income scale - dropping the 33 percent rate to 30, and the 39 percent rate to 33
@flambonkscious @Dave That’s back to front and complicated. The Australian rates where people don’t pay tax on the first $14-15k or so is much simpler and much more use to people on low incomes. Reducing GST back to 12.5% would also help low-income earners a lot, too. Much less complicated than a rebate or tax credit.