The Real Marginal Tax Rates

With the release of the Federal Budget, marginal tax rates changed for Australians.

But not in the way the media would report.  Our Deputy Director, Queensland economist John Humphreys, has crunched the numbers and the results are surprising:

Once you start  factoring in the Low Income Earner Tax Offset, the result shows that in two places our marginal tax rates are regressive.

This means is that people with lower incomes pay a higher marginal tax rate. 

In fact, the increase in the Medicare Levy is a 8.5% marginal tax increase for some of the poorest people in the country

So here are the REAL Marginal Tax Rates for 2014/15 after the Medicare Levy Increases:

Up to $20,542 = 0%
$20,543-$25,667 = 29%
$25,668-$37,000 = 21%
$37,001-$66,666 = 36%
$66,667-$80,000 = 34.5%
$80,001-$180,000 = 39%
over $180,000 = 47%

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