THE AGE, May 10, 2005:
Treasurer Peter Costello has delivered Australians their third income tax cut in three years with a $22 billion package that ensures every taxpayer will be better off.
From July 1 this year, the 17 per cent marginal tax rate will be sliced to 15 per cent in a move that will deliver a $312 annual tax cut to a person earning $55,000.
And in another move, the thresholds for the 42 per cent tax rate will be gradually lifted to hit between $70,000 and $125,000 a year, while the 47 per cent rate will only apply to those earning more than $125,000 a year.
A person on $125,000 will save $502 a year in tax in 2006-07.
On top of the relief for mum and dad taxpayers, Mr Costello also dumped the three per cent tariff on business inputs in a move that will save the manufacturing sector $1.3 billion over the next five years.
And he abolished the superannuation surcharge on high income earners that will cost the government $2.5 billion over the coming three financial years.
The government was attacked last year when Mr Costello unveiled tax cuts that only applied to those people earning more than $52,000 a year.
On Tuesday, he delivered tax cuts to all in what he described as a huge development for Australian taxation.
Mr Costello said without a tax cut, the government's aim to ensure 80 per cent of taxpayers pay less than 30 cents in the dollar would not be met.
Medicare thresholds are to be lifted for low income families and individuals.
The threshold will rise to $15,902 for individuals and $26,834 for families. The threshold will be lifted for each additional child or student by $2,464.
The threshold for pensioners below age pension age will also be increased to $19,252.
Copyright © 2005. The Age Company Ltd. (theage.com.au)
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