As the 2015 budget looms and we’re still not close to returning a surplus, we’re all wondering where the next government money grab will come from. Last year the every day person, the pensioner and the student were hit hardest but luckily a large portion of the harmful legislation wasn’t passed. This year however, the government could take an alternate route and could regain an additional $2 billion by changing one thing.
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According to the Sydney Morning Herald, research commissioned in the lead up to the 2015 budget showed that 1 per cent of Australian wage earners earn more than $300,000 a year, but between them they claim over $2 billion in tax deductions.
What this rule would do is put a limit on tax deductions available for these high income earners. The SMH also reports that according to the Australia Institute, in 2011-12 75 Australian tax payers recorded income of over $1 million however used deductions to cut their income rate to below the $18,200 tax free threshold.
In the report prepared for GetUp! the institute suggests a so-called Buffett Rule. A similar rule was proposed by Barack Obama and is named after US billionaire Warren Buffet. It would create a tax rate floor which would only allow legitimate deduction but would prevent them from cutting high income earners’ tax rate below a specified minimum.
While $2 billion might not seem like the biggest sum of money in terms of government funds, it’s but enough to make a difference. This difference could stop us from paying more for healthcare, could provide us with more from the pension and could make our lives easier.
Tell us, is this a budget saving measure you’d actually like to see in Australia? Considering that every pensioner is guaranteed to be untouched by this rule, will you give it your support?