Australians earning less than $126,000 per year will lose out as the government winds back its extended tax break.
Treasurer Josh Frydenberg announced the tax offset for low and middle income earners would be extended in July 2020.
The tax offset meant Aussies who earn between $48,000 and $90,000 would pay $1,080 less tax.
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But now, that offset is set to come to an end in the coming financial year, meaning millions of Aussies will be seeing an increase in their overall tax.
A new report, commissioned by The Age and The Sydney Morning Herald determined that the Federal Government will need to grant 10 million Australians workers personal income tax cuts or else risk a slowdown in the country’s economic recovery.
The analysis, conducted by Bankwest Curtin Economics Research Centre, determined that without Government action, ending the tax offset would result in 3.4 million people will losing $1,080 a year, while 7 million will less take home pay.
The offset costs around $7 billion a year and is paid as a refund after people lodge their tax returns.
The analysis determined that a person earning $80,000 will get a net income of $63,013, but next year that will drop to $61,933 if a tax cut is not introduced.
Not only that, but those in the high income bracket will actually end up paying less tax. A person earning $250,000 will pay over $9,000 less.