Yahoo Finance Controversial bill could save Aussies $6,000
Senator David Leyonhjelm has introduced a bill which would cut tax receipts nearly in half.
Personal income tax would be slashed to a flat rate of 20 per cent and the tax-free threshold increased to $40,000.
The tax cut is touted to deliver an average $6,000 saving to most Australians.
The bill also abolishes six indirect taxes on items including tobacco, alcohol, fuel, wine, luxury cars.
Liberal Democrats Senator, David Leyonhjelm has introduced a bill which reduces income tax a to a flat rate of 20 per cent and lifts the tax-free threshold to $40,000.
The proposed tax cut is part of a suite of reforms which would nearly halve the amount collected in tax each year.
Tax is used to pay for public services like schools, hospitals, roads and other essential infrastructure.
The tax cut would save the typical worker more than $6,000 a year, according to Leyonhjelm.
The Lower Tax Bill 2018 also abolishes fuel tax, alcohol tax, tobacco tax and substantially reduces the company tax rate to just 20 per cent.
The bill also abolishes the luxury car tax, which Leyonhjelm argues would boost the tourism industry.
“My plan to nearly halve Commonwealth tax collections is responsible and doable because it is coupled with even greater cuts to Commonwealth Government spending,” Leyonhjelm said.
“Both the spending cuts and tax cuts have been independently costed and published by the Parliamentary Budget Office (PBO).
“My bill to slash tax will not pass the parliament in the final sitting weeks before the election. But for each tax cut detailed in the bill, it will allow us to ask the major parties ‘Why not?’”
Introducing the bill into the Senate yesterday, Leyonhjelm said high taxes are stopping Australians from spending, saving and investing.
“Such a massive tax reduction is warranted because tax involves using coercion to take someone’s property, and so should be kept to a minimum.”
The PBO costing found the reform would see tax revenue fall a staggering $187 billion in the first year and $221 billion by the third year of operation.
It said a reduction in the company tax rate would likely have a positive impact on business investment and economic activity.
However, while this would usually be expected to result in higher revenue from other taxes including personal income tax, the sheer size of the proposed reform and the number of questions around how to fund it means it’s “too uncertain to estimate”, the PBO said.
The bill comes after the government introduced income tax cuts in the 2018-19 budget which, it believes, will deliver a $530 benefit to more than 10 million Australians.
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