“Trickle Down Economics!” elated Emmanuel Charles. “Have there ever been three more nonsense words to bring a smile to my face? I don’t think so!” beamed Mr Charles when interviewed by the Surry Hills Times on Bourke Street today.
Last night’s budget had sprinklings for everyone but at its core was an 80 billion dollar tax break to major corporations and Australia’s wealthy.
But the Liberal party have staunchly defended the ‘trickle down economics’ that underpin this budget.
To debate the point on their behalf they have commissioned interior designer Philippe Mushu. Monsieur Mushu has been creating the world’s most artful champagne pyramids for the last 32 years.
Over to Philippe: “Zee champagne pyramid is zee greatest example we ‘ave of zee trickle down zeory! Just look at eet! Zis gorgeous champagne tricklez from one glass to anozer… zereby spreading c’wealth as eet does. Eez so gorgeous eet brings a tear to my eye.”
Members of the opposition however disagree.
The Federal Budget handed down by Treasurer Josh Frydenberg has been hailed as a generous cash splash to win the votes of lower and middle income Aussies.
But it’s not all bad news for higher income earners.
If the government is re-elected, it has big plans to flatten out tax rates, which would lead to big cuts for the wealthy.
The government wants to lower the marginal tax rate — which covers those earning $37,001 to $87,000 — from 32.5 cents in the dollar to 30c.
But then the government wants to go a step further and abolish the second highest tax rate of 37c by lifting the 30c marginal tax rate threshold from $87,001 to $200,000.
This would give additional tax relief to everyone earning between $45,000 and $200,000 — more than 94 per cent of all Australians.
It would cut the number of income tax brackets from five to four, and would mean everyone earning between $45,001 and $200,000 would effectively pay the same tax rate.
This is a significant change to Australia’s progressive tax system, which is based on the principle that those who earn more should pay a higher percentage in tax.
If implemented, it would mean an Aussie on $50,000 a year would receive a $1205 tax cut based on 2017-18 levels. Someone on $200,000 would receive a whopping $11,640.
Oh dear.
