Tax fall benefits the rich

Press, 4 April 1989, Page 1

Tax fall benefits the rich

Last October’s tax changes fuelled a 9.5 per cent rise in disposable income for top earners in the December quarter, but the bottom 20 per cent of earners had a 0.8 per cent increase.

Total real disposable incomes of full-time wage and salary earners rose 4.5 per cent between the September and December quarters last year, according to the Department of Statistics.

Average gross incomes rose 1.6 per cent, partly balanced by a 1.2 per cent rise in the consumers? price index. ' The lowering of the top marginal tax rate from October 1 from 48c to 33c caused an 11{2 per cent drop in the average tax rate, from 26.8 c to 23.8 c. !

This led to the highest fifth of wage and salary earners,, with annual gross incomes of $36,100 and over, getting a 9.5 per cent

rise in their after-tax spending power.

The second highest fifth ($28,300 to $36,100) had an increase of 3 per cent. The middle fifth ($22,400 to $28,300) had a 1.9 per cent increase, while the second-lowest fifth ($17,000 to $22,400) had a rise of 1.7 per cent. The botton fifth, who earn under $17,000, had their after-tax spending power boosted 0.8 per cent.