Bracket creep pushes Australia’s effective top tax threshold to $279,000
- 8 hours ago
- 1 min read
Millions of Australians are paying more income tax as inflation and wage growth continue to push workers into higher tax brackets, reigniting debate over so-called "bracket creep".
New analysis suggests that if income tax thresholds had been adjusted for inflation since 2010, the top 45 per cent tax rate would not begin until an annual income of about $280,000, compared with the current threshold of $190,000.
The findings highlight how more workers are being taxed at higher rates despite rising living costs reducing the real value of their income.
According to the analysis, the current 30 per cent tax bracket would extend to around $124,000 under an indexed system, while the 37 per cent bracket would begin above that level and continue to nearly $280,000.
The issue has resurfaced amid ongoing debate over Australia's tax system, including recent changes to capital gains tax and negative gearing.
The Coalition has renewed calls for automatic tax threshold adjustments to prevent workers from being pushed into higher tax brackets over time. Labor, meanwhile, points to its revised Stage 3 tax cuts, arguing they provide greater benefits for low- and middle-income earners.
The debate underscores growing pressure on governments to address rising tax burdens as Australians continue to face cost-of-living challenges.
Source : News.com
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