Far from being a no surprises government, the Abbott government last night unleashed a bomb-shell.
TAXPAYERS will be slugged with a debt levy taking an extra $800 a year from someone earning $80,000.
One in five people in NSW earn $78,000 or more a year.
And Joe Hockey’s “sharing the pain’’ deficit levy will be tiered so that higher income earners will pay significantly more than other taxpayers.
The new tax to be imposed in the Treasurer’s first Budget on May 13, will be a levy on taxable income — similar to the Medicare surcharge.
It will only apply to workers on incomes of $80,000 and above and the rates will increase in line with tax brackets.
Taxpayers in the 37c tax bracket — on incomes of $80,000 to $180,000 — are likely to pay an extra 1 per cent.
Those earning above $180,000 are likely to pay an extra 2 per cent.
Like the Gillard government’s flood levy, the debt tax will also be temporary, applying only while the budget is in deficit. Under the new levy someone earning $150,000 will pay an extra $1500 a year.
A worker on $200,000 will be slugged an extra $4000 a year, while a taxpayer earning $400,000 will pay $8000 in extra tax.
* To be fair – Abbott didn’t quite say “There will be no new taxes under a government I lead” and there isn’t a great youtube grab like there is for Julia Gillard. This is what he did say:
Whether it’s a stealth tax (like) the emissions trading scheme, whether it’s an upfront and straight forward tax like a carbon tax, there will not be any new taxes as part of the Coalition’s policies.
I suspect in the coming days appropriate clips of Abbott’s no new taxes promise will become available.