Are the 2020 Budget tax cuts 'fair'?

Some people (such as the welfare lobby) have argued that the tax cuts brought forward as an economic stimulus measure in this year's Australia budget are 'unfair' as the largest benefit is received by those on higher income levels, and there is no benefit to those on low or no income (such as the unemployed).

Of course the fundamental reason for the unemployed and low income workers getting no benefit from this tranche of tax cuts is that you can't benefit from a tax cut if you already pay no tax!

But looking at the criticism that these tax cuts provide the biggest benefit to those on higher incomes, one has to look at the cuts not just in dollar terms, but as a percentage change in the amount of tax paid:

Taxable Income        FY2018                    FY2021                     Change in Tax

                              $ amnt  % change     $ amnt  % change     $ amnt  % change

$40,000                   $4,947     12%         $3,887      10%         -$1,060     -21.4%

$60,000                   $12,147   20%         $9,987      17%         -$2,160     -17.8%

$80,000                   $19,147   24%         $16,987    21%         -$2,160     -11.3%

$100,000                 $26,632   27%         $24,187    24%         -$2,445     -9.2%

$120,000                 $34,432   29%         $31,687    26%         -$2,745     -8.0%

$140,000                 $42,232   30%         $39,667    28%         -$2,565     -6.1%

$160,000                 $50,032   31%         $47,467    30%         -$2,565     -5.1%

$180,000                 $57,832   32%         $55,267    31%         -$2,565     -4.4%

$200,000                 $67,232   34%         $64,667    32%         -$2,565     -3.8%

This shows that the biggest percentage reduction in tax burden is flowing to those on lower incomes.

Overall, it seems a bit churlish on those already paying a lot less tax than they receive in benefits (e.g. free schooling, medicare, NDIS, JobSeeker etc. etc.) to complain that those who foot the bill for their benefits will be getting a small reduction in the amount of tax they pay.

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