Australia : The Government is selling its personal income tax plan by arguing that “94 per cent of Australian taxpayers will pay no more than 32.5 cents in the dollar”, compared to 63 per cent if the current system is left unchanged.
At the same time, analysis by various think tanks, experts and media outlets shows that the substantial majority of savings from the tax cuts will go to higher income earners.
It all comes down to tax brackets and marginal tax rates, essential features of a “progressive” tax system.
In this context, “progressive” means that you pay a higher rate of tax as your income goes up.
This is as opposed to a “flat tax” system, where everyone pays the same rate on all their income.
