Shiny New Deficit Tax

Deficit Tax Cash

It’s a sad day when we see the government passing the responsibility of the Country’s debt onto its citizens.  In news this week, it has been revealed that the Abbott government plans to introduce a ”deficit levy” in May to help to bring the budget back into surplus sooner.

The proposed levy would most likely apply to medium to high income earners – those earning more than $80,000 a year – and would work in a similar fashion to the Medicare surcharge, according to news reports.

It would see an additional levy of 1 per cent for those earning between $80,000 and $180,000, meaning someone who earns $80,000 will have to pay an additional $800 a year for the deficit levy.  A proposed levy of 2 per cent would hit those earning more than $180,000.

News.Com.Au reports the following:

Tony Abbott promised a government of no new taxes and no surprises.

But his government’s first budget, to be delivered on May 13, risks breaking both key election commitments.

The prime minister insists the proposed “deficit levy” on people earning $80,000 or more, which could remain in place for up to four years, is not a broken promise.

“If there was a permanent increase in taxation that would certainly be inconsistent with what was said during the election,” he said.

Abbott argues that bringing the budget back to surplus within the decade demands short-term pain for permanent and lasting gain. While the idea of a tax hike on the highest income earners has found some support in the welfare sector, Labor leader Bill Shorten has seized on it as a “deceit tax”.

“It is clear to most reasonable Australians that the Abbott government said one thing in opposition and is now doing something else in government,” he said.

You can read the full article by News.Com.Au here: Aussie Taxpayers $800 Hit: four years of sharing the pain to reduce the huge Budget Deficit.