Yes those who pay more tax get more in tax cuts

The Herald reports:

Treasury analysis of the Government’s tax cuts has found that the 20 per cent of households with the lowest incomes will see their weekly incomes increase by just $13 a week on average, which is just a third of the increase that the top 20 per cent of households will receive.

Any change to tax brackets or rates will always refund more money to those who pay more tax. They are the ones who have had the largest tax increases over the last 14 years.

What is the useful comparison is how the reduction in tax compares to their overall income. Here’s what they are as a proportion of average income for each quintile:

  • 1: 3.1%
  • 2: 3.4%
  • 3: 3.3%
  • 4: 3.0%
  • 5: 1.8%

So the bottom three quintiles (low to middle) get the biggest boost in relative income and the top quintile the smallest.

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