More Australians will be ‘captured’ by higher marginal tax rates under Albanese’s plan

KPMG Chief Economist Dr Brendan Rynne says a larger proportion of Australians will be “captured” by higher marginal income tax rates, which they have still been “uncompensated for” after the Albanese government scrapped the stage three tax cuts. Prime Minister Anthony Albanese has defended his decision to change the much-promised stage three tax cuts, with the new reformers providing greater tax cuts for Australians earning below $146,486. The government claims the tax changes will benefit an estimated 11.5 million people. “Our preliminary calculations suggest that what we’re going to see is that proportionally more Australian taxpayers getting captured by higher marginal income tax rates than what was proposed under stage three. “Stage three was specifically designed to deal with bracket creep, although it wasn’t going to be fully addressing it. “Our initial analysis suggests that while the first, second and third tax brackets are largely dealt with in terms of bracket creep … it’s really the top two tax brackets that are still being uncompensated for that bracket creep.”