Tax cuts for the poor..

Whenever the Liberals mention tax cuts or increasing the income amount for the highest tax rate, Labour and the Howard haters quickly starting mouthing off that these are just tax cuts for the rich and Howard is just ditching the poor and doesn't care about them.

Not so, read on..

Almost 40 per cent of families receive more in welfare payments than they pay in tax, challenging claims the low-paid have been unfairly treated by the tax system.

The modelling shows double-income couples with two children have to earn $48,000 a year before they pay any income tax, after accounting for generous family, aged and other benefits. The benefits mean the point at which families pay tax will have risen from $33,000 when John Howard took power in 1996 to $45,000 by next year. It is a rise of one-third, an official Treasury and private sector consultants report has found.

The figures help to explain why the Howard Government has been reluctant to make any substantial changes to tax scales, particularly the top two marginal rates, with those on average wages of $50,000 and above carrying the financial burden for the Government's welfare largesse. The figures are also a challenge to Labor's claims that families on lower incomes are being left behind.

"Governments are often criticised for not giving large tax cuts to low-income earners," the Treasury paper says. "However, many low-income earners pay very little tax, if any at all, and would not be able to benefit from tax cuts.

Labor treasury spokesman Wayne Swan said yesterday that relying on welfare payments to redistribute income was inefficient. "The improvement in net tax thresholds has been accompanied with increased complexity and a widening in the impact of high effective marginal tax rates," he said.

I have no idea what that means, I'll bet he doesn't either.

I suppose now the opposition will start saying that income needs to be taken away from those that earn more than X (to be determined by a loose alliance of Greens, Communists and other left wing loonies) and redistributed to the oppressed, disadvantaged and victimised, including illegal immigrants and anti-everything activists.

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