Stealthy Tax Rises
In the run up to the 2016 Federal Election there are the perennial favourite issues rolled-out by the media and opposing political forces, everything from the very-fast-train (that is a very slow argument) to a second international airport in Sydney (oh, that’s proceeding) to the Government collecting more taxes via superannuation and bracket creep.
Over the last 10 years or so, quite apart from changes in tax rates (or lack of change, with increasing incomes) there are a number of other factors that is costing you more money, boiling you slowly:
each 1 April, the tax offsets reducing numbers of people can access for private health insurance is falling (a sort of reverse indexation, with the ‘30% rebate’ no-more)
fuel excise increases each 6 months
the net medical expenses offset, which in the early 2000s allowed a taxpayer to claim 20% of their out-of-pocket medical expenses over $1250 was indexed, altered depending upon income, and ultimately abolished
for high income-earners, superannuation contribution caps have fallen significantly in real terms, and are taxed at up to 30% (with the crazily-named “Division 293 tax”)
if you have had a period of non-residency after 8 May 2012, you may be surprised to learn you cannot access the full (or any) 50% CGT discount on many assets
as your income rises, the $300 maximum ‘unsubstantiated’ claim falls in value
the most popular method of claiming motor vehicle deductions for work purposes, has reduced dramatically
the medicare levy is 2%, not 1.5%
the medicare levy surcharge is up to 1.5%
HELP / HECS debts are increasing, and the pace of repayment appears to be on the way up – and ‘escaping’ overseas will still mean the long arm of the ATO will reach out to you for payment.
Being complacent means you will be taxed more, now and in the future, and won’t know until it hits you, or your circumstances change and you are caught-out by some new rule.
Get to know your tax affairs, manage them pro-actively, beware of issues that are starting to boil on you, and make smart decisions to avoid unnecessary tax impositions.