Changes to the tax tables by moving the threshold at which the 37% rate kicks in will mean a saving about $315 for someone earning $87,000.
Middle income Australians are bearing a growing tax burden, according to the government.
Treasurer Scott Morrison told a media budget briefing that a dollar does better in the pockets of taxpayers rather than in the hands of government.
He says his budget isn’t about winners and losers.
“What I am seeking to do in this budget is to expand the middle income tax bracket,” he says.
The 32.5% tax level threshold being lifted to $87,000 from $80,000 stops about 500,000 taxpayers from facing the 37% second top marginal tax rate.
The change will cut tax revenue by $3.95 billion over the next four years.
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