Taxing the poor, for years

The media’s full of the Howard government’s magic $3.7 billion “extra surplus” today. It’s hard to know how to start making sense of it all. But here’s one thought which struck me: the tax-free threshold for personal income tax.

Democrat Senator Andrew Murray says in Crikey today that the amount you can earn before being taxed has stayed at the same figure of $6000 since the year 2000.

If it had been indexed since 2000, it would now be well over $7000. Had the 1980 personal threshold of $4,041 kept pace with earnings, the tax-free threshold would now be well over $15,000.

Senator Murray also points out that the minimum income required for basic subsistence is around $13,000. That is, if you earn less than that, you simply don’t have enough money to cover the basic living expenses of accommodation, food, clothing, education, medical care, transport and so on. Sure, you might be able to fake it for a while, but eventually something will give.