Comments on: LITO 2008-09 (take 2)

By: John Humphreys

John Humphreys — Tue, 28 Jul 2009 06:45:46 +0000

It reduces the actual amount you pay by $1200. Actually… that’s now up to $1350 (as of 01/07/09).

But that only applies in full to people earning less than $30,000 per year. It then gets “phased out” by 4%… which means higher marginal tax rates of 4% on people earning between $30,000 and $63,750.

By: Joel

Joel — Tue, 28 Jul 2009 04:32:42 +0000

Hi, So does the LITO reduce the your taxable income figure or reduce the actual amount of tax you pay by $1200?

By: George Kudrna

George Kudrna — Fri, 21 Nov 2008 04:55:59 +0000

Government websites and many websites of financial planners and accountants states that the Medicare levy thresholds are set in such ways that senior australians (those eligible for SATO) pays no Medicare levy when no personal income tax is payable. But if a senior Australian is also eligible for MAWTO, then he or she may pay the Medicare levy (reduced) even if due to MAWTO, LITO and SATO no personal tax is paid. Correct me if I am wrong.

By: Club Troppo » Missing Link Daily

Club Troppo » Missing Link Daily — Mon, 21 Jul 2008 23:00:36 +0000

[...] Oil imports into Australia dropped by 28% against May 2007 figures, 1.6 billion litres vs an average of 2 billion litres. Peter Martin reports, citing a fall in average kilometers driven as proof that higher prices do lead to a reduction in greenhouse gas emissions by way of reduced oil consumption. Meanwhile, Niall Cook* is still banging on about the average consumer being confused by pricing black magic 44. gilmae: Level 6 Accountomancer spell, Wisdom save to resist. [↩]Terje revises some botched figures in a criticism of the Low Income Tax Offset. [...]

By: Clinton Mead

Clinton Mead — Fri, 20 Jun 2008 08:21:06 +0000

The Medicare Levy adds another regressive element. It is 1.5% of total income, but you don’t have to pay it until you’re over $16740 or something. Once you hit $16740 its something like 10c in the dollar til you reach 1.5% of total income, at $19,694.

As a side note, can anyone say 30/30?

The LDP should just market it as a $30000 tax free threshold, with a $9000 refundable LITO that phases out at $30000.

For some reason, people understand that more. Maybe its the negative numbers that put people off.

By: derrida derider

derrida derider — Fri, 20 Jun 2008 05:05:51 +0000

There’s a more creditable reason they’ve gone for the LITO rather than just raise the tax threshold. Raising the tax threshold causes some very weird interactions with the SATO that would actually result in quite a lot of low-income retirees paying more tax.

Which just shows the sort of mess they’ve made over the years with things like the SATO.

By: Backroom Girl

Backroom Girl — Fri, 20 Jun 2008 02:18:45 +0000

Of course, the main reason that we have a LITO is that even though the government apparently thinks that you don’t have enough income to pay tax until you earn $11,000 it doesn’t want to give all of us a tax-free income threshold of $11,000. So it is much cheaper to raise the tax-free threshold if you do it this way.

The really bizarre thing is that once the scheduled increases to the LITO are fully phased in by 2010-11, when it will be worth $1,500 and the effective tax-free threshold will be $16,000, the LITO will not be fully phased out until someone earns $67,500. So, in other words, someone earning $65,000 (or even $67,499) will be defined administratively as ‘low income’.

By: TerjeP (say tay-a)

TerjeP (say tay-a) — Thu, 19 Jun 2008 22:51:39 +0000

The Medicare Levy isn’t a rebate but it sure adds to the mess. One would almost think that they set out to create a mess.

By: Clinton Mead

Clinton Mead — Thu, 19 Jun 2008 16:31:13 +0000

You might want to include the Medicare Levy also just to make things even more messy.

By: TerjeP (say tay-a)

TerjeP (say tay-a) — Thu, 19 Jun 2008 12:58:38 +0000

LITO
SATO
MAWTO
FTB-A
FTB-B

With all these rebates one might think they were trying to whiteant the income tax system by stealth. Not an entirely bad thing but not as good as clear and transparent tax cuts.