Top tax rate for middle income earners reduced to 42 cents
Anyone earning up to $125,000 a year will have their top marginal rate of income tax reduced to 42 cents from 47 cents. The most dramatic change to tax scales is in the band at which tax is collected at the rate of 42 cents in the dollar. Presently, it covers every dollar earned between $58,001 and $70,000. The threshold will be expanded substantially, in two steps. From July 2005, the 42 cents tax rate will apply on incomes between $63,001 and $95,000. From July 2006 the threshold will be pushed out again, to cover the income range from $70,001 to $125,000.