What’s your threshold for Business Tax?
Labor and the Coalition are butting heads again – this time over the Business Tax threshold. Treasurer Scott Morrison has proposed a tax break for all small businesses making less than $10 million in turnover. Labor opposes the figure, suggesting the threshold should be limited to $2 million instead. So how does this affect us?
Well, assuming you’re a small business owner yourself you’d likely prefer the threshold to be raised. But there are two sides to the coin here.
Morrison estimates 100,000 small businesses with turnovers between $2 million and $10 million a year employed about 22 people each. By minimizing tax, small businesses will be allowed more freedom to reinvest their profits into the life of the business.
The argument being, by letting small business owners gain more control over their profits the trickle down effect will improve the lives of their staff as well as leading to a more successful economy.
The flip side of the argument is Labor’s stance on the tax break. In theory small businesses will benefit but what would’ve been tax paid to the government would become a gap in the tax fund. This means potentially less funding for infrastructure, education and health care to name a few.
Whatever side of the coin you sit on, it’s looking like the Coalition will need to seek cross bench backing if they want to get this off the ground.