The Coalition v Labor: which tax cut will put more in your pocket?
Immediate tax cuts
The good news is that both Labor and the Coalition are prepared to splash cash to get your vote at the next election.
Both are offering an immediate tax cut that can be claimed when you lodge your tax return this year, though there are bigger differences further down the track.
The offset offer
Both parties have promised to introduce a new low- and middle-income tax offset that can be claimed by anyone earning up to $126,000 in this year's tax return.
This is in addition to the existing low-income tax offset, which is only available to a smaller group of taxpayers.
After being outbid by Labor when it announced its original offset last year, the Coalition has promised to lift its offset from $200 to $255 for those earning less than $48,000.
It will then be phased up to a maximum of $1080 (previously $530) for those earning between $48,000 and $90,000 and then phased down again so that anyone earning more than $126,000 is ineligible.
Labor has agreed to match the maximum offset but offered a $350 offset for those earning less than $48,000.
Labor has also agreed to match the Coalition's plan to increase the top threshold for the 37% tax bracket from $87,001 to $90,001, which will deliver everyone earning more than $87,000 a tax break as they will be paying less tax on that extra income.
According to the government, this will result in a tax cut of $135 for anyone earning over $126,000. All up, it says someone on $90,000 will receive a $1215 tax cut.
Down the track
However, the big differences emerge in the longer-term view.
The Coalition has put forward a plan for major tax reform that extends out to 2024-25 and succeeded in having this plan legislated last year, despite having to win two elections before it can be fully implemented.
As the table shows, the Coalition has promised to eventually eliminate the 32.5% and 37% marginal tax rates so that everyone earning between $45,001 and $200,000 will have a marginal tax rate of just 30%.
(The new offset will disappear as the tax rates are changed so that the tax cut is maintained in the new rates.) It claims 94% of taxpayers will be on a marginal rate of 30% or less by 2025.
Labor wants to keep the immediate tax cuts but repeal the future changes, which it says are too expensive to be locked in so far in advance.
It also argues that the future cuts, particularly the extension of the 30% bracket to higher earners, are skewed to higher-income earners and it would prefer to offer a better deal to lower-paid workers. Those earning less than $37,000 receive no benefits from the cuts after those coming in this year.
In his budget reply speech, Labor leader Bill Shorten said 6.4 million people would pay the same amount of tax under Labor as under the Coalition, while another 3.6 million people would pay less.
The Coalition claims around 13.3 million people will pay less tax by 2025 when its full plan is implemented.