Q: Can you clarify the answer to your recent question about the new 15 per cent Division 296 tax? It stated that the tax on earnings above $3 million, or $180,000 in your example, is 5.66 per cent or $1528, whereas most people I talk to think it is a straight 15 per cent on the additional $180,000 of earnings or $27,000. Leigh.
A: The clarification you seek highlights possibly the most common misconception about the proposed new tax, which is that it is a straight 15 per cent levy on earnings above $3 million.
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