The proposal has two components:

• Component 1: Permanently reinstate the deficit levy at 2 per cent for taxable incomes greater than $180,000. The fringe benefits tax rate would also increase to 49 per cent.
• Component 2: Implement a minimum tax liability (also known as a ‘Buffett Rule’) for individuals with total income above $300,000.
  • Total income would consist of assessable income, net investment losses, exempt foreign employment income, reportable superannuation contributions and reportable fringe benefits. Net (rather than gross) business and investment income would also be included in the calculation of total income. Franking credits would not be included as part of total income.
  • The minimum tax liability would be calculated as 35 per cent of total income.
  • The minimum tax liability would be assessed against gross tax, the application of refundable and non-refundable offsets (including franking credits), and the Medicare levy, but not the Medicare levy surcharge.
  • The $300,000 threshold would be indexed every two years in line with male total average weekly earnings.

The proposal would have effect from 1 July 2019 (for the personal income tax changes) and 1 April 2019 (for the fringe benefits tax changes).