At the time of writing, only senators Derryn Hinch and Tim Storer stand between the government and the remaining $36.5 billion in tax cuts it wants to give to corporate Australia.

Senator Storer may find the decision easier, as he has a degree in economics and an MBA to help him work out who would win or lose if the phased cuts go ahead.

For Senator Hinch, then, I’ve crunched a few numbers that may help.

The calculations are relatively simple once the tax cuts are understood within the context of the Australian tax code – and I’m indebted to Sydney University tax expert Professor Michael Dirkis, his colleague Micha Birch and Victoria University economist Janine Dixon for explaining that context in past weeks.

The first thing to grasp is that in Australia, as Professor Dirkis puts it, “companies don’t pay tax – shareholders pay tax”.

Company tax is really a ‘withholding tax’. It lets the Australian Tax Office hang on to the money until it knows who’s receiving the company profit in the form of dividends.

If the recipient is an Australian resident, the ATO looks at their marginal tax rate to work out whether they owe more or less than 30 cents in the dollar.

If the recipient is a pensioner living tax-free, the entire 30 cents is refunded via the franking credits process, and for income earners higher up the tax scale part, or none, of that 30 cents is handed back.

If the recipient is an overseas investor, the ATO just keeps the entire 30 cents.

The Coalition’s tax cut policy has already been legislated for companies turning over less than $50 million a year – their rate has been reduced to 27.5 cents, and will eventually be lowered to 25 cents.

The government now desperately wants to pass the remaining tax cuts for bigger businesses, so that they would see phased cuts until they too got to 25 cents by 2026.

Most of those bigger companies are listed on the Australian Securities Exchange, and on average about 50 per cent of their shares are owned by overseas investors.

So Senator Hinch needs to understand that the owners of half the shares listed on the ASX would do very well from the planned cut, but other shareholders less well – as the chart below shows.

There are several variables that produce that result.

As the tax rate is lowered, a company – I’ve used BHP as an example because it’s a widely held stock – has more after-tax profit.

It can use that money to invest in its business, pay higher wages, save it for a rainy day or pay it out to shareholders.

The calculations for the chart above assume that it decides to pass the windfall on to its shareholders – not unreasonable in an era when yield-hungry investors are lobbying for higher returns.

The calculation compares the start and end point of the phased tax cuts – that is, 30 cents vs 25 cents in the dollar – and is based on a small shareholding worth $20,000 which would return a bit over $1000 for a pensioner living tax free.

For other income earners, it’s one step forward, one step back.

As their dividend income rises, so does their tax bill. Meanwhile the ‘franking credit’ per share would reduce. So it’s a bit more money, a bit more tax and a bit less of a refund.

That formula for anyone in the top tax bracket – 45 cents in the dollar – would actually make them worse off.

Based on the above assumptions, they’d see their dividend income rise from $861 to $922; their personal income tax bill would rise from $387 to $415; and their franking refund would fall from $210 to $175. All told, they’d see a very small fall in their annual income.

The overseas investor, by contrast, also sees their dividend income rise from $861 to $922, but no Australian taxes or franking credits apply.

Since we don’t know where that investor resides, we can’t know what portion they’ll get to keep and spend – but some of it will go to fill the coffers of a foreign government.

Put simply, Senator Hinch needs to know that a lot more of the company tax cut will end up overseas than in the hands of Australian investors.

And although it would make local pensioners a bit better off in terms of dividend earnings, it would blow a big hole in Canberra’s future ability to fund other things pensioners need, like healthcare and, err, pensions.

So who are you going to put first senator? It’s your call.