Why is Tax So High in Australia?

[Deactivated] on 01/02/2022 - 09:58
Last edited 01/02/2022 - 09:59

If we earn over $180 thousand a year we have to pay 45% in income tax, Medicare Levy and mandatory Superannuation contributions. Plus the 10% GST on most items we purchase. This is not including other tax luke stamp duty and etc.

We have one of the highest Tax rates in the world yet we don't have free education, Our roads and public transport are in terrible shape and our Hospitals are way understaffed with very long wait times.

I really do wonder why our tax rate is so high and where the money is really going? Because it certainly isn't for education,roads and healthcare.

Financial

Comments

          • supersabroso on 01/02/2022 - 14:24

            @Hybroid: It's been relatively stable but you look at it over the last 5 years, our currency has consistently been devalued to the point where it's 16.5% less than what it was 5 years ago.

        • lewislardboy on 01/02/2022 - 10:21
          +6

          if you spend your dollars domestically, it makes very little difference what the exchange rate is. fuel/imports obviously will be impacted — but this gets assessed inside the inflation figures the RBA uses to diddle the interest rates. all balances out eventually.

          • rektrading on 01/02/2022 - 10:31
            +2

            @lewislardboy: The world reserve currency is the USD. Import and export are nominated in USD.

            The USDAUD makes a big difference for domestic goods.

            • lewislardboy on 01/02/2022 - 10:38
              +3

              @rektrading: "big difference" — very enlightening statement.

              do these differences sit outside of the cost-of-living calculations, or are already included? CPI and interest rates are meant to keep the system balanced.

              does it work? not too well, most of the time — but it's certainly not the first issue i'd look to tackle inside the system.

    • Montyjpm on 01/02/2022 - 11:47
      +7

      I was wondering you're one of those with the Australia is "fking full" sticker?

    • Butterfly Gocha on 01/02/2022 - 12:57
      +9

      Ill be seeing you at dubaibargain.com

    • Donaldhump on 01/02/2022 - 13:01
      +2

      pity you still pay tax here whilst working in dubai, unless you can alienate yourself from the country

    • striker5950 on 01/02/2022 - 15:36
      +1

      if by hot wife you mean Russian and eastern European 'freelancers' who are obviously marrying you for your personality and not your money, than yes

      • ak47wong on 01/02/2022 - 15:49
        +5

        Or maybe they're hot because the average temperature there is 35°?

  • pharkurnell on 01/02/2022 - 10:02
    +73

    If I earned anything close to $180 thousand a year I wouldnt care.

    • bobbified on 01/02/2022 - 10:10
      +31

      I thought that before too. But when you realise that the huge pay increase you got doesn't seem to be making much difference to your bank account (relatively!), you start to wonder where the rest of that damn increase has gone..! haha

      • Chandler on 01/02/2022 - 11:51
        +107

        Keep in mind that the 45% is ONLY on earnings OVER $180k as we use a marginal tax rate.

        So if you earned $180,000 you pay $51,667 in tax. If you earned $180,001 you pay $51,667.45 in tax. That extra $1 is taxed at the 45% rate (as it is in excess of the $180k), so you pay 45c tax on that extra dollar. The rest of your income's taxation is unchanged (i.e. you don't pay more tax on ALL your income, only the income in the higher bracket).

        Lower Upper Rate Explanation
        0 18200 0 First $18.2k is tax free
        18201 45000 19% Next $26.8k is taxed @ 19%; so if you earn $45k you pay $5,092 in tax (19% of $26.8k + 0% of $18.2k)
        45001 120000 32.5% Next $75k is taxed @ 32.5%; so if you earn $120k, you pay $29,467 in tax ($75k @ 32.5% + $26.8k @ 19% + $18.2k @ 0%)
        120001 180000 37% Next $60k taxed @ 37%; so earn $180k, pay $51,667 in tax ($60k @ 37% + $75k @ 32.5% + $26.8k @ 19% + $18.2k @ 0%)
        180001 45% Anything over $180k taxed at 45%; so earn $300k, pay $105,667 in tax ($54k @ 45% + $60k @ 37% + $75k @ 32.5% + $26.8k @ 19% + $18.2k @ 0%)

        Information current as of 01/02/2022. Brackets and rates from https://www.ato.gov.au/Rates/Individual-income-tax-rates/. #thisisnotfinancialadvise

        • bobbified on 01/02/2022 - 12:09
          +6

          What you've outlined, I understand.
          Imagine an increase where your new 'monthly tax witheld' amount pretty much matches your previous 'monthly net pay'. It was a bit of a shock and I double-checked the calculations/figures to make sure they were correct. The "net monthly" pay didn't increase that much (relatively!)

          • StalkingIbis on 01/02/2022 - 12:17
            +5

            @bobbified: I dont earn over 100k, but when i took 3 days off unpaid in a fortnight, my take home pay only dropped like $300 bucks….made me wonder why Im working full time…

            • dylan345 on 01/02/2022 - 12:44
              +13

              @StalkingIbis: that's your regular take home pay but your tax return at the end of the FY better reflects your real take home pay. Which would have dropped due to you having unpaid days off.

              the PAYG system confuses a lot of people because people look at our paychecks and assume that's the accurate result, then when tax time comes around usually get a refund which some people seem to dismiss as a pay bonus or something….. its usually the refund of paying too much PAYG on your paycheck.

              which is why I dispute people who say never get a 2nd job because you'll pay more tax because the PAYG rate is higher but your refund at the end of the FY is calculated on your total income not number of jobs…… you could have 8 jobs and earn 100k total and pay the same amount of tax as someone who has 1 job and earns 100k total there's little to no difference.

              • bobbified on 01/02/2022 - 13:45
                +1

                @dylan345:

                ..which is why I dispute people who say never get a 2nd job because you'll pay more tax because the PAYG rate is higher

                It's a disincentive for people who have a full-time job to take a second job because they will be paying tax at their marginal rate on all the income from their second job (which is also often a minimum or close-to minimum wage job). This is in direct comparison to someone who works in the abovementioned 'second' job only.

                For example: A weekend job that pays $400/wk ($20,800/year):

                Person A: For someone that already has a full time job on a salary of $50,000/year does this weekend job, they have a marginal tax rate of 32.5%. So the whole $20,800 gets taxed at that rate (being $6,760). So their take home for the weekend work is $14,040.

                Person B: Whereas for someone that doesn't have a job and only works on the weekend, that person will earn $20,300 (Gross 20,800, less $500 in Tax) for the year.

                Whether it's worth it for Person A or not is up to how they value their time.

                • dylan345 on 01/02/2022 - 14:45

                  @bobbified: Main point is personal tax is based total personal income.

                  Earn more pay more… Not do more jobs/OT pay more. As PAYG amounts on paychecks have so many people wrongly assume.

                • Chandler on 02/02/2022 - 00:17
                  +4

                  @bobbified:

                  It's a disincentive for people who have a full-time job to take a second job because they will be paying tax at their marginal rate on all the income from their second job (which is also often a minimum or close-to minimum wage job)

                  Really depends on how you value your time, because work is essentially you trading your time for money.

                  The only difference with your second/nth job in regards to taxation is that you can't claim the tax-free threshold off second job/s, I assume since the ATO is operating on the assumption that your second job should put you over the tax-free bracket, so there's no point claiming it upfront in your PAYG.

                  Job #1 earning $45k = pay $5092 in tax ($26.8k @ 19% + $18.2k @ 0%)

                  Job #1 + Job #2 earning $45k and $18.2k respectively ($63.2k total) = pay $11007 in tax ($18.2k @ 32.5% + $26.8k @ 19% + $18.2k @ 0%)

                  So yeah, it seems like you're paying through the nose in tax on that second job - $5915 tax on your $18.2k second job vs $5092 tax on your $45k first job - but realistically your paying $11k tax on your $63k income you earn from working your 60-whatever hours per week between the two jobs - the ATO doesn't care which job your tax is from. And if you want to assign the full tax rate to your second job (which TBH is realistic: you wouldn't be paying the higher rate if you weren't working it) you are still taking home ~$12.2k from it.

                  In actuality, you would probably get a $2.5k tax bill as your second employer will probably tax you at the 19% (I'm assuming here, never worked payroll), so by the end of the financial year you would have only paid $3458 tax on it instead of the $5915 (again, the ATO doesn't look at is as you underpaid tax on your second job, just that you underpaid tax on your total income)

                  • bobbified on 02/02/2022 - 08:47
                    +2

                    @Chandler:

                    Really depends on how you value your time, because work is essentially you trading your time for money.

                    And that's correct. What I'm saying is, the "value" in the second job depends on you're existing income. For someone with a first ("main job") already, every dollar they earn in their second job gets taxed at their marginal tax rate, Whereas, for someone else who doesn't already have a job can still claim the tax free threshold. This is where there's a 'disincentive' for the person that already has a first job. Yes, I'm aware that the tax payable is based on your total personal income rather than based on each job. I used a weekend job in my earlier example because it was easier to see that it would be "less worth it" for Person A than Person B to take that weekend job.

                    So yeah, it seems like you're paying through the nose in tax on that second job

                    You're referring to the "tax witheld" here - it doesn't matter what the employer witholds (from the first AND/or second job) during the year, it's going to be recalculated when tax return time comes. All the income from the second job will be taxed at the marginal rate.

                    I, myself, work Monday to Friday already and I don't really do much on the weekends so I often think that it'd be fun to try working in a retail environment to kill some time and keep myself occupied. But I'm already on the highest tax bracket in my normal job and if I was to work on the weekend, say at $25/hour (~minimum wage - IF they even pay the minimum wage), that's $200 gross per day. After tax, (regardless of what is witheld by the employer), I'm only getting $106 in my pocket for a whole 8-hour day's work. Works out to be $13 per hour after tax. (I know I'm not really doing it for cash, but that's obviously a factor in the reason we all work). So up until now, the thought of weekend work still pops up in my head regularly, but it's just not worth it for me. This is the 'disincentive' i'm referring to.

              • StalkingIbis on 04/02/2022 - 22:59

                @dylan345: I always explain the same to people who make that stupid more tax on multiple jobs comment.

                In my case though, if i took the 3 days off every fortnight, my fortnightly pay would be the same each time. The tax taken out that week is equal with how much I would pay if i was earning that much.

                in my situation, lowering my take-home pay reduced my tax and hecs bill so significantly (and so my take-home pay was only marginally different) that it made it feel like i work for peanuts

          • Chandler on 01/02/2022 - 13:02
            +8

            @bobbified:

            Imagine an increase where your new 'monthly tax witheld' amount matches your previous 'monthly net pay'.

            I can't imagine that, even if you've had a ridiculous pay rise; but then you said that the net monthly pay didn't increase that much. Note that net = after deductions (like tax). Gross is before deductions.

            Say you went from $45k to $120k, your tax paid should have gone from ~$424 to ~$2455 per month, but your cash in hand (net pay, after tax) would have gone from ~$3325 to ~$7544 per month.

            $45k

            Lower Upper Rate Gross Amount Tax Paid Net Amount
            0 18200 0 18200 0 18200
            18201 45000 0.19 26800 5092 21708
            45001 120000 0.325 0 0 0
            120001 180000 0.37 0 0 0
            180001 0.45 0 0 0
            Total 45000 5092 39908

            $120k

            Lower Upper Rate Gross Amount Tax Paid Net Amount
            0 18200 0 18200 0 18200
            18201 45000 0.19 26800 5092 21708
            45001 120000 0.325 75000 24375 50625
            120001 180000 0.37 0 0 0
            180001 0.45 0 0 0
            Total 120000 29467 90533

            And as I showed in my previous comment, if you've only just entered a bracket, you only pay the higher rate on the portion in the bracket. Based on your comment about monthly tax and net pay, I suspect your employer isn't calculating your tax properly. Mind you this is only accounting for tax, not any other deductions (i.e. HECS/HELP, voluntary super, salary sacrifice, other employer deductions). But I'm not an accountant or anything, just someone interested in their own finances enough to understand some of it; so I could be completely wrong.

            • bobbified on 01/02/2022 - 13:25

              @Chandler:

              …so I could be completely wrong.

              No.. what you've calculated is correct.

              ..but then you said that the net monthly pay didn't increase that much.

              At the upper end, the net monthly does still grow with an increase, but it grows so much slower than before. It just feels weird to see that for every extra dollar that goes in the bank account, the tax amount also grows by about the same amount.

              • Chandler on 01/02/2022 - 13:40
                +1

                @bobbified: Yeah ok I think I got you. In my two examples above (45k vs 120k), the gross amount almost tripled (2.6x), but the tax amount almost hextupled (5.8x) and the net amount just over doubled (2.3x). Actually looking at those multipliers it's not actually as bad as I would have thought.

                • bobbified on 01/02/2022 - 13:51

                  @Chandler: I was trying to avoid posting figures publicly so I was going to PM you, but looks like you've got what I mean now. Think I'll need to readjust how I view the future payrises etc.

            • DrScavenger on 02/02/2022 - 06:12

              @Chandler: You are missing one big thing. The extra 2% medicare levy.

          • Nereosis on 01/02/2022 - 13:16
            +7

            @bobbified: I have an idea for you: don't look at your pre-tax and how much tax you paid - it makes no difference!
            Look at how much goes into your bank account and be happy it's not $500 a week like a lot of Australians.

            • bobbified on 01/02/2022 - 13:53
              -2

              @Nereosis:

              Look at how much goes into your bank account and be happy it's not $500 a week like a lot of Australians.

              You make it sound like I was somehow born into an above-minimum wage job out of pure luck. lol
              (I can assure you that is not the case and I have put plenty of effort into it over the years).

          • AustriaBargain on 01/02/2022 - 21:21
            +3

            @bobbified: Why not just work three months out of the year and make 45k, and just relax the other nine months? If it's so intolerable paying taxes on a 180k income why not just work less and cut your income down to 45k a year? If it'll make you feel better to earn 45k a year than 180k a year then stop complaining already and just do it.

            • bobbified on 01/02/2022 - 22:27
              +1

              @AustriaBargain:

              If it's so intolerable paying taxes on a 180k income why not just work less and cut your income down to 45k a year?

              $45K? How am I going to move out and enjoy Tinder dates?

              • AustriaBargain on 01/02/2022 - 22:32

                @bobbified: How many old men on their deathbeds look back and say "my one regret is not staying at my parents house until I was in my 30s to save for a home deposit". Wasting your youth just to save a few bucks is no way to live, especially if you're young and already making 180k a year.

            • Eeples on 01/02/2022 - 22:49

              @AustriaBargain: That’s what I’ve done. Kinda.

              I have chosen to work 3 days a week and chosen to salary sacrifice 27.5K per year; in order to earn around 45K.

        • Seraphin7 on 01/02/2022 - 13:37
          +1

          Keep in mind that the 45% is ONLY on earnings OVER $180k as we use a marginal tax rate.

          You say that as if it's a good thing. Having close on half of your earnings (even if only earnings above a certain threshold) taken by the government is outrageous.

          • Chandler on 01/02/2022 - 13:57
            +3

            @Seraphin7: Wages, taxation and the like are a complicated topic, with viewpoints often tainted by personal circumstances.

            Government services (i.e. Health, Education, Defence) need to be paid for somehow. Are government services costing more than they should? Are politicians overpaid? Are higher-earners overpaid? Are lower-earners underpaid? Are corporations/businesses being taxed appropriately?

            I think part of the problem in regards to income tax specifically is higher-earners typical penchant for tax minimisation. Your typical $45k earner isn't usually going to be using the tools that your typical $120k earner will, and so whilst on paper the $120k earner will be paying a significant amount more in tax, how much do they actually end up forking out (typically)?

            • Seraphin7 on 01/02/2022 - 14:15
              -7

              @Chandler:

              Government services (i.e. Health, Education, Defence) need to be paid for somehow.

              The issue is both the depth and breadth of what government pays for. Only idiots will claim government (and the services it provides) should be eliminated, but it is the (IMHO) total overreach of all forms/levels/persuasions of government that has created this beast that needs to be fed by the high taxes payable.

              Are government services costing more than they should?

              Where those services could otherwise reasonably be provided by the private sector, almost universally.

              Are politicians overpaid?

              Politicians are not the actual problem. Add up how much they get paid and its actually a drop in the ocean. Its the massive bureaucracies of government (not politics) that are the issue.

              Are higher-earners overpaid? Are lower-earners underpaid?

              Compared to what?

              Are corporations/businesses being taxed appropriately?

              Generally speaking, no. Business tax in Australia is structurally awful.

              I think part of the problem in regards to income tax specifically is higher-earners typical penchant for tax minimisation.

              Of course it is. When you are getting whacked at close on 50% … and then can implement schemes to claw that back … of course you are going to advocate for lower taxes.

              Your typical $45k earner isn't usually going to be using the tools that your typical $120k earner will, and so whilst on paper the $120k earner will be paying a significant amount more in tax, how much do they actually end up forking out (typically)?

              Not really sure what this means?

              Is your assumption that $45k wage earners are all "tradie types" with the need to purchase tools? Plenty of tradies I know seem to be making a lot more than $45k! Equally, not sure what tools you need to purchase to work in retail (as an example) at this wage point?

              On the other hand, are you saying that those making $120k have no expenses? You seem to assume that this type just operate in offices, with no need to spend money in relation to their employment. Even if we accept that, are you saying they have no costs of university/professional education/compliance either past or present (as an example amongst other costs)?

              • Mr Haj on 01/02/2022 - 16:18

                @Seraphin7: what? Chandler was saying that the higher earners have greater access to tax minimisation options… nothing to do with tradies and office workers…

            • leiiv on 03/02/2022 - 12:55
              +1

              @Chandler: The difference between typical $45k earner and $120k earner, heck even $180 earner are just statistical noise when you take into acccount the multi-billionaires who run the shows. A wage earner who make less than $200K a year should really be put in the same bucket. Those elites don't normally earn salary so they are not fairly taxed. The difference that makes it unfair is this: the typical wage earners grow their wealth from the taxed salary, the elites can grow their wealth from other untaxed means.

        • adaminperth on 01/02/2022 - 15:02

          Probably more likely to be Paying $55267 in tax at $180k. As you also have to pay the medicare levy in most circumstances which technically isnt a tax, but is still coming out of your pay.

        • Domingo on 02/02/2022 - 17:21
          +1

          You missed one. Once you earn over $250,000 (or say you leave after a long period at a single company and have your annual and long service leave paid out), after your tax return you get hit with a Divison 293 assessment notice saying that you haven't been taxed enough on your super contributions, and an extra tax bill on your super contributions above a certain threshold.

      • Gumster on 01/02/2022 - 15:07
        +1

        Thats lifestyle creep for you!

      • SierraBMel on 02/02/2022 - 15:05
        +3

        I made close to 180k for a while. The wardrobe, stress, high blood pressure meds, booze, therapy, proving to my dad that I was “a success”, and a bunch of other toxic and self destructive coping strategies cost me way the (profanity) more than taxes ever did. Waking up tired every damn day and going to bed angry about work shit 6 nights a week, insomnia, anxiety and trashed personal relationships/complete lack of time for my friends and hobbies also didn’t help.

        I’ve heard there are people who can work those jobs, or versions of high money jobs that don’t cost more than they (pay, but I never met anyone at that level of how private life wasn’t a mess and who’s health wasn’t trash, and I never found one of those supposed jobs. I knew one genuinely rich guy who was happy and healthy - but he is income stream had at least one more zero than mine and maybe two. Everyone else I met who was making north of 200k either never got laid without it being transactional, or their life or Heath was a mess. And the taxes made next to no difference. Besides - I paid an accountant to make sure my taxes were done right - my effective tax rate was closer to 25% anyway. If I’d been more responsible with my money and invested more of it - I could have brought that down by a solid chunk.

        Taking a 60% pay cut and moving to a gig where I help people was the best decision I ever made. I miss the money and the toys - but my blood pressure is healthy and my BMI is almost ideal and I don’t hate most of my coworkers. I even like some of them.

        • GG57 on 02/02/2022 - 15:32
          +1

          And you probably don't need to pay an accountant any more?

        • bobbified on 02/02/2022 - 16:58
          +1

          That sounds really bad. I understand where you're coming from and I see the stress in other people every day when I sit in meetings with them (lately, just on zoom/teams). Everyone seems to have their own coping mechanisms - I can tell you (and I think you already know this) that drug use is pretty common amongst the very senior people. My logic is that I'll do and earn as much I can while I'm still relatively young to set myself up for a comfortable life later on or one day when I have my own family. I don't know whether that's the right decision or not, but time will tell. I'm currently on an amount of just under three hundred thousand (that's the OzB average, btw! lol) as an employee so there's not exactly a lot that I can deduct for tax purposes. For me, I find that the responsibility can be challenging at times, but most days, I'm still pretty okay and am still able to enjoy my life outside of work. I find that the amount of stress etc to me now isn't very different to when I was on half that amount.

    • maxwellhill on 01/02/2022 - 10:48

      Go try take some money of one of these high earning politicians and see if they care

      • Chandler on 01/02/2022 - 14:04

        They're high-earning so that they don't take bribes, silly!

        You wouldn't take bribes if you were high-earning, would you?

        • 811b11e8 on 01/02/2022 - 15:08
          +2

          It just pushes the cost of bribes up.

          Instead of offering up some cash you now have to offer them a career after politics afterwards. Paying them for there old contacts in the government.

    • brendanm on 01/02/2022 - 11:14
      +2

      Pretty sure you would actually.

    • baldur on 01/02/2022 - 16:31
      +1

      You would care.

    • R4 on 01/02/2022 - 19:01
      -6

      Not trying to stir sh1t with you or anything like that but although $180k is a good salary, in reality it's not that great. In WA, many earn that kind of income with many others - normal working (albeit skilled) people who work hard and make it happen for themselves.

      • Tambani on 01/02/2022 - 19:30
        +10

        Get our of your bubble. $180k taxable income puts you in the top 3% of earners in Australia (2018-19 ATO stats).

        Lets say you have tons of expenses and you end up with $140k taxable income. That still puts you in the top 8% of earners.

        • baldur on 01/02/2022 - 23:46
          +3

          probably he thinks seven-eleven cashiers make 120K per year.

    • ln28909 on 02/02/2022 - 09:05
      -4

      If you earn over half a million a year, it starts to bite very hard

      • Tambani on 02/02/2022 - 09:41
        +6

        Cry me a river

        • ln28909 on 02/02/2022 - 09:45
          -4

          Once you get there you'll understand, I will pay more in tax this year than 97% of people in Australia earned income (if your stat is to be believed)

  • bemybubble on 01/02/2022 - 10:03
    +30

    It's all relative. Keep in mind we are ranked 8th in the world for quality of life as a whole

    • R4 on 01/02/2022 - 19:04
      +4

      Yep, we have a great quality of life here - although not that long ago, we were 2nd on that list.

      We also have very high levels of disposable and discretionary income.

  • onetwothreefour on 01/02/2022 - 10:03
    +27

    Aren't you moving overseas to look for foreign women? Why do you care how high the tax is here?

    • websterp on 01/02/2022 - 10:12
      +1

      Maybe he imported one instead?

      • Kangal on 01/02/2022 - 11:24

        He tried, but it was confiscated by Border Patrol

      • DashCam AKA Rolts on 01/02/2022 - 12:51
        +2

        OP was looking for an Eastern European M'Lady, and given the roubles' troubles he might bag a bargain. On the other hand his next katana or fedora will be dearer.

        • [Deactivated] on 01/02/2022 - 14:22
          +1

          Gold. Its always this type of 'man'.

      • Mr Haj on 01/02/2022 - 12:53

        I wonder how much the tariff was

      • Jaspa7 on 01/02/2022 - 12:58

        Got one, thanks! Anyone have any experience with the 'Novak Djokovic' model?

  • Fiximol on 01/02/2022 - 10:05
    +12

    Along with your annual income tax return, you should have received an infographic from the tax office giving you an indication of how the money is spent (e.g. something like this)

    • Almost Banned on 01/02/2022 - 13:18

      This is a great infographic.
      I am thinking about a post where people get to vote on what categories of government spending should be increased, and which decreased…
      I think it would be interesting.

      • clinton on 01/02/2022 - 17:35
        -7

        It's not great, it's rubbish conservative propaganda. Australian dollars come from the Government not from tax payers, how and how much the Government spends and how and how much it collects tax are completely unconnected.

        • duchy on 02/02/2022 - 10:36

          Surely you are joking?!?

    • Domingo on 02/02/2022 - 17:23
      -1

      I wonder how much tax the tax office spent on design consultants to produce a chart showing where tax dollars are shown. Probably enough that it could have been listed on the chart itself.

      • Almost Banned on 02/02/2022 - 19:03

        Its not a very complex chart.
        Don't get me wrong - government departments are famous for wasting money and overspending on nonsense, I get it - but this is a simple chart that can be extracted straight from the budget summary.

  • SBOB on 01/02/2022 - 10:12
    +32

    If we earn over $180 thousand a year we have to pay 45% in income tax

    you understand the higher rate only applies to the portion over the tax thresholds?
    earning $180,001 does not mean you pay 45% income tax

  • bobbified on 01/02/2022 - 10:13
    +3

    If we earn over $180 thousand a year

    Is this a vaguely-disguised flex after this post to try prove that you're worthy of what you were ranting about? lol

    • [Deactivated] on 01/02/2022 - 10:15
      -3

      My salary is only $120k a year, even so my tax is still too high.

      • GG57 on 01/02/2022 - 10:41
        +7

        What do you think the tax rate should be? (use an income of $120k as an example).

          • SBOB on 01/02/2022 - 11:43
            +4

            @maxwellhill:

            here's more than enough now (politicians have ridiculous salaries)

            exactly what portion of the current annual tax revenue do you think makes up politician salaries?

          • Kangal on 01/02/2022 - 11:44
            +6

            @maxwellhill: You are not wrong, but not for the reasons you brought up.

            Going back to 1800, there really wasn't income tax, and it wasn't mainstream. As taxation was introduced and mandated, it was about taxing large businesses, and not individuals.

            This period saw some of the biggest economic growth in Western Markets, despite being hampered by wars. However, after WW2, the collapse of industry, they took gold-backed currency and introduced fiat currency. They also developed IMF and nominated the USD as the global currency. Among many other legislative changes, this was the period they introduced (or enforced it/mainstream) income taxes for individuals. It was fairly low, living expenses were cheap, and the backlash was curbed due to other societal issues of the day. It's only increased in rates since then, and loopholes and incentives were given to businesses, and legislative influence (lobbying) has become huge.

            So there is (some) argument to be made that income tax for individuals, at least those who aren't wealthy, should be zero. That's the status quo for thousands of years, and it's only really changed in the last 50-or-so years.

            • maxwellhill on 01/02/2022 - 12:24
              -1

              @Kangal:

              Going back to 1800, there really wasn't income tax, and it wasn't mainstream. As taxation was introduced and mandated, it was about taxing large businesses, and not individuals.

              Yes, should never be anything different
              Big corp to gov: stop taxing us or we'll stop supply, tax the people instead
              Gov: ok

              However, after WW2, the collapse of industry, they took gold-backed currency and introduced fiat currency

              Why were they so against jfks interest free money?

          • JDMcarfan on 01/02/2022 - 11:46
            +9

            @maxwellhill: and so then you should pay for everything out of your own pocket.
            Trip to the doctor/hospital: pay $$$
            Send Child to School: $$$
            Go to any park/wildlife/beach area: $$$
            Pay Tolls to travel between cities/towns on rural highways (like in Europe): $$$
            I could go on and on, I wonder how much would be left for ordinary Australians…..

            Our tax rates are comparative/lower to any other developed country (that isn't a designated tax haven) and we have an equal/better quality of life than nearly every other before even taking into consideration our ideal climate (despite the fact that we're one of the most sparsely populated nations on earth).

            Not only that but we have numerous 'loopholes/grey areas' to legally reduce your income tax bills (main one being the 50% CGT concession for assets held more than one year), which practically reduces the vast majority of tax bills that would otherwise be paid. Would you rather pay 45% tax on half of 500k gains (45%*250=112.5 or 22.5% effective tax rate) or a 30% top flat tax rate (highly unlikely) without any concessions.

            People complain about taxes on everything like GST, but again ours is one of the lowest in the world at 10% (unchanged since inception in 2000) compared to other developed nations (the lowest in the EU is 17%, avg in the US is 6.35% (but they have a slew of localised sales taxes on top) and the only 2 notable developed countries lower than ours are the tax-haven Singapore: 7% and incredibly-expensive anyways Switzerland: 7.7%). Likewise those who complain about the cost of fuel don't understand how lucky we are and how cheap fuel is here. Yes it has gone up a lot in recent years but comparing it to any other developed country (bar the US, who invades countries for Black Gold) and you'll find they are on average much more expensive elsewhere. Fuel tax here in Oz is 42c per litre which is minuscule compared to Europe, where the tax component is a large component of our retail pump price (retail prices in UK, Netherlands, Germany: $2.73, $3.18, $2.76, fuel tax per litre $1.03, $1.29, $1.03 respectively).

            Whilst our tax system is definitely not perfect - I for one would prefer a decrease in income tax rates to be supplemented by higher consumption driven taxes (e.g. 15+% GST and $1.00 per litre Fuel Tax to decrease emissions and boost p/t infrastructure whilst also reducing traffic volumes) - I think by and large, esp. compared to other countries we have it real good.

            • maxwellhill on 01/02/2022 - 12:08

              @JDMcarfan: Why would I have to pay for everything when there is still tax on everything else, every cent on fuel, food, rego it's literally never ending.

              Trip to the doctor/hospital: pay $$$
              Send Child to School: $$$
              Go to any park/wildlife/beach area: $$$
              Pay Tolls to travel between cities/towns on rural highways (like in Europe): $$$

              I pay income tax now and I still pay to go to the hospital (public) I get biological treatment and I still pay for some of the medication, I also pay for the blood test to be done to check the medication. We pay income tax now and still pay for kids to go to school… uniforms, books etc nothing is supplied for free and public schools charge fees as well annually. I pay income tax now and when I go camping I have to pay to use the ground (despite always being the cleanest person there) I went to a lake at the blue Mountains and I had to pay for parking. And in terms of toll roads, that is probably the worst argument to make as we have private toll roads now that are ludicrous in terms of cost, and most of the public roads are horrendous despite all this income tax and tax being paid

              • JDMcarfan on 01/02/2022 - 12:23
                +2

                @maxwellhill: Knew I was going to get snagged about the toll roads but Aussies love a road trip and many countries have intercity tolls that really mount up, we don't.
                Pretty much every other city in the world does have some form of ludicrous toll charges or has horrendous traffic within their cities (we unfortunately have both).

                And did you read my response, I acknowledge that we pay taxes on all those other things but I've also given real examples of the fact that our rates are at the bottom end of our international counterparts. What more do you want… I mean are you just looking for handouts left right and centre???
                You're not getting charged for the doctors labour are you, just some ancillary treatments (which would be pennies on the dollar of the total cost of treatment). Are you being charged for the teachers labour cost or cost related to school upkeep, no just uniforms and a small annual fee for some materials and building funds (I went to one of the most expensive public schools for annual fees and even then it was $1200 a year for a student, big deal). You go camping and are charged a small fee to use facilities specifically set-up for campers and not the park as a whole (no charge for park maintenance or rangers salaries). if camping was free, think about how over-crowded popular locations would be and the damage to the ecosystem it would cause. The fees there are not for revenue raising but to create a balance in demand and to supplement ecological maintenance in the area.

                I do agree with you on parking though. I get annoyed when they charge for public locations esp during times that there are no people.

              • DashCam AKA Rolts on 01/02/2022 - 13:00
                +1

                @maxwellhill:

                And in terms of toll roads, that is probably the worst argument to make as we have private toll roads now that are ludicrous in terms of cost, and most of the public roads are horrendous despite all this income tax and tax being paid

                I don't think that you are taking into account the size of country, the sheer distances between places, and the size of the population to support the infrastructure costs. Perhaps if the entire population moved to Tasmania, we could reduce road costs compared to our current arrangement, but …. mining, agriculture, aquaculture, etc are spread around the entire country.

              • bchliu on 01/02/2022 - 16:08
                +3

                @maxwellhill: Try and pay for medical in the US without work provided insurance and tell us again whether we have it good here or not. Not to mention their tax rates are worse than here having to pay both on a State and Federal level taxes.

            • clinton on 01/02/2022 - 17:38

              @JDMcarfan: Taxing income is a proxy for taxing wealth. The economy literally relies on consumption, why would you discourage that? Remove consumption taxes, they are regressive; tax wealth because we should discourage widely disproportionate access to resources.

          • node modules on 01/02/2022 - 12:32

            @maxwellhill: epstein didnt kill himself

          • Shaddolf on 01/02/2022 - 22:33

            @maxwellhill: There is zero chance we could have the same quality of life provided by public services if we just removed income tax.

          • mooney on 01/02/2022 - 22:58
            +2

            @maxwellhill: Congratulations maxwellhill on the stupidest take I’ve read on this thread so far.

      • Hearthstone on 01/02/2022 - 10:47

        Resident tax rates 2021–22
        Taxable income

        0 – $18,200
        Nil
        $18,201 – $45,000
        19 cents for each $1 over $18,200

        $45,001 – $120,000
        $5,092 plus 32.5 cents for each $1 over $45,000

        $120,001 – $180,000
        $29,467 plus 37 cents for each $1 over $120,000

        $180,001 and over
        $51,667 plus 45 cents for each $1 over $180,000

        • cashless on 01/02/2022 - 10:56
          +1

          On that basis, OP is paying for about 50% of a teacher's salary.
          Where did it all go wrong?

          • brendanm on 01/02/2022 - 11:16
            +1

            @cashless: I think you need to go back to school and do some mafs.

            • cashless on 01/02/2022 - 13:55

              @brendanm: Maybe you're right.
              Average teachers earn about 65k p.a., Data was just a little bit old…..but there again, so is my brain;)

              • brendanm on 01/02/2022 - 14:27

                @cashless:

                Average teachers earn about 65k p.a.

                That's just false. Starting salary for a teacher first year out of uni is maybe $65k, average is $80k + from memory.

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