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

        • Mr Haj on 01/02/2022 - 13:32
          +1

          ohhh I see

  • TheBilly on 01/02/2022 - 11:19
    +1

    Here you go !

    https://budget.gov.au/

  • trustnoone on 01/02/2022 - 11:22

    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.

    Something people seem to forget, state and federal governments are widely different. Most of the taxes you discuss above are all federal taxes but roads, hospitals, police, teachers etc AFAIK are all state funded. And most of State funds I think comes from stamp duty (housing) and payroll tax (company tax not employee). While some funding does come from federal, I do feel like so much money is funneled to federal instead of state with the outcome being a very annoying process regarding Centrelink/Medicare/etc.

  • djones145 on 01/02/2022 - 11:23
    +5

    these topics are only getting better

    https://www.ozbargain.com.au/node/680529

    troll life is cool

    whats next?

  • [Deactivated] on 01/02/2022 - 11:23
    +4

    No one is paying 45% tax, but if you want to know where most of it goes, more than half goes to welfare (mostly pensions) and healthcare. Then submarines and all the other every day services we use.

    • GG57 on 01/02/2022 - 11:30

      Submarines and tanks…

    • MetaLaugher on 01/02/2022 - 14:39
      +5

      Yeah people forget that the large majority of all social welfare spending is dedicated to making sure your grandparents can afford to eat 2 meals per day at best.

      No politician wants to address that unwieldy and bloated issue. Old people will aggressively vote in blocks and usually conservatively. It's easier to target foreigners, dole bludgers, immigrants, teen mothers etc. and say that they are to blame despite accounting for comparatively little in welfare spending.

      tl;dr the social welfare component of your taxes mostly makes sure your superannuation-less gran can eat

    • jleno on 01/02/2022 - 20:21

      and a massive chunk is just wasted through govt's ineptitude at spending.

      • [Deactivated] on 01/02/2022 - 20:48

        Sure, there's plenty of things that could be done better. The combined cost of welfare and healthcare are the majority of government expenditure though. Their ineptitude accounts for much less than that.

  • Blitz001 on 01/02/2022 - 11:24
    +2

    I’ll let you know when I’m earning 180K. Only 120K to go..

    • Mr Haj on 01/02/2022 - 13:33
      +1

      only then may you complain

  • weezlebub on 01/02/2022 - 11:31
    +3

    Our tax rate is so high because we got rid of import / export taxes, the government once taxed big mining companies and products coming into the country (new cars were about double the price, but people buying those cars could afford them - that's why some older people still rate BMW's very highly) … as the tax income shrinks, the government doesn't take a pay cut, they 'find' the money in other ways (taxing us more, introducing GST as an additional tax while promoting it as a replacement for income tax, lots of things) …

    as for someone on 180k, i'd suggest tax minimisation techniques:
    - rental property is a good one, doesn't have to be negatively geared
    - pay packaging providers, i was once offered a role that paid 240k / year and the tax would have been around 78k / year (it was a few years ago and i'm going from memory), by using a packaging provider and returning to my primary place of residence at least once per fortnight (over 120kms from work) I would have been able to claim travel, accommodation and meal allowances to drop my annual tax to around 23k / year (but would have had to forgo 10% of my income) …

    lots of different tricks and things you can do to get around it

  • Cluster on 01/02/2022 - 11:44
    +11

    It has to be stated that anyone earning $180k/pa has plenty of opportunities to cut their tax bill.

    • Chances are they run their own business. My employer (a doctor) has each of his three personal cars owned by the business. Tax deduction.
    • Own property and rent it out. Lots of tax breaks there.
    • Set up a family trust

    And of course, anyone earning $180k doesn't actually pay 45% tax. They only pay 45% on every dollar earned above $180k.

    https://www.superguide.com.au/how-super-works/income-tax-rat…

    The number of people I meet who do not understand tax brackets, and think you pay the higher tax rate on your entire income as soon as you hit the next bracket, is astounding.

    • dave999 on 01/02/2022 - 13:55
      +5

      Just to be clear:

      Chances are they run their own business. My employer (a doctor) has each of his three personal cars owned by the business. Tax deduction.

      is not a tax deduction, it is tax fraud. You can only claim what you can prove was for business use.

      Own property and rent it out. Lots of tax breaks there

      Tax on profit and not revenue is not really a tax break at all.

      Set up a family trust

      Trusts are taxed at the beneficiaries tax rate which only helps to spread the tax burden over multiple people that you are willing to give your money to, and beneficiaries really need to be over 18 otherwise they a taxed even more than adults.

    • mdavant on 01/02/2022 - 20:51
      +1

      Stop speculating

      Read up about psi income

      Come back when you understand what you are talking about

      Car tax deductions are another thing as well unless your doctor employer takes a ladder to work

  • roozmik on 01/02/2022 - 11:46
    +1

    When you make a lot of money, i believe you get unfairly penalized.

    Not only is your tax rate higher, but then you lose out on a lot of things like childcare rebates which can be substantial.

    Do they not want "wealthy" people having children or something?

    You get absolutely nothing.. and you're only recourse is OzB….

    • Drewbo on 02/02/2022 - 19:16
      +2

      Try being a single high income earner. May as well have “ATM” tattooed on your forehead.

  • shaybisc on 01/02/2022 - 12:00

    You sound like a wage slave. Start your own business, become a billionaire and your tax rate will never go over 30%.

    • weezlebub on 01/02/2022 - 12:03

      that's a good point, set up a company and get paid through that as a sub-contractor, corporate tax rate is 30% :)

      • CrowReally on 01/02/2022 - 18:03
        +3

        Ignoring the fact that PSI/"Personal Services Income" exists and it would likely draw a gigantic red line through all of this..

        Which tax return are you going to put your sub-contractor income in? Oh, your own personal return at your own personal tax rates?

    • roozmik on 01/02/2022 - 15:13

      False.

      Your company won't pay more than 30%. You != Company.

      If your company starts buying stuff and you want to use it for personal use, you have to lease it at market rates.

      If you want to get paid some fat dividends, you're still going to get taxed at whatever marginal rate is applicable.

  • bozbargain on 01/02/2022 - 12:02
    +1

    It’s all about perspective - you could also argue that the tax rate on income is actually not that bad compared to many European countries. That is maybe a reason why eg our public hospitals are OK but not great? Quality of life in Oz is hard to beat though, regardless of what profession you’re in (as long as you at least have a job).

  • Drakesy on 01/02/2022 - 12:08
    +3

    Welllllll
    a $1 trillion debt isn't going to pay back itself.
    The best part is the people who will be burdened with the debt won't even be the ones who directly benefitted from it.

    The coalition has sold out the future generations.

    But to be honest, you travel to other countries and our roads aren't actually in that bad shape. (although some states have sold out to privatised toll roads which is a big issue).
    The health system is one of the best in the world considering it's effectively free (or would you rather be burdened with a $10,000 insurance bill a year?)
    The publicTransport has been privatised in some states (which admittedly is a terrible idea once it becomes for profit)

    Luckily privatisation in WA is relatively non existent, no toll roads and affordable public transport is terrific.

    But yes our tax rates are high consideration wage creep and inflation. Thanks to the current government!

  • Brick Tamland on 01/02/2022 - 12:18

    The GST rate is one of the lowest in the world, how can you complain about it being high

    • rektrading on 01/02/2022 - 12:49
      +2

      GST/VAT should be higher and income tax lower.

      • souths123 on 01/02/2022 - 15:14
        +1

        that is REGRESSIVE and penalises people on lower incomes that have to spend nearly all, if not all on goods and services.

        • rektrading on 01/02/2022 - 15:37
          -1

          The rich and the wealthy don't pay income taxes. A consumption tax is the only fair tax that treats everyone equal. It ensures that they pay more for their lambos, yachts and trips to space.

  • johnwinds on 01/02/2022 - 12:22
    +8

    We have an excellent health system, one of the best in world. Good standard of living, nice clean air (at least here in Melbourne). It's safe to go out at day and at night. Most issues are dealt with fairly quickly. Overall a very nice place to live.

    • Ghost47 on 01/02/2022 - 13:32
      +4

      Don’t talk up Melbourne we don’t want people moving here.

      • johnwinds on 01/02/2022 - 13:48
        +5

        True, we'll be into Sydney real estate pricing territory!

        • Ghost47 on 01/02/2022 - 13:50

          We live in the worst, most locked-down city on the planet. Our lefty government is doing nothing to improve infrastructure. Dan and his commie mates have no interest in making this state better. We have no culture down here. Sudanese gangs are taking over. I can’t wait to move to Adelaide.

          • johnwinds on 01/02/2022 - 14:36
            +2

            @Ghost47: You forgot to mention that it's impossible to get delicious speciality coffee at cafes in Melbourne, there are no gourmet restaurants and cafes available, people are unfriendly and never say hi when you pass them by on the street, strangers don't stop to help if you get in an accident, world class selective entry high schools don't exist, outstanding universities are nowhere to be found, the list goes on.

    • Munki on 01/02/2022 - 15:41
      +1

      It's safe to go out at day and at night.

      In all parts of Melbourne?

  • tsunamisurfer on 01/02/2022 - 12:22
    -7

    We have such a high rate of taxation because of two main things.

    Welfare.

    We spend more on welfare than we do on Health, Education and Defence combined.

    We need to start cutting back on welfare across the board.

    The progressive tax system.

    The progressive tax system is disgusting.

    From the ATO website.

    https://www.ato.gov.au/About-ATO/Research-and-statistics/In-…

    If we rank our 100 people by their taxable incomes:

    People with the top 3 taxable incomes paid 29% of all net tax
    the next 6 paid 19% of all net tax
    the next 31 paid 40% of all net tax
    the next 35 paid 12% of all net tax
    the final 25 didn't pay any tax.

    The top 9% of taxpayers bear 48% of the tax burden, that is disgusting.

    The bottom 60% of taxpayers, only 12%.

    We need to remove all exemptions from the GST and then have a flat rate taxation with a very small tax free threshold.

    This report shows that half of Australian families take more from the government that pay in taxes, that has to stop.

    https://www.news.com.au/national/welcome-to-the-welfare-nati…

    • rektrading on 01/02/2022 - 12:50

      I suspect the social army will kick down your front door any second now.

    • Mr Haj on 01/02/2022 - 13:10
      +5

      I completely disagree with you. The wealthiest 9% or people should be doing a bulk of the work. How can you expect the 25 poorest people to pay as much tax per dollar as those on the highest income? the poorest of people barely have enough money to pay rent…

      • rektrading on 01/02/2022 - 13:47
        +3

        People that make over $1M per year don't pay income taxes.

        Millionaires who paid no tax and the richest and poorest postcodes revealed
        By business reporters Nassim Khadem and Michael Janda Posted Tue 8 Jun 2021 at 2:42pmTuesday 8 Jun 2021 at 2:42pm, updated Wed 9 Jun 2021 at 4:42am

        Sixty-six millionaires paid no tax in 2018-19, Australia's highest earners continue to live in Sydney's harbourside suburbs, and the country's lowest incomes have been recorded in drought-ravaged central NSW.

        Analysis of the data by the Australia Institute reveals there were 66 Australians who earned more than $1 million in that financial year who did not pay a cent of income tax, compared to 73 the year before.
        https://www.abc.net.au/news/2021-06-08/tax-stats-ato-million…

      • jv on 01/02/2022 - 15:48
        +1

        The wealthiest 9% or people should be doing a bulk of the work.

        Everyone should pay the same amount. End of story…

        • Mr Haj on 01/02/2022 - 16:13
          +1

          go make your own country

          • jv on 01/02/2022 - 16:14
            -1

            @Mr Haj:

            go make your own country

            I already have one…

            Do you?

  • jleno on 01/02/2022 - 12:26
    +3

    These arguments always descend into an argument about taxation vs paying for public welfare etc.

    The real problem is inefficiency and wastage. Governments waste a hell of a lot. Taxes can be much lower and public spending can be much higher if governments didn't waste so much. But no government is going to be good at this so, they taxes need to be high to account for wastage.

    • mskeggs on 01/02/2022 - 23:14
      +2

      Consider that there is much less waste than you think.
      The items one person considers waste, are the careful checks and balances needed to safely operate an aged care facility, or the support staff that makes sure the submarine’s target system is effective, or the team that ensures the tax returns are calculated correctly.

      Everyone sees waste, but if you ask them to explain the actual items they would cut, they suddenly uncover everybody has different priorities.

      • bobbified on 02/02/2022 - 10:43

        Consider that there is much less waste than you think.

        I'm not so sure about this. There's definitely a need for items you highlight such as 'careful checks and balances', but then there's also "overkill" and way too many inefficiences in how the end result is achieved.

        There's certain departments that get privatised that then go on to make a killing for their new owners and I wonder why the government can't do that themselves and turn a profit.

  • macrocephalic on 01/02/2022 - 12:27
    +5

    The OECD calculates and publishes the total tax wedge for each country. The tax wedge is the ratio of gross to net pay (how much it costs an employer vs how much the employee gets). Australia has one of the lowest tax wedges in the OECD. The only comparable countries which are lower are the US (no free healthcare), New Zealand (lower overall salaries), Switzerland (very high VAT), South Korea, and Israel.

    As bad as governments and spending can be, we're actually better than most other countries in that regard.

    https://data.oecd.org/tax/tax-wedge.htm

    • Carmen Sandiego on 01/02/2022 - 17:06

      Speaking about South Korea (I am Korean so, don't come at me), that is a country where there is near constant reports of bribery and incoming presidents throw the predecessor into jail…

  • RolandWaites on 01/02/2022 - 12:32
    +3

    Have you ever looked out your window or walked down the street? That frankly incredible standard of living for most of us, just by virtue of being born into at least a working class family, is what our taxes pay for.

    • mskeggs on 01/02/2022 - 23:14
      +1

      But somebody on the internet said taxes are too high!

      • mdavant on 02/02/2022 - 14:15

        Yeah, probably one of the 5-10% who actually pay a significant amount of tax

  • shaybisc on 01/02/2022 - 12:40
    +5

    And yet despite the soul destroying inhumanity of high tax rates the high tax countries are where you'd like to live and the low tax countries are where you wouldn't. How can that be? It's a mystery.

    "Here Are the Most and Least Tax-Friendly Countries

    Paraguay. ...
The United States of America. ...
Equatorial Guinea. ...
Saudi Arabia. ...
Argentina. ...
Ethiopia. ...
Myanmar. ...
United Arab Emirates. The United Arab Emirates is at the top of this list for one good reason: The country enforces neither a personal nor a corporate income tax."
  • Roddi on 01/02/2022 - 12:47
    +1

    So look at the graph you got with your tax assessment for where the money goes, and their proportions.
    How effectively it is spent is another thing, but all large bureaucracies have that problem.

    But the system can really come through, in my experience.
    Dad was a pensioner without much money who passed away from pancreatic cancer a couple of years ago.
    The help he got from the health system in the months after he was diagnosed was exceptional.
    Everything was covered, with never a question of how it would be paid for.
    All medications, many sessions with multiple medical specialists, multiple procedures for gastric complications, in-home nursing and specialists, and in the end really good palliative care. Even a carer's allowance for me while he was at my place.
    It was a hideous time emotionally, but I'm grateful the medical and financial side were taken care of.
    Good luck in a user-pays country like the USA.

    • muzzamo on 01/02/2022 - 15:57

      while i'm glad your dad was cared for, I do wonder where the money will come from when there are 10x as many people requiring these sorts of services and half or a quarter as many workers to pay for them.

      From both the demographic (boomer) hump but also because health care advances will mean that we all live longer and eventually die from complicated rather than simple to fix things.

  • FittyFitty on 01/02/2022 - 12:56

    How does education, roads and healthcare happen in this country, I wonder…

  • hearitfromhorse on 01/02/2022 - 13:04
    +5

    Weird flex, but okay.

    Ever heard of public school?

  • Dack Smith on 01/02/2022 - 13:12

    Our wonderful free public health system and social security.

    The tax rate needs to be raised even more to ensure people don’t get disadvantaged by those who earn massive bucks off the very society they live in.

    People need to understand that the public health system, used by all, is propped up by taxes, so lower taxes means no free healthcare for anyone and a low standard of medical care.

    I’m sure no one thinks their own Lives are so expendable to die being treated in a substandard system.

    Think about that before the pig whining starts…..

  • Mr Haj on 01/02/2022 - 13:21
    +6

    Jesus there are some entitled knobs in this thread…. OP you speak of superannuation as if it is a tax? Superannuation is a system that benefits the high income earners…

    • [Deactivated] on 01/02/2022 - 13:39
      -8

      Dude the retirement age for people like me is going to be 70, that super means nothing to me right now

      • Brick Tamland on 01/02/2022 - 14:16
        +6

        It should because if you aren't putting money aside where is your retirement income coming from. Dont say the pension if you are whinging about paying taxes.

      • souths123 on 01/02/2022 - 15:21

        you do realise that the money going into your super fund can be accessed when you retire….be that 55, 58, 60, 65, not at the govt mandated retirement age for access to the Aged Pension??? Not only that, you only pay 15% tax on the earnings on it, so if you end up with a shitload in there (which you would on over $180k a year??….rate goes up to 10.5% this July and 11% the following year etc), then that is a huge tax break right there! Only thing is you would be paying a nominal amount of tax on your pension through your super fund if you are under 60 when you retire. Are you not considering salary sacrifice on voluntary extra contributions?

      • cashless on 01/02/2022 - 18:33

        If you want to reduce your tax bill of $29.5k p.a. you could consider salary sacrifice into your super. Right now I estimate you are paying $12k per year through the govt superannuation guarantee.
        You could increase that by $15.5 k to a total of $27.5k for this financial year.
        As a result, your taxable income would drop to $104.5k, which would drop your tax bill down to $24429 for this year.
        Not only would you save about $5k in tax, you would be putting a very healthy amount into a tax free vehicle for your retirement, which means you can retire a long time before you reach 70

      • mskeggs on 01/02/2022 - 23:17
        +1

        You’re not even able to consider your own future, yet aren’t embarrassed to post your views as if we should value them?

      • techlead on 02/02/2022 - 14:09

        Its still your money

    • mdavant on 02/02/2022 - 14:17

      Rubbish. Please explain how it benefits high income earners more than low income earners.

      If you are thinking about a 15% less tax payable (Google div 293 because you probably haven't heard of it)

      Then the high income earner is not benefiting from it, they are merely paying what everyone else would be too.

      • Mr Haj on 02/02/2022 - 15:06

        I am not familiar with div 293. Doesn't look like it changes much. Let me provide two extreme examples.
        Person A is an adult on minimum wage (772.60 x 52) = $40,175.2
        Tax on income is $4,175.28 which represents just 10% of their income.
        Superannuation contribution is 40,175.2 x 9.5% = $3,816.64
        Superannuation is taxed at 15% so $3,244.14 reaches their superannuation account and $572.5 is taxed.
        Total tax $4,747.78

        Person B earns $250,000 and $23,750 of superannuation contributions.
        Income tax is $83,167 which represents 33% of their income.
        Superannuation is taxed at 15% so $20,187.5 reaches their superannuation account and $3,562.5 is taxed.
        Total tax $86,729.5

        If superannuation did not exist, person A would theoretically earn $44,350.48 and pay $4,968.59 in tax
        Person B would theoretically earn $273,750 and pay $93,854.5 in tax.

        In addition to this, any gains made within superannuation are only taxed at 15%, which once again benefits the wealthy.

        • mdavant on 02/02/2022 - 18:28
          +1

          Oh trust me I am aware of super.

          I pay div 293, and I am very very aware that super is taxed at 15% and that things are fairish until almost 2 million in balance.

          But that is it

          A person on 300k pays 30% on super contributions

          A person on 80k pays 15% on super contributions.

          Both pay 15% on earnings

          So where is it less fair for the low income earner.

          Imo the high income earner is just being screwed over less hard.

          But the learners can never understand that as they don't understand how hard/smart you have to work to earn 300k.

          Just happy to get all the handouts that an 80k income earner gets.

  • kanad on 01/02/2022 - 13:22

    Australia is big spreadout country. Delivering public service in this country is expensive. Brisbane to Cairns within a single state is more distance than Melbourne to Brisbane, can fit a few European countries in between. Yet you need to provide same level of say healthcare facilities, NBN, police roads, and salary for such a vast low population density area. This is not cheap.

    • SupeNintendoChalmers on 02/02/2022 - 14:10

      Yet you need to provide same level of say healthcare facilities, NBN, police roads, and salary for such a vast low population density area

      Never going to happen, most reasonable country folk would accept that services cannot be on the same level as capitals or major provincial cities.

  • Vote for Pedro on 01/02/2022 - 13:27
    +5

    I have no issues with a progressive tax system that increases tax on the proportion over a certain amount.

    Remember, when people say ‘i get taxed at 45% coz i earn over $180k’ - what they are actually saying is ‘i get taxed just like everyone else up to $180k and then get taxed 45% for the component above $180k’

    • mdavant on 03/02/2022 - 19:28

      And also lose benefits along the way.

      • Vote for Pedro on 04/02/2022 - 11:39
        +1

        Lose benefits. Jfc people who think those on benefits are living a life of luxury.

        And yes, the more you earn, the less state support. That’s the point. If it doesn’t make economic sense for you personally, don’t go to that bracket. Yet for some ‘weird’ reason, many people do - so dunno about your point.

        • mdavant on 04/02/2022 - 11:55

          I am pointing out there is more to "lose" than just the tax changes.

          Eg no private health rebate
          Div 293 tax
          No childcare rebate
          Etc etc

          If some of the lower Hugh income earners did the math. You might find that they would cut hours.

          • Vote for Pedro on 04/02/2022 - 14:05
            +1

            @mdavant: And thats a decision we all have to make for our own personal circumstances.

            Though i think you’ll find that it would rarely happen as most people are happy to progress their career/earning potential. I could be wrong.

  • Jaspa7 on 01/02/2022 - 13:27
    +2

    It's a balance - you want to reward the hard-working individuals, but also help those in need to also become productive.
    Naïve idealists (I was one of them) believe that there's no way anyone who is earning any more than 2-3x the median wage deserves it. The world is not that simple though - wealth accumulates in the hands of those who use it wisely - whether they 'deserve' it or not.

    If you have really low taxes, there will be too much inequality where all the wealth will accumulate in the hands of the top 1%, and your wealth will be largely determined by inheritance.
    If you have high taxes, everyone will be equal, miserable and won't want to work to get ahead.

    Did a back-of-the-excel-envelope inequality vs. quality of life index only to find that there is a sweet spot of inequality to maximising quality of life. Australia is not far from hitting that mark.

    How we are spending the money though… well pretty much everyone would have negative opinion of that, but swayed to their own biases.

    • mskeggs on 01/02/2022 - 23:20
      +1

      I guess I’m a naive idealist.
      How many pay rises have you turned down because of the tax burden? If you had what you considered was a good idea for a business, would you say “too bad” if taxes were 3% higher?

      People pretend high earners are desperate to work at Maccas to save the tax, but it seems they keep on with their terribly difficult jobs even though they have to pay tax.

      • Jaspa7 on 02/02/2022 - 09:05
        +1

        I have personally stepped out of the race for jobs where the expectations were too high i.e. 50hr work weeks, management of too many inexperienced people etc. Would I have taken them up if taxes were lower? Probably not, but…
        How many businesses have closed down and/or moved elsewhere because of the tax burden? I can name three just in the car manufacturing industry..
        I wouldn't say 'too bad'.. I would set it up in a different country or find a loophole to make it work.. while the competition would find illegal means of making it work

        • techlead on 02/02/2022 - 14:13

          Taxes are levied against profits, if you have no profits, you pay no tax. No business has closed down because of the "tax burden", its always due to something else, like bad management etc etc.

          The first account bad businesses raid would be their GST account, the GST which they collected on behalf of the ATO which needs to be paid to them. You can't blame the closure of any business on the "tax burden" unless tax is 100%.

          • Jaspa7 on 02/02/2022 - 15:00

            @techlead: valid, but that still doesn't refute me taking my business to somewhere where it is more profitable

      • techlead on 02/02/2022 - 14:11
        +1

        Think of it like this, if someone said they will give you $1 but you need to give $0.45 back. I'd take this deal all day long.

        Unless the tax rate is 100%, its always worth it to take the extra income and pay the extra tax.

        • Jaspa7 on 02/02/2022 - 14:58
          +1

          not a good argument as that $1 is not 'given' to you.. it is traded for your time.
          I sure wouldn't work an extra hour if I got paid 45% less for it

          • techlead on 02/02/2022 - 17:06

            @Jaspa7: ok, fine, if your employer said to you, We will pay you $1 more but you need to pay $0.45 to the ATO vs $0.37 to the ATO without this extra $1 for each hour of your time, would you take it?

            My point is, it is always better to earn more and pay more tax, what scenario would prove this wrong? You are always better off with more income and paying more tax, that's just maths.

            • Jaspa7 on 02/02/2022 - 20:35

              @techlead: not always, again.. it depends on what they expect for that extra dollar.. which, to them is a dollar, to you, it's 55c.

              If you comfortably make 10 widgets a day.. and the employer might want to push you to 11;
              a perfectly fair employer would say 'hey that's 10% extra so we will pay you an extra 10% too..'
              BUT for every extra dollar they put forwards, it's only 55c in your pocket..

              suddenly, you actually get paid less per hour.

              you'd actually want to bargain for 18.2% more - and that's just to maintain your hourly rate.

  • Ghost47 on 01/02/2022 - 13:44
    -1

    Our roads and public transport are in terrible shape

    This depends on where you live I’d say. Which city do you live in?

    We are becoming an unhappier nation as the years go on though. Scrimp and save to buy a house, then scrimp and save to pay it off. People are putting off having kids to own a house now, so our replenishment rate is decreasing too, therefore we need to rely on more Dineshes and Xiao-wus to help bolster our economy (I have no issue with this but I bet you there are plenty of people who do).

    When climate change digs its claws in further we’ll end up living in a world similar to The Road (I suggest everyone watch that movie to see where we’re heading). The good old days were 1980 to 2010 frankly. In 20 years we’ll be literally eating each other to survive, so let’s all enjoy life to the fullest right now.

    • DrScavenger on 02/02/2022 - 11:35

      That's too pessimistic

      • Ghost47 on 02/02/2022 - 11:49

        I hope I’m wrong.

  • Xuaxace on 01/02/2022 - 13:46
    +5

    " 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"

    This type of throw away comments irk me a bit. Education in Australia is not bad, roads are not bad, health care is not bad. Sure there are countries that do things better, but I genuinely think we have a good mix of societal safety net to tax ratio. Now lets not forget for example, that road expenditure is mostly done through fuel excise tax, not income tax. Each topic is nuanced in itself.

    • turbochris on 02/02/2022 - 09:13

      "road expenditure is mostly done through fuel excise tax"

      This is a widely held misnomer. Fuel excise is not hypothecated for road funding.
      Since 1959, it goes into general revenue to be used for fossil fuel subsidies, car parks, shooting ranges, election slush funds etc.

      https://www.aph.gov.au/About_Parliament/Parliamentary_Depart…

      "Even though hypothecation has been discontinued, the impression remains that the level of Commonwealth spending on roads is linked to revenue from petrol and diesel excises. In fact, Commonwealth spending on roads is considerably less than revenue"

  • eek on 01/02/2022 - 13:52

    180k salary these days is just a moderate income. By the time you pay a mortgage, child care fees, rates, insurance, groceries etc, there's not much left over. The believe the actual median income of Australians is heavily skewed by those who operate business entities and have cash income that isn't declared. They only pay themselves the absolute minimum wage to minimize tax, whilst everything else is heavily geared under their business - which conveniently has a 25% tax rate. If you think you can live on sub-100k, own a home, investment property and send your kids to daycare, it's impossible.

    Depending on what industry they're in, it can be (but not limited to) computer equipment, cars, mobile phones, internet, tools, clothing, groceries etc etc. It's sort of the accepted "loophole" in Australia for those who own a business. I mean- have a look at the next supercar/exotic on the road. It will no doubt be under finance, registered under a business as a 'work vehicle'. Nobody is dumb enough to register or pay for it privately under their own names - for tax and liability purposes.

    Even during covid small businesses could receive state/federal grants (free cash!) and business owners could double dip and claim jobkeeper on top as an employee of the business - so win win.

    • GG57 on 01/02/2022 - 14:17

      Nothing stopping you starting your own business though.

    • souths123 on 01/02/2022 - 15:24
      +5

      I would hardly say $180k p.a. is a "moderate income"…that would be the top 5% of earners

      • RolandWaites on 01/02/2022 - 18:26
        +3

        If you think you can live on sub-100k, own a home on Sydney's eastern suburbs, investment property in the Sydney CBD, send your kids to daycare and then private school, go on three non-South East Asian trips a year, own a new spec luxury SUV and go out to dinner four times a week, it's impossible.

        • mskeggs on 01/02/2022 - 23:24
          +4

          And you’re already cutting corners by going to Asia instead of Europe! Please have a tax cut funded by 20yro hospitality workers.

  • burns13 on 01/02/2022 - 13:53
    +2

    Definitely agree that Australians are getting pretty average bang for buck for our Tax dollar in the budget. My opinion the LNP are poor economic managers. But our income Tax rate is not unusually high.

    All the little hidden taxes I'm more interested about. Eg- Look at the price of alcohol and tobacco compared to overseas. I'd like to see how we all compare indirect taxes. My suspicion its on that front we are getting screwed.

    And yeah GST springs to mind as a big one.

    • Vote for Pedro on 01/02/2022 - 16:21

      Yeah ikr. Compared to Singapore we’re cheap as for alcohol

    • Mr Haj on 03/02/2022 - 12:57

      Tax on alcohol and tobacco would have to be some of our best taxes… Drinking and smoking is a choice. The tax helps pay for the police and healthcare workers that deal with alcoholics and smokers. Why should healthy people who don't smoke or drink have to pay for the smokers and drinkers?

  • Jugganautx on 01/02/2022 - 13:59
    +8

    I keep forgetting the average person on ozbargain is a senior analyst earning 180k+ a year with bonus and 10% super.

    Thankyou for reminding me.

    • bobbified on 02/02/2022 - 10:18

      senior analyst earning 180k+

      It's closer to $300K…. Get it right! 😂

    • Mr Haj on 03/02/2022 - 12:58

      … and they think they're worth every penny, despite spending their working hours here on ozbargain!

  • AndyC1 on 01/02/2022 - 14:00
    +1

    Nothing stopping you going OS and see what the rest of the world is like, especially USA where you have to watch out if you are not insured for this and that.

  • kaleidoscope on 01/02/2022 - 14:12
    +1

    No free lunches OP. If you think tax is high in here compared to services offered for it, feel free to roam around other countries. in us&a people literally can go bankrupt when they are hit with an unexpected medical expense (even with normal private insurances)

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