Only the top fifth of households ranked by their income - those with incomes of more than $200,000 a year in the financial year ending June 2012 - pay anything into the system net of the value of social security in cash and kind received, according to data from the latest Australian Bureau of Statistics survey of household income. The distribution of personal income tax - the federal government’s biggest source of revenue, raising about 45 per cent of the total ($165 billion this year) - is far more progressive than headline marginal tax rates suggest. Including the 1.5 per cent Medicare levy, Australia’s income tax rates range from 19 per cent for every dollar of income above $18,200 to 46.5 per cent for every dollar above $180,000. Most taxpayers face a 34.5 per cent marginal rate. But average income tax rates on households’ privately generated income (ordinarily wages and salaries, but dividends and rental income too) ranged from 1.5 per cent for the bottom fifth of households in 2012 to 22 per cent for the top fifth. The 1.73 million households in the middle quintile paid an average tax rate of 12.3 per cent on average incomes of $88,900. But the ABS survey estimates these households received $31 a week in Age Pension payments, $13 in disability payments, $48 in child-related payments and $12 in unemployment benefits, along with a host of others that whittle their average net tax payments down to $84 a week. This sort of analysis excludes the value of government benefits beyond cash: “free” schools, hospitals, public transport and the like, which the ABS estimated to be $413 a week for these middle-ranked households. Netting everything off shows even “average”, let alone lower-income, households got back $2.70 for every $1 they paid in tax. Households in the bottom quintile enjoyed benefits worth more than 320 times what they paid in tax compared with about 10 times for those in the second-lowest quintile. theaustralian.au/national-affairs/opinion/no-the-rich-dont-pay-a-fair-share-of-tax-they-pay-all-of-it/story-e6frgd0x-1226841174461
Posted on: Sun, 07 Dec 2014 01:04:21 +0000