Taxes have not fallen much since the 1980s despite government propaganda to the contrary

Squire

Active member
When the GST was introduced it was supposed to fund a decrease in top tax rates, however, it did not do so as effective tax rates have not fallen much.

"In 1951, the top marginal tax rate for incomes above £10,000 what is equivalent to $425,000 today, was 75 percent. from 1955 until the mid-1980s the top marginal tax rate was 67 percent."

When you add in Superannuation 9%, medicare levy 2%, and GST 10% that is ostensibly another 21% on top of the 47% marginal rate, notionally a marginal rate of 68% although GST is diminished by its applicability to discretionary spending. Also, many government services that were once free are now charged for at exorbitant rates. Furthermore, utilities: gas, electricity, water, and medical insurance which were once government-owned are now 'free enterprise' monopolies and have become virtual tax imposers due to their shareholders requiring earnings growth of 10%+.

Government revenue has risen as a percentage of GDP while wages have fallen as a percentage of GDP. That implies that taxes are rising overall.

"The shift in the incidence of taxation from income taxes (especially business taxes) to more regressive indirect taxes (primarily the GST) represents a secondary cause of growing inequality in final consumption, and in this light the increase in indirect taxes as a share of GDP can rightly be associated with labour’s falling share of final output (in which case measuring factor shares relative to GDP, not factor incomes, is more appropriate). In any event, however, the trends depicted in the two series are very similar. Figure 3: Real Unit Labour Cost, 1985-2017 Source: ABS Catalogue 5206.0, Table 42"

If government revenue as %GDP is rising and wages as % share of GDP are falling, it means that effective taxes are rising.

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https://en.wikipedia.org/wiki/Income_tax_in_Australia
 

johnsmith

Moderator
Staff member
it's all smoke and mirtrors

Until they raise the tax free threshold so that it keeps up with real inflation and not CPI, tax cuts are usually swallowed up within a year or two of the tax cut first being offered..
 

Squire

Active member
it's all smoke and mirtrors

Until they raise the tax free threshold so that it keeps up with real inflation and not CPI, tax cuts are usually swallowed up within a year or two of the tax cut first being offered..
Taxes are like a water bed. You push it down in one spot and it rises in all other places.

Governments never really reduce taxes. Tax cuts are a mirage that hides and diverts attention from all the other tax rises.
 

Auggie

Active member
I think taxes for a specific purpose like superannuation or the medicare levy are better than just general taxes because they are for a specific purpose and people know what they're paying for.

BTW, we should add health insurance premiums into the mix - that's a tax - it's just a tax paid to a private company.
 

johnsmith

Moderator
Staff member
I think taxes for a specific purpose like superannuation or the medicare levy are better than just general taxes because they are for a specific purpose and people know what they're paying for.

BTW, we should add health insurance premiums into the mix - that's a tax - it's just a tax paid to a private company.

even worse than the health insurance premium is that 'extra tax' you pay if you don't have private health insurance.
 

Squire

Active member
There are cunningly concealed taxes associated with medicare some of which are levied by the insurer and are legislated by the government.

It is certainly arguable that those who would be subject to the LHC loading are discouraged from buying medical cover by the loading applied by health insurance companies.

So total marginal taxes could be 47% + 2% + 1.5% + 1% LHC + 9% Superannuation = ~ 60.5% plus taxes from GST and taxes from import duty.

Australia is a high tax country.

https://www.iselect.com.au/health-i...urcharge (MLS,t have private health insurance.

... Usually, Australians pay a standard 2% Medicare Levy at tax time. The MLS adds an additional amount to those who don’t have private health insurance. This equates to either 1%, 1.25% or 1.5% of your income. The MLS is calculated based on income, and only applies to those singles with a taxable income over $90,000, or families who earn over $180,000.

Find out more about the Medicare Levy Surcharge.

Lifetime Health Cover loading
Lifetime Health Cover (LHC) loading encourages Australians to take out private health cover earlier in life and hold their cover continuously by introducing financial penalties if they don’t purchase before their 31st birthday.

Under LHC loading, all insurers must add 2% to an individual’s private hospital premium for every year they did not take out health insurance after the next July 1 following their 31st birthday. This does not affect individuals who took out health cover before the next July 1 following their 31st birthday, and therefore encourages young Australians to take up private health insurance earlier.

Lifetime Health Cover Loading Infographic


For example, if you decided to start private hospital insurance when you turned 35, you would pay LHC loading of 8%. This additional charge is payable for 10 years. The maximum loading that can be applied is capped at 70%. ...
 
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