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

  • Herbse on 01/02/2022 - 14:38
    +1

    The back of your tax return tells you exactly where your tax is going.

    I highly doubt you're earning what you say and not offsetting the tax with deductibles that also earn you more income when you sell them off.

  • ribze1 on 01/02/2022 - 14:49
    +6

    We live under the highest taxing Government in our history, the second highest was the Howard Government.

    LNP = higher taxes, higher debt and deficit and poor economic management.

    • Mr Haj on 03/02/2022 - 13:06

      While I am not really a fan of LNP, this is a blatant lie… taxes in 2008/2009 under the LABOR government were higher than they are now.

      Taxes in 2008/2009:
      $1 – $6,000 Nil
      $6,001 – $34,000 15c for each $1 over $6,000
      $34,001 – $80,000 $4,200 plus 30c for each $1 over $34,000
      $80,001 – $180,000 $18,000 plus 40c for each $1 over $80,000
      $180,001 and over $58,000 plus 45c for each $1 over $180,000

      Taxes Now:
      $0 – $18,200 Nil
      $18,201 – $45,000 19c for each $1 over $18,200
      $45,001 – $120,000 $5,092 plus 32.5c for each $1 over $45,000
      $120,001 – $180,000 $29,467 plus 37c for each $1 over $120,000
      $180,001 and over $51,667 plus 45c for each $1 over $180,000

      • ribze1 on 03/02/2022 - 14:46
        +2

        Average tax as percentage of GDP (tax to GDP ratio) is the measure/benchmark to be used, not the tax rates.

        I had it the wrong way round, second highest after Howard.

        "The data shows that the Coalition under Mr Howard was the highest-taxing government of the last 30 years, with an average tax-to-GDP ratio of 23.5 per cent."

        Over its first four years — prior to introducing the GST — that rate was 22.5 per cent.

        In second place was the current Coalition government, whose average rate was 22.2 per cent (excluding the 2021-22 financial year, for which only estimates are available).

        The Hawke-Keating Labor government placed third, with an average rate of 21.8 per cent over its 13 years.

        Rounding out the list was the Rudd-Gillard Labor government, with a rate of 20.9 per cent.

        For context, Fact Check has also considered which prime ministers were the "highest taxing", finding that four of the top five belonged to the Liberal Party."

        Source: https://www.abc.net.au/news/2021-12-13/fact-check-is-the-coa…

        • Mr Haj on 03/02/2022 - 15:18

          I wonder if any of this really means anything… The government will pay for things one way or another. The labor government increased our level of debt to pay for services, while the liberal government has been ranting about getting back into surplus. Only way to get back into surplus is to increase taxes or reduce services, which I guess liberal have done both.

          • ribze1 on 04/02/2022 - 09:06

            @Mr Haj: It debunks the myth of the Libs being the superior economic managers and lower taxing governments.

            • Mr Haj on 04/02/2022 - 09:12
              +2

              @ribze1: Yeah well I can agree with you there. How can they claim to be superior economic managers while Josh Frydenberg is at the helm? I don't have any faith in either of our governments, but I guess I will be voting for labor because I think the current liberal government is the worst we've ever had.

  • Hearthstone on 01/02/2022 - 14:55
    +5

    I been to a few countries, I prefer the Aussies system, everyone has a safety net doesn't matter who you are

    Aussies model is probably one of the best in the world, Capitalist with semi socialist model like Centrelink, Medicare and Cheaper education
    the broken one is the American system with their guns, healthcare and education cost is out of control.

    We are still a magnet for a lot of immigrants because from their point of view this is paradise just the people living within it doesn't see it that way.
    I get to see it from the outside and It is a paradise

    • cameldownunder on 01/02/2022 - 15:00
      +4

      Safety net my *sssss
      Plus everything is means tested

      You work your but off, and pay more tax than anyone, you save for comfortable retirement, and as a thank you, you get zilch from the government.

      On the other hand you work close to the barely minimum, you can't afford car insurance, but who cares, and when you retire, you get funded by the government.

      No wonder there are so many people in this country with no aspiration of earning

      • Hearthstone on 01/02/2022 - 15:02
        +4

        what you demand there is entitlement not safety net, you expect to be given free stuff when you have the ability to earn
        safety net is when you don't have a job, or sick and the system take care of you.

        I been on both side of the scale, I am more than happy to pay my share of capital gain and income taxes.

        • cameldownunder on 01/02/2022 - 15:05
          +1

          It's not entitlement, if you have paid more than anyone else for it.

          If you lose your job, but have assets, you have to burn through that first ?

          Lose the house before you get help.

          You basically have to live on the road to get help from the "Safety net".

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

            @cameldownunder: that is the definition of safety net, if you have ability to earn and accumulates asset
            you dont need hand out

            like If I am unemployed and I got income from properties and shares I don't expect the government to hand me anything

            • cameldownunder on 01/02/2022 - 15:09

              @Hearthstone:

              like If I am unemployed and I got income from properties and shares

              That is something else.

              It's not a good safety net, if you have to become poor before someone helps you.

              • Hearthstone on 01/02/2022 - 15:11
                +1

                @cameldownunder: free to immigrate to other countries that you think offer better system than Australia, I doubt you find too many it globalization now everyone free to move around

                • cameldownunder on 02/02/2022 - 14:28

                  @Hearthstone: Don't you worry, got a place to go once Australia is sold out to foreigners and only negative tax return people are left behind in this country.

              • mskeggs on 01/02/2022 - 23:27
                +1

                @cameldownunder: Why would you want to pay higher taxes to fund payouts to people who have money in investments?

                • cameldownunder on 02/02/2022 - 14:27

                  @mskeggs: Because they have made payment like everyone else, and should not be discriminated.

                  • mskeggs on 02/02/2022 - 14:30

                    @cameldownunder: So you will pay more tax now, so that if your wealthy neighbour loses his job he doesn't have to be in a hurry to get another? Surely you must think it is a bad deal if the neighbour is many times wealthier than you, but your taxes go up $1000 to pay them a job search allowance?

                    • cameldownunder on 02/02/2022 - 14:36

                      @mskeggs: It's not. If you really think about it.

                      If my wealthy neighbour does not have to sell house and stays in Australia, and once he gets a job continues to contribute to the taxes, I am more than happy.

                      Rather have 1 Wealthy neighbour who pays 10x more tax than a "poor" one, and is tax positive, and occasionally needs support from the government, than 1 neighbour who is 100% of the time tax negative.

                      • mskeggs on 02/02/2022 - 15:21

                        @cameldownunder: Lol.
                        I think you're getting very confused.
                        Why would a job search allowance make any difference to where a wealthy person lives?

                        And why would it be a good use of your taxes to pay it?

                        In your very example the current means tested safety net would mean your neighbor would have access to newstart if they still couldn't find work after their savings ran out.

                        If they were considering moving overseas anyway, wouldn't higher taxes here necessary to pay wealthy job search allowances sway them to move?

    • cameldownunder on 01/02/2022 - 15:03

      We are still a magnet for a lot of immigrants

      Mainly from third world countries looking for an Australian passport. I am pretty sure that No-One except from India and China is coming here for the money. If you want to earn good money ( and not taxed beyond senseless ) Then Singapore, Emirates, London, Switzerland or the US are your choices.

      • Hearthstone on 01/02/2022 - 15:05

        half of Australia CEO are either immigrants or born oversea

        • cameldownunder on 01/02/2022 - 15:07

          List me a few please.

          People coming from the US to work in our company are here to Prove something or they have been "De/pro-moted" here.

          • Hearthstone on 01/02/2022 - 15:09
            +4

            @cameldownunder: https://www.afr.com/work-and-careers/management/more-than-a-…

            More than a third of chief executives of ASX100 companies are foreign-born, exposing how dramatically the federal government's visa changes could reshape Australia's C-suite.

            The analysis by The Australian Financial Review shows that changes which deny C-suite executives on the visa a path to permanent residency could make it far harder for major Australian companies to attract global talent.

            • cameldownunder on 01/02/2022 - 15:12

              @Hearthstone:

              More than a third of chief executives of ASX100

              It's now a third, before it was half.

              Plus, there are plenty of Australians that are Foreign-Born , How are they calculated?

              • Hearthstone on 01/02/2022 - 15:12

                @cameldownunder: ASX 100, the whole country is 1/2

                • cameldownunder on 01/02/2022 - 15:13

                  @Hearthstone: Prove ?

                  Some significant CEO's not some 10 people company please.

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

                    @cameldownunder: If I can find the article but the main point is you only see articles covered poor third world countries people want to get
                    in, what you don't see high earning individual also get in but no one covered them

                    so over 1/3 of CEO of 100 is not insignificant.

                    I know a few expat having stink oversea and still want to come back home, they on 250K - 500K and don't mind paying tax they can stay oversea but they prefer Aussie way

                    I know a few tech migrants on 200-300K working for IT companies like Microsoft and Adobe

                    • cameldownunder on 02/02/2022 - 14:32

                      @Hearthstone:

                      I know a few tech migrants on 200-300K working for IT companies like Microsoft and Adobe

                      Migrants from where ?

                      I know a few expat having stink oversea and still want to come back home

                      Not talking about Aussies wanting to come home, There is no home like home. I am talking about people from good income countries like UK, US, Europe, aka 100% foreigners with no previous ties to Australia, that come here, not because of lifestyle or weather, or ocean, but because they can make better money than were they are currently.

  • souths123 on 01/02/2022 - 14:56
    +2

    cry me a river….and with all the tax breaks going around, not sure why you aren't using them to minimise tax like most do on high incomes.

  • cameldownunder on 01/02/2022 - 14:57
    +3

    If you were to live in Germany, and you would earnt he equivalent of 180K AUD, you get 113K Euros
    You would pay 42% Tax, and have a GST ( Mwst ) of 20%.

    If you were to live in Italy, you would not have a Job

  • adaminperth on 01/02/2022 - 15:03
    +1

    Hire a good accountant if you're earning that much.

  • Trying2SaveABuck on 01/02/2022 - 15:04
    -1

    As we become more Woke we become more broke

  • jv on 01/02/2022 - 15:38
    +1

    Why is Tax So High in Australia?

    To encourage people to leave and find a foreign bride…

  • kerfuffle on 01/02/2022 - 16:12

    So why is OP in the Penalty Box for a week? Too busy looking down on everyone else but not realising their own faults?

    • jv on 01/02/2022 - 16:15
      +7

      So why is OP in the Penalty Box for a week?

      Same reason he can't find a girlfriend…

    • dust on 01/02/2022 - 17:40

      I'm guessing he posted something offensive that has been removed.

    • CrowReally on 01/02/2022 - 18:11

      I'm guessing some women really broke the rules and got the admins fuming and they locked them in there with him.

      Still, could be worse, they could be in the SlavOz penalty box.

  • jleno on 01/02/2022 - 16:14
    +1

    Move and work in low tax country (middle east / Asia) in your 20s and 30s, pay low tax, save heaps and buy Australian property (while the rest of Australians pay tax). Come back in your 40s take advantage of the family lifestyle and social security safety net. Profit from your property until retirement.

  • kaitoivan on 01/02/2022 - 16:43

    I heard millionaires and billionaires don't have to pay taxes. Have you tried that OP?

  • JDMcarfan on 01/02/2022 - 16:44
    -2

    Recommenting this as the thread was closed due to too many negs for an earlier comment and hope its useful info for people:

    OP have you been to the developing world? Asia/Africa/Latin America, Far Eastern Europe. Those of us who have been or hail from those regions are well aware of how good we have it here and how much opportunity we are given. Those regions are where infrastructure is generally in terrible shape and services provided to the populous are poor.
    Please do some research when saying we have the highest tax rates in the world (we dont!), it seems you're born and bred in this country without having experienced the outside world and like to preach a dystopian image of our country, when its far from it.

    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.

    • burningrage on 01/02/2022 - 19:02
      +1

      "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."

      Nope card for you!

      • techlead on 02/02/2022 - 17:10
        +1

        Consumption driven taxes are usually regressive, ie they hurt the low income people more than the high income people. Think of it like this, an increase of the GST from 10 to 15% would disproportionally hurt those with a lower income. So you need to introduce subsidies to help them out, eg the FTA and FTB.

        Unfortunately my income is way too high to qualify for any of these subsidies and in theory, I would benefit from the tax rate decreasing (phase 3 tax cuts) and the GST increasing. Personal benefit aside, I don't think it should be done as its not good for society as a whole.

    • Slippery Fish on 01/02/2022 - 22:46

      LoL I drive alot in disability work a tank a week atleast… It would wanna be a good tax break…

      • JDMcarfan on 01/02/2022 - 23:26
        -1

        Look I understand that and given Australians drive a lot more km than our European counterparts, the $ cost per vehicle may be equal or higher.
        However our big cities are also largely struggling with immense traffic issues that are only going to get worse in the future. A lot of this is from people (incl. myself) making unnecessary trips that could be done by PT or carpooling. Investing in PT is one thing but increasing fuel taxes would have a dual benefit of reducing traffic volumes whilst ‘hopefully’ using the extra fuel excise to fund such PT expenditure. Likewise the extra fuel excise can go a long way to improving infrastructure rurally and further promote the transition to more ecological alternatives. I sympathise with your situation but you are given the opportunity to claim such expenses from your taxable income, so the increase would be mildly offset and if traffic volumes reduce then the hours saved driving might make it worthwhile.
        Just my thought on this, and given that fuel excise indexing was frozen for a large part of the last 20 years I believe the comments I made hold ground.

        • Slippery Fish on 02/02/2022 - 07:10

          You don't fix over use of roads by increasing tax, people will just get used to the new price and largely accept it after 6-12 months as it becomes normal.

          You fix it by improving alternatives to the standard people feel happy to use them.

          • Vote for Pedro on 02/02/2022 - 10:17

            @Slippery Fish: 100% correct.

            Problem is our (NSW) government is addictive to toll roads that simply fill transurbans coffers. So you can forget about any investment in public transport that risks that

            • JDMcarfan on 02/02/2022 - 10:53

              @Vote for Pedro: When did I talk about tolls? I don’t support the privatisation of it either and think it’s a ridiculous profit making scheme.
              I was talking about an increased level of fuel taxation to bring us online with other countries and using the excess funds to fund PT/infrastructure alternatives.
              People here in Oz can afford to drive big falcodores and v6/v8 sedans and SUV’s simply because fuel is cheap enough (relative to RoW) to do so. We have extremely high incomes as well so the annual fuel bill as a % of incomes is extremely low. When you look at our European/kiwi mates they by and large drive smaller and more efficient cars and drive less because the price of fuel simply dictates it. I understand that it may not be as practical an option here but with our fuel tax being less than half of many equivalent countries extra revenue there can go a long way if funnelled correctly

          • JDMcarfan on 02/02/2022 - 11:04

            @Slippery Fish: Valid point. I would expect levels of complacency by people who’d just accept it whilst verbally complaining. However there would be some level of reduction in traffic volumes from increased taxes (or at least EV ownership uptake and hopefully even better subsidies) and funding to improve the alternatives should be a direct contribution from the increased rates.

    • Vote for Pedro on 02/02/2022 - 10:15

      Another one that supports a regressive tax that absolutely slams low income earners.

      • JDMcarfan on 02/02/2022 - 11:01
        -1

        Supports? No, not in a way that makes it punitive. Bringing us line with the RoW. Yes

        I have an economics background and understand the impacts of such taxes on low income earners. However income taxes also have several loopholes that allow for minimisation well below the otherwise due rate of tax. Consumption based tax on the other hand is unavoidable and would directly lead to increased gov revenue. Would I support increases in GST without concession to income tax rates? No
        But increasing GST whilst giving more tax breaks to low-middle income individuals whilst also minimising the loopholes commonly available to high-income earners, yes, as that would in effect make a more equitable society. And should leave the people you mention in particular with more money in their pocket overall.
        People like myself (middle income earners, sub 100k) who are cautious with their money and work without excessive consumption to save up for a future (and to avoid any dependence on government benefits) are mildly penalised when it comes to tax time. But those who rack up more debt than they earn and go out and spend get time enjoy their consumption at one of the lowest GST (Sales tax rates) in the world. I know that consumption is the driver of economic growth but why not then scrap GST altogether? We still need funding for our state based systems (health, transport etc) and bringing us inline with the rest of the world shouldn’t have too much of an impact on that

    • JDMcarfan on 02/02/2022 - 11:06
      -1

      Surprised this being negged. Understand the negative sentiment to my personal opinion in the last paragraph, for which I’m happy to have discussion.
      But the rest of the points stand true, and go along way to rebutting OP’s argument

  • larmesdelhiver on 01/02/2022 - 17:02
    +3

    Emergency doctor here. The marginal tax rate of 47% is certainly a disincentive for people to work harder, and a contributing reason why many many people would have to wait for 8+ hrs in Emergency deparment. With the COVID wave there has been a massive staff furlough and every day we get multiple messages and calls asking people to work extra hours to cover sick leave. However considering I get taxed at 47% every hour I work extra sweating like a pig in gowns mask gloves faceshields and getting abuses from patients and families it doesnt seem like worth it. 30% marginal rate is better i think. Tax earned income less and tax capital gains on real estate or consumption/GST more is more beneficial to society I think.

    • CrowReally on 01/02/2022 - 18:15
      -1

      Bonkers logic. So if your real estate agent called up and said he was negotiating a $1000 a week increase on rental income on one of your properties you'd say "Never mind, I don't want to give $470 to the tax man, it's a pity I'm not on the 32% tax rate then it would be a worthwhile thing to do because I'd only be paying $320, don't bother"?

      • Manche on 01/02/2022 - 18:42
        +4

        Thats a stupid comparison.
        One you have to do your own hard labour for.
        One you have to do nothing incrementally for.
        This is possibly the worst piece of reasoning i’ve ever read, and i’ve read some bad ones.

        • CrowReally on 01/02/2022 - 19:37
          -3

          Once you've hit that 47% tax level, it's the same tax across all your income. Why earn any income (additional or not) anywhere if it's going to "cost" you 47%? Why is this person willing to work an eight hour shift at 47% tax rate but not a ten hour one? There's not 'extra tax' on those last two hours.

          "I'm not working an extra 2 hours today for an 2 hours pay! I'd have to pay 47% tax on it! Now give me my 8 hours pay that I happily worked 8 hours for and paid 47% tax on and get out of my way!" — truly genius reasoning

          Same level of tax understanding as "I didn't get the tax free threshold from my 2nd employer, ohhhh noooo, it's costing me more taxxxxx"

          • burningrage on 01/02/2022 - 21:19

            @CrowReally: I am not 100% sure but I think what OP is saying is if I am already at $180k and pay loads of tax already, why accepting additional hours because 1/2 of them will go to tax anyway and therefore, not worth the stress.

            x100 or x1000 of these thoughts to other health practitioners of the same situation, then you can see why there may be shortages.

          • larmesdelhiver on 01/02/2022 - 22:10

            @CrowReally: Mate. There's the regular hours that I'm contracted for to work (43hrs a week contract, no choice) vs extra shifts a week they offer because of shortage/ sick leave/ pandemic. Not just me but almost every of my colleague are in the same boat. Why working extra hours (hints: extra fatigue and sacrifiying rest and family/friends time) if getting taxed at 47%?

            • CrowReally on 02/02/2022 - 02:03
              -1

              @larmesdelhiver: The "extra work" you are being offered is being taxed at exactly the same rate as the regular work you are being offered.

              The fact that you think in these terms ("I wouldn't do overtime unless I somehow got a cheaper tax rate for that shift and then of course I would") is frankly baffling - at the end of the year you add up all your income from all your sources, take up all your deductions and then apply the progressive tax bands based on whatever the final number is. If it turned out being $30k tax payable instead of $28k, would you be bemoaning the fact you did some extra shifts four months earlier?

              Unless you're keeping a spreadsheet of what your current taxable earnings are on all of your investments and you know what your tax position is this week, I suggest the "oh the COVID is making us all work extra shifts but we need a 30% tax rate to make it worthwhile" is handwringing nonsense.

              • gr70 on 02/02/2022 - 09:12
                +1

                @CrowReally: Larmesdeliver doesn’t say anywhere that he thinks there should be a 30% tax rate on overtime hours only. Its pretty clear that if the top rate he faced was 30% then he would be more willing to sacrifice more of his leisure time for work since obviously the reward to him would be greater. Its entirely fair to say a higher rate is a “disincentive” to take on extra work. 0% tax is no disincentive (from a tax perspective) - 100% a huge disincentive. Between those 2 extremes are varying degrees of disincentive and he thinks 30% would provide about the right balance. Obviously if he needed the extra 53% of what he earned then he would suck it up and accept the extra work. But he makes enough from his standard hours to choose not to. Many people agree with him, including many that understand the progressive tax system.

                • CrowReally on 02/02/2022 - 09:49
                  -1

                  @gr70: I'd agree more with that concept if all of his income was from the sweat off his brow - but for someone with rental properties/stock market passive income that's pushing you into the 47%, it's nonsense to say the 47% tax rate is a disincentive to work harder. It's just as much a disincentive to own a share portfolio, or any of the other things that contributed to it.

                  It's like the classic children's tale 'Who Sank the Boat?' which is about a rowboat filled with various animals (horse, ox, cow, chickens). The last animal to get in is the mouse, and then boat sinks. But even children know the mouse didn't "sink" the boat.

                  And if someone has a high paying job and enough assets earning passive income to push them into the top tax bracket and they want to come around to discuss how tough it is and why they're being 'disincentivised' by paying off the same tax tables everyone else uses, well, let me get out the tiny violin. You think the cleaners on the 32.5% tax rate being asked to stick around and do the same amount of overtime aren't working as hard? Ridiculous. Put down the Ayn Rand and pay your taxes.

                  • burningrage on 02/02/2022 - 10:08
                    +1

                    @CrowReally: "I'd agree more with that concept if all of his income was from the sweat off his brow - but for someone with rental properties/stock market passive income that's pushing you into the 47%, it's nonsense to say the 47% tax rate is a disincentive to work harder. It's just as much a disincentive to own a share portfolio, or any of the other things that contributed to it."

                    Iarmesdelhiver is an emergency doctor so his/her scenario is one where he/she can choose to take up additional hours of work. He/she may/may not have investment portfolio or rental properties but that is irrelevant because he/she did not include that in his posting.

                    We are not talking about rental income/investment income, we are talking strictly on PAYG earners because Iarmesdelhiver has said he is an emergency worker.

                    I think this is the part you seem to missed.

                    If you are talking about investment/rental income, that's a separate discussion altogether (in the same thread but different comment altogether)

          • larmesdelhiver on 01/02/2022 - 22:18
            +1

            @CrowReally: You sound like you never worked a day in your life. I'm talking about overtime work.

            • CrowReally on 02/02/2022 - 02:06
              -1

              @larmesdelhiver: And you sound like you don't understand how the progressive tax system works.

              "Why taxing earned hard labour so high while passive income (which I also have) have preferential treatment (discounts, loopholes, etc.)"

              It's all taxed at exactly the same rate. Your rental income is taxed to you personally at exactly the same rate as your labour. Whether you get an extra $1000 from the sweat of your brow or the luck of a decent property manager hiking up a rent increase on your tenant, your taxable income increases by the same amount, as does your tax. If the result is identical, it's not "punishing" either outcome.

              But if you really insist that tax is a disincentive to work, why not lock yourself into a career that pays exactly $18k a year and live a happy life never being required to pay tax again? Then you won't have to give up a single red cent! It's all yours!

              • t0087669 on 02/02/2022 - 09:03
                +1

                @CrowReally: I thought he meant that at this point he has earned >180k already this financial year, and any more shifts he does from now on it will be taxed at the highest rate? But obviously that’s before any deduction at the end. If there’s no deduction, and knowing that those income will be taxed at the highest rate I understand why there’s little incentive to work

                • CrowReally on 02/02/2022 - 10:09
                  -3

                  @t0087669: Maybe a worked example will showcase the fallacy behind this level of thinking.

                  If you earned $179,000 taxable income, you're near the top of the 39% tax rate. Your tax is calculated:

                  Tax band: $120,001 – $180,000: 39% $29,467 plus 39c for each $1 over $120,000

                  So: $29467 + (($179K - $120k) x 39%)) = $52,477

                  Your shift supervisor offers you an extra shift of $11,000. The first $1,000 will be on the 39% tax rate and then the next $10,000 pushed you into the 47% tax rate. So your "extra" tax on this shift is.. at a guess… $1,000 x 39% + $10,000 x 47%, $390 + $4,700, so $5,090, right? Let's check.

                  What are the actual numbers on earning $190,000 (the original $179,000 + $11,000 overtime)?

                  Tax band: $180,001 and over: 47% $51,667 plus 47c for each $1 over $180,000
                  So $51,667 + (($190K - $180K) x 47%) = $56,367

                  "Muh disincentive tax" thought process thought it was a $5,090 penalty for working the $11,000 shift. But it's $3,890 ($56,367 - $52,477).

                  And $3,890 is a 35.3% tax rate on $11,000. The tax man 'took' an extra $3,890 off you for working overtime, so the overtime was taxed at 35.3%. Nothing near 47%.

                  Because that's how the progressive tax bands work. Stop thinking about "oh no they took my 47%" because it didn't happen like that.

                  • Quantumcat on 02/02/2022 - 11:31
                    +1

                    @CrowReally: I can understand their reasoning. Everyone only gets 24 hours in a day no matter how rich you are. If you work overtime shifts you do not have as many hours for things you want to do. It makes sense that you wouldn't want to sell those hours cheaply. In my last job I could do as much overtime as I wanted, at first I did a lot but later I realised I valued my spare time more than the small increase in my next monthly pay and stopped it (unless I needed to meet a deadline). Real estate and other investments are different as they don't cause you to have to sell those precious leisure hours.

                    • CrowReally on 02/02/2022 - 11:41
                      -1

                      @Quantumcat: I agree entirely. I've worked 3 simultaneous jobs myself and made the '$ to cost of life' decision on when to continue (or in this case, not) those very jobs based on which portions of free time I was giving up and what it got me in return. At one stage Job 1 required more downtime and so Job 2 [on a Saturday] got the chopping block for a quality of life decision.

                      I can especially imagine working at a hospital during COVID would have similar strains - especially if other coworkers are not showing up to shifts and there's pressure (actual or imagined) to cover those shifts.

                      I get all that.

                      I think it's intellectually disingenuous to wrap all that up and say "and that's why the tax system punishes hard workers" however. Especially with fallacies on how the progressive tax system actually works.

                      • larmesdelhiver on 02/02/2022 - 15:44

                        @CrowReally: Clearly the guy/gal never finished high school math. Can't understand the concept of marginal rate. Can't do calculations. This is the people who can vote…

                  • keejoonc on 02/02/2022 - 11:41
                    +1

                    @CrowReally: WTF are you even on about? Your silly example switched tax bands which makes no sense in this context when larmesdelhiver already said he is on marginal tax rate of 47%. Or is that your lame attempt to try and make it seem like your illogical argument makes any sense?

                    Since larmesdelhiver is on marginal tax rate of 47% already, any extra work he does will be taxed at 47%. Period.

                    • CrowReally on 02/02/2022 - 11:43
                      -2

                      @keejoonc: My example explains exactly why getting $10,000 on the "47% tax band" isn't a tax of $4,700. It's nonsense to say "extra work is taxed at 47%", I just proved it wasn't.

                      Read the numbers, turn the brain on.

                      • keejoonc on 02/02/2022 - 11:46

                        @CrowReally: No, you are blending tax rate on his normal income with tax rate on his overtime income, which isn't even what he was talking about. It seems you can't even grasp the point being discussed here. Ofcourse his overall tax rate won't be 47% but the more overtime he does, his effective tax rate will keep going up because he will be taxed at 47% on any additional income he earns!

                        • CrowReally on 02/02/2022 - 11:50
                          -3

                          @keejoonc: "tax rate on normal income versus tax rate on overtime income"?

                          Now it's my turn to say WTF are you talking about.

                          At year end, all income from all sources is added up and whatever the final magic number is, we look it up on the tax chart and do that calc. I provided examples of the 39% and 47% tax bands above. Note the 47% tax band description isn't "47% of everything if you're on $180K". There's no flat tax on $180k amounts. I just proved that by doing my calc.

                          Prove it to yourself. Run the numbers on someone of $200k. Now run the numbers on $210K. They just earned an extra $10K in income, did they pay an extra $4,700 in tax? No, they did not.

                          And that is why you don't understand how the progressive tax system works.

                          • keejoonc on 02/02/2022 - 11:56
                            +1

                            @CrowReally: No idea what you are on about. Try going to paycalculator.com.au and punch in the numbers since that should be easy enough for even you.
                            It says "$51,667 plus 45 cents for each $1 over $180,000". How hard is that to understand?
                            It seems you are the one who doesn't understand the so-called progressive taxation system.

                          • DrScavenger on 02/02/2022 - 11:59

                            @CrowReally: https://paycalculator.com.au/

                            Calculate it yourself mate. It literally makes 4700$ difference

                          • keejoonc on 02/02/2022 - 12:02

                            @CrowReally: Gone all quiet eh? I guess you haven't turned on your brain before posting all those meaningless numbers of yours?

                            Not even a "Sorry I was wrong"? Typical keyboard warrior.

                          • dji1111111 on 02/02/2022 - 12:31

                            @CrowReally: All those words wasted to give incorrect information lol

                          • Manche on 02/02/2022 - 13:39

                            @CrowReally: You've got absolutely no idea. Don't worry, I'm sure your daddy will keep paying for your share investments.

                      • keejoonc on 02/02/2022 - 11:52
                        +1

                        @CrowReally: Since you love numbers so much:

                        If he's earning $185,000 without any overtime, he pays $54,017 in tax ($51,667 plus 47% on $5,000).

                        If he does $10,000 worth of overtime, his overall income is $195,000 and he payd $58,717 in tax ($51,667 plus 47% on $15,000).

                        $58,717 - $54,017 = $4,700

                        Please tell us how that's not paying 47% of $10,000 overtime he did?

                        • 7ekn00 on 02/02/2022 - 23:52
                          +1

                          @keejoonc: Yep, time to eat Crow :P Clearly his username checks out ;)

                          • keejoonc on 03/02/2022 - 09:54

                            @7ekn00: So funny that someone who's been so vocal in this thread has suddenly disappeared off the face of the earth.

      • burningrage on 01/02/2022 - 19:00

        In your case, you could have then donated the $1,000 a week and you get some karma coins if you don't want to give $470 to the tax man ;-P

        • larmesdelhiver on 01/02/2022 - 22:14
          +1

          I do donate 10% of my income a year to MSF & UNICEF funds. What's your point though?

          • Slippery Fish on 01/02/2022 - 22:50

            @larmesdelhiver: You could donate 10% to my homeloan.

          • burningrage on 02/02/2022 - 10:12

            @larmesdelhiver: It is a joke for CrowReally. He is saying it is ridiculous to deny earning additional $1,000 because of extra tax so all I am saying is if he doesn't mind earning that $1k, he could donate that and he doesn't have to give the tax man $470 because that $1,000 if kept would have costed him $470 in tax.

    • [Deactivated] on 01/02/2022 - 19:21

      Wow…with the amount of money you get, cheap education, and paid residency you go you have to pay too much tax on the dollar so you'd rather not work…when you get paid what you do, there should be a sense of responsibility tbh…you're one of the best paid doctors in the world.

      sweating like a pig in gowns mask gloves faceshields and getting abuses from patients and families it doesnt seem like worth it.

      Basically what teachers (with poorly climate controlled schools) and nurses cop for like 1/5th of the pay and no OT for teachers.

      • larmesdelhiver on 01/02/2022 - 22:12

        Mate. I did not get any cheap education or HECS or any benefits from the gov't prior to working. Did all my education in the US and me/ my family paid all of them on my own. Basically just came here to work.

        • [Deactivated] on 01/02/2022 - 22:19

          Still, you're getting paid in the hundreds of thousands, even if you're taxed at 47% you're earning a (profanity) ton of money, very well overpaid. Sure, it's not great conditions but by far not the worst.

          • larmesdelhiver on 01/02/2022 - 22:22
            +2

            @[Deactivated]: You're missing my point. I understand I'm well compensated but the 47% marginal tax rate is a disincentive for ADDITIONAL overtime work for a lot of people.

            If I'm already working 5 days a week regular job, and my colleagues called in sick (with the COVID wave) > can you see the point that not many people would be willing to pick up extra hours? Why taxing earned hard labour so high while passive income (which I also have) have preferential treatment (discounts, loopholes, etc.)?

            • [Deactivated] on 01/02/2022 - 22:42

              @larmesdelhiver: Because you're a doctor and lives depend on it. I've worked in schools where teachers work 50-60 hour weeks and go well beyond their responsibilities because their students need it. Unlike you, they don't even get paid for it let alone complain about being taxed a bit more, but do it out of responsibility. Every principal I've worked with gets in at 7am and doesn't leave till 6pm. They're on at most half what a GP would make working 9-5.

              My sister is also a nurse, she was working 7 days 12 hour shifts at the height of the pandemic despite getting taxed what you were saying. Again, she's probably on 1/5th of what you're on..When you're on that much money, surely an extra 14% tax or something hardly makes a difference…

              • larmesdelhiver on 01/02/2022 - 22:48
                +1

                @[Deactivated]: First, I already do 5-10hrs unpaid overtime at work on top of the paid hours. Secondly, nursing has a much better union than doctors with mandatory breaks, safe ratio, etc. whereas for us doesn't matter how many doctors call in sick you still have carry on. When a nurse calls in sick they just close the beds and I have to see the patients in the waiting room…

                And you're wondering why we have a severe nursing shortage at the moment with burnout and people quit in droves. I don't get your point though every individual calculates the marginal cost vs benefits of their labor and gov't should provide incentive for work (I want to work and I love my job) not the other way around. I'm getting punished for any extra hard work I make.

                • Slippery Fish on 01/02/2022 - 22:56

                  @larmesdelhiver: Think of it this way, you pay 47%, they use it to pay for harry the bogan to come see you. The circle of wealth.

                  :) I work disability and did 126 hour a fortnight for 4 months, I liked the money but now work 88 to earn 2k less over all and I only ever saw 1k of that as the rest was tax…

                • [Deactivated] on 02/02/2022 - 17:06

                  @larmesdelhiver: Again, you're on literally thousands a day…it's called a tradeoff.

                  Secondly, nursing has a much better union than doctors with mandatory breaks, safe ratio, etc. whereas for us doesn't matter how many doctors call in sick you still have carry on.

                  You don't get the pay you do unless there's someone behind it. Limited positions for med school tends to do that.

                  First, I already do 5-10hrs unpaid overtime at work on top of the paid hours.

                  Again, that's normal for a teacher who's on 80k a year..

        • DrScavenger on 02/02/2022 - 11:54

          You should have done the opposite. Work in US. Bank the cash there and then invest in here. Why study there too, its too expensive.

    • techlead on 02/02/2022 - 17:11
      +1

      This is very untrue. I'm in the highest bracket, its not a disincentive at all. I'm still as motivated as before.

      I'm also grateful for what I have and happy to pay more in tax.

  • burningrage on 01/02/2022 - 18:04
    -2

    Regardless of the morality or justification for high tax in this country, even if you are being charged on avg 33% after medicare levy on $180k, plus GST 10% plus council rates and state taxes (rego, land tax, stamp duties, etc), that would take it to at least 40% or nearly half of your work gone in taxes.

    So almost one day you work for Govt, one day you work for yourself.

    That is too much of an impost.

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

      if Australia sucks so bad then go to Nigeria where the effective tax rate is 12%, except there is no infrastructure for broadband internet, no police so you are likely to be stabbed to death in your own home for whatever valuables you have laying around, no national health strategy so your girlfriend is much more likely to give you HIV, no environmental agency so water supply from the local river is toxic, no free or regulated media so you don't know what to believe about your own country. People here complain about paying a marginal tax rate of 37% on their 180k income, yet no one is forcing you to live in crummy old Australia, you can frack right off to any on sharthole country that will tax you less anytime you want. No one is forcing you to live in this country that has been better to you than it has to the rest of us.

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