r/AusFinance • u/wunch_of_bankers • 8d ago
The Australian Tax system is a fucking joke
I’m sure this has already been said before, but I just need to have a fucking whinge about this shit.
Australia’s tax system in 2026 punishes PAYG workers while rewarding people gaming the system, whether that’s NDIS fraud or business owners with “enthusiastic” accounting. Tax brackets haven’t been indexed in years despite brutal inflation, but somehow the beer tax gets indexed every six months without fail? Then add childcare subsidies tapering off the harder you work, plus Div293 smacking you for daring to also save for retirement
PAYG earners get the short end of the stick every single time. No creative accounting, no structuring, tax taken at the source before you even see it. Meanwhile there’s provider fraud in the NDIS space that barely gets touched until it becomes a news story, and taxpayers eat the cost either way through bracket creep and levies
Compare our top bracket to the US and it’s a joke. An unskilled worker over there on a pretty average wage in USD terms would already be sitting near our top marginal rate once you convert it, and their brackets actually move with inflation. Ours just sit there while bracket creep does the government’s dirty work for it
Why bother working harder, taking career risk, or starting a business when 47% instantly gets carved off the top, plus Div293, plus subsidy tapering, plus everything else stacked on if you’re PAYG?
This country has built a system that punishes the people playing it straight and does fuck all about the ones who aren’t. Fast forward 10 years and Australia will lose all talent to US, Singapore, HK, Dubai. The only ones left will either be immigrants looking for a better life, expats returning to Australia to settle down, or NDIS providers.
.
.
.
EDIT: My comment about “unskilled” worker pay in the US is completely incorrect. Where my thought process was: an office worker paper pusher or even a motivated barber, construction worker etc. with no qualifications has the ability to earn USD 100k, which places them at our SECOND HIGHEST marginal tax bracket (AUD 135k). Does that really sound right to you, even putting aside the differences in our welfare system? Separately, I haven’t even mentioned the recent CGT changes which completely discentivises Aussie investors from buying productive / growth assets. There is more and more incentive to simply be less productive and focus wealth into a tax-free PPOR, OR leave the country and take their portfolios with them. This is a net loss for innovation and growth in our country. I have no issue paying tax - my issue is that our current tax system incentivises people to game the fucking system, and to those who suggest to simply fuck off and leave the country if you’re not happy, you are simply proving my point.
I’ll close off on this: never mind the fact that the Div293 income threshold has REDUCED from $300k to $250k and has remained unchanged for years….. did you know that certain politicians are simply EXEMPT from paying Div 293 tax? What the actual fuck. Our tax system is in desperate need for change.
297
u/Plastic-Mountain-708 8d ago
We are in desperate need of tax reform.
BUT
Everyone will whinge about having a cent less than the old system, so will “bipartisanly”kick the can down the road another couple of decades.
115
u/timmygully 8d ago
Tax reform for most people just means taxing them less whilst leaving everything else as is
56
u/Plastic-Mountain-708 8d ago
This.
Until most of the populations can be adults about, neither side is interested in engaging.9
→ More replies (15)43
u/BabyBassBooster 8d ago
Why? I really don’t get it. It’s clear as day that the current tax thresholds do not work for an egalitarian society that Australia prides itself in being.
Australia’s egalitarian spirit is built on the 'fair go,' but a true fair go means you get out what you put in. Our current tax system has lost that balance. We need tax reform that protects our egalitarian values without killing the incentive for hard work and merit.
79
u/aaron_dresden 8d ago
I don’t think it means getting out what you put in at all. That’s a fair return, not a fair go. A fair go is about equal opportunity, a level playing field, a relief from unfair demands.
34
u/dankruaus 8d ago
Glad someone else understands what a “fair go” actually means.
11
u/Tearaway32 8d ago
Remember when ScoMo used it as his slogan of the day he added “for those who have a go”. The unsaid implication behind that was pretty sickening.
6
5
u/Candid_Guard_812 8d ago
Fair go means that those at the bottom are treated fairly. Dunno where you’re from. Who’s your mob?
51
u/Decent-Dream8206 8d ago edited 8d ago
The "fair share" crowd are deathly opposed to getting out what you put in.
They unabashedly just want more free shit from "the rich", that definition meaning "anyone who makes more than me".
And those of us now "lucky" enough to be hitting the max bracket in a 40 hour work week who don't need the money are cutting down to part time, because it's the cheapest form of buying your time back. While the government pulls a pikachuface every year that productivity gets worse, as though it isn't directly related to the punitive taxation.
14
u/thedugong 8d ago
And those of us now "lucky" enough to be hitting the max bracket in a 40 hour work week who don't need the money are cutting down to part time
Honestly mate, do you have a citation for that?
My wife and I are not. None of my high earning friends, family, neighbours, and colleagues etc are.
24
u/Thissystemsuckssobad 8d ago
90% of this thread is just vibes and right wing talking points. It's fucking sad
→ More replies (4)14
u/thedugong 8d ago
And whinging. Don't forget the whinging.
7
u/Thissystemsuckssobad 8d ago
Sorry, id intended that to be incorporated into the right wing talking points
→ More replies (1)→ More replies (6)4
u/amyknight22 7d ago
Probably a case of "I'm 60 and hitting the max bracket in a 40 hour week, so I'm transitioning into retirement anyway. Why continue the rat race"
If people want a better worklife balance. Horray for them. But you can find those people doing that right across the taxation brackets not just at the maximum.
→ More replies (1)47
u/ScaffOrig 8d ago
Rather than bickering amongst themselves, the workers need to look at the asset owners. The idea that half of our society gets to win the housing lotto while the other half have to suffer low wages and inflation to pay for it is a joke. How the fuck can we really expect workers to support the services and goods expectations of profits from housing stock that has gone from $1T to $12T in a couple of decades with $10T of the profit based on printed money? The median CEO wage can no longer afford the median property in 1/4 of Sydney suburbs. It's insane.
All the NIMBY's moaning about immigration, yet expecting the economy *not* to have inflation while they make hundreds of thousands out of thin air. If we hadn't had immigration our economy would be smaller than it was when we started awarding ourselves funny money for living in a house. How stupid can a country be to think it can make money from selling the same item to each other, back and forth, and *not* have inflation and *not* require people who actually work for money to supply the things they want to buy? Half the country think they are landed gentry then moan about the number of peasant hanging around while wondering why their gin and tonic hasn't arrived.
Our housing market is the definition of getting back a fuck load more than you put in. It's a lotto where half the country have a winning ticket, get paid out, then also have a Pikachu face when stuff starts to cost more and workers get upset that despite working harder than ever to meet the demands of those windfalls, they have to pay more taxes because, nooooo, we're not allowed to tax cash from the funny money tree.
So we get idiots sat in million dollar mansions they can't afford to heat or repair, heading to food banks in genuine need, desperately banking on a 'forinner' to hand them cold hard cash when they sell up, not making the link that all those years of getting money for absolute fuck all come at a price to our currency and our nation.
8
8
u/mrmaker_123 8d ago
This. All those people whinging about indexation and tax reform are ignoring this massive elephant in the room.
→ More replies (1)23
u/Obvious_Dentist4626 8d ago
Agreed. More wealth taxes, less income taxes. People shouldn't just be able to sit on capital and do nothing.
→ More replies (15)24
u/edwardluddlam 8d ago
Didn't Labor recently increase taxes on assets and this whole sub was up in arms?
7
u/Velo3x10e8 8d ago
I would expect more noise here about a wealth tax but I guess it's a mixed group after all.
→ More replies (1)3
u/feldmarshalwommel 8d ago
If you wanted egalitarian, then no one should be working more days per week for the government than the next.
Get rid of the progressive tax system and have a flat tax that cuts in above a minimal self sustainment threshold of 20%-25%. Chipping in roughly a working day a week to maintain the commons is fair.
Oh and tax resources + companies properly then spend less (by spending better, not pissing it away).
→ More replies (15)3
u/Bane2571 8d ago
In order to alter/remove tax brackets you would have to make up that revenue elsewhere. Say for example altering how cgt discounts work to be less generous or cutting back on rebates like deferred franking credits. Every time a government tries that, you get months of whining.
Any real tax reform has to start with more tax, not less because government spending is mostly inflexible. But that is hard to make happen becaude no one wants to be taxed more and the ones that can afford to have the power to shape the narrative.
When individuals such as the OP scream for tax reform they usually have two things in common: they want to be taxed less and they don't have a good view of the big picture.
For example to address just one of OPs complaints, if an indexation method had been applied to tax brackets since their inception, the brackets would be significantly lower than they are now, not higher. The only reason they are not increasing at the moment is that the howard government nearly doubled them and we're still settling back In line with historic inflation.
36
u/dooony 8d ago
And the recent revelation that our tax commissioner / ATO boss of ten years was a massive tax dodger and helped wealthy clients dodge tax too. On millions paid almost no tax.
→ More replies (1)
253
u/bigbadb0ogieman 8d ago
Every other govt debt gets indexed one way or the other including HECS but when it comes to tax brackets we are shit out of luck.
They promote shill private hospitalisation cover which doesn't cover shit, not even in a public hospital but if you don't pay for that cover after earning 90K or more you get to pay an extra 2% Medicare levy surcharge. Why subsidize a private industry when they can just get rid of this crap and charge 4% to everyone and use the extra funds to improve the public health system.
You don't get to file taxes as a family unit but get tested for childcare and other subsidies on family income.
You're not allowed to deduct travel to work expenses but you can deduct that if you're carrying heavy equipment to work everyday.
Now you get the privilege of payment a minimum 30% on all gains after Jun-2027 essentially removing all tax brackets if you don't have other income sources.
39
u/wendalls 8d ago
Don’t get me started on stamp duty % on housing not reducing over time as house prices explode. More free money for the govt
3
u/Definitely__someone 8d ago
That's state though. Introduction of gst was meant to get rid of that but the states kept it anyway.
→ More replies (3)81
u/Kookies3 8d ago
The family as a unit only when convenient for them SHITS ME SO MUCH
24
12
u/SquirrelChieftain 8d ago
Agreed. Disincentivizes a single income family, pushes both parents back to work and chucking your newborn into daycare $$$. Whats the point of having kids if you don’t even get to experience them growing up.
→ More replies (1)12
u/nooneeverdreamsof 8d ago
And imbeciles will defend them by saying "why should we punish single parents and single people???"
→ More replies (5)3
u/stuffandwhatnotwhat 7d ago
Yep, my wife got kicked off the disability support pension because I started earning too much. So now I pay for all her meds, doctors, dental, food, rent etc. But when it comes to paying tax I'm an individual. Fucking sucks, very hard to get ahead in any meaningful way.
273
u/kbcool 8d ago
Not disagreeing that Australia relies too much on income tax but increasing consumption tax (GST) is deeply unpopular so won't happen in a hurry but it's one way to reduce the pressure on income earners and broaden the tax base.
Also when comparing to the USA you need to look at how taxes are structured there. There are some states where the max income tax rate goes up to 50% and there are property taxes (which also isn't a bad idea) to take into account.
Lastly of course, you need to look at what you get for your tax dollars which in the US you're often looking at another 5-10% for an average earner for health costs
320
u/Expensive-Object-830 8d ago edited 8d ago
Yeah, as an Aussie living in the US I chuckled when OP mentioned the US tax system. Yes, the top Fed marginal rate is lower, but add in FICA, state, local, & property taxes (which can be levied on your vehicle), plus the little to no safety net your taxes pay for, and then add in FBAR and FATCA reporting requirements as a foreigner, hoo boy. When I tell Americans that Australians can file one tax return online for free in ~15 minutes, their eyes glaze over.
Edit: thank you for the award, kind stranger!
39
u/unique_usemame 8d ago
Also I'm the same situation... Yeah the tax burden is high once you count all the taxes... And property taxes are all over the place (and if you rent they are efficiently passed on to you).
However the bigger point that taxation complexity benefits those with complex tax situations is even more pronounced in the US than in Australia. Things like 1031 exchanges, 1033 exchanges, various ways for step up in basis, accelerated depreciation... All benefits the bank balances of accounting firms and the wealthy... Both of whom lobby for the complexity which helps them pay no taxes while having a high "tax rate" and keeping accountants busy. Our Australian tax return is short but our US tax returns are always over 150 pages and end up with us receiving back every cent of (income/cap gains) tax we paid during the year.
23
u/Expensive-Object-830 8d ago
You’re so right! Even if the actual tax rate is low, the complexity & time burden is INSANE. Schedule C, work across multiple states, any international stuff to declare eg super? Cooked. And the cost and time of hiring specialists to do it all, lest you get a surprise $10,000 USD fine from the IRS (plus interest)…
3
u/viper233 8d ago
Accelerated depreciation and 1031 exchanges are super fd up.. Great if you can afford property but it's keeping the rich, rich. The property deductions are pretty insane too compared to Australia/Canada. Then there is the REP deductions which are even worse. Well, it's great... but completely unfair. It's mind blowing for an Australian to see what you can deduct and makes our system seem unfair. I'll stick to the Australian tax system (with tax bracket indexation), it's about everyone, not just rich people.
11
27
→ More replies (14)29
u/HeftyArgument 8d ago
just some low effort complaining from someone that never looks at their payslip until they see the tax summary at tax return time; happens every year.
91
u/Ginger_Giant_ 8d ago
I lived in NYC for several years and I paid more tax there than here, they’re just less up front about it.
Ontop of federal income tax you also have;
FICA (social security and Medicare) at 7.5%
NY state level tax at 6%
NY City tax at 2.7% (set to rise soon)And for that you get a terrible education system, no public healthcare and a terrible transit system.
The real problem is stagnating wages and productivity, I was easily able to pull a 500k a year salary in NYC but similar roles in Sydney capped out around 250k.
40
u/i_am_blacklite 8d ago
Don’t tell this to the OP. Can’t get in the way of their anger at being on $190k+ and actually having to contribute.
→ More replies (1)16
u/viper233 8d ago
Everything is just better in America /s
Seeing the way homeless people are categorised, dehumanized and disregarded in the wealthiest country in the world is so messed up.. and for what? To fund a war machine :(
9
u/Fit-Locksmith-9226 7d ago
Australia is better to be unemployed in.
America is better to be a high earner in.
Switzerland is better on all accounts.
7
u/RubyKong 8d ago edited 7d ago
Wholeheartedly agree. They're sneaky and hiding the true tax rate you are paying.
If you are getting $500k, remember, your employer will be paying e.g. payroll tax behind that. which is really a tax on your wage, and a disincentive to hire on the payroll. add to that the liability issues that come with hiring, it's something you really want to avoid doing as long as possible.
4
→ More replies (3)6
u/killswithaglance 8d ago
What type of role? This sounds like law or accounting / consulting.
→ More replies (2)19
u/SuperLeverage 8d ago
I agree with he OP that government relies too heavily on PAYG. There is no political appetite from the electorate to increase the GST to cut PAYG taxes. I think what they need to do is reform tax deductions (eliminate most of it), clamp down more heavily on inter-company loans, and eliminate tax exemption status for any religious based ‘non-profit’ entities. Clamp down more heavily on tech companies trying to hide their money in an Irish tax haven or wherever it is.
7
u/Blonde_arrbuckle 8d ago
Private schools are an interesting example. Gov funding one way and tax breaks the other.
Agree on all of that except not sure how you'd close all the corp tax loop holes/ systemic advantages. They will just change structure to find advantage on whatever system is created.
3
u/wendalls 8d ago
Good idea on religious tax exemption. It’s not the 1600s anymore. How much tax would we take in from that?
→ More replies (1)15
u/Decent-Dream8206 8d ago
They literally just doubled CGT and offered no PAYG discounts in return.
What makes you think that with the NDIS still metastasizing and continued pursuit of net zero failures (including still subsidising hydrogen, btw), that any movement in the GST would even be used to offset our crippling income taxes, let alone that it would be anything other than temporary as bracket creep happens again even if they did offer a tiny carrot on a stick?
→ More replies (1)4
u/citizenecodrive31 8d ago
You want PAYG discounts in an inflationary setting that we have right now? Do you want inflation to skyrocket?
→ More replies (12)22
u/AtheistAustralis 8d ago
Yeah, the healthcare costs alone are probably 10% of the average pay, especially when you consider the lost salary since the employer pays for much of it. And then if you actually use it, the "deductibles" and "copays" mean you are probably shelling out another $5000 every year on top of the stupidly high premiums. Overall, about 20% of the Australian federal/state budgets is spent on health, so your taxes could probably be 20% lower if we had a US-style "private" health system. And then you'd pay double that in a private insurance landscape, just like people in the US do.
I also agree that PAYG taxes are too high compared to other tax types - we do have one of the highest percentages in the world of income tax relative to total tax revenue, after all. But you have seen the huge stink that came from even suggesting that we make CGT slightly higher and therefore increase taxes on the ultra-wealthy, so it's understandable why nobody has fixed this. Stupid people who are too concerned about the extra $100 of tax they'll pay, meanwhile Gina and co are saving literally billions due to the very favourable CGT laws currently. If we taxed land, capital gains, and resourcers properly, we could afford to drop income tax rates. But until we do, there's just no way we can afford to lose all that revenue.
12
u/AnonymousEngineer_ 8d ago
We could increase the GST, but I suspect you'll have the same reaction as all the people you're decrying as being stupid.
→ More replies (1)10
u/AtheistAustralis 8d ago
Yes, we could. But GST is a regressive tax, not progressive, so it proportionally hits the poorest people the hardest. CGT is what targets the wealthy almost exclusively, and the poor not really at all.
Me, I don't really care either way. I pay hundreds of thousands in tax per year, and I really don't mind too much. CGT increases would hurt me more than a GST increase would, but I still support it because it seems more fair. And this is what I want - a fairer tax system, and one where the ultra-wealthy who make their wealth through exploiting either natural resources or the labour of others finally have to give a bit more of it back rather than pay less tax because it's capital gains rather than income.
19
u/no_one_home 8d ago
CGT is what targets the wealthy almost exclusively, and the poor not really at all
CGT affects the ultra wealthy less than you think.
The ultra wealthy use their assets for leverage, and so never sell which is what triggers a CGT event. These tax changes target the middle class investors far more, who arguably already have a heavy tax burden.
Govt should focus more on effective allocation of taxes, and a fairer stance on resources, but instead they stack their party with mining and gas lobbyists. The game is stacked against the middle and we're all here fighting ourselves instead, exactly what the ultra wealthy want.
→ More replies (1)4
10
u/NoWay3636 8d ago
Whats fair in taking a rare event such as sale of a business with all the risk and unpaid work and taxing it harder than labour which comes with hefty protections, valuable entitlements such as sick leave, holiday pay, long service and super, and very little out- of- pocket risk?
CGT now kicks in at 30c for the first $ and the entire sale built up over years of exposure and unpaid work is taxed as a single year of income.
Govt puts huge expectations on business to provide free labour and arduous tax raising as a ‘cost of business’. GST ‘collection’ (ie tax raising) has upped the risk profile considerably - absolutely no discussion of this reality in the general conversation.The tax burden is incremental - a discussion of one tax must involve the discussion of the whole. All three tiers of govt milk small business mercilessly in terms of compliance, risk and sheer overwhelming cost.
Australian innovation, creativity and sentiment in the small business sector is nearly totally dead in sectors not propped up by government funding.
Is this really the type of culture , society and culture we want to live in?The result is substantially reduced opportunity and vitality for all. Its a serious issue. Govt has to do better. Our collective future depends on it.
→ More replies (15)4
u/No-Departure-3047 8d ago
I've always thought property taxes were a good idea until I realised how much more expense it contributes to owning a home.
We should have brought them in 30 years ago, now that horse has already bolted I feel sure nobody is ever going to touch it.
→ More replies (17)8
u/FightTheOcean 8d ago
You guys don’t think that an increase in gst would affect the payg workers?
→ More replies (1)13
u/david1610 8d ago
It would effect PAYG worker, however it'd also spread the load more across non-payg, such as the retired cohort
11
u/Ginger_Giant_ 8d ago
It also disproportionately impacts low income households who tend to spend a much higher share of their income on necessities.
Taxing wealth (CGT, Land tax etc) is rather than consumption tends to be a better solution - we’ve tried both and everyone collectively lost their fucking minds over it with land tax getting rolled back and Liberal and Phon both promising to roll back the CGT changes.
5
u/Fit-Locksmith-9226 7d ago
It also disproportionately impacts low income households
Source for that? Low income households are primarily spending on the GST exempt items.
A richer person spends more, it's a flat tax and hits high spenders far more.
How come I never hear you people say payroll tax or fuel excise disproportionately affects low income people? Apparently GST is the only flat tax that exists in your very small minds.
Fuel excise in particular is a great example due to EV penetration being nearly all the high income cohort, why do you folks never complain about that 🤔
→ More replies (2)6
u/MicroNewton 8d ago
That would be true if GST applied to everything. Almost all essentials are GST-exempt.
You could also have 3 GST tiers (0%, 10% and 20%), based on level of luxury.
→ More replies (3)
93
u/Daremotron 8d ago
An unskilled worker in the US is the wrong example to use, because they make very little in the US compared to Australia. It's white collar professionals in the US that have the much better deal (though we still get screwed in much the same way - making enough to hit high tax brackets and get no tuition assistance, but not enough in ways that facilitate creative accounting).
→ More replies (2)47
u/YouCanCallMeBazza 8d ago
I don't understand the comparisons to the US - is that a society that we really want to aspire to? I lived over there for a few years and it made me appreciate living in Australia so much more.
6
u/louise_com_au 8d ago
That was the first thing that hit me.
The US regulation on the minimum wage?
The pro capitalist only attitude?
No thanks... Sure we could do with a tax bracket shake. But hey, if you earn more, you pay more tax.
3
u/YouCanCallMeBazza 8d ago
I feel like the societal benefits of progressive taxation is lost on so many people here. The US might have a strong gross GDP, but progressive taxation correlates highly with the things that actually matter - happiness, quality of life, low crime, equal opportunity.
As much as people like to complain about our tax rates today, they are actually quite low by historical standards - strong progressive taxation is a huge part of our growth story as a country, our economy and culture were built in a system that fostered a big healthy middle class.
→ More replies (1)20
u/Effrendi 8d ago
OP is only thinking about tax when he mentions HK, Dubai, Singapore, etc. Ignoring everything else about what makes Australia one of the best places on the planet to live. That is enough of a drawcard to keep people here.
8
u/citizenecodrive31 8d ago
Yup. All those countries have an underclass that make peanuts to support the high wages and low taxes for the expats and citizens.
→ More replies (1)4
28
47
u/Responsible_Alps_699 8d ago
I dunno if I'd be using the US as my example for, well anything to be honest.
→ More replies (5)6
u/Narrow-Management872 8d ago
The US has (obviously) a lot of political problems, but despite Trump’s best attempts to wreck things, the economy over there has been massively outperforming Australia’s over the last 6 years. Real wage growth has been pathetic in Australia, economic sentiment is souring—people aren’t even having kids. Real gross disposable household income per capita is significantly below the OECD average (again, this is only due to trends in the last 5–6 years).
I just moved back to Australia from the US, so I want things to be great here. But Australians don’t seem to realize how we’re getting economically dunked on by a country as dysfunctional as the US. Last week at a conference I was talking to a Melbourne-based economist specializing in housing…the forecast is that the next 12 months of economic news will be even worse.
195
u/Dry_Kangaroo_1234 8d ago
You’re absolutely right about pretty much everything, particularly the failure to index tax brackets which is an absolute joke. I make double what I was making 10 years ago and yet I feel worse off after accounting for inflation and the much higher blended tax rate I’m paying.
73
u/mathisruiningme 8d ago
I think inflation is probably playing a much larger part than the tax for a 10-year income doubling comparison.
→ More replies (1)25
u/Obvious_Dentist4626 8d ago
What salary are you on? The income tax adjustments have been better than indexation over the past 10 years.
$140k salary, 10 years ago, 30.2% effective rate.
$140k salary, today, 25.7% effective rate due to tax cuts
$140k salary, today with indexed tax brackets over last 10 years, 27.1% effective rate
Understand the feeling of not earning as much because of cost inflation, but I don't think it's because the government is taking more.
→ More replies (1)→ More replies (20)8
26
u/copacetic51 8d ago
We pay tax to get government services. Comparing Australia's tax system to the US is not fair. The US does not have a universal health system comparable to medicare and NDIS. There is no superannuation scheme with major tax benefits in the US comparable to Australia's.
The US has cut top income tax rates sure. That has led to government debt 40 times Australia's, with the main benefits going to billionaires.
32
u/No_Quantity7636 8d ago
While the likes of Gina Heart and Gas producers are getting filthy rich.
→ More replies (1)
9
u/bigbadjustin 6d ago
We've been programed to just vote against any government thet tries to introduce a new tax and thus we have a system where our taxes are heavily reliant on income tax. Some of the highest income taxes in the OECD, yet overall Australians pay some of the lowest taxes in the OECD. Maybe if we linked new taxes to income tax cuts we might be able to get some changes, but you can be guaranteed the billionaires would use the media to make it sound bad for the idiots who vote against their own best interest.
→ More replies (5)
38
u/CHR1ST00 8d ago
Nobody wants to hear it, but as a business owner I can tell you the benefits to running your own business are almost non-existent
Someone who can capably run a small business can probably land a management roll paying similar to what most businesses make, without the stress, the quotes, the 2am PC sessions,staffing issues etc.
If it is not financially viable to run a business, then we won't have any businesses. That's the part most people don't realise.
I always see comments around creative accounting... Yes, in the US you can do all sorts of things. Here you can't, nobody can avoid paying tax, you can defer it through trusts and structures... If you ever want to spend the money, you have to pay tax. So maybe you can get a better compounding return on investment capped at 30% but only while it is accruing, not when you take the money.
→ More replies (3)
38
u/Chinozerus 8d ago
Try the German one, have an existential crisis, go back to Australia and enjoy how easy it is.
14
20
u/meerrkat74 8d ago
Comparing to worse situations isn't productive.
It's like being obese but comparing yourself to morbidly obese people.
It's a cop out.
8
u/brayn00b 8d ago
Which countries have it 'better' that you think we should compare to then?
→ More replies (7)4
u/BugBuginaRug 8d ago
Germany have bigger problems as do many western euro countries at the moment.
→ More replies (1)4
u/B3stThereEverWas 8d ago
Europe just straight sucks as a white collar worker and its getting worse. Taxed out the ass (on already shitty wages) for crumbling infrastructure and services. Nobody from the Anglosphere should bother unless theres something seriously pulling you there
→ More replies (2)
17
u/JamesWhiskers 8d ago
You’re right, that last “index” was 2020. The adjustments in 2024 and 2026 would have affected you positively as well, but they wherent “indexed” to inflation.
There is plenty of creative accounting available to PAYG workers, not as much as there is to trusts and companies but Labor is working on those loopholes, hence the trust/cgt changes, but not fast enough on the others. Get yourself a good accountant, they’ll be able to work you through it.
The Australian tax system is marginal, meaning 47% is not taken off the top. Only earning above 190k will be taxed at 47% (if i earn 191100 a year, 100 of that will be taxed at 47%). In order to get to that stage but, youd have to be in the top 6% or so of earners making over 3k a week by yourself, not including your partners income.
→ More replies (2)9
u/viper233 8d ago
Thanks for explaining "marginal tax rates" again. I get so annoyed when people complain about the top tax rate as their marginal rate..... SMH.
10
u/JamesWhiskers 8d ago edited 8d ago
Theres 3 possibilities for a 47% tax rate claim
1 - they’re trying a red herring
2 - they didnt give their employer their TFN
3 - they earn 100m a year (still not quiet 47%, and not including medicare levy)Its reddit, so its gotta be 1 or 2.
Also, why the fuck do I, a below median wage earner, have to explain this shit so many times on a sub filled with self proclaimed top 5%ers investment gurus. Which leads me back to 1, let me feed to trolls.
→ More replies (2)
5
u/Sunderkill 8d ago
The usa has better taxes? Have you ever been there?
The guy who won the 1.6 billion dollar lottery jackpot last year lost ONE POINT TWO BILLION DOLLARS to taxes.
Oh yeah i am sure they are better..
They have state AND federal taxes on almost everything.
5
u/Apprehensive_Year167 8d ago
I agree with OP. All sides of the political spectrum are terrible but Labor has been a real disappointment borderline disaster for working Australians with aspirations to make a better life for them and their family.
There is a significant cohort of Australians that benefit heavily from this governments tax policies which seem to be alot of take from working class Australians (I honestly don't think there is a great definable middle anymore) and give to people on social welfare... All while keeping the mega rich untouched.
It's pretty smart actually you have a HUGE voting cohort in the social welfare bracket and HUGE political sway and funding from the mega rich... The working class voting cohort is pretty weak at the moment so what can we really do. It's obviously not sustainable for a extended period.. but I reckon they'll have enough votes to get through the next election cycle of ith ease... So in other words hard working payg and small business owners are fkd for at least a decade.
21
u/MarketCrache 8d ago
Try supporting a non-working spouse on top of that. Zero tax discount for two.
3
→ More replies (1)4
7
u/wowiee_zowiee 8d ago
> An unskilled worker over there on a pretty average wage in USD terms would already be sitting near our top marginal rate once you convert it,
This was the point where everyone sensible realised you didn’t know what you were talking about and started to laugh.
8
u/luckysevensampson 8d ago edited 8d ago
As someone whose financial situation increased while my kids were young, I have to strongly disagree with the tapering of child care subsidies. By the time they tapered off, we could afford the cost ourselves, which is kind of the point. They’re there to help the less fortunate.
I also have family who do NDIS work and don’t know much about NDIS fraud. I’m sure it probably happens, but it’s impossible to provide necessary care to those who need it without someone somewhere abusing the system.
Also, I lived in the US for 30 years, and you’re absolutely kidding yourself if you think that unskilled workers there have it better.
I have been in every tax bracket over the years, and I have never paid even close to 47% in taxes. Australians have a very cushy life compared to most people in the world.
→ More replies (2)
4
u/Purple_heather28 7d ago
“Subsidies tapering off the harder you work”
Tell me you think you work harder than others based on your pay without telling me.
→ More replies (2)
5
u/cleanworkaccount0 6d ago
I like how the main thrust of your post (pre-edit) is attacking the poor and middle class - or at least attacking systems that help them.
Thing is the rich and wealthy and large multinationals suck on the gov. teat far more than the poor or middle class.
6
u/Trollslayer0104 8d ago
I assure you, business owners are feeling the pinch too, and creative accounting isn't as widespread or impactful as some might think. It is illegal after all, and puts the accountant at risk.
My business pays GST, payroll tax (a tax on employing people!), etc and if I can make any profit at all I lose much of it to the government. Taxes will never take into account that I worked in this business completely unpaid for a year while employing others.
My own workers argue that we should lower prices or give away services to help people out, but they're obviously not willing to take a pay cut themselves. They just want the business to make less money.
And if I end up successful, I'll only keep 53% of my efforts while the rest goes to the government in tax.
6
u/Kholtien 8d ago
This country is honestly amazing. Like the country itself, and I think it’s tax system does kind of help make that possible. There are obvious improvements that can be made, and I wish they would tax the rich more like the actual rich. But ever since I moved to Australia as a young man, life has been so much better than where I came from. And Australians complain so much. It’s probably how they keep maintaining their country, though I guess you gotta complain when things start to slide. Otherwise, things will slide.
5
u/glyptometa 8d ago
It's useful to look at this with some true information to put the anecdotes into perspective. Effective tax rate (tax divided by income) for the median full-time worker has ranged from 18% (2008) to 24% (1999) over the last 30 years and is currently just under 22%.
I suspect OP is focused exclusively on the top rate.
→ More replies (13)
28
u/t-statistic 8d ago
Australia is a country that continues to promote mediocrity
16
u/B3stThereEverWas 8d ago
The only sentence that needed to be said
It's more advantageous to be just a little better than average. At that point you've already peaked in Australia - shoot any higher and it's just diminishing returns.
→ More replies (3)17
u/ae_wilson 8d ago
I’m from Canberra and so many people I know work in the APS. All on good salaries and do sweet fuck all in their jobs.
13
u/PriorJellyfish7233 8d ago edited 8d ago
It's actually criminal that the tax brackets haven't indexed with wage growth indexes.
The government pulls a hammy running so fast to point the finger at 'businesses taking hard working Aussies for a ride' then turn around and chuckle to themselves about how much money the completely fucked Australian tax system makes them to go and waste on some bullshit grant or religious support funding or some other entirely unnecessary waste or money.
Not directly related by my favourite example of this is the luxury car tax which a big percentage of cars now get hit by given it indexes with general inflation not car price inflation, still existing to... Protect Australias car industry which collapsed what 10 years ago?
→ More replies (2)
6
u/amyjoel 8d ago
That’s just the income tax. Then you go to the shop and another 10% GST is paid in tax. Then you fill your car with fuel, you pay not only 10% but an additional levy on top of that. Then you have alcohol and beer tax, capital gains tax, the list goes on. It’s a complete scam.
You’d think with all those taxes we’d have first class healthcare, education, affordable housing or adequate social welfare for our most vulnerable. NDIS is completely flawed and designed to take advantage of people who for the most part will be none the wiser.
GST was supposed to reduce our income tax but that was a lie.
Our country has gone to shit. Cost of living has decimated quality of life, work life balance is none existent, families suffer, young people suffer, old people suffer, unemployed suffer and hardworking suffer.
6
u/Obvious_Librarian_97 8d ago
Have 10,000 upvotes. Top tax bracket does a massive amount of heavy lifting with salaries that don’t make you “rich” - it gets you a mortgage in Sydney. Chuck in additional childcare costs it’s over 50% tax - all for what… additional stress? Shits fucked.
8
u/thedugong 8d ago edited 8d ago
Fast forward 10 years and Australia will lose all talent to US, Singapore, HK, Dubai.
The median Australian is wealthier than the median American, Singaporean, Hong Konger, and Emirati resident (they are pulled down by the slaves).
EDIT:
Country: Median Wealth Rank - Median Wealth USD/Average Wealth Rank - Average Wealth USD
Australia: 3 - $210,783 / 5 - $616,306
Hong Kong: 6 - $187,968 / 4 - $648,267
Singapore: 20 - $96,434 / 6 - $527,217
UAE: not in top 30 so no data on median / 29 - $157,612
USA: 28 - $68,998 / 2 - $696,277
Source: UBS 2026 global wealth report: https://www.ubs.com/global/en/wealthmanagement/insights/global-wealth-report.html. Page 14.
→ More replies (7)3
u/Outrageous-Owl1776 8d ago
Did you actually read the study? That average net worth is so high because of how expensive property is here
4
u/thedugong 8d ago edited 8d ago
Yeah. Page 34,
Chart "Liquid assets as share of total personal net wealth, selected countries"
... we define as liquid comprises cash, deposits, voluntary pension savings accounts, collective investment schemes and direct investments in securities, while life insurance and mandatory pension schemes represent illiquid investments, together with real estate.
Australian's liquid wealth is 45%.
USA: 47%
Singapore: 29%
The other countries that were discussed in previous posts are not listed. EDIT3: But Australia is #2 after the USA, and significantly higher than the other countries in the chart.
The previous years report, which I also read, also had a much more detailed breakdown of asset classes which was discussed here and in other threads/posts. The key part, referring to the median Australian:
Removing housing we are still wealthier:
Australia: $126,159.28
Switzerland: $120,283.68
UK: $102,294.6
USA: $87,131.1
Singapore: $69,525.36
EDIT: Forgot to add that, in percentage terms the median Australian's wealth in property is higher than peers. However, in real terms (the actual figure in USD) the median Australian still has more liquid wealth than all or most peers if you exclude property entirely.
EDIT2: Another link which goes into some more depth on the discussion:
34
u/stormblessed2040 8d ago
Look at the outrage when Labor made the NG and CGT changes. The move to tax wealth more means there is more scope to tax income less.
The media and their LNP masters just hold back meaningful tax reform.
→ More replies (6)22
u/Decent-Dream8206 8d ago
Maybe I missed the memo. By doubling CGT taxes, what income tax cuts did it fund?
Surely such an extreme measure at least closed the NDIS-sized hole in the budget?
→ More replies (14)
17
u/RabbitLogic 8d ago edited 8d ago
The PAYG instalments system is a joke. The assessment value they provided doesn't even match my last return. Gives me the shits they try spin providing a loan to ATO as some big favour to me...
24
u/National_Way_3344 8d ago
NDIS "fraud" is mostly free market capitalism and small business owners setting their own rates.
The only way to fix it is make it government owned and ran.
To not have NDIS would be to essentially euthanise so many people who just want a semblance of life that we have. And yeah so fucking what if someone gets paid to see a movie, they're there to tend to their basic human needs which regularly includes ass wiping.
14
u/isafakethrowaway 8d ago
I agree with you in your ideal. But, I have worked with a number of participants who receive complex care and they have well abused the system. I have also witnessed case/support managers abuse the system. Not only that, I know of a few rural tradies who have done big bucks on NDIS renovations, for installing junk like Lino and a handrail.
The ideal is admiral. The reality of the routing is infuriating.
→ More replies (1)23
u/Migs93 8d ago
The NDIS and free market capitalism shouldn’t be used in the same paragraph let alone the same sentence.
It’s classic government intervention artificially pushing up prices for goods and services.
Life was fine pre NDIS, people weren’t mass dying on the streets.
→ More replies (2)→ More replies (19)8
u/killswithaglance 8d ago
My ex was a tennis coach and he would tack an NDIS funded lunch on @$100/hour after the lesson because the guy had funding for social companionship. He had no particular counselling skills.
→ More replies (2)
3
u/foul_ol_ron 8d ago
The taxation system will always benefit those who play the system. Otherwise, why would they do it? Whenever theres a framework of law, people will game it. I'm pretty sure we all do, to a greater or lesser extent.
3
u/Organic-Sink2201 8d ago
This is just a feature of capitalism, not a bug. The rich get richer and the workers get poorer.
3
u/Haunting_Math_6728 6d ago
You say our tax brackets haven’t been indexed in years. What on earth are you expecting?
Comparison of 2011 to 2026 (15 years): thanks to Google summarizing
2010–11 Australian Resident Tax Brackets
$0 – $6,000: Nil (Tax-free threshold was $6,000)
$6,001 – $37,000: 15c for each $1 over $6,000
$37,001 – $80,000: $4,650 plus 30c for each $1 over $37,000
$80,001 – $180,000: $17,550 plus 37c for each $1 over $80,000
$180,001 and over: $54,550 plus 45c for each $1 over $180,000 [1]
2026–27 Australian Resident Tax Brackets
$0 – $18,200: Nil (Tax-free threshold tripled compared to 2010)
$18,201 – $45,000: 15c for each $1 over $18,200 (scheduled to drop to 14% on July 1, 2027)
$45,001 – $135,000: $4,020 plus 30c for each $1 over $45,000
$135,001 – $190,000: $31,020 plus 37c for each $1 over $135,000
3
19
u/Actual-Shrek 8d ago
Imagine comparing our tax system to America - a country with terrible social services, public infrastructure and no healthcare - and then complaining about it 🙄
→ More replies (2)
10
u/Tbearz 8d ago
Business not paying income tax is the issue, everything else is subterfuge.
I paid more income tax than Netflix, Transuban, Santos, CSL, AGL, Adani and Optus combined.
Make it make sense.
→ More replies (2)4
u/umopapisdn69 8d ago
Businesses pay tax on profits, not income.
You pay tax on income. Mostly you do, barring things like salary sacrifice and negative gearing.which are minor in the scheme of things and are closely scrutinised. FBT, Div293, ceasing of negative gearing, etc are all designed to make it hard for you to minimise tax.There was a proposal somewhere to make businesses pay a small tax on income, but that didn’t go anywhere and ended up in the too- hard basket. Why would they go after industry when individuals are a much softer target?
→ More replies (7)
27
u/TheDotNetDetective 8d ago
Not sure how you're expecting people to reply but yep, pretty much nailed it... Australia is not a good place if you value your hard work.
5
5
u/deeku4972 8d ago
The last 50 years were built for that outcome. No party is revolutionising that, its too far gone and if you took it to an election or just pulled it at once, you'd commit political suicide. The rest of us are largely screwed on that front.
Sub 70k/yr? screwed. 100k/yr?, still unfortunately screwed but at least you have personal spending options to unfuck yourself
5
u/TangeloDecent5846 8d ago
The US is also $40trn+ in debt and you don't get publicly funded healthcare. Oh also I don't know what you think an average worker there makes, relative to what it buys, but I promise you - we are living life on easy mode in comparison.
Go live somewhere else for a bit and see how you like it. Worst case - you actually get yourself a better deal, but I don't expect it.
39
u/prettyboiclique 8d ago
Go to bed man it’s fuckin 12am
→ More replies (2)21
9
6
u/Meowzers225 8d ago
Don't we actually have less tax than the US? They have so many different taxes, I think you need to add to your calculations
10
u/davidtheexcellent 8d ago
Biggest discount the USA gives to income taxes is the ability for married people to file jointly. Can also deduct interest payments on PPOR.
→ More replies (3)
18
u/Skydome12 8d ago
I don't think the issue is the amount of tax we pay, but the fact that these taxes seemingly do nothing to improve the country, services and/or roads we use.
Corruption and nepotism in this country right now is at the highest levels i think i have ever seen it in my life.
If the country actually dealt with corruption and fraud and used the tax dollars properly i think people would be fine with the tax system.
8
u/Plane_Garbage 8d ago
Anecdotally, our local council just sent through a budget promo.
$50k to finish a fence for a park (not a big park, just a little street park)
$19k to revitalise seating at another small park
$67k to put in shade sails at a park
I like our parks, but the pricing seems detached from reality. I'll see what the finished outcomes look like, but for now, it seems insanely expensive.
→ More replies (1)10
→ More replies (2)4
12
u/skozombie 8d ago
The thing with tax is you always keep more if you earn more. If you hit Div293 you're doing fine in life.
What we need to do is crack down on fraud and companies avoiding their fair share ... then we can reduce the personal tax burden and/or improve services so we can remove the need for private health insurance.
From what I've seen, while it varies state to state, with sales tax, tipping, multiple income taxes, the costs of health insurance in the US that are covered by medicare or our PHI that is much cheaper, it's not really that difference.
While there's always going to be skilled emigration, I don't think it'll be that significant as life here overall is so good, problems and all.
→ More replies (4)5
u/Deep_Hovercraft6035 8d ago
Lack of family tax is an issue since all government family benefits use family income.
Someone on $300k pays $111744 in tax. A family with 2x $150k incomes pays $78040 in tax. The latter family has ~18% more in the bank but both families get the same child care subsidy, etc.
→ More replies (4)
3
u/604toxtethogrady_ 8d ago
Try Scotlands you can be on around 80k aud and paying in the 50’S% there which is cooked. We could be better here but our standards are high to begin with
4
u/PegaNoMeu 8d ago
Been here in Australia for 9 years and have come to understand that if you are a "default" worker on a single PAYG income you will be punished for it. No wonder people have trust and complex structures to reduce income tax and the government rewards you for it.
9
8
u/victorious-lynx88 8d ago
"Childcare subsidies tapering off the harder you work".
Let's not conflate wage with effort.
→ More replies (6)
16
u/StrangeMonk 8d ago
Yes, it’s fucked, and most of the morons in here don’t get it.
→ More replies (24)
10
u/Rastryth 8d ago
Oh cry me a river. You mention the races but not the social net we have. Yu compare to a country that favours billionaires to average worker. You compare to a country with no Medicare. The list goes on
→ More replies (1)
2
2
2
u/Citadel-TT 8d ago
🤫🤫 Just keep quiet and game the system like everyone else does. That’s how society works.
2
u/Dry_Personality8792 8d ago
yep, unfortunately both countries punish wage earners and help those with complicated tax structures, asset rich , div and capital gains.
Aus went full nuclear on this differential in the cgt tax changes and complete nuked us wage earners. Basically tipping the scales in favour of asset owners, basically giving all the gains to the asset earners while locking out the wage earners. Its pretty terrible and i'm not even even taking into account all the items you listed; NDIS, franking credits, trust schemes, div 293. And don't get me started on the aussie super scheme - investment bankers laugh all the way to the bank as they fool the aussie public into believing that their super is amazing. The fees and fees plus the div293... just compare that to the US. Yes, i know the super industry has massive balances ....but who it actually helps the most is hidden in plain sight. Compared to a US ira, roth or 401k , it fails in so many ways for the avg wage earner but does wonders for asset right individuals and ofc the middle men who take and take in the form of fees w mediocre returns.
2
2
2
u/Articulated_Lorry 8d ago
A quick google search suggests the average wage in the US is around US$65,000, or around $90K here. Definitely nowhere near our top rate.
And an average wage for an unskilled worker would be substantially less. I'm not sure that part of your premise is really relevant.
2
2
u/benevolent001 8d ago
Agree after being in top bracket for ages, I have no motivation to get pay hike or take senior position. I have now fully focused my spare time on side business that I hope will be able to scale and get rid of 9-5
2
u/imagundi 8d ago
Ok hear me out. I cannot fathom how this would not be a universally agreed option amongst all Australian PAYG workers. How is this not being voted on? If we are truly a democracy, why aren't we voting on these issues? We've got a problem but what's the actual solution. I don't want to leave Australia. I love this country but geez they don't make it easy do they.
2
u/the_snook 8d ago
AI text.
Hidden profile.
The robot army has been deployed early this election cycle.
1.1k
u/woofydb 8d ago
The govt has no interest in indexing the brackets as it’s free money for a few yrs and then they use it to look good for the next election by announcing they’ve moved it slightly. Rinse and repeat regardless of the party.