Tuesday, June 05, 2018

Whiteford on progressive tax

A good article here by Peter Whiteford, looking at the question of how much tax the rich pay.

I liked this part in particular (my bold):
The most obvious reason why the top 1 per cent or 10 per cent pay a higher share of tax is that they receive a much higher share of taxable income. Tax Office figures show that in 2015–16 the highest 1 per cent of income taxpayers — just over 100,000 people earning $330,000 or more per year, which adds up to about $72 billion of taxable income, or an average of roughly $720,000 per taxpayer — paid 16.9 per cent of net tax but received 9.6 per cent of all taxable income. (After their income taxes, that 1 per cent of taxpayers still netted about 7.2 per cent of all after-tax income.)

So even if Australia had a completely flat tax — a single rate with no tax-free threshold — very high–income earners would still pay close to 10 per cent of all income taxes. They pay 16.0 per cent rather than 9.6 per cent because Australia has a progressive income tax scale: the rate of tax paid increases as the taxpayer’s income increases.
Puts all of the "but the rich pay too much tax" whiners into perspective.

Whiteford is like the perfect antidote to Sinclair Davidson, Adam Creighton, and David Leyonhjelm:  knowledgeable, fair, reasonable and always polite.


not trampis said...

yes he tried to put straight the ignoramuses at Catallay on various issues. He failed.
Mark Hill comes to mid as one as not understanding a wit of what Whiteford was talking about.

Steve said...

Yes, I remember him making an occasional appearance in comments at Catallaxy. But it's an audience that is unreceptive to messages not fitting their preconceptions, to put it mildly.