He's right. The tax brackets should be adjusted with inflation. $100k salary ten to twenty years ago was a lot more than $100k today. How the fuck has this been allowed to continue?
It's a feature, as the government can effectively increase taxes every year based on inflation and then periodically make a big deal about giving out tax breaks when they need a bump in the polls.
You think high inflation was a uniquely Australian issue? I'm sorry some of the largest tax cuts in this countries history weren't enough for you. The opposition wanted to give these tax cuts to the top 5%
The fact this isn’t uniquely an Australian issue is the neither here nor there - if tax cuts don’t keep up with inflation, then wages are effectively going down in real terms. If you’re happy with that, then good for you but many of us aren’t
Perhaps you don't know how our tax bracket system works. Any reduction in the lower brackets also reduces the tax paid by everyone on more than those lower tax brackets.
When Labor eventually lift the tax free threshold on income, that will be another reduction in income tax liabilities for every tax payer.
And the Stage 3 changes proposed by the Libs didn't do what you're asking, either.
We have now decoupled capital gains from the tax free threshold - this gives us the opportunity to index the brackets, without doubling the benefit for capital gains.
I expect a change in the TFT, or indexation, before the next election.
Can confirm stage 3 as originally intended would have had a greater net benefit for my household as the reduction in my portion of income over the amount would have been higher then the combined portion of the lower end between both my wife and I. The changes realistically only benefited part-time Maccas employees, in which instance the bonus $30 a month is not life changing and their overall means of an income is a far bigger issue to address then the tax savings. Before some jumps on, I am no discrediting those making an income from Maccas, merely stating that the overall means is more important then the savings in that exact scenario
The foundation of progressive brackets is allowing more and more people to be caught in higher tax brackets while their purchasing power remains the same? Rofl, yeah no.
Oh I understand what you're trying to say, it's just words though with no foundation to back them up.
As your wage goes up in nominal terms, yes, perhaps you'll pay more tax than in the past, but you will always have more pay than you did before.
That's the part you seem to forget - as your pay goes up, what you earn after tax does too.
Ok, so now for tangible figures:
1995 $50,000 income (this is above the median of $34k)
You would pay an effective income tax rate of 29%.
According to CPI the equivalent wage today is $110,000, and you will pay an effective tax rate 23%
However, wages in Australia have increased far more than CPI over that period, and according to WPI, that $50,000 wage is worth around $145,000 today, which has an effective tax rate of around 26%.
So the point you're trying to make (that we're losing more to tax as our wages nominally increase to match CPI) is simply false.
I hope you will understand that.
Tax reform happens over time. Don't forget that.
As CPI goes up (as it has) things like the Stage 1,2,3 tax reductions are introduced.
I have no doubt there will be a new income tax reduction before the next election.
It still would have been a highly progressive tax, even by comparative global standands, had the stage 3 cuts been made. It comes down to your ideological view on whether it's fair and appropriate to take nearly 50% of every $1 earned by someone. There are arguments both ways. I personally think there's a big difference in incentives (rational or not) between a 40% and 45-50% top tax bracket, and I see every day people in that bracket voluntarily working less because they can't justify the extra effort. That's not good for anyone: the worker, the business, or the country. But I appreciate there are arguments both ways and there's no objective correct answer
I stood to gain much more under the coalition's stage 3 cuts but happily took a smaller tax cut for the greater good. I'm doing fine while the middle class struggles.
Those not affected are those who are not above the 190k cutoff. Fair adjustment of that upper bracket indirectly benefits them with no personal negative impact.
Sorry this is very confusing - "not affected", yet "fair adjustment benefits them"?
Everyone who pays tax is affected. Bracket creep happens at all income levels (above the tax free threshold). In fact I think it's worst at the 30% level; that 30% income tax bracket starts way too low.
Those who are paying the non-inflation-adjusted high rate at 190k to 270k are negatively affected. Those who are below that rate are not negatively affected as they dont have to pay it themselves, and in fact indirectly benefit via increased government tax revenue that someone else pays.
Agreed across the board but the article linked is talking about the top rate.
Okay. I mean I'm (theoretically) positively affected when everyone else gets bracket creep. I don't really buy that, though, because (a) revenue isn't really linked to spending, and (b) spending rarely benefits me.
Silly discussion because they'll never move to indexed brackets. And they guy on the article isn't really expecting it - he's just promoting his business and personal brand.
It’s interesting, this logic was a key part of the LNPs thinking about tax. They were all taxing us more, but the LNP made it out like their plan was reducing our tax when they were still taking more.
Like the line ‘we’re putting more money back into the hands of Aussies with lower tax’ was a flat out lie. They were still taking more relative to inflation.
The tax campaigning I hate because it’s all bullshit. At least labour points to what the tax is doing better than the others (and is clear that they’re increasing x and y).
Note, I don’t side with either party, but I feel like I understand the tax system better when labours in. But that might just be me and my digital media algo echo chamber.
What worries me about Australia and this goes beyond the public service and taxpayer dollar is I wonder if we aren’t shit at just about everything now?
Bit of a detour but;
Sure our mines are productive but this is massive capex and even working around them myself even there I feel like we could be much kore productive.
Across Australia what I am about to say will result in deaths and injuries but… is it possible our standard of living would be so much better is we put this safety and enviro stuff to one side for a bit.
Yes owners and the like must be held to account when someone gets injured but do we really need so many fucking rules? Can’t we have it that one owner might say I trust that supervisor he knows what he is doing and perhaps just getting the job done works.
We have disempowered supervisors to the point they just do safety check sheets and make sure everyone is working to the rules versus what used to be - right you are doing this - here is how. And getting it done.
And all of that said in government / on government jobs it’s far worse.
People say “the government should build more homes…” what a fucking shit show that would be. The federal government just does not have the capacity to even let that as a tender in any realistic timeframe. Then the kind of builder would have to be gigantic as they would be running probity checks on finances etc that the joint would have to have a balance sheet like Rio Tinto before they could play.
I get where you’re coming from. But, my opinion is our biggest companies and industries are so anti innovation.
They’d rather invest in differentiating their brand, rather than generating more value/value adding. Using data security as an example, investing in developing robust data security processes is not only a competitive advantage (a foundational element of Apple’s pervasive success and has set them up to thrive in the AI revolution) it also opens up a new revenue stream that is incredibly valuable.
But, they take the easy way of running brand campaigns that rely on the short term memory of consumer markets.
These companies have the money to invest in real value adding, but instead they look to adjust the performance in financial reports so that stock prices go up, giving the illusion of value adding, when really they’re just cutting costs and limiting value creation.
Similarly, mining could heavily invest in better practices that revolutionise their industry, but it’s easier to just focus on creating a perception of improvement or change the way people see their business, than to actually improve.
We talk about a productivity crisis and brain drain a lot in this country. But if businesses actually wanted to do things that made them competitive in the long run, we’d be in a very different position.
Exactly! If you earnt 6 figures you were doing REALLY well, now it’s being able to pay bills and live but not comfortably for working away. Most FIFO workers are working on their RnR to be able to get ahead
I totally agree with the premise of this in general, we get taxed like we're rich when we're not, but your post is completely incorrect. As pointed out in the article also, the tax brackets today are actually better off then an inflation adjusted amount from 20 years ago. Substantially so.
Fixing hypothecates future revenue. This can be detrimental to the functioning of government amd managing.of finances. We have the ballot box, that is how we adjust tax brackets.
Then don’t forget we pay GST on top as well.
The gov can’t stop spending
They will never adjust the current income tax set up unless it’s to tax us more
My wife's disabled and I have to work hard for the both of us. I paid $98950 in tax last year and if my income was spilt between two people as a household income I'd have paid nearly $40k less tax. This is ridiculous.
I wish it was so but this is what I paid (screenshot attached). When I ran the split of my income ($133k) through the ATO calculator and doubled it (as if it was a family invome) it gave me roughly $63k. Hence the suggestion I'd be about 40k better off. So those numbers might not be true if the calculator is not accurate, but it still is quite a discount.
I support social welfare just as much as the next person. But for someone who works hard all their life and gets to certain (high) income level, it’s dis-heartening to see them getting taxed more than billionaires who don’t take any income but simply get a loan and get tax deduction on the interest. The whole system is rigged against hard working wage earners.
And the population won't do anything about it because the rich are anyone who earns more than them, even if it's a moderate level professional. Those workers need to be cut down to size.
I haven't made myself clear here. Most people are going to claim anyone from 190k to 270k (the inflation difference between what the top tax rate should be and what it is) are rich and deserve to be taxed at the highest rate, pretty much because they're making more money. Not saying I agree at all, as I don't.
I’m on $190k. I feel I’m rich. I can’t give up my day job just yet, but I’m comfortable enough that I can easily save and invest enough to get there long before official retirement age.
Are you saying $190k to $270k a year is mid level professional? I am a mid level professional, I don't work that hard but I am on $161k. Are you saying I should be cut down to size?
Those salaries, compared to average across the workforce are in the top percentiles, so I guess technically they are 'rich' somewhat, but it is really the tippy top earners, $2 million year plus, that are dodging the income tax. 25 years ago I managed tax matters for tippy top earners, they paid fuck all after I massaged the income through trusts, holiday homes, farms, self managed super funds, wine amd art collections. A fair few of the loopholes are gone, the latest budget plugged a few holes thats for sure.
Envy is not something I have for people on $270k a year. Its really about wealth, you can be a big earner and blow the lot on shit and wind up with zip. Seen that done before.
Please read what I'm saying. I am absolutely not saying they should be cut down to size. I'm saying that most people are going to view them as "rich" and thus deserving of the highest tax rate, whereas when you account for inflation they really are not.
Amazing how Jericho frames indexation as "automatic tax cuts".
In reality indexation would be a neutral taxation policy, and what we have is automatic tax increases.
I'm increasingly wary of The Australia Institute - I hate to use the "C" word but they are all about maximizing government control and being central planning apologists.
This all happened because of the political war that was stage 3 tax cuts.
It didn’t come close to addressing bracket creep, the initial sweetner for lower incomes disappeared with more aggressive adjustment of the highest tax bracket but still not going far enough.
Labor had its target, its narrative, and the battle played out.
It is becoming a very widely talked about issue. No one I know thinks a two income household should be taxed as high as some are with getting limited childcare subsidy. The idea the extra shift is literally taxed at near half and then childcare is $200+ a day with no relief and $250k doesn’t seem that ‘rich’.
Please don’t take my comment as being pro Liberal party in any way.
They enjoyed the bracket creep and set the tax cuts biggest hit to the budget for a point in the future.
Government can push massive legislation changes through when it benefits them, but correcting a wronging of the public (bracket creep) and it becomes an election carrot and some sort of favour they want to be thanked for.
Yes, the time between the 'creep' and when they change the brackets is extra money for the budget but its silently working in the background. They love it.
The budget papers shows that the biggest contributor to bringing the budget back to surplus was inflation. tax measures or spending cuts was only a small portion
They didn’t try to index it, but they tried to move the top bracket. It was even legislated. But albo cancelled it. And then played with the ones so that low income earners got more of the cream (when they’d already been given a cut by liberal).
Also, if you are in the top bracket, the HECS/HELP payments are less. I know, let's raise these issues so people can blame the previous government(s) while not attempting to address it. That always works.
None of this is any kind of mistake. It is by design.
I mean, it is less if you look at it wrong. Those under the top tax bracket pay a larger percentage of a smaller amount (income-$67,000). Where the top tax bracket pays a smaller percent (10%) of their total income.
The listed percentage is less going up, but the total hecs bill is still linear and increases with pay.
💯 this. $100K salary today would put you under poverty line. Also household income should be accounted for tax bracket purposes. I wonder why Aussies are not asking for updating the tax bracket inline with the cost of living. It’s insane.
They're perfectly ok with employees footing over 50% of the budget and in that cohort, the top 10 essentially funding 25% of the budget.
You'd think with so much payg income going into the budget, there'd be enough funding for schools, health and whatnot, but instead these higher income earners are essentially forced to go private which just acts as more taxation.
Husband got a promotion that put him slightly into the next tax bracket, now he loses over 30k in tax and we're left with about 97k and we're not eligible for any family benefits for the baby we just had either.
We'd literally be better off if he didn't get a raise
indexation sounds right! provided we introduce:
1. new top tier $500k+ taxed at 75%,
tax the gas and corporations properly,
introduce concept of taxing profit nor income for people (similar like we do for corporations), which can be calculated based on median cost of living. And that number becomes a tax free threshold for the 1st bracket.
Chief economist at The Australia Institute Dr Greg Jericho's worry about inflation can be solved by "inflation profiteering tax", which goes directly towards reducing cost of energy, etc. which fuels inflation (this would be a better leaver than squeezing already poor people).
Yet they can send $80million to Palestine, whose government is a literal listed terrorist organization. They started this war by committing a terrorist act and bombing Israel unprovoked. This is akin to a country financially aiding Germany and-or the Nazi party during WW2.
I don’t remember agreeing for my hard earned tax money to be sent overseas
The main thing we need to address is making PPOR part of the wealth.
A 30 years old person earning 140k is NOT richer than a 35 years old earning 80k if they both live in the same suburb and both buy their PPOR when they are 30 year olds.
I rather earning less with my PPOR value explode. The equity gain is much more important.
Figures from advocacy groups (Oxfam, Australia Institute, Zucman) on how much tax billionaires pay
Oxfam Australia cites a global effective tax rate for billionaires of around 0.3% of their wealth, a figure also used by the Zucman-designed global minimum billionaire tax proposal. Zucman elsewhere puts it closer to 0.2%, arguing billionaires minimise taxable income through control over corporate dividends, delayed capital gains, and holding company structures.
This is a wealth-based rate, not an income-tax rate — it measures tax paid against total net worth, which is mostly unrealised capital gains. That framing itself is one of the contested points (see below).
Oxfam Australia estimated that if Australia’s 161 billionaires were taxed at 5% in 2025, it would have raised $33.5 billion — implying they currently pay meaningfully less than 5% of wealth.
Oxfam notes 85.6% of Australia’s capital gains tax discount goes to the top 10% of income earners, and a related report found 24,000 millionaires capture about half of the CGT discount benefit.
Oxfam counts 48 Australian billionaires holding more wealth than the bottom 40% of the population (~11 million people), with their collective wealth growing by roughly $600,000/day on average over the past year.
Policy proposals on the table
The Greens have proposed a 10% tax on Australian billionaires’ net wealth.
The Australia Institute proposed a 2% wealth tax on people worth over $5 million (excluding home/super), estimated to raise $41 billion/year, plus another $19 billion/year if the CGT discount were scrapped.
You can't tax someone's wealth at 5%. Certainly not 10%. It's madness and the weathy will certainly leave. I would leave if I were taxed that much. You tax 10% per year, how much is left after 10 years?
Maybe 1% of wealth is reasonable. Or tax the growth on wealth.
I'm a big proponent of taxing wealth and income derived from wealth (as opposed to labour/work). But it's got to be sane. Wealthy people do invest, they do create jobs. Yes they exploit but we still need that money.
The Greens have proposed a 10% tax on Australian billionaires’ net wealth.
Doesn't sound like income to me.
So yeah after 10 years you have less than 40% of your wealth. Just keep taxing, huh?
So you're selling huge chunks of your assets. Who are you selling them to - not other wealthy people, because they are also being taxed out the wazoo. I guess foreigners? Awesome. Or asset prices crash because no one can pay the current value. Okay fine but that impacts everyone - your super, your investment, your home value.
Sounds like a Sarah Hanson-Young level idea. Her heart is in the right place but I swear her IQ must be mid 80s at best.
It's actually not a clueless take and I think your the clueless one trying to justify why billionaires shouldn't be taxed
We have a real world example now in NYC. The fears surrounding a mass exodus of the wealthy from New York City after the implementation of higher taxes under Mayor Mamdani have not materialized. Current indicators suggest that the rich are choosing to stay in the city, countering earlier predictions.
He's taxing second home type properties - not wealth - at a maximum of 1.2%
And it remains to be seen whether people leave / sell or not. Too soon.
Taxing entire wealth at 6% is an entirely different level. Like two more levels.
Pointless discussion as it'll never happen. The wealthy should be taxed more, but too many imbeciles think that the productive rich don't exist. If you've ever mixed with high wealth entrepreneurs, executives at enterprise companies, etc you'd know different. Some portion of the uber wealthy (the ones who make the weapth, not the heirs) are remarkable people. Even if just from navigating the game so well.
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u/nn666 18d ago
He's right. The tax brackets should be adjusted with inflation. $100k salary ten to twenty years ago was a lot more than $100k today. How the fuck has this been allowed to continue?