In his article on ABC’s The Drum, CPD researcher Chris Stone suggests a different way of thinking about the budget, and makes important predictions about budget night media and political commentary which he claims is driving a serious and repeated problem: “A national economy is a lot more like the Titanic than a speedboat; significant changes in direction take a long time. This means that if we think there’s an economic iceberg 30 years ahead, the time to start turning the wheel is now“. Chris goes on to give three examples of issues that probably won’t get a lot of air time on 8 May, but which really should. You can read the article on ABC’s The Drum here.
A number of comments on The Drum’s website raised questions about the assertion that Australians pay less tax than those in the US. Chris responds as follows:
The short answer to this is that the US has a large “social security tax” whereas Australia doesn’t, and so the total amount of tax that Australians pay on their wages is less.
The longer answer is that comparing tax internationally is complex, because every country has a different mix of multiple taxes that apply to wages. For this reason I’m basing my assertion on data from the OECD, which produces some useful reports comparing national taxation. This report gives a good understanding of our position: http://bit.ly/JcKpmc
Because the percent of wage taxes in all OECD countries depends on income and family circumstances, it gives comparative statistics for a number of hypothetical tax payers. Across all these, Australia is in the bottom 8 out of 34 OECD countries in terms of percentage of tax imposed on wages. And in every hypothetical we rank lower than the US.
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