Australian Federal Income Tax Brackets

This is for residents in 2005 and does not include the Medicare Levy which is another 1.5%;

• $0-$6000 : Nil
• $6,001-$21,600 : 17c for each $1 over $6,000
• $21,601-$58,000 : $2,652 plus 30c for each $1 over $21,600
• $58,001-$70,000 : $13,572 plus 42c for each $1 over $58,000
• Over $70,000 : $18,612 plus 47c for each $1 over $70,000

Non residents pay 29c for every dollar from $0-$21,600. The remaining upper brackets are the same as for residents. This is blatantly unfair and inequitable for non-residents. Many of the Australian Diaspora find partners overseas who return with them when they come back home. Once again the Diaspora finds itself discriminated against by government policies.

I think this table is the one that breaks out the amount of people in different brackets. The table is for 2002. They don't match the tax brackets either, so I have tried to approximate the tax brackets and the information in the table to get comparable sums to the 2005 tax brackets. From that table, the tax brackets approximately netted;

• $0-$9,824 : ~ $132,000,000
• $9,824-$20,902 : $2,562,000,000 (sum $2694,000,000)
• $20,902-$58,614 : $40,298,000,000 (sum $42,992,000,000)
• $58,614-$67,362 : $ 7,512,000,000 (sum $50,504,000,000)
• Over $67,362 : $36,265,000,000 (sum $86,769,000,000)

That is a very heterogeneous outcome. Two tax brackets are doing the lion share of funding government.

This suggests that the progressive tax system isn't as equitable in sharing the burden as it is presumed to be.

US Federal Income Tax Brackets

This is the American federal tax income brackets for 2004. These are for a single unmarried person. This is in USD, so add about twenty-two percent more at the current exchange rates to convert it to AUD;

• $0 to $7,150 : 10c in the dollar
• $7,151 to $29,050 : 15c in the dollar
• $29,051 to $70,350 : 25c in the dollar
• $70,351 to $146,750 : 28c in the dollar
• $146,751 to $319,100 : 33c in the dollar
• $319,101 and above : 35c in the dollar

The US Federal government does not leverage any consumption taxes, such as a GST. Many US states have sales taxes while others have no income tax.

British Income Tax Brackets

The British tax brackets for 2005 are in pounds. A pound is about 2.4 Australian dollars.

• 0 to 4,745 ($11,678 AUD) : Nil
• 4,745 - 6,765 ($16,650 AUD) : 10p in the pound
• 6,765 - 36,145 ($88,961 AUD) : 22p in the pound
• over 36,145 : 40p in the pound

The British tax brackets have a very large and wide bracket which has a 22% tax rate.

Indonesian Income Tax Brackets

The only information I could find on Indonesia's tax rate was for 2001, and from a US embassy .

• 0 to 25 million IPD ($3,330 AUD) : 5%
• 25 million to 50 million IPD ($6,660 AUD) : 10%
• 50 million to 100 million IPD ($13,322 AUD): 15%
• 100 million to 200 million IPD ($26,644 AUD) : 25%
• over 200 million IPD : 35%

I could not find information on tax brackets for Japan, Germany, Sweden and South Korea. In 2002, China had nine tax brackets with tax rates progressing from 5% to 45%. It appears common for nations to have a mix of income tax and consumption taxes. The goods and services tax is usually between 10% and 15%.

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The Australian tax brackets are skewed. They are designed to extract a single tax rate of thirty cents in the dollar from nearly sixty-three per cent of the population. Those that earn $20,000 now rise quickly into that tax bracket and then remain there. With salary inflation it also appears that the forty-two cents in the dollar is set to catch a large number of Australians earning in the $40,000 to $50,000 range.

Salary earners in the range $20,000 to $40,000 need to be removed from the 30% tax bracket. The 42% tax bracket also need to be raised higher so bracket creep doesnt catch a large number of income earners.

Graphs On Tax Per Income Bracket

The data was taken from the Taxation Statistics 2002-03. These graphs were constructed from the data in Table 5, Part A: Tax Office calculated and miscellaneous items [XLS warning]. The personal tax payable includes the Medicare Levy and other taxes but which don't appear to include capital gains.

From the data it seems to count only 8.6 million tax payers. Is this a real number?

The first graph shows the number of taxpayers per income bracket. The curve rises near the 20K-30K before dipping and rising at 40K-50K. The largest tax accruing tax bracket is between $21,601 and $58,000 . It is designed to catch all these people.

From the number of taxpayers, the 21K-58K bracket approximately contains 63% of taxpayers. This is inequitable and unprogressive in my opinion.

The amount of tax payable is not evenly distributed either. The area to note is the amount of tax those earning between 20K and 40K pay. I would say these folk need tax relief and the 30% tax bracket needs to be raised to the 40K level.

The current tax system is set up to tax at 42% in the small range 58K - 70K. Those earning 40K-50K are rapidly inflating toward that bracket. Another example of bracket creep.

Those that earnt more than $100,000 werent included on the graph as their individual contributions were high and hide the difference between income earners in the 20K - 80K range.

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