Key ministers including Joe Hockey and Finance Minister Mathias Cormann have argued that a tax increase was one of the few ways to ensure those on high incomes bore some of the pain from the budget.
What Joe Hockey and Mathias Cormann aren’t saying is that high income Australians already bear much of the burden of financing Australia’s excessive public spending.
For several years I have been collecting data from the ATO and graphing the share of the net income tax paid by the top 25% on net income tax payers, the middle 50% and the bottom 25%. The latest ATO data came out last week. The graph is below – as can be seen the top 25% of income earners (those taxpayers with an income above $75,650) paid 67.4% of all net income tax in the 2011-12 financial year. Mind you, it isn’t all bad news, the top 25% share is down from 67.9% the year before.
Update: Peter Costello tells it:
The Liberal Party could be caught out campaigning for a tax rise that will never pass into law. All on the grounds it has to be seen to do something to the middle and upper-middle wage earners who voted for it.
When Labor was handing out money like confetti to “stimulate” the economy with pension bonuses, tax bonuses, back to school bonuses, it wasn’t going to those people. They just kept working and paying their taxes and hoping for a better Government. Very few would have expected a Coalition Government to propose higher income taxes than the previous Labor government.