Wealthy Australia Face Lower Tax Rates
October 8, 2015 Taxation in Australia
CANBERRA – Wealthy Australian families pay less tax then low-income families, due to the fact that wealthy families are often retired and prefer to pay for GST-exempt items.
In a new report released on October 9th the Productivity Commission of Australia claimed that wealthy families pay a lower effective tax rate than poorer families.
Families with total assets worth up to AUD 150 thousand faced an effective total tax rate of approximately 18 percent, while families with total assets of between AUD 500 thousand and AUD 1 million paid a rate of 13.4 percent.
The reduction in the tax rate was attributed to the fact that a larger portion of individuals with high-valued assets are retired, and pay less income tax.
However, it was also noted that as a greater number of wealthy individuals and families come to retirement age, the total cost of supporting retirees will rise, while the burden of paying for superannuation costs will fall on to younger people.
It was also found that wealthy families pay less GST, as a portion of their incomes, as they are more likely to purchase GST-exempt items, such as private education and private healthcare.
Photo By: Nicki Mannix