Tax Exodus: All Roads Lead to the Airport

As bracket creep pushes more Australians into the top tax rate of 37% for those earning over $120,000 (10–15% of taxpayers) and 45% plus the Medicare levy for those earning over $180,000 (3–5% of taxpayers), it’s only a matter of time before mobile Australians decide they no longer want to pour an ever-increasing share of their income into funding Albanese’s political priorities.

For those who can pack up and leave, here’s a quick global tour of destinations where you can park yourself between seeding and harvest to keep the taxman at bay.

Let’s start with the Caribbean. The Cayman Islands offer 0% income tax and 0% GST, but import duties of 27% make the cost of living steep. Monaco is another tax-free haven, with 0% income tax and a high 20% GST, but the glamorous local lifestyle might be worth the trade-off. The United Arab Emirates has 0% income tax up to $375,000, with 9% thereafter, and a modest 5% GST, though the temperatures are stifling during our winter.

Closer to home, Singapore caps income tax at 22% with a 8% GST, but skyrocketing housing costs, driven by Hong Kong exiles, are a downside. Panama levies 25% income tax and 7% GST, though it’s a lengthy journey from Australia. Meanwhile, Bulgaria boasts a flat 10% income tax and 20% GST, though proximity to Ukraine may add risk. My personal pick is Vanuatu, with 0% income tax, 0% corporate tax, 0% capital gains tax, and a modest 15% GST. The weather is balmy, and the locals speak English.

Take your pick—Asian, Middle Eastern, European, Caribbean, Central American, or Pacific options abound. For those keen to escape Australia’s tax burden, there’s a place for you, and more people are taking advantage of these havens rather than fund the ambitions of progressive politicians.

A History of Tax-Driven Exodus

Australia has a history of taxing people out of the country. In the 1970s, the highest marginal tax rate soared to 67%, kicking in at about three times the average income, thanks to Gough Whitlam’s economic policies. By the mid-1980s, the Hawke-Keating reforms reduced the top rate to 49% to stem the talent exodus and encourage longer working hours.

Under Howard and Costello, taxes fell further, hitting 47% in the early 2000s. Later, Morrison lowered it to 45%, and had the Coalition won the last election, their Stage 3 tax cuts would have reduced the top rate to 37% for incomes up to $200,000. Labor had promised to honour these cuts but abandoned them this year under Albanese and his Treasurer, despite earlier assurances:

"We will deliver responsible economic management and ensure Australians benefit from the tax relief already legislated. Our plan supports working families and creates a fairer tax system."

So much for credibility.

Global Comparisons

Australia’s top marginal tax rates aren’t the highest globally, but they’re burdensome. Sweden, Denmark, Japan, Finland, and France all exceed 55%, adopting economic models that Treasurer Jim Chalmers appears to admire.

Tax reduction should be a priority for any government. Margaret Thatcher slashed the UK’s top rate from 83% (or a mind-boggling 98% with the investment income surcharge) to 40% by the time she left office. Here in Australia, during the Menzies, Holt, and McMahon eras, the top tax rate ranged between 67% and 75%, though less than 1% of the population paid it—compared to 7.4% today.

This is why disruptors like Thatcher and Trump matter. During his presidency, Trump lowered the top US income tax rate from 39.6% to 37%, doubled standard deductions, and reduced corporate tax rates from 35% to 21%. His proposed Tax Cuts 2.0 promises to eliminate payroll taxes and reduce corporate tax further to 15%, funded by tariffs on imports.

Australia’s Corporate Tax Rates

Australia’s corporate tax rate sits at 25% for businesses with turnovers below $50 million, matching global averages, but rises to 30% for larger companies—putting us at the higher end of the scale. Compare this with:

• 21% in the US
• 25% in the UK, Germany, and France
• 28% in Italy
• 12.5% in Ireland, which attracts major corporations.

Meanwhile, 0% corporate tax havens include the Cayman Islands, Bermuda, the British Virgin Islands, and Jersey. Mauritius levies 15%, while Singapore sits at 17%.

What Needs to Change

With a forecast $13 billion surplus this year and $35 billion next, it’s time tax policy took centre stage. Reducing tax burdens is the simplest way to ease cost-of-living pressures and boost business growth.

When the government struggles to manage programs like the NDIS or casually writes off 20% of student debt for votes, it’s clear they don’t need more of our money. Instead, Australians need tax reform that rewards effort, attracts talent, and leaves more in the pockets of those who work for it