Warning For Labor On Gearing

Almost two-thirds of all investors who negatively gear property are on taxable incomes of less than $80,000 a year, according to new ATO data that suggests Labor’s policy to slash the widely used practice would hit lower-income earners with only one property.

Higher-income earners bore a larger share of the broader tax burden, according to the most recent ATO numbers, with 17% of the $186 billion collected in personal income tax paid by the top 1% of taxpayers. At the same time, 3.6 million households effectively pay no tax because of the increasing size of government handouts they are receiving.

Treasury analysis of tax records confirm the trend toward families increasingly shouldering the lion’s share, with workers on salaries of between $80,001 and $180,000 contributing 40% of the annual personal income tax take, despite representing less than a quarter of individual taxpayers.

With income tax looming as a major political issue ahead of the May 8 budget and next federal election, an OECD report confirms that Australia’s personal income tax take, as a share of total tax revenue, is the second highest in OECD member countries, after only Denmark.