A super interesting interactive widget on the Sydney Morning Herald website lets you key in your gross income and see exactly where your tax dollars go. It also shows how much tax you are likely to pay depending on what you earn.
It does not include the Medicare Levy which is currently 1.5% and the assumption is that the income you have input is based on working 40 hours a week.
Whilst some may feel that people on high incomes should pay more, it is worth while taking into consideration that a person earning a high income rarely works a 40 hour week, many would arguably work double or even more than that to earn the money they are paid – in addition to gaining years of work experience, additional qualifications and basically working their way up. But it isn’t just high income earners who work longer hours, there will be many people on middle incomes who also put in more than an average 40 hour week.
To see where your tax dollars go you can visit the SMH website and key in your wage.
For interest sake here are the results from a range of incomes and the amount of tax paid based on the 2014 budget;
Looking at the tax paid for the different income levels is very interesting and much more easy to understand than when we so often hear income levels written and spoken about in “high”, “middle”, or “low” income brackets.
Just taking an example of the income and tax paid from the information above we can consider two households with the same annual income but earned as either a single income or dual income;
Family A: Double income household of $100,000 (both income earners earning $50,000 each). Household tax paid $15,594
Family B: Single income household of $100,000. Household tax paid $24,947 ($9,353 MORE tax than Family A) – Chance of income earner having to work additional hours (above 40hrs a week) for this pay rate is extremely high.
Does seeing the break down of incomes and tax paid make you think differently about your views of ‘low’, ‘middle’, or ‘high’ income earners?