Meet the 48 millionaires who pay no income tax, not even the Medicare levy
Forty-eight of Australia's highest earners paid no income tax in 2014-15, not even the Medicare levy, according to an analysis of Tax Office data that lends weight to calls for legislated minimum tax payments.
Each of the 48 earned more than $1 million before deductions, an average of $2.46 million each.
All were able to drive their taxable incomes down below the $18,200 tax-free threshold. Thirty-four reported taxable incomes of zero, while 12 reported combined losses of $13.9 million.
Extraordinarily, the biggest deduction claimed by 19 of the 48 was "cost of managing tax affairs", averaging about $1.07 million each.
On the face of it, the figures suggest these people spent almost half of their reported incomes managing their tax affairs, a proportion so high as to raise suspicions that their actual incomes were higher.
The Tax Office defines "cost of managing tax affairs" as including the cost of preparing and lodging tax returns, the fees paid to recognised tax advisers, the cost of court appeals and interest charges imposed in relation to tax disputes.
Bizarrely, a handful of the highest earners who escaped the Medicare levy were forced to pay the Medicare levy surcharge. The surcharge is meant to be charged on top of the levy for high earners who don't have private health insurance, but a budget change in 2008 applied to a broader measure of income than the levy itself.
The levy itself applies only to taxable income, which 579 people earning more than $250,000 managed to cut to less than the tax-free threshold.
I think competent people who make money by working hard, benefiting the economy, and creating jobs, should be rewarded in a way that reflects their hard work. Anything less would be met with the stifling economic impacts of 20th century communism. The problem isn't making money, or being wealthy, it's taking from the Australian society in the form of infrastructure, public services, and governance, and not giving anything back.
The Buffett Rule was coined by Warren Buffett in 2011 when he realised that his secretary paid more tax than he did. It proposes a minimum tax rate after income earners cross the no-tax threshold, regardless of deductions. This seems entirely too logical to me, so I'd be interested to hear what objections Atomicans raise?
Edited by tastywheat, 20 April 2017 - 10:20 PM.