Australia’s personal income tax burden has reached record levels, outpacing other advanced economies and impacting citizens’ cost of living. The Organisation for Economic Co-Operation and Development (OECD) has revealed that the personal income tax burden in Australia grew faster than any other advanced economy last year, as bracket creep fueled record Commonwealth tax collections.
The figures published by the OECD indicated that a single, average wage-earner without children paid approximately $24,791 in personal income taxes last year, which was up 7.6% from 2022 levels. In comparison, Luxembourg, which recorded the second-largest increase in personal average tax rate, rose by just five per cent. This data underlines the significant growth in Australians’ personal income tax burden and puts them at the forefront of global tax challenges.
Given this context, the surge in state and federal government taxes has further exacerbated the financial strain on Australians. The Australian Bureau of Statistics revealed a 10% jump in the tax take per person collected by the federal government through 2022-23. This comes on the heels of a near-$2600 increase in the average Commonwealth tax per person the previous financial year, resulting in per capita tax reaching an all-time high of $23,495.
The impact of these tax increases is compounded by the broader economic challenges faced by Australians. Rising inflation has eroded real wages, making it even more difficult for citizens to bear the burden of increased taxes.
This double-whammy of tax hikes and escalating living costs has put immense pressure on households, with incomes failing to keep up with the rising cost of living.
Australia’s predicament is distinct, as the country faces a unique combination of surging taxes and creeping living costs, placing it at the forefront of global economic challenges. These developments warrant a closer examination of the policies driving these tax increases, and the potential implications on the overall economic well-being of Australian citizens.
In conclusion, the rapid growth of Australia’s personal income tax burden, outstripping that of other advanced economies, has laid bare the challenges faced by Australian citizens. With tax collections reaching record levels and cost of living pressures mounting, Australians are grappling with a formidable economic landscape. The repercussions of these developments on the country’s overall economic health and the well-being of its citizens should be carefully monitored and addressed by policymakers.
