Our tax system

Individuals income tax

Individuals’ income tax is the single most important source of government revenue. Since the mid 1970s it has consistently raised around half of the Australian Government’s tax receipts and continues to be a stable and predictable source of revenue.

Australia’s individuals income tax schedule is progressive , with a high tax-free threshold followed by increasing tax rates at subsequent thresholds. This means that the largest amounts of income tax are paid by high income individuals. In 2011-12, around 2 per cent of individuals had taxable income above the $180,000 threshold and collectively paid around 26 per cent of total individuals’ income tax.

For many people, individuals’ income tax does not significantly alter their workforce participation. However, it can be more distorting for particular groups of taxpayers, such as low income earners or the second income earner in a family, or high income earners with the ability to plan their tax affairs.

See the discussion paper for more information.


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