Good article Andrew. Perhaps a better solution would be to raise the tax free threshold. Come on! Who can live on eight thousand a year? When income tax was first introduced, my grandfather didn't pay because the tax free threshold was set above the median wage of the day. Only the wealthy (and corporations) paid income tax then. How times have changed! I propose that the tax free threshold be increased to match the Median adult income of $26,000 / year and that this be indexed to the CPI.

Bootstrapper you're on to something. Yes, times have changed, but not as much as you would think. Average Australians face the same demons as Americans. Taxes, unless going for legitimate and accountable to the penny expenses of government, are no different than the middle ages where the tax collector came to get the masters cut of the goods produced. It's a transference of wealth, nothing more or less.

Government is a burden on the people. Those in power have no idea (nor do they want to), what it really takes to live. Lest we forget the taxation upon taxation we all endure. Sit down sometime and really figure your tax burden. It's not just income tax, it's property tax, sales tax, requirements of certain insurance, communication tax, gas tax; you pay in so many ways. Yet all is not debated, because all do not benefit. Whenever I see any tax argument, I laugh. At some point enough good citizens will say no at the say time and a revolution will begin.

"Viva the revolution"

The only way people can whine about 'tax cuts for the rich' is when the rich are already being taxed unequally.

It seems equality is only important in some instances.

The problem is not many of the rich are being taxed at 47%, such a high tax rate means that people who makes that much are

1. not willing to work as hard (unlikely)
2. finding way to avoid tax (trusts, companies and income splitting)
3. going o/s to work

The amount of people evading tax and going overseas to work has put additional pressure on the rest of the working class to pay more tax. Therefore a high top marginal tax rate does create problems. People like Rupert Murdock are leaving Australia with their businesses and taking employments people in overseas countries.

A high marginal tax rate also makes it harder for Australia to attract skilled professionals like Doctors, since they would much prefer to make their money in a Country like the US, where the highest tax rate is 30%. this creates a lack of doctors in Australia, and a lack of services to the community and higher health cost for all of us.

The top marginal tax rate have to move to make us a more attractive place for skilled labour and to stop these skilled labour from leaving Australia

Patty Jr, I would not have realised from other posts of yours that you are an anarchist. Never having studied anarchist doctrine ( a contradiction of terms?) I don't understand how it is supposed to 'work' (perhaps it's not and that's the point). However, most of us accept the need for taxes to fund government services. We can exercise our vote if we don't like the way the taxes are spent. But most of us want governments to provide more and better services, as the surveys quoted in the article demonstrate.

The problem with the tax system is that it is still unfair. There are so many ways that higher income earners can minimise tax. There is 'churn', where taxes are returned in the form of family benefits or industry assistance for example, losing a lot in the process. The tax system could be a lot fairer. I would like to see an article written about the pros and cons of a flat income tax system and how it could be used for fairness, the abolition of a lot of other taxes and tax rorts.

Thankyou Andrew for an excellent explanation of "bandied about" statistics. I always thought that the figures I saw and heard quoted of what was “average” were far too high. As far I as could see I should have been in abject poverty but miraculously I wasn't. Yes, I congratulated myself for economic management during my undergraduate studies but as I progressed into the adult workforce it was obvious that most people didn't earn very much and most families were dependent upon government handouts and tax deductions. From then I've always questioned why Australian society prefers to take the earnings of the Australian people, like children who don't have the skills to manage their own money, and then require us to deduct and beg in a bureaucratic quagmire to have a proportion of our earnings return to us as if it was a gift. Increasing the tax-free threshold will return responsibility and pride to the Australian people. How high? I personally don’t know I’m so dazed and confused by all the terminology, but the “average” working majority must not have to depend upon a social system of handouts and deductions to fight back to an economic position of self-sustainability? Yes, everyone should provide a portion of their earnings to the betterment of all but please raise the tax-free threshold so those who are "average", “median”, whatever you call it, are not forced to recover their hard-earned money through bureaucratic backflips, nods and winks. Please remove the uncertainty of knowing how much money we really have in our pockets and give the right to personal economic management to the Australian people.