Australia is NOT a low-tax country

Within the highest tax bracket, every $100 paid as gross salary sees between $58 (excluding the deficit levy and Keating's longevity levy) and $62.5 extracted as personal tax or compulsory employer levies. As a percentage of employer costs including SG and workers' compensation, the marginal tax wedge is between 52.3% and 56.3% (the latter including the deficit levy and Keating's proposed longevity levy). If the SG increases further – say to 12% or even 15% - the top marginal tax wedge increases to between 54.5% and 57.2% assuming there is no deficit levy or longevity levy.

The numbers here show the formal incidence of the various taxes and levies (ie, who legally must pay). The economic incidence will depend on the state of the various markets involved, which will influence abilities to shift tax burdens around.

Nevertheless, their formal incidence is a measure of the initial impact of these taxes and levies. It is also applicable to every $100 of gross wages actually paid after any shifting of tax burdens. Most importantly, it is a warning about the distorting damage to the economy from these imposts, including via incentives to arrange one's affairs to maximize chances of shifting tax burdens to others, or at least trying to avoid them.

The high marginal tax rates shown in the table suggest strong and growing incentives legally to minimize tax burdens, especially for higher income earners. Opportunities afforded by, for example, capital gains tax discounts and superannuation concessions concentrated at the higher end of the income scale facilitate this. Increasing on-costs faced by employers probably don't help the labour market either.

Australia's revenue problem is the structure of our tax 'system', not the myth we are a low tax country.

For the deniers, the OECD and other data presented here will be regarded, at best, as an inconvenient truth.