"Nothing can be said to be certain, except death and taxes"*

Thankfully I’m not talking about the first. At this time of year the latter is the more common topic of conversation. (For those of you located elsewhere, you may not be aware that the Australian financial year runs from 1 July - 30 June. We then have from 1 July of the new financial year to 31 October to lodge our tax returns.)

It’s also on my mind because I realise it’s also my biggest monthly spend, undeclared to date. Last month my tax spend (including HECS) was $1,218.

For the whole financial year, it was $10,807. This is about 22% of my annual salary.

To me, 22% is pretty close to 25% meaning that I pay the government a quarter of my salary.

Apparently Aussies spend the first 98 days of the year working for the government. Those in the know call the day we start working for ourselves ‘Tax Freedom Day’. There’s the official description of Tax Freedom Day where people with a better command of figures than I look “at the total tax bill at all levels of government – federal, state and local – and compare it with the total wealth Australians are creating through economic activity. From this comparison [they] calculate how many days of the year, beginning 1 January, Australians would have to work before the annual tax bill is paid, assuming that all they produce goes to the tax man.”[1]

The way I understand it is, let's say you wanted to pay your tax obligation to the government upfront and not incrementally from each pay packet. Depending on your country's tax rate, if you paid your tax upfront to the government from your salary, basically you work for the government until this particular date of the year. After that, the money you earn is your own. This year that date was 9th April. Seems like a long time til I spare a thought for my Swedish friends – theirs was 20th July!

My paltry $10K contribution in merely a drop in the $122,710 million collected by the government to, well, run the country. The graph below shows other sources of revenue but as you can see, we (as individuals) carry the bulk of the responsibility.

[3]

One of Australia’s richest men’s philosophies on tax was:

“I pay what I’m required to pay, not a penny more, not a penny less. If anybody in this country doesn’t minimise their tax, they want their heads read because, as a government, I can tell you you’re not spending it that well that we should be donating extra.” [2]

Here here.

Because I don’t always agree with what the government always spends our its money on, I too look to ensure that I am only paying what is absolutely necessary – not a penny more, not a penny less. This is why I spent Wednesday night with a very competent accountant who specialises in the travel industry. Being new to the industry I figured it was best to speak with an expert to ensure I know what I can and can’t claim for in the future. Even better, her services didn’t cost me anything thanks to work.

I can guarantee that Mr Packer, were he still around, and I probably didn’t agree on anything other than tax minimisation and would take a very different view of how and where the government ought to spend our money given our very different politics. If you’re interested, the graph below shows where our money goes:

[3]

You can see from my declarations (and certainly the government can, having my tax-paying history on file since about 1993) that I pay my share and contribute financially and in full to helping this country run.

Why is it then that I have half the rights of my fellow citizens?

[1] http://www.cis.org.au/media-information/media-releases/article/1483-rejoice-tax-freedom-day-is-friday-9-april

[2] Kerry Packer in 1991 at Senate: Select Committee on Certain Aspects of Foreign Ownership Decisions in Relation to Print Media quoted in Sydney Morning Herald 18-19 February 2006 p 41

[3] Graphs come from http://www.aph.gov.au/budget/2009-10/content/overview/html/overview_40.htm

*The full quote reads "Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes."


Benjamin Franklin in a letter to Jean-Baptiste Leroy (13 November 1789).