Working the system: rich getting richer
Jacob Saulwick, smh
March 20, 2009
IT WAS an Indian summer for the big end of town.
The denizens of the state's most elite postcodes - in Darling Point, Bellevue Hill and Mosman - enjoyed income rises of more than 20 per cent in 2006-07.
But the poorest postcodes - including Bogan Gate, west of Parkes - had relatively small increases or suffered declines in income.
The latest statistics released by the Tax Office offer an insight into the state of the country's finances just before the onslaught of the global financial crisis.
In NSW, the postcode covering Darling Point and Edgecliff had the highest mean taxable income at $194,000, followed by Bellevue Hill ($155,000), Mosman ($152,000) Dover Heights ($150,000) and Northbridge ($145,000).
The postcode covering Callaghan and Newcastle University had the lowest mean taxable income at $27,800. It was below postcodes covering Aberdeen ($30,400), Bogan Gate ($32,500) and Koraleigh ($32,600). Across the country, taxpayers declared $533.9 billion in income, up 10.5 per cent from the previous year. Some $380 billion of that was in salary and wages, which rose 8 per cent.
As they grew richer, it appears people also became better at working the system. The value of tax deductions rose by more than 26 per cent to $34.1 billion.
The largest tax deductions related to property. Landlords earned $21 billion in 2006-07 but declared a loss of $6.3 billion.
Tax breaks for property investment and the complexity of the system as a whole are being examined in a review of the tax system. The review will look at the sustainability of business taxes, where receipts have plunged since the crisis began.
Companies reported income of $2040 billion, more than 13 per cent higher than the previous year. Big companies with income of more than $250 million contributed more than 60 per cent of the tax take but represented only 0.1 per cent of the number of companies.