Australians believe they are highly taxed, yet public perceptions of taxes are wildly different to reality.
In the most recent Per Capita annual survey (opens PDF), 95% of respondents felt that low-income and middle-income earners are taxed too much, while only 16% felt that high-income earners paid too much tax. However, it seems that many of our beliefs about tax and government spending are wrong, for example, that the government spends too much on defense and overseas aid, or that companies pay more tax that individuals.
Here are some of the main findings of the survey.
Australians want a more progressive tax system, with 53% believing that high income earners do not pay enough – even the high income earners believe they and big businesses do not pay enough tax. 64% of respondents believe that big business do not pay enough tax, while 44% said that small businesses pay too much.
A large majority would prefer the tax system to be made easier to deal with, rather than adjusted to make it harder to avoid paying tax. Given the choice, the preferred option would be to centralise federal, state and local taxes (34%), followed by a reduction in the number of taxes (24%) and a simplification of deductions, rebates and exemptions (20%).
73% of respondents say governments should spend more on public services, especially health, while just 6% want government to spend less. This is a significant change in public opinion since the 1980s, when 65% of respondents favoured tax cuts, while only 15% wanted more spending. In the current survey, more than 90% wanted higher spending on health, followed by education and social security.
In light of the current government’s desire to see a budget surplus, 61% of respondents felt it was better to stimulate the economy through a budget deficit than a surplus, when responding to an economic downturn. The majority of people feel that the deficit should involve a combination of greater public spending and tax cuts.
Another key takeaway from the survey was that people’s attitudes are underpinned by a poor understanding of the balance between personal and company tax and of the relevant expenditure allocated to various policy areas such as health, defence, overseas aid, education and social security.
For the political parties in the run up to the September election, the survey offers a virtual road map of which policies to focus on.
In the market for high yielding ASX shares? Get three “Rock-Solid Dividend Stocks” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
- Why PWR Holdings Ltd could see its share price rise from here – July 21, 2017 12:11pm
- Fortescue Metals Group Limited share price sinks on native title decision – July 20, 2017 4:23pm
- 5 overlooked finance shares to add to your watchlist – July 20, 2017 2:33pm