100 Aussies: five charts on who earns, pays and owns

At the other end of the scale, 3.5% of people pay nearly one-third of personal taxes, and another 15.6% pay 36%. That means less than 20% of people pay two-thirds of personal income tax.

That’s our system, but policy and society need to recognise that, as it should be, high-income earners provide the services for low-income earners.

The ATO provides a further breakdown by ranking the 100 people by their taxable incomes:

• the top 3 paid 29% of all net tax
• the next 6 paid 19% of all net tax
• the next 31 paid 40% of all net tax
• the next 35 paid 12% of all net tax
• the final 25 didn’t pay any tax.

Of the 2.2 million, about 60% or 1.3 million claim a net loss, which can be charged against other personal income.

In total, the gross rental income of almost $50 billion (thank you, renters!) is offset by a slightly larger amount of capital works deductions and other rental deductions (mainly mortgage interest) to produce a net loss for the 2.2 million people overall.

It’s thoughtful of tax policy to allow the loss to be charged immediately against income rather than the treatment of business losses which must be carried forward and charged against future profit.

This number is worthy of a moment’s reflection. Half of Australians earn less than $48,000 a year. While this number includes many who are asset rich/cash poor (retirees, superannuants, owners of valuable properties on age pensions, etc), there are millions not earning the big bucks who are renting and not participating in surging property and stock markets.

But even for people aged 65 and over, average superannuation balances of less than $200,000 will only finance a decent retirement if there are other assets such as owning a home and investments outside super.

Although SMSF members are usually older, this does not mean they are high income earners. In fact, the chart below shows that only 18.5% have income over $100,000 to less than $200,000, with 8.6% over $200,000. That leaves nearly three-quarters of SMSF members earning less than $100,000, and a quarter less than $20,000.

The main reason is not that younger people on lower salaries represent a high proportion of SMSF members. Rather, super funds are legal entities and tax is paid within the fund rather than being passed into an individual’s taxable income. A person may operate a $10 million SMSF but have little in personal income.