Imputation credit. Tax paid at the
company rate is allocated to shareholders by way of imputation
credit attached to the (franked) dividends they receive. An amount
equal to the imputation credit is included in assessable income of
the shareholders, who are then entitled to a (franking) rebate of
tax equal to the amount included in their income.
Mean net tax. Average (mean)
amount of tax paid per taxable individual and equal to total net
tax divided by the number of taxables.
Mean taxable income. Taxable
income divided by the number of taxables, i.e. the average (mean)
amount of taxable income per taxable individual.
Net tax ratio (previously known as
effective rate of tax). The percentage of total taxable
income paid in tax and equal to total net tax divided by the total
taxable income.
Non-taxables. Individual taxpayers
who, after taking into consideration the amount of income,
deductions, rebates, credits and levies, are not required to pay
tax.
Taxables. Individual taxpayers who,
after taking into consideration the amount of income, deductions,
rebates, credits and levies, are required to pay tax.
Taxpayers. Taxable plus non-taxable
individuals.
Tax deduction. An amount that is
deducted from assessable income to arrive at the taxable income on
which the gross amount of tax to be paid is calculated. Each dollar
of tax deduction only reduces tax by the percentage of the
taxpayer's marginal rate of tax.
Tax rates scale, 2000-01
|
Taxable income
|
Tax
payable (a)
|
|
From
|
To
|
|
$0
|
$6
000
|
Nil
|
|
|
|
|
|
$6
001
|
$20
000
|
Nil
|
+
|
17c
|
for each
$1 over
|
$6
000
|
|
$20
001
|
$50
000
|
$2
380
|
+
|
30c
|
for each
$1 over
|
$20
000
|
|
$50
001
|
$60
000
|
$11
380
|
+
|
42c
|
for each
$1 over
|
$50
000
|
|
$60
001
|
|
$15
580
|
+
|
47c
|
for each
$1 over
|
$60
000
|
(a) A Medicare levy of 1.5 per cent of taxable
income is also payable.
Tax rebate. An amount that reduces
tax (i.e. tax offset) that is subtracted directly from the income
tax payable. Each dollar of tax rebate reduces tax by a dollar and,
in general, rebates and credits allowed cannot exceed the gross
tax.
Total net tax. Tax payable by taxable
individuals after rebates and credits have been deducted from the
gross tax calculated on taxable income. Net tax includes the
Medicare Levy as well as the amount equal to the imputation
credits, because each taxpayer claiming this credit has effectively
paid the tax the dividends (income) they received are already net
of tax (paid at the company rate).
Total taxable income. The income of
all taxables, to which the tax rates scale is applied; it is equal
to total income less deductions.
This paper provides taxation information for
each Commonwealth electoral division (CED) following the 2003
redistribution of electoral divisions in Victoria, Queensland and
South Australia. The information relates to the electoral divisions
applicable at the next election and includes such categories as the
number of taxpayers (taxables and non-taxables), taxable income and
the amount of tax paid. Tables have also been produced that rank
the CEDs against some of these categories. The paper also includes
choropleth (colour coded) maps of electoral divisions for mean
taxable income and net tax ratio.
The statistics in this brief relate to the
2000 01 income year and provide updated information to that
published by the authors earlier this year and to the 1996 97 data
published by the authors in 1998 99 (see bibliography). However,
the statistics are not necessarily directly comparable because of
electoral boundary redistributions in all States and the Northern
Territory and because total net tax data released by the Australian
Taxation Office (ATO) now includes imputation credits.
The information shown in the following tables
has been derived from data published at the postcode level by the
ATO in Taxation Statistics, 2000 01. The allocation of
postcodes to CEDs, or the concordance, is based upon results from
the 2001 Census of Population and Housing. When a postcode falls
entirely within a CED, the postcode is wholly included within the
CED. When a postcode is dissected by CED boundaries the results for
the postcode are proportioned between the CEDs based upon the
percentages of the population of that postcode that reside in each
CED. Postcodes specified in the ATO data that are not featured in
the Census have been allocated to a CED using a map overlay
method.
The postcode information published by the ATO
is for the postcode stated in the home address on each tax return.
If a postcode is not stated or, if stated, is not a valid postcode,
i.e. no such postcode exists, the information is classified as
unallocated within the State or Territory where the tax return was
processed.(1)
The tax data shown in the tables were compiled
by the ATO from individual tax return forms for the 2000 01 income
year. Although the tax statistics were released on 15 December
2003, they only include information from forms which were processed
by 31 October 2002. Therefore, the data for 2000 01 are not
necessarily complete.
Table 1, Taxation statistics by
Commonwealth electoral division, shows various categories of
tax information for each Commonwealth electoral division listed
alphabetically by State/Territory.(2)
This information shows that the ACT has the
highest average (mean) taxable income ($43 171) followed by
NSW ($41 626) and Victoria ($38 636). The Northern
Territory, which had the second-highest average taxable income in
1996 97, has now dropped to fourth.
The ACT ($10 922) pays the highest average
(mean) tax. However, the average tax paid in NSW ($10 649) is only
just below the ACT and causes NSW to have the highest net tax ratio
(25.6 per cent); this is probably due to NSW paying more tax
(proportionately) in the top income tax bracket.
The Northern Territory, with greater access to
tax rebates such as zone rebates, and Tasmania, with the lowest
average taxable income over $4900 below the national average and
$9600 below the ACT are the lowest net tax ratio jurisdictions
(21.8 per cent).
Victoria is just above the average income,
average tax and tax ratio of Australia as a whole, while Tasmania
is also the bottom State in average income and average tax.
Table 2, Commonwealth electoral divisions
ranked by taxable individuals, shows, as expected, the
smallest electorates (by number of electors enrolled) at the bottom
of the table.(3) Tasmania has four electorates in the
bottom five and all five of its electorates are in the bottom
eight, while the Northern Territory electorates are bottom and
ninth bottom. The ACT electorates of Fraser and Canberra appear
almost at the top of this table due to their size they are the
largest electorates (by number of electors enrolled) in
Australia.(4)
Although not shown in this paper, if a comparison
is made of the ratio of taxable individuals to electors enrolled in
2001 a further picture emerges.(5) The top five
electorates have, on average, 83 taxables for every 100 electors
enrolled; Sydney (NSW) having 98 and North Sydney (NSW) and
Wentworth (NSW) each having 88. The bottom five electorates have
only 54 taxables per 100 electors; the Northern Territory
electorate of Lingiari has only 46. The Australian average is 66
taxables per 100 electors.
The top ten electorates are all inner
metropolitan (in Sydney, Melbourne and Canberra). These electorates
tend to have lower unemployment levels and more two-income
families. Over half of the bottom ten electorates are classified as
rural, and electorates such as Cowper (NSW) and Richmond (NSW) both
rural electorates on the north coast of NSW also include large
numbers of retired people.
Table 3, Commonwealth electoral divisions
ranked by total taxable income, shows similar patterns to
Table 2 and is influenced by two factors, firstly, the number of
taxable individuals, and secondly, the size of the incomes of those
taxables. The ATO states that:
The source and level of income varies according to
the age and employment status of the taxpayer. For example, among
retirees the main sources of income are government and other
pensions and annuities, and eligible termination payments. As a
result, the amount of taxable income [is] low among older age
groups.
Level of income also varies widely according to
geographic location. People of similar incomes tend to live in the
same general areas.(6)
An obvious example of the effect of income
sizes whether incomes are generally higher or lower relative to
other electorates is the re-ordering of electorates throughout this
table in comparison with Table 2. At the top of the table, the
generally much higher incomes of the north shore and eastern
suburbs areas of Sydney and the eastern suburbs of Melbourne have
caused these electorates to displace the ACT electorates, which
have higher numbers of taxpayers but lower income levels.
At the bottom end of the table, the smaller
electorates in Tasmania and the Northern Territory are joined by
the NSW north coast and hinterland electorates of Lyne, Cowper,
Page and Richmond and the Queensland rural electorate of Wide
Bay.
Table 4, Commonwealth electoral divisions
ranked by mean taxable income, shows an income spread from
just over $29 500 in Wide Bay (Qld) to almost $70 900 in
Bradfield (NSW). Calare (NSW) and Bowman (Qld) are the electorates
in the middle of the table with average incomes over
$35 500.
As mentioned above, unemployment levels have
an important effect on the number of taxpayers and the level of
income. In the December quarter 2000, Bradfield (NSW), North Sydney
(NSW) and Wentworth (NSW) were estimated to have unemployment rates
of 1.7 per cent, 2.5 per cent and 3.0 per cent
respectively.(7) At the other end of the rankings, Wide
Bay (Qld), Cowper (NSW) and Fairfax (Qld) had unemployment rates of
11.8 per cent, 12.2 per cent and 12.3 per cent, respectively. At
this same time the national unemployment rate was 6.2 per cent.
Fairfax takes in the Sunshine Coast of
Queensland; Wide Bay sits directly to the north of Fairfax and
includes Maryborough, Hervey Bay and Fraser Island; and Cowper is
situated on the north coast of NSW. Apart from having high
unemployment levels, these areas are all rural electorates that
also have high proportions of retired people. The combination of
these factors would help explain their low levels of average
taxable income.
Table 5, Commonwealth electoral divisions
ranked by total net tax, shows the total net individual income
tax paid on the total taxable income in each electorate.
This table is not comparable with the similar
table in the 1998 99 publication because the net tax category
published by the ATO now includes imputation credits.(8)
This particularly affects the electorates at the top of the table
which have high levels of imputation credits reflecting the levels
of share ownership by the higher income groups.
North Sydney (NSW), at the top of the table,
paid nearly $1.8 billion in tax in 2000 01, Lingiari (NT), at the
bottom, paid under $210 million. The effect of marginal tax
rates(9) is evident here because North Sydney only has
3.0 times the taxables of Lingiari yet has 5.6 times the taxable
income and pays 8.7 times net tax. The average taxable income in
North Sydney (see Table 4) attracts the top marginal tax rate of
48.5 per cent in 1996 97, its average taxable income attracted the
second top marginal rate of 44.7 per cent while the average taxable
income in Lingiari attracts a marginal rate of 31.5 per cent (the
electorate of Lingiari did not exist at the 1996
election).(10) This result is further emphasised when
looking at the net tax ratio (or average rate of tax) shown in
Table 7.
Table 6, Commonwealth electoral divisions
ranked by mean net tax, shows the average tax paid by the
taxable individuals in each electorate. This varied from $5810 in
Wide Bay (Qld) to $23 550 in Bradfield (NSW), with the tax
paid in the middle-ranking electorates of inner metropolitan Wills
(Vic) and outer metropolitan Hotham (Vic) of just over $8000.
Table 7, Commonwealth electoral divisions
ranked by net tax ratio (previously called effective rate
of tax), shows the average (mean) rate of tax paid on the
taxable income. At the top of the rankings 33 per cent, or a third,
of income is paid in tax compared with the bottom where 20 per
cent, or a fifth, of income is tax.
Australian Taxation Office, Taxation
Statistics, 2000 01, on ATO website
http://www.ato.gov.au/taxprofessionals/content.asp?doc=/content/37484.htm.
S. Barber and A. Kopras, Taxable Income and
Tax Paid in Commonwealth Electoral Divisions, 1996 97 , Current
Issues Brief, no. 13, Information and Research Services,
Department of the Parliamentary Library, Canberra, 1998 99.
S. Barber and A. Kopras, Taxable Income and
Tax Paid in Commonwealth Electoral Divisions, 2000 01 , Current
Issues Brief, no. 9, Information and Research Services,
Parliamentary Library, Canberra, 2003 04.
S. Bennett, G. Newman and A. Kopras,
Commonwealth Election 2001 , Research Paper, no. 11,
Information and Research Services, Department of the Parliamentary
Library, Canberra, 2001 02.
A. Kopras, Postcodes in Electoral Divisions
(2003 Electoral Boundaries) , Research Paper, no. 11,
Information and Research Services, Parliamentary Library, Canberra,
2003 04.
G. Newman and A. Kopras, 2002 03
Redistribution of Commonwealth Electoral Boundaries , Current
Issues Brief, no. 13, Information and Research Services,
Parliamentary Library, Canberra, 2003 04.
Taxpayers Australia Inc., Tax Summary,
2001 & 2002.