Every year, with apologies to the radio station JJJ, the Australian Tax Office releases it’s own version of it’s ‘Hottest 100.’ Well, not really. What the ATO actually does is ask us to imagine that there are only 100 taxpayers in Australia – and then gives us a profile of what that 100 people look like, according to their tax returns. For tax types, this is lots of fun. For the rest of us, it is an easy way to think about percentages and to put our own taxpaying efforts in perspective.
Because tax returns are lodged after the financial year ends, and because lots of people lodge them late, the latest ATO figures actually date from the 2019 financial year. 2019 was pre-covid, so it can be hard to remember those good old days. But things have not changed that much since then.
51 of the 100 taxpayers in 2019 were male. The largest number of tax returns came from NSW, with 31. The smallest number came from the Northern Territory, which had just the 1 taxpayer. We compared the numbers of taxpayers in each state to the population distribution within Australia, and there were no real surprises. No state or territory seems to be harbouring tax dodgers: each state has about the same proportion of taxpayers as it does people. On a state by state basis, here is how the 100 taxpayers are divided:
- 31 from New South Wales
- 26 from Victoria
- 20 from Queensland
- 11 from Western Australia
- 7 from South Australia
- 2 from Tasmania
- 2 from the Australian Capital Territory
- 1 from the Northern Territory
- 1 from overseas or an unknown address.
As you might expect, taxpayers do not pay equal amounts of tax. In fact, the ‘top’ 3% of taxpayers paid 29% of all income tax for the year. The next 6% paid a further 19% of tax, meaning that almost half of all income tax was paid by just 9% of taxpayers. The ‘bottom’ 25% of people who lodged tax returns did not pay tax at all. Of course, this actually makes quite good sense, given that we have a progressive income tax system in which people pay a higher rate of tax as their income rises.
Perhaps surprisingly, 15 of the 100 taxpayers reported rental income. Of these, 60% reported a loss on their rented-out investment, indicating the extent to which negative gearing impacts on the Australian tax system. That figure probably contributes to the fact that a whopping 80 of the 100 taxpayers received a tax refund after lodging their return. Interestingly, if you look at this from the point of view of taxpayers, this also means that 80% of taxpayers basically lent the Government at least some money (for zero interest!) during the 2019 tax year.
Only 7% of people ended up owing the ATO more tax after they lodged the return. The ATO is very good at getting its money early.
The largest number of taxpayers came from what ‘Generation Y.’ Born between 1980 and 1995 (and thus aged around 23-38 during 2018/2019), 35% of taxpayers came from this group. The next largest was ‘Generation X’ (born 1963-1979), with 31%.
10 of the 100 taxpayers operated their own business to earn at least some of their income. Encouragingly, 80% of these businesses made a profit. And finally, Australians still seem to be a generous bunch: 29% of us claimed a deduction for a charitable donation during 2018/2019.