You would think there is nothing surer in life than death and taxes – and the belief that people think they pay too much tax. But the latest annual survey on attitudes towards taxation by the progressive thinktank Per Capita reveals that people are mostly satisfied with the amount of tax they pay.
The survey also found that the number of people who believe they are taxed too high has fallen dramatically from 2012 and there are now more high-income earners who believe they pay too little tax than those who believe they pay too much.
Taxation is a vexed issue for governments. It is needed to pay for services and yet increasing taxes is considered a politically risky move, especially when applied to income tax. In the early 1990s Paul Keating infamously advised then UK opposition leader, Tony Blair: “Don’t ever put up income tax, mate. Take it [money] off them anyhow you please, but do that and they’d rip your fucking guts out.”
From the results of the 2015 Per Capita tax survey it would appear Keating knew what he was talking about.
When the 1,413 people in the survey were asked about collecting tax for “quality public services”, raising income tax was the least favoured way:
The only response less popular than raising income tax was the suggestion the government should borrow more. As the report’s author David Hetherington notes, the Abbott government’s “unequivocal message that further debt is unhealthy for the Australian economy” appears to have struck a chord with the public.
Coalition pressed on refusal to deny alleged people smuggler payments – as it happened
The Coalition and the opposition have their own takes on the Magna Carta, and an Ipsos poll joins other post-budget polls putting Labor in front. All the day’s developments from Canberra
Not surprisingly, respondents were most in favour of the government raising revenue in ways which wouldn’t directly affect their income. Sixty-five per cent of respondents were in favour of cutting corporate tax avoidance, while 44% were in favour of increased income tax – so long as it was only on the richest 5% of income earners.
Should the government wish to tinker with the GST, it would seem people are most comfortable with the range of items which already receive tax. Whereas 15% suggested they would be happy to see the current 10% GST rate increased, only 9% would prefer to see the GST broadened to include private education and health.
Somewhat confusingly, 13% want to see it broadened to include all items – such as food.
But changing the GST is much less popular than cutting negative gearing. Thirty-five per cent surveyed were in favour of such as move – suggesting the Greens latest policy to phase out negative gearing for new housing investments could find some broad support.
This is also supported by the responses to Per Capita’s specific question about negative gearing and what changes should be made to the system. Only 16% of respondents suggested it should not be changed at all.