Tax Freedom Day represents the point at which Australians have worked enough to pay off their total tax bill for that calendar year.
“For 2019, the nation had to work 107 days to pay its annual tax burden of more than $560 billion”, says CIS Research Fellow, Eugenie Joseph. “This is an extra day on the 2018 tally.”
“Australians are working longer this year to fund expenditure across all levels of government — federal, state and local.”
Ms Joseph says the tax burden on the Australian economy has been creeping upwards in recent years.
“It now stands at 29% of national output, which represents an average tax bill of more than $22,000 for each Australian.”
“Once again, we see the insidious effects of bracket creep stealthily increasing the total tax burden on Australian workers.
“Tax Freedom Day is a timely reminder of the dearth of meaningful tax reform in recent years; and modest income tax cuts for Australian workers are not enough to undo the ongoing effects of bracket creep.
“Income tax bracket creep is simply increased tax by stealth. Australian workers will continue to pay higher average tax rates over time, if income tax thresholds are not adjusted for inflation.
“We also know that governments still rely too much on inefficient sources of taxation — that is, taxes that distort incentives to work, save and invest.”
Projections of tax revenue indicate that Tax Freedom Day will continue to fall on progressively later dates in the coming years, she says.
“Governments must focus on spending responsibly. Only by reining in wasteful or unnecessary spending, can governments alleviate the tax burden on Australians.”
Eugenie Joseph is a Research Fellow at the Centre for Independent Studies.