Taxation

• Econs
• Secondary Education

Taxation

Henry VIII introduced a beard tax

1. true
2. false

What is a new term we spoke about yesterday?

3 tax types

Proportional - tax % is the same for everyone 

Regressive - tax % decreases as income increases 

Progressive - tax % increases as income increases

Medicare Levy and Medicare Levy Surcharge

Medicare Levy -  flat rate of 1.5% of an individual’s taxable income, with exemptions may be given to low income earners and foreign residents.

 Medicare Levy Surcharge  - extra 1-1.5% tax on high income earners who do not have private hospital insurance.

What is the purpose of the Medicare Levy?

Direct Taxes

Individuals

•  personal income tax - tax table (varies)

• capital gains tax (CGT) - gains (profit) made from sale of assets is added into your INCOME amount

• the Medicare levy - 1.5%

• superannuation fund tax - 15%

Businesses

• company tax - 30% (small/medium business - 25%)

• fringe benefits tax (FBT) - 47%

Give an example of an direct tax

Indirect taxes 

$ goes to a business who then sends $ to government

•  excise duty e.g the excise on unleaded petrol is about

30%

• customs duties - on imported goods  (alcohol at 'duty free')
•  goods and services tax (GST) - 10%
• Departure tax

Why do you think the Australian government uses customs duties?

Car registration

car registration depends on vehicle, not the owner.

What type of tax is it?

Progressive, regressive, or proportional?

A country in which the tax payers who earn more pay a relatively higher amount of tax has a

1. Regressive income taxation system
2. Progressive income taxation system
3. Proportional income taxation system

Extended Answer Questions

Explain two methods used by the Australian government to redistribute income.

Definitions and examples and answer the question 

and diagram (if relevant)

two methods - 

redistribute income - 

circular flow diagram - 

Explain 2 methods used by the government to redistribute income.

Let's do one together

Describe Australia’s taxation system.

 

(Hint – 3 types of tax R, P and P)

Your turn - pair or individual

Outline two reasons why the government tries to redistribute income in Australia.

Outline two reasons why the government tries to redistribute income in Australia.