THE TRUTH ABOUT THE TAX BURDEN - How much tax we really pay

1 Measure 1: Tax as share of GDP at market prices By far the most commonly-cited measure The highest this measure has ever been in of the overall tax burden is tax revenue as Australia — at least since the Second World a percentage of GDP, and while it is never War when taxes were very high to finance made explicit, this is GDP estimated at the war effort — was 30.3% in 2000-01, market prices. [...] This means that if all the economy’s expresses the ratio in calendar days as output went to paying tax until the year’s a measure of how far into the year the tax demands were satisfied, the economy economy is working only to pay taxes. [...] at factor cost instead of GDP at market prices — which includes the effects of On this basis, tax freedom day would come indirect taxes and subsidies on prices.2 about 10 days later and the economy GDP at factor cost is a broad measure would be working almost four months of of the income accruing to the factors of the year just to finance government. [...] The various measures of the tax burden Medium to long term projections of include tax revenue as a percentage of government expenditure suggest there GDP at market prices and at factor cost, will be pressure to increase the tax burden tax freedom day, revenue as a percentage further to record levels unless federal and of total private income in the economy, state governments make a concerted effor. [...] The various measures of the tax burden include tax revenue as a percentage of GDP, tax freedom day, revenue as a percentage of total private income in the economy, revenue as a percentage of household income, and revenue per capita.