Tax Return in Australia gives you a breakdown of where your money went

One of the issues with this kind of document is that there's a trivial but misleading way to calculate it.

You can look at the government, notice that 19% of spending goes to healthcare, 9% to defense, 8% to education, 1% to education… then multiply by the total tax paid by the individual. It would generate a document like this and many people would think it "feels right" but it's misleading and that seems like what's happening here.

Australia spends nearly $5000 per person on healthcare each year. This person paying $2200 in taxes is covering about 40% of their own health care bills and "somebody else" is picking up the tab for all of the welfare, defense, education, foreign aid, etc. This person making $30k a year isn't paying out $850 to welfare recipients. Like most other "socialist" countries (and the USA), an average wage earner doesn't pay enough taxes to fund 'their share' of the programs they benefit from.

Using a naive calculation—this is for the sake of illustrating the point, I'm not proposing exact numbers here—Australia's budget is $500b, about 60% of that comes from income taxes, and there are 25m people in the country. Simple division and assuming everyone benefits equally from government programs you need to pay at least $12,000 a year in taxes in order to cover your 'fair share'. Of course 35% of the budget was to 'welfare', and my argument was that "poor people don't pay for other poor people's welfare" so maybe a better number is around $8000. This person is still getting a 75% discount on the benefits they receive: they really shouldn't be angry about tax rates: even if the government wasted half the money they took in, they still haven't covered their own medical care costs.

A more fair document would probably rank the distribution based on priorities for an individual. An ancient childless widow probably doesn't get as much from schools as a yuppie couple with 4 kids. Our Widow gets something but maybe only $100 a year to avoid living in a country full of illiterate brutes. The yuppie couple on the other hand has signed up for $320,000 in early-childhood/primary/secondary education so a larger share of their taxes should be directed that way. Our imaginary widow probably gets a lot more out of the health care program than a young single 20-something college student so her tax breakdown should more heavily favor medical spending. Rich business owners have more stuff to defend from invading armies so maybe they should be paying a higher amount towards national defense than beach bums and impoverished single mom refugees.

Anybody earning under $55,000 a year should probably have $0 directed towards welfare programs because they're not paying enough taxes to cover their share of what they receive. The median household income in Australia is $80k, the average is $105k: they're getting (on average) $35k in benefits for $20k in taxes. Most Australians are benefiting from the current taxation/spending programs, and half aren't paying anything towards welfare. It's the individuals earning $100k+ that should see their normal share of schools, healthcare, defense, and the excess going to fund welfare, foreign aid, etc.

Most people should see a document like this that shows all of their money going to programs they care about: healthcare, education, national defense, interest on debt, public safety, etc. You should have to be in the top quintile of income earners before welfare starts showing up.

Alternatively, we could have income taxes only cover things individuals want and that funding for the 35% or so unpopular programs (which varies from voter to voter) are funded by government corporations/investments, royalties, payroll, property, sales, and business taxes.

That's the thing about dollars: they're all identical. Revenue comes in, spending goes out, but which of your dollars go to what programs gets erased in the machinery of government. You should keep this in mind when you read this document, and also my story about how "most people's taxes only go to things they benefit from".


TLDR: If this document is meant to show what "you" or "the average" person paid for with their taxes then it's misleading. This person is getting about $8000 worth of healthcare, education, and defense spending and only paying in $2200 in income taxes. They'd have to pay another $5800 to break even on what they receive before we even start thinking about welfare spending. The idea that we're all paying for the same things with taxes at equal rates is a way of manipulating people and should be questioned.

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