Long list of Australian taxes short on sense

With the federal election campaign amplifying fears of new taxes, a Facebook post from an Australian user lists 35 imposts it claims did not exist 100 years ago.

However, many of the taxes in the post (screenshot here) were in effect a century ago and others don’t apply in Australia.

Experts told AAP FactCheck the meme is likely based on the American tax system as several are in effect in the US but not in Australia.

The May 2020 post, which has recently been widely shared, features a photograph of a man wearing a hard hat and is captioned with an anti-tax poem and a list of 35 taxes.

The list includes excise taxes, federal income tax, federal unemployment tax, fishing licence tax, petrol tax, licence tax, inheritance tax, liquor tax, property tax, real estate tax, road usage tax, sales tax, state income tax, and vehicle licence registration tax.

“Not one of these taxes existed 100 years ago, & our nation was prosperous,” reads text at the bottom of the list. “We had the largest middle class and Mum stayed home to raise the kids. What in the heck happened? Can you spell ‘politicians’? GO AHEAD… BE AN AUSTRALIAN,”

The meme has surfaced in various guises over the years, including a 2003 blog post and a UK variation in 2014. Additional taxes mentioned in the UK post include cooking tax, poverty tax and “a blooming Carbon Tax!”.

Professor Helen Hodgson, a taxation expert at Curtin University, told AAP FactCheck that “the meme is based on the American tax system with a few Australian-specific items added”.

“We do not have a Federal Unemployment Tax – this is a US charge. I don’t know what the telephone usage charge tax or utility tax are, but these also seem to be based on a US tax,” she said in an email.

Prof Hodgson said sales tax, luxury goods tax, service tax, inheritance tax, property tax, personal property tax and real estate tax do not exist in Australia.

Contrary to the post’s assertion, excise taxes, federal income tax, state income tax and liquor tax all existed in 1920.

A sales tax was introduced in 1930, but was discontinued in 1999 and replaced in 2000 with the good and service tax (GST), which is a value added tax. Although similar value added taxes differ from sales tax as they are collected at each stage of the supply chain.

Inheritance taxes, sometimes referred to as ‘death taxes’, also existed in 1920, but were repealed by all state and federal governments between 1977 and 1984, as outlined in a 2006 tax history paper from the Australian Treasury.

Treasury also says state income taxes are not charged in Australia as the states stopped applying them during World War II in return for reimbursement grants from the federal government.

Prof Hodgson notes the post double-counts several taxes, including listing excises and licences as categories and separately again as individual taxes. For example, fuel and alcohol taxes would fall into the excises category.

It is also unclear whether the licence taxes in the post are actually taxes. Licensing or registration fees paid in exchange for a service can sometimes be considered distinct from taxes.

A 2008 Treasury paper says it is difficult to define what is and isn’t a tax. A defining feature of a tax is that there is “no clear and direct link between the payment of the tax and the provision of goods and services to the taxpayer”.

A fee is generally considered distinct from a tax if the money goes wholly towards the goods or services related to the fee.

For example, recreational fishing licence fees in NSW go towards improving infrastructure used by licence holders, such as fish-cleaning tables and stocking programs.

While the post is wrong on taxes applied in Australia, it is true the amount of tax revenue governments collect has increased over the past 100 years.

Treasury’s history paper states Australia’s tax to gross domestic product (GDP) ratio in 1920 was under 10 per cent. Australian Bureau of Statistics figures show total taxation revenue was 28.7 per cent of GDP in 2020/21.

Experts noted the tax revenue rise has been necessary to pay for increased government expenditure on essential services such as health, education, social welfare and defence.

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