According to a report recently conducted by a top research firm, Australians are the world's richest people - so why are so many of us not feeling rich??
The first thing that will come to mind is tax. We have so many different Taxes in Australia - we have a tax on salaries, a tax on interest and dividend income, we have a tax on the profit you make on the sale of an investment property (Capital Gains Tax),we have a tax on property acquisitions (also known as Stamp Duty), we have a tax on the land value of your investment property (Land Tax), if you have staff there is a Tax on the Salaries you pay to your employees (PAYG Withholding, and in some instances, Payroll Tax), and yet another Tax, Goods and Services Tax (GST), imposed almost everything else you are likely to buy with only very few items exempted from the tax.
The marginal tax rate in the United States on income ranging between $87,881- $183,250 is 28%. In Australia incomes of $80,000 to $180,000 are taxed at 37 per cent, and in New Zealand, incomes greater than $70,001 are taxed 33 per cent.
So great, we are the richest, but you really have to ask yourself, must we also be one of the most taxed countries in the world?
No. Lucky for us we are not the highest taxed country in the world - that title goes to Aruba which taxes individuals at a top marginal rate of 58.95 per cent!
If we look at our New Zealand neighbours, they don’t have a Capital Gain Tax, they don’t have Stamp Duty on Property acquisition and they don’t have Land Tax.
If we look to the United States they don’t have property Stamp Duty or a Land Tax (although they do have state taxes on property held, which essentially equates to our Council Rates, thereby calling it even).
A cost comparison
If we move away from taxes we can take a look at the median house price in Sydney, which as at June 2012, was $650,000, for Auckland it was $570,500, and for Los Angeles it was $350,000.
The median rental on a one bedroom apartment in Sydney city will set you back $2,300 per month, in Auckland is $1,240 and Los Angeles is $1,200.
Cost of living is also higher in Australia.
Related: Lifetime costs up 76 per cent
A regular Cappuccino will cost you $3.50, a taxi ride home will cost you $3.00 per kilometre and a mid-range bottle of wine will set you back $17.00.
In LA, you will be paying $10 for a mid-range bottle of wine, $2.80 per kilometre for a taxi and $4.00 for a Cappuccino.
In Auckland, you will be paying $15 for a mid-range bottle of wine, $2.65 per kilometre for a taxi and $4.00 for a Cappuccino.
The above comparisons give some insights into why you may not be feeling quite as rich as you think you should be. In saying that, would you really want to live anywhere else? They don’t call Australia “The Lucky Country” for nothing.
For more information on taxes and taxation services, please visit Marcos Accountants at Marcos Taxation and Accounting