Comparing tax rates in Australia and the US

Comparing tax rates in Australia and the US

Taxes are compulsory levies imposed on individuals and corporate organizations by the government of the country. No country can grow without taxes.

Whenever you visit Australia and see lots of infrastructure, like good roads, steady electricity, healthcare facilities, etc, those infrastructures weren't built by itself. They were built from taxes.

Tax rates in Australia have been criticized for being excessively high. To see if this assertion is true, we look at Australian tax rates and compare them to those in the United States.

Tax in Australia vs USA

Australian Tax Rates

Comparing tax rates in Australia and the USA

The table above depicts Australia's income tax brackets and the percentage rate at which each is taxed. Once you earn more than $18,201, you'll be subjected to a 19 percent tax rate. Immediately you exceed $37,001, this increases by nearly 13%.

Although this is small compared to the highest tax level, which is 45 percent and applies to anyone earning $180,000 or more. Of course, that highest tax bracket is only reached by a small percentage of the population. However, it has an impact on the economy because many companies choose to operate from another country, and people work a little less to avoid paying such high rates.

The benefits of having high income taxes include a well-functioning country that is consistently ranked among the world's top ten most livable. Indirect taxes, like the GST, are also among the lowest in the world.

US Tax Rates

Comparing tax rates in Australia and the USA

Any earnings in the United States are subject to income tax, which starts at 10%. While tax rates are high for low-income earners, they do not rise in lockstep with earnings. Only individuals earning more than $91,150 are subject to the 28 percent tax rate. Only those earning more than $415,000 are eligible for the highest tax level of 39.6%!

Income tax rates in the United States are substantially lower — for high earners – than in Australia. This makes it an appealing location for doing business. If you make less than $9,275, however, you pay a comparatively high rate of 10%, which is substantial for low-income taxpayers. It's simple to send money from the United States to Australia.

Conclusion: Tax in Australia vs USA

Australia has some of the highest tax rates in the world. High earners will pay significantly higher rates on far lower incomes than in the United States.
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  • Anonymous
    Anonymous April 6, 2024 at 6:56 PM

    Australia does not have states taxes, but many US states and counties have added taxes on incomes. Such as Howard county in Maryland has over 8% in taxes just between county and state taxes. So the above comparison seems to be only federal level which does not account this difference.

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