Working mums are taxed higher than the mega rich.

When mums receive family benefits and then return to work, they get a rude shock to discover that their tax rate exceeds that of the mega rich.

A report to the Australian Government’s Henry Tax Inquiry last year indicated that working mothers on low to middle incomes are taxed at a rate of 56 per cent, whereas the super rich are taxed at only 45 per cent.

Last week a seminar on women and tax was delivered by Professor Patricia Apps at the University of Sydney. The presentation argued that the current taxation system significantly curtails women’s workforce participation by up to 40 per cent. This in turn impacts negatively on our nation’s progress, delivering losses in productivity. This also translates to a loss of around 30 per cent in household savings for couples.

Another interesting point in Professor Apps’ paper is that she indicates that in this instance, half of the income of working mothers who also have a working partner is utilised by our taxation system to fund the tax breaks for high income earners.

More articles on this topic:

News.com.au

http://www.news.com.au/money/money-matters/working-mums-taxed-more-than-super-rich/story-e6frfmd9-1111119016017

SMH.com.au

http://www.smh.com.au/opinion/politics/mumsy-taxation-is-causing-workforce-economy-to-bottom-out-20100730-10zms.html