A Very Interesting Article on Mothers and Taxes in Australia

[callistra]

Located here
http://www.news.com.au/story/0,23599,21666402-5007146,00.html

Breif paragraph:
MOTHERS do 70 per cent of the housework and more than 90 per cent of the childcare. Now it seems they're also paying tax at three times the rate of their husbands.



Taxing times for toiling mums

By Sue Dunlevy

May 04, 2007 01:00am
Article from: The Daily Telegraph

MOTHERS do 70 per cent of the housework and more than 90 per cent of the childcare. Now it seems they're also paying tax at three times the rate of their husbands.

A tax symposium was told Australia has one of the most sexist systems in the world and it could be part of the reason we're facing a skills crisis.

What self-respecting mother would bother entering the work force if her long hours at work actually left her family worse off by $6.25 per week?

Why is it that the male primary earner in a family on average pays just 10.3 per cent of his income in tax but his wife loses on average 32.7 per cent if she goes out to work?

In the past it was sexist social traditions and biased public service rules that kept women out of the workforce.

Now they're being taxed into a life of polishing the whitegoods and laundering the dirty undies because the taxman and the welfare system claw back much of the money they earn.

Research by University of Sydney Law Professor Patricia Apps shows the average tax rate on the father's income in a family was just 10.3 per cent.

But the average tax rate imposed on the mother was 32 per cent, when you took account of the welfare benefits clawed back when she worked.

It's why the hours worked by married women in Australia are among the lowest in the developed world, she says.

In Sweden married women work 75 per cent of the hours worked by married men, in the UK 62 per cent of male hours, and in the US 57 per cent.

In Australia, where women get penalised financially for working, women work just 46 per cent of the hours worked by married men.

With the nation already in the grip of a skills shortage and with an ageing work force a tax policy that actively discourages women from working is nuts.

Research by Professor Brian Andrew from the University of NSW shows why our tax system is so sexist.

He has identified a mix of 10 tax offsets, Medicare concessions, welfare payments and income tests that combine in different ways to provide a financial disincentive to work.

One of the big problems with our system is that we have a tax system based on individual income and a welfare system based on family income.

When a mother goes out to work she not only has to pay tax as an individual but also as a family.

Her income boosts the family earnings and the family also begins to lose family welfare payments such as the family tax benefit.

Professor Andrew shows how this combination means some families pay effective tax rates of between 71 and 110 per cent on their earnings.

One of the worst cases is that of a two income family with three students which earns between $37,500 and $50,000 a year. These families are paying effective tax rates of up to 110 per cent on their income.

Once this family earns over $50,000 a year they lose six separate welfare allowances for their children, the main breadwinner loses some of his low income tax offset and his wife starts paying the Medicare Levy.

When combined with the tax they have to pay, the welfare clawback leaves this family worse off by $6.25 per week.

The Government has been moving slowly to reduce some of the worst effects of these tax and welfare disincentives for women to work.

Tax cuts and changes to the family tax benefit thresholds in the last two budgets have reduced effective tax rates for some two income families from 89 per cent to 71.67 per cent.

But clearly a lot more needs to be done.

Treasurer Peter Costello has boasted of wanting to make Australia the most female friendly country in the world.

With the Budget predicted to be in surplus by over $15 billion this year and $13 billion next year there could never be a better opportunity for some action on making the tax system female friendly.

But fixing the problem isn't going to be easy.

Professor Andrews's research showed cutting tax rates won't necessarily make much difference. One proposal that could help some families is to raise the tax free threshold from $6000 to $12,000.

Liberal MP Alan Cadman wants the Government to pay all families with children under five $4700 a year per child which they'd get whether mum worked or not.

The Treasurer has promised a family friendly budget but this research shows is that what we really need is a mother friendly budget.

Comments

[cupidsbow.livejournal.com]

So much grrrrrr.

[callistra.livejournal.com]

Did you see what vegetariansushi was talking about too? I found it completely amazing what powerful white men will not only *allow* things to remain unbalanced, but that they will *actively try to stop the balance from righting itself*.

WTF is with that?
How do they sleep at night ffs?

[cupidsbow.livejournal.com]

I did see it. I really don't understand people a lot of the time. I think that's why I became a writer--characters are so much easier than real people :)

[discordia13.livejournal.com]

Ugh really bad article. Heavily biased towards causing a reaction in females, specifically those in the single mother demographic, and from the comments I've seen (In other places as well) it's worked.

I think if you actually looked at the facts the govt penalizes those on the welfare system who are actually working to supplement the income. It's been this way for 10+ years.

Research by Professor Brian Andrew from the University of NSW shows why our tax system is so sexist.

He has identified a mix of 10 tax offsets, Medicare concessions, welfare payments and income tests that combine in different ways to provide a financial disincentive to work.

One of the big problems with our system is that we have a tax system based on individual income and a welfare system based on family income.

Maybe I'm still missing something here (actual references?, quotes?, good journalism?) but I'm still looking for how the system is specifically sexist. It's pretty obvious that it fucks over the low income earners that shouldn't be paying tax on welfare.

This is not a specific men vs women issue here. It's about a fucked up system and the only solution I see in the short term is to get a good accountant to fuck it back.

[angriest.livejournal.com]

I can only speak from personal experience, but lie-xin is on a government disability pension while I work full-time, and we are financially hamstrung by the government at every turn.

[leahcim.livejournal.com]

I'm afraid that I too suspect that the article involves some questionable assumptions. Such as that when the second partner starts work, the reduction in welfare payments and the increase in tax is only attributable to the female. What I think is true (AFAICT) is that a single-income family is quite a bit better off than a dual-income family with the same total income. This encouragement of single-income families is likely to benefit more males than females.

Some of the comments (http://www.news.com.au/comments/0,23600,21666402-5007146,00.html) were worth reading too. Of course, many others weren't...

[dr-jekyl.livejournal.com]

I agree that the tax system is unfair. Everyone, I think, can agree that the tax system is unfair. However, I don't think that it's deliberately biased against women. Men who aren't the family's primary income earner are affected in exactly the same way as they would be if they were female.

You can also turn it around and argue that current taxation policy is biased against men. Far fewer men than women can and do claim the baby bonus, after all. It also penalises single people and childless couples, male and female alike, because they simply aren't eligible for any of those lovely parenting benefits in the first place.

[callistra.livejournal.com]

No one ever said it was *deliberately* unfair. Which is why people are or should be looking at ways to rectify it.

I also think that a biological difference is not a good argument, since there is no biological reason women should pay more tax (on average) than men.

When men can carry babies, I will be lining up for them to get the baby bonus too. And I think men being able to carry babies will be fantastic! I do wonder about the men who would like to be fathers and yet never get the same chance to do it alone the same way women do. I'd love for John to be carrying this pregnancy. But since men as a whole have such a lack of interest in protecting their right to procreate (the male pill is just a complete flop cos no man will take it) then I fail to see that many men leaping to actually go through an entire pregnancy.

However, I think that if the prime minister wants to encourage births, then giving away money is a nice step in that direction. It's about as penalising for your examples as is the fact women who are SAHM don't get paid as much as couples who work. So I don't think your example applies. Single/childless/whatever people have different benefits. And $4K is nothing in the costs of raising a child.

What the article is really talking about is how women already have it hard, and their value is de-valued further because, in a society in which the almighty $$ is the *only* way to show your value, we get less, keep less, and are worthless as working halves in a marriage.

[zey.livejournal.com]

I'd love for John to be carrying this pregnancy. But since men as a whole have such a lack of interest in protecting their right to procreate (the male pill is just a complete flop cos no man will take it)

I'm curious. Are there any stats on this? (As far as I knew, the male pill hadn't even left the testing stages yet, let alone ever been on the open market.)

I always thought there might be a good market for such a thing, actually. Especially among that paranoid mysogynist type who think women are out to "trap" them into marriage using pregnancy, but, also among young sexually active men who just want to be on the safe side.

[callistra.livejournal.com]

I believe it came out in america, and not in Australia yet. As soon as it does I'm going to buy it for Vinnie.
:-)

I'll see if I can find some articles or something on this. It's a very interesting topic.

[lucretiae.livejournal.com]

I think there are men who would take a male contraceptive pill if it was available. For starters, I'm married to one.
From a purely biological perspective as well, it's far harder to create a male contraceptive drug than a female one. Using some generalisation here (shoot me later, I'm going from memory here), but the female contraceptive works essentially by fooling the body into thinking it's already pregnant so various things happen that will prevent pregnancy - cessation of ovulation, unsuitability of the uterus wall for embryo implantation, increase in cervical mucous production to stop/slow down sperm. It does something that the body already does naturally from time to time. In women you only have to prevent one thing once a month, ovulation, to avoid pregnancy. To have a drug contraceptive for men you have to do something that doesn't normally happen, stop sperm production. And you need to do it all the time and it needs to be 100% effective. Even 99.9% effective wouldn't be good enough with the millions of sperm produced at each ejaculation.
Now don't get me wrong, I'm all in favour of a male drug contraceptive. I just wanted to point out that it's not as easy to do as a female drug contraceptive. I think any research body using the argument that men wouldn't want to take them as the reason not to look into developing a male drug contraceptive is a cop out on their part. I think there are plenty of responsible, rational men out there who would use one if it was available with the same degree of safety as female drug contraceptives. Not every woman on the planet wants to use a drug contraceptive, hell just as a starter there are millions of catholics who wouldn't, but that wasn't a good reason not to develop them. I think there are plenty of reasons why men would want a drug contraceptive... no unplanned fatherhood, allergic to latex, a female partner who didn't want to use a contraceptive or couldn't use one, or even just out of a general sense of responsibility (single and sexually active).

[discordia13.livejournal.com]

Yeah, I think all of what you have mentioned is correct by my recollection as well. The biggest problem with (even existing prototype) male contraceptives is the side effects. Now sure, the female pill has a few side effects(and they have been working for decades to reduce these), but as I recall a lot of the ideas for the male pill involved mucking about with the testosterone cycle. This can get really nasty (Heart disease, hair growth/loss, muscle growth, acne and other skin problems, libido issues, cancer, psychotic episodes.) (Articles Here (http://health.howstuffworks.com/male-bc-pill1.htm) and Here (http://www.theage.com.au/articles/2003/10/26/1067103267041.html)).

I for one would take it if it was safe, but right now the other options seem more fun.

I don't get it...

[lucretiae.livejournal.com]

Maybe it's coz I don't have to deal in welfare payments of any kind, and maybe it's coz I already have a well above average income, and maybe it's coz I've only had two coffees this morning but I don't get it. I must have missed something.
Maybe it's coz I live in the ideal family finance world where all of the money, regardless of whether it's earned by Matt or myself, goes into the same bucket. There is no mine or his, just ours.
When we have children Matt is more likely to be the person losing income and I plan to keep working (ah the joys of a job that you can do from home). Would the same thing said of the bias of the system and his income if he was the stay at home parent?
Should the real statement be that the system is biased against the stay at home or single parent?

I don't get it.

[foamiethegreeny.livejournal.com]

The tax system penalizes you for earning money simple as that. If you earn more money as a couple then the state supports you less. The tax system is not sexiest, society is, it considers you less of a man if you don't work. Would you and john be worse off if you both earned 1/2 his wage both working part time. In Australia especially wa you could earn a reasonable living and buy a home on one income. In Sweden (& europe in general you haven't been able to do that for 30 yrs), in the US you can work 40hrs and still not make enough money to survive.
The tax system givse benefits to couple that is does not give to individuals, is this sexiest or simply that our society think you raise a more balance person by having at least one parent around. Whether that parent is mum or dad is the couples choice. My cousin is a stay at home dad and loves it, his wife is a doctor. Why would he go back out to work and earn 1/4 of the income she does. Who goes out to work is a couples choice not the tax department.
But there are plenty of men out there who would say his not a real man because he does the cooking and cleaning. Funny in our house we both work & we share the house work. When one of us is working less then they will do more around the house. Even if that consist of sitting and playing with the baby all day. Fuck the house work, i'd rather have a great life than a neat home.

[lucretiae.livejournal.com]

Yeah OK, enough of that equality shit.
Get back in the kitchen bitch.

(just for anyone that is about to explode, it's OK. We're married and he's laughing already. We take each other very seriously, can't you tell?)

[callistra.livejournal.com]

And make me some pie??
:-)