Rich pay only 25pc tax

The wealthiest people in Australia are paying only 25 per cent of their income in tax and are easily avoiding the top personal rate of 47c in the dollar.

The very rich pay less than a third of the tax paid by the nation's highest-paid workers - $28,000 versus $92,000 a year - because they are allowed to use their investments to minimise income and claim tax breaks not available to regular workers.

The Howard Government claims that only 3 per cent of taxpayers, with taxable incomes above $125,000, will face the top marginal rate of 47c when the thresholds are lifted again on July 1 next year.

The truth is that the richest 2 per cent of the nation won't be among the people on the 47c band, according to evidence from the Melbourne Institute's recent survey of the nation's 3.6 million working households.

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