Factcheck: On tax, Chris Minns does his best Joe Hockey impression and it's not pretty

Is there a worse criticism of a politician’s understanding of economics than to suggest they are as bad as Joe Hockey?

Can you be as bad as Joe Hockey, who said poor people don’t drive, and suggested that the solution to the housing crisis was for young people to get a good job that pays money?

Well, alas, the NSW Premier Chris Minns has now reached the Joe Hockey level of economic ignorance.

Back in 2014, Joe Hockey, who was then Treasurer and thus in charge of the income tax system, suggested that “higher income households pay half their income in tax”.

This statement demonstrated a total ignorance of how income tax works, and yet a few months later, he doubled down, telling Neil Mitchell on 3AW that “Australians spend the first six months of the year working for the government with tax rates nearly 50 cents in the dollar.”

This was so utterly wrong as to almost suggest Hockey was wilfully spreading falsehoods.

Chris Minns, this week, however, has decided to be just as ignorant.

Minns told reporters on Wednesday that “The top marginal rate is 47 per cent. As I said in Parliament last week, you work Monday, Tuesday, and half Wednesday for yourself and then Wednesday, Thursday, and Friday for the government, that’s a tough burden for a lot of families to hit.”

Cripes.

It is almost impossible to make a statement about income tax that is more wrong than what the NSW Premier just uttered.

It is a statement so wrong that it makes you feel glad that state premiers have no control over the nation’s finances.

Income is taxed at progressive rates, according to the schedule below:

We also pay a 2% Medicare levy. There are a few moving parts to that, but essentially if you are single and have no kids, the Medicare levy fully kicks in after you earn more than $34,027.

What this means is that, if, for example, you earn $200,000 (someone whom Minns presumably thinks works half the week for the government because they are in the 47% marginal tax bracket), this is how much tax you would pay:

You can track how much tax you pay by following the blue line below:

But I know percentages can be a bit confusing, so I have taken Hockey’s and Minn’s lead by referring to tax paid in terms of days of a 5-day working week.

If you earn $100,000, which is just a touch below the average full-time earnings, you effectively work 1 day, 1 hour and 7 minutes for the government, and the rest is for yourself.

Chris Minns himself earns $431,540. Even at that level of income – which puts him squarely in the top 1% – he works 20 minutes shy of two full days for the taxman and rather below the two and a half days he suggests most families are having to pay in tax.

But the real horror of Chris Minns ignorance is that as a Labor leader, he is repeating the same lies pushed by arch-conservatives, which are designed to encourage tax cuts for the very rich.

Consider:
Someone on $200,000 per year taxable income pays a 30% average tax rate (but only 5% of taxpayers pay this or higher).
Someone on $500,000 per year taxable income pays a 40% average tax rate (but only 0.6% of taxpayers pay this or higher).
Someone on $1,000,000 per year taxable income pays a 44% average tax rate (but only 0.2% of taxpayers pay this or higher).

Who is Minns worried about? Certainly not those on the median income of $74,600, who would need to earn an extra $115,400 just to reach the top tax bracket.

Enough with the ignorance. If you don’t know how the tax system works, best to keep quiet rather than betray that ignorance to the world.