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Geographical Mobility and Taxation - 10 |
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Employment (and unemployment) is also influenced by the level of
geographical mobility of the population.
Australia is a highly urbanised nation, with 85% of the total population living in urban areas.
Most of the population in each state is concentrated in the capital city and in a small
number of regional centres. Inter-state and migration rates in Australia are quite high, but
lower than those of the population of the United States of America. There may be jobs in
Queensland, but people from Adelaide may be unwilling to move, even if they are unemployed,
because they do not wish to leave their family and friends, or disrupt their childrens'
education.
Some economists argue that our present tax system contains disincentives for those
who earn even moderate incomes. After all, they say, a worker who earns $80,000 per year faces
the marginal tax rate of 47 cents in the dollar for every additional dollar he or she
earns over $60,000. Workers may be unwilling to do extra overtime : why work when half the
money you earn goes to the ''tax man''? The new GST system has seen a reduction in the
rates of income tax, and should remove some of these disencentives.
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