The amount of individual income tax we pay depends on two things—marginal tax rates and tax thresholds. Although nominal marginal tax rates have declined in Australia over the last 20 years, most of us are losing a bigger slice of our incomes in tax than ever before. This is because tax thresholds have not kept up with inflation. This has affected taxpayers at all levels of income. In 1980, people did not start paying the top rate of tax (then 60%) until they earned around $35,000—nearly three times the average income at that time. Today, however, we start to pay the top rate (47%) on earnings just one and a third times higher than the average. Australia today not only has one of the highest top tax rates in the whole of the OECD, but also levies this top rate at a lower income than almost all other advanced industrial nations. The top rate of tax starts at A$83,000 in France, A$84,000 in the United Kingdom, A$98,000 in Germany, A$115,000 in Canada and an astonishing A$549,000 in the United States. In Australia, it cuts in at just A$62,500.