Anyone who believes in the tooth fairy probably believes also that the fringe benefits they receive from an employer as part of their salary package are tax free. I have always thought that the Fringe Benefit Tax was a gutless intrusion into the tax system by a government that was not game to tax the recipients of a benefit, namely the employee, and chose instead to tax the employer.

It did not take very long for employers to wake up to the fact that there was no logic in giving someone a car or a holiday or a game of football in a private box at the Gabba or some other perk and paying the tax on that while the employee thought that all they were getting was the cost of that extra.

For the last 25 years I have not seen any employer who does not pass on this tax to the employees who are getting the benefit. This seems a perfectly logical process to me except that the tax net has been extended to the ridiculous extreme that a fringe benefit is deemed to be provided even when an employee is out working, such as taking a big client or potential customer to lunch.

Fringe benefits are taxed at a rate of 46.5%. The assumption therefore would seem to be that the only people who get fringe benefits are those earning more than $180,000.

When the tax scales were changed in 2000 there were thousands of taxpayers with incomes in the range of $45000 to $65000 who were receiving part of their package as a fringe benefit.

Tax rates keep on changing to the extent that many employees are now paying 46.5% on the fringe benefit that they are receiving instead of 39.5% or even 31.5% if they received this benefit as part of their salary.

I think there are still far too many employees in this pickle.