It's the economy, stupid!

 
  don_dunstan Dr Beeching

Location: Adelaide proud
It doesn't matter. If contributors can afford it then it doesn't matter how small their numbers are.  You still do not understand the concept of a progressive tax system, do you?
DirtyBallast
It's not that he doesn't understand it, he just doesn't like the idea.
Since the gov't can't lower the cost of living for the working poor, they must ensure that penalty rates are not decreased.
DirtyBallast
Combine an ageing population with increasing automation of even skilled jobs and the current workforce structure will not be able to sustain long term full Employement or long term welfare payments. The PTUA website makes the assertion that the cost of Melbourne's Myki running costs, $135m pa , that it would be cheaper to employ ticket sellers than persist with "cheap" automation. Perhaps we need to relook at how and why we should actually employ people than machines .
Radioman
Governments just don't think like that - although perhaps they should. It's the poorest half who face the most challenges in the future due to automation and the deliberate policy of shrinking wages but they should just learn to love the cake considering neither party is prepared to talk openly about those challenges.

Sponsored advertisement

  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Gentlemen,

A few good points mentioned, but before I start. I have no issues with being proven wrong and often quote a long (open to correction), I do however have issue with being mis-quoted in a point scoring exercise.

What the issue with the Feds today, budget wise, basically a $35-40B black hole that is difficult to fill in and doing so would more than likely push the economy into recession, but things have to change regardless. The reference to Japan is interesting as i was just there. Their population is shrinking by over 200k pa, millions of empty homes in the country, overpriced tiny apartments in the cities. They have a govt debt of 200% of GDP, higher than Greece but have the ability to pay. Average age of construction worker, 50! Oldest living population on the planet (or 2nd?) However walk around, you see old people everywhere, working!!!  Security guards being most common. The average taxi driver must have been 70+. However I assume the ones who cannot work are being looked after in decent old age facilities or by their families.

What this tells me is that as a society we don't have a use by date and any one nominated age, these people are proud to work and business are proud to employ them. My Grandmother is 99 this year and on a full pension living in +$10m realestate on the edge of Lane Cove National park on two sides in Killara (even my dad disagrees in this). My grandfather would was born same year and he died 5 years ago, he retired at 65 after working since he migrated in 1947. 27 years on the pension for him, my grandmother is likely to go 35 years. Many people don't even work that long in their careers. This has to be paid for and the old adage they worked for 40 years so they deserve it is true, but it still has to be paid for.

Yes I agree, the single mum references are BS as the rate of births to teenage mums has been dropping for 50 years and really insignificant, but what ever the cost is, its still there.

Yes there are a number of middle class welfare payments that need to stop, remember I said the top 50% to 25% need to be more realistic about what they need welfare for and why. Above average wage, there should be no welfare with the exception of paid maternity leave.

Even Alan Jones says frequently, he is entitled to medicare, but why?

Yes I agree with removal of negative gearing on existing property, but on new property I believe it aids the development of new properties. However this saving is around $1-1.5B only. A bit but not a make or break.

The issue with just looking to the wealthy to solve your budget problems, is that they are small part of the equation and basically already funding the country. How much should these people be expected to pay? If you earn $400k, how much should you be expected to pay in tax? The Europeans believed in taxing their wealthy heavily, result, they become Americans. Industry can be taxed out of the country and so can the rich.

The reason Australia lost so much manufacturing because we provided an environment where industry cannot succeed and make money. Reduce the cost in doing business and they will come and because we operate on a world platform, corporate tax is one of those that needs to be reduced and elimination of payrole tax as a starter.
  Heihachi_73 Chief Commissioner

Location: Terminating at Ringwood
I wonder if we should take up Spanish as our national language (we don't actually have one), we seem to be following the footsteps of Venezuela lately.
  bingley hall Minister for Railways

Location: Last train to Skaville
I wonder if we should take up Spanish as our national language (we don't actually have one), we seem to be following the footsteps of Venezuela lately.
Heihachi_73

No we don't.
  DirtyBallast Chief Commissioner

Location: I was here first. You're only visiting.
The issue with just looking to the wealthy to solve your budget problems, is that they are small part of the equation and basically already funding the country. How much should these people be expected to pay? If you earn $400k, how much should you be expected to pay in tax? The Europeans believed in taxing their wealthy heavily, result, they become Americans. Industry can be taxed out of the country and so can the rich.
RTT_Rules
As I've said before, the numbers of contributors is irrelevant. A high income earner thinking otherwise shows a certain level of selfishness.

I will declare right here and now that if I made $400k in a year I would be extremely happy to pay $200k tax. That is a rare position I know, and counters the vast majority of anyone earning a low-scale 6-figure wage or salary who normally becomes increasingly greedy the more they make. "Keep your hands off my stack" etc. Again, selfishness.

It's all about greed for most higher income earners. Guaranteed, the relatively few who do earn $400k would probably pay less tax than me, but that is just plain wrong. Can't you see that?

PS the reference to single mums was meant as a generic term to differentiate between genuine people receiving the age pension and all others normally labelled as leaners, or as you call them, takers.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
I wonder if we should take up Spanish as our national language (we don't actually have one), we seem to be following the footsteps of Venezuela lately.
Heihachi_73
I think English is fine.

It would however appear many New World economies which use Spanish/Portuguese as their national languages have longterm political instability and basically default on their horrific debts at least once a generation. Causation or correlation, you choose!

There is alot that needs to be done and i would vote left or right for any party that I believe could actually do it, but alas both sides of the federal govt for last 8-9 years have been lacking (understatement). I use my far right dad as a litmus test on how good a LNP party is performing and he has more than given up on his once poster boy TA and never held much hope for MT.

Unfortunately since the early 70's, I believe we have only had two good govts. The first was Hawke with Keating as Treasury (pity he didn't know his place), the 2nd was Howard with Coestello as Treasury. Both provided the changes to the economy required to be made and kept the country moving forward and ahead of the global pack, often making the hard and at times unpopular decisions and not afraid to do so, were relatively politically stable and kept their party in check. The rest have treaded water at best and/or caused more harm than good.
  Valvegear Oliver Bullied, CME

Location: Richmond Vic
Even Alan Jones says frequently, he is entitled to medicare, but why?
"RRT_Rules"
Don't you love it when someone quotes one of the country's leading authorities.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Even Alan Jones says frequently, he is entitled to medicare, but why?
Don't you love it when someone quotes one of the country's leading authorities.
Valvegear
Ok reason behind this, first I am a believer in a universal health care system and Medicare fails to achieve this thus forcing even lower income to take out costly medical insurance to cover things that fall outside Medicare. For me, once you drop below average income earner, private medical insurance shouldn't be a cost you need to incur.

Now on of the problems with universal health care is that should wealthy people be able to use it? Doing so reduces the funding available for others, but if they cannot use it why pay it etc etc

However here is a wealthy celebrity, who clearly leans to the right and a strong supporter of TA and he says point blank. He should not be entitled to claim Medicare and one day he said that he tested the system by wanting to pay cash for something (cannot remember) and they refused to demanded his Medicare card.  

Point was, should universal medical system be universal?
  don_dunstan Dr Beeching

Location: Adelaide proud
Ok reason behind this, first I am a believer in a universal health care system and Medicare fails to achieve this thus forcing even lower income to take out costly medical insurance to cover things that fall outside Medicare. For me, once you drop below average income earner, private medical insurance shouldn't be a cost you need to incur.
RTT_Rules
Blame Howard - didn't abolish Medicare completely but made it really unattractive for working people by penalising them unless they take out unwanted and un-needed private health insurance.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
The issue with just looking to the wealthy to solve your budget problems, is that they are small part of the equation and basically already funding the country. How much should these people be expected to pay? If you earn $400k, how much should you be expected to pay in tax? The Europeans believed in taxing their wealthy heavily, result, they become Americans. Industry can be taxed out of the country and so can the rich.
As I've said before, the numbers of contributors is irrelevant. A high income earner thinking otherwise shows a certain level of selfishness.

I will declare right here and now that if I made $400k in a year I would be extremely happy to pay $200k tax. That is a rare position I know, and counters the vast majority of anyone earning a low-scale 6-figure wage or salary who normally becomes increasingly greedy the more they make. "Keep your hands off my stack" etc. Again, selfishness.

It's all about greed for most higher income earners. Guaranteed, the relatively few who do earn $400k would probably pay less tax than me, but that is just plain wrong. Can't you see that?

PS the reference to single mums was meant as a generic term to differentiate between genuine people receiving the age pension and all others normally labelled as leaners, or as you call them, takers.
DirtyBallast
Your focusing on an ideology and not looking at the maths. I've never even come close to earning 1/3 of $400k, but I'm sure if I did I would not be smiling as I write my annual cheque to the govt for half my income and I'm sure most would feel the same. I'm sure most people earning this sort of cash kind of feel they deserve it after years of study usually combined with long hours and/or taking significant financial risks.

Ok, lets pick $400k, thats $153k in tax + $8000 in medicare levy for a single income 2 child family and no other off-sets. Total $165k.

Ok so tax them to $200k, govt has got an extra $35k. Now how many are there out there can you go and grab another $35k? Answer, very very few, I think less than 1% of tax payers.

Meanwhile on the left side of the curve, you have millions of people with their hands out and growing! There are not enough wealthy people to off-set this.

Govt spending is around 25.5% of GDP and considered too high now for the economy to grow efficiently as too much money is going to the govt and not the economy (not my words). The economy grew the strongest when the govts take was closer to 24% of GDP.  What this tells you is more taxation is not the answer unless there are significant reductions in spending to off-set and go further.

If you go through the budgets in detail for last 5-10 years, you can see how much work the govt has to do each year just to cut from one area to fund the growing OAP/Welfare bill. I did it about a year ago and its basically a few billion a year. So if the govt made no policy changes now and did nothing more for 10 years, in 10 years the welfare bill would be pushing 25% and another $18B or so in the black. (open to correction)

I think blind Freddy can see this is unsustainable and things have to change and yes reviewing who's getting paid and making cuts is part of the problem to ensure those most needy are looked after.
  DirtyBallast Chief Commissioner

Location: I was here first. You're only visiting.
There is one thing that you consistently fail to acknowledge - wealthy people CAN afford to contribute more, and those even up to some sort of middle class level in some circumstances, CANNOT.

I want to live in a society where there is an availability of first class health and education services, great infrastructure, (not just roads and rail), bulletproof utilities, social services etc. I'm sticking up my hand and declaring that I AM WILLING TO PAY FOR IT, even if I am paying on behalf of those that can't. However it galls me that I am probably also paying for those that won't - and that's the group that you are defending, people legally evading tax to feather their own nests. They are akin to fare evaders in my book.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
There is one thing that you consistently fail to acknowledge - wealthy people CAN afford to contribute more, and those even up to some sort of middle class level in some circumstances, CANNOT.

I want to live in a society where there is an availability of first class health and education services, great infrastructure, (not just roads and rail), bulletproof utilities, social services etc. I'm sticking up my hand and declaring that I AM WILLING TO PAY FOR IT, even if I am paying on behalf of those that can't. However it galls me that I am probably also paying for those that won't - and that's the group that you are defending, people legally evading tax to feather their own nests. They are akin to fare evaders in my book.
DirtyBallast
For one, when someone is paying for their fair share and that of many others, they can hardly be called "fare evaders" in anyones book.

Issue number 2, Australians in general don't like paying for infrastructure and the reason why so many toll roads failed to be a success and the rail system is under funded. Look at the comments in the newspapers and media every time a new toll road opens. "I already pay for the roads in my taxes, not paying to use this one"

Issue number 3, as I stated before,
- The bottom 1/4 are almost fully funded by the wealthy
- The bottom 2/4 are partly funded by the wealthy
- The bottom 3/4 are not contributing to others
- The Top 1/4 are paying for at least half the population PLUS themselves

Don't take my word for this, Google it!

While I no doubt believe there is more that can come out of the top, the issue is top end cannot solve the deficit problem PLUS future deficit for the growing welfare bill as % of GDP alone and you are ignoring this. Its simple mathematics.

The govt is already taking what is considering on the upper limit of comfortable/healthy in revenue from the economy. Taking more just removes money from the economy and spending.  Again simple mathematics.

Also interesting on your comments on medical, was just reading this on CNN>  http://edition.cnn.com/2017/03/17/health/health-care-global-uk-national-health-system-eprise/index.html


and finally
I want to live in a society where there is an availability of first class health and education services, great infrastructure, (not just roads and rail), bulletproof utilities, social services etc.


That's exactly where I live now, except there is a difference. Only 15% of the population is able to access welfare and free govt funded schools (which are marginal) and govt funded world class medical. The rest of us are expats and hence have to pay for our own everything including a school system and medical for world class facilities (if you have the money, basic if not). Don't work, don't eat and you have to leave the country.

Back in the real world of Australia, if you want these facilities then the money to pay for it needs to come from those who use it, there simply isn't enough from the top end.
  kitchgp Chief Commissioner



Ok, lets pick $400k, thats $153k in tax + $8000 in medicare levy for a single income 2 child family and no other off-sets. Total $165k.
RTT_Rules


Negative Gearing,
Capital Gains Tax Discount,
Superannuation Concessions,
Old Age Pensions addressed to 3142 (nee SE2),
Novated Leases*,
Salary Sacrifice*, ...............................................................................

* - even more lucrative if company tax rate decreased.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE


Ok, lets pick $400k, thats $153k in tax + $8000 in medicare levy for a single income 2 child family and no other off-sets. Total $165k.

Negative Gearing,
Capital Gains Tax Discount,
Superannuation Concessions,
Old Age Pensions addressed to 3142 (nee SE2),
Novated Leases*,
Salary Sacrifice*, ...............................................................................

* - even more lucrative if company tax rate decreased.
kitchgp
Increasing the tax brackets only makes the above more lucrative.

Negative gearing needs to be addressed, however its well proven negative gearing on new property increases the supply on new property so be-careful what you wish for.

The rest you can argue either way, but again the overall net benefit lost from the tax system is small because the number of taxpayers earning this amount of money is very small.

Not sure what any of the above has to do with company tax, but in almost developed country in the world including Australia when the company tax rate was reduced, economic activity in the country improved and jobs were created. Again look the low tax city states like Singapore, Luxemberg, HK and Dubai etc which have few natural resources and no real reason to justify their existence beyond that of a fishing village as prime example. Again, be careful what you wish for.

Old Age Pensions addressed to 3142 (nee SE2)  ????
  don_dunstan Dr Beeching

Location: Adelaide proud
Again look the low tax city states like Singapore, Luxemberg, HK and Dubai etc which have few natural resources and no real reason to justify their existence beyond that of a fishing village as prime example.
RTT_Rules
It just doesn't work that way in the real world, Ayn Rand. They're very selectively picked examples - for every one of those stunning successes there's dozens more cities/states pursuing that "no corporate tax" thing the just end up being very poor, crime-ridden undesirable places for the residents to live.
Back in the real world of Australia, if you want these facilities then the money to pay for it needs to come from those who use it, there simply isn't enough from the top end.
RTT_Rules
Those poor rich people, do you think they might end up in caravan parks if their tax shelters/lurks are closed down? I do so worry for them.
  Radioman Chief Train Controller

Hello All,

Much to my surprise I find a lot of things RTT is explaining I broadly agree with , yet I consider myself an unreconstructed socialist !

Part of the problem with the Tax Act is its provisions , rulings, exemption and what have you fills about three walls of the local Accountants Office. Serious consideration needs to be given to simplifying the Tax Act so that its administration is simpler. This would address a lot of the tax minimisation strategies that wealthier corporates and individuals are able to take advantage of, to the detriment of other taxpayers.

Whilst I generally support the idea of progressive tax , I also think that the current three brackets of personnel tax rates undermine the concept . When I first went to work I the 1970s I think there were ten or twelve tax brackets. That made sense to me as a system of progressive tax. I think the top rate at that time was 50% ( I am happy to be corrected on this )

Regarding Corporate Tax, the Economist Magazine in the 1970s was in favour of a no deductions flat rate turnover tax or an even lower flat tax rate on capital inflow. In the latter case the intent was to knock off inter corporate loans as a means of tax avoidance , and in the former case the intent was to raise a similar amount of company tax but expressed as a tax on turnover, with a special definition for financial institutions which are effectively profiting of differentials , so a normal turnover definition would not apply.

Whilst I cannot remember the actual rates discussed I thought the simplification and redefinition of what was taxed made a lot of sense, was cheap to administer , significantly reduced tax avoidance ( effectively made avoidance a form of fraud ) and everyone paid an appropriate share.

Without now knowing the maths behind it, I think it is  a concept well worth another look at.


For your consideration and thoughts,

Best wishes and regards, Radioman ( listening to Rachmaninoff Piano Concerto No2 )
  rxclass Junior Train Controller

Location: On the manual turntable at Marino turning an exquisite Rx class steam locomotive.
Again look the low tax city states like Singapore, Luxemberg, HK and Dubai etc which have few natural resources and no real reason to justify their existence beyond that of a fishing village as prime example.
It just doesn't work that way in the real world, Ayn Rand. They're very selectively picked examples - for every one of those stunning successes there's dozens more cities/states pursuing that "no corporate tax" thing the just end up being very poor, crime-ridden undesirable places for the residents to live.
Back in the real world of Australia, if you want these facilities then the money to pay for it needs to come from those who use it, there simply isn't enough from the top end.
Those poor rich people, do you think they might end up in caravan parks if their tax shelters/lurks are closed down? I do so worry for them.
don_dunstan
G'evening All,

According to my 'Law of Monetary Wealth", the further you are removed in monetary terms to poverty the more petrified of poverty you are:-

If you have $100,000, it is not enough, you need $1,000,000. If you have $1,000,000, it is not enough, you need $10,000,000 and so on. The result of this is that the wealthier you are, the more you seek out tax minimizing/avoidance schemes. These of course are encouraged by the 2 major political parties, because most members of Parliament have their own various tax minimizing schemes. Do you ever hear MP/Senators complaining about the amount of taxes they pay.

Regards,
  Valvegear Oliver Bullied, CME

Location: Richmond Vic
Best wishes and regards, Radioman ( listening to Rachmaninoff Piano Concerto No2 )
"Radioman"
I prefer the Beethoven No 5.
  don_dunstan Dr Beeching

Location: Adelaide proud
Much to my surprise I find a lot of things RTT is explaining I broadly agree with ...
Radioman
There's nothing surprising about it, RTT and myself have had lots of general points of agreement in the past such as the fact that the closure of the car industry is bloody-minded stupidity failing to plan for future contingencies and that property speculation isn't taxed heavily enough.

Where we disagree is that he refuses to allocate blame to the Aussie banks for pumping up the speculative asset bubble and he actually believes that a banking system that is too profitable is a good thing. This ignores is the fact that the banks and their hyper profits are directly connected to the destruction of all other sectors of the economy in Australia, purposely making the cost of living here much more expensive for their own benefit.

He also fails to make the connection between some things and squrims in revulsion against any ideas that he considers too socialist in nature ... like the comment about Alan Jones above. The point of a universal health system is just that - that it is universal in nature. Who cares that Alan Jones is very rich and doesn't want a Medicare card? The fact is that as a citizen he's entitled to it; and it's actually a privilege he should be proud of (many Americans would kill for one).
  don_dunstan Dr Beeching

Location: Adelaide proud
The result of this is that the wealthier you are, the more you seek out tax minimizing/avoidance schemes.
rxclass
Or that money becomes the ends within itself. Pathological greed.

People become addicted to the power that they wield with more and more money, forgetting that one day they'll be dead and their money will not be coming with them to the next world.
  DirtyBallast Chief Commissioner

Location: I was here first. You're only visiting.
Back in the real world of Australia, if you want these facilities then the money to pay for it needs to come from those who use it, there simply isn't enough from the top end.
RTT_Rules
Which only widens the chasm between the haves and the have nots.

Ok, I'm tired of this debate. Lets just agree to disagree on what we see as a legitimate partial fix.

I guess at the end of the day I'm after some sort of utopia, and on the other hand you will go to your grave defending greed and selfishness.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE

The problem is for those who can contribute more is that the number is small and those on the take the number is very high.

If you don't provide money for investing, money goes to places more attractive and if we look around, where the money goes the jobs follow. why else does the likes of Singapore, Dubai, HK, Luxemberg etc have a reason to exist?

Question is, how much should someone on say $250k a year contribute to someone on $50k a years lifestyle? Things like Heathcare and education no argument, but as I have two cousins on combined of low income and welfare, I can assure you it goes alot further than this.

It would also be easier if the govt could lower the cost of living for the working poor, rather than sitting on fence watching housing going to such absurd levels.  

Something else to consider, in 1980, Welfare cost the taxpayer 10% of all fed revenue, its now 20% and rising. 10% is the budget deficit. This is not sustainable and when does it stop and chasing the higher income earners to fill the gap is a chasing law of reducing returns as this pool of people become less and less and alternatively they finds ways to get their money out as the incentive to do so increases.
It doesn't matter. If contributors can afford it then it doesn't matter how small their numbers are.  You still do not understand the concept of a progressive tax system, do you?

Negative gearing still does not allow the working poor to invest, but as it stands it allows people already at a certain level of wealth to become even more wealthy.

I don't make $250k but I did pay $53k in tax last year, and was quite happy to do so (and just a little proud), because I still had plenty left over. Paying tax is my way of contributing to society. And please, stop pretending that someone on $50k has a 'lifestyle'.

Since the gov't can't lower the cost of living for the working poor, they must ensure that penalty rates are not decreased.

The welfare bill is increasing largely due to an ageing population, not because of teenage mums.
DirtyBallast
Of course I understand the progressive tax system, have I said it was a bad idea? I also understand basic maths rule over poorly thought out ideologies and hence the failure of many socialistic schemes both here and abroad.

If you have no money, not tax incentive based system will allow you to invest. The idea of a tax incentive investment system is to encourage those with money to invest in ways that benefit the country, not just them. Wealthy people will inherently always become more wealthy, typically for the same reasons they became wealthy to start with. Some will also fail as there is always risk and circumstance beyond your control.

$50k has a lifestyle over someone on $40k. Part of the issue is why can someone not working with 5 kids end up with a higher income than someone working say as a truck driver 45 hours a week. My understanding is the UK has now installed a welfare ceiling such that it no longer encourages people to breed for welfare or not work, I don't know exact details as its from a 5min conversation I had with a UK (Aussie) resisdent.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Again look the low tax city states like Singapore, Luxemberg, HK and Dubai etc which have few natural resources and no real reason to justify their existence beyond that of a fishing village as prime example.
It just doesn't work that way in the real world, Ayn Rand. They're very selectively picked examples - for every one of those stunning successes there's dozens more cities/states pursuing that "no corporate tax" thing the just end up being very poor, crime-ridden undesirable places for the residents to live.
Back in the real world of Australia, if you want these facilities then the money to pay for it needs to come from those who use it, there simply isn't enough from the top end.
Those poor rich people, do you think they might end up in caravan parks if their tax shelters/lurks are closed down? I do so worry for them.
don_dunstan
Like many things, good concepts also require good management and good systems and good support systems. There are reasons these countries/cities succeeded and others failed.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Back in the real world of Australia, if you want these facilities then the money to pay for it needs to come from those who use it, there simply isn't enough from the top end.
Which only widens the chasm between the haves and the have nots.

Ok, I'm tired of this debate. Lets just agree to disagree on what we see as a legitimate partial fix.

I guess at the end of the day I'm after some sort of utopia, and on the other hand you will go to your grave defending greed and selfishness.
DirtyBallast
Fair enough,

One parting comment to address your Utopia (which be the way I do support). The Iron Ladies most famous one liner.
"The problem with socialism is that eventually you run out of other peoples money". Moral of the story, successful progressive human society is based on having both rich and poor and no one has yet to find a Utopian way to avoid it and they have been trying for over 2000 years and includes the basis of the Koran for Muslims.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Hello All,

Much to my surprise I find a lot of things RTT is explaining I broadly agree with , yet I consider myself an unreconstructed socialist !

Part of the problem with the Tax Act is its provisions , rulings, exemption and what have you fills about three walls of the local Accountants Office. Serious consideration needs to be given to simplifying the Tax Act so that its administration is simpler. This would address a lot of the tax minimisation strategies that wealthier corporates and individuals are able to take advantage of, to the detriment of other taxpayers.

Whilst I generally support the idea of progressive tax , I also think that the current three brackets of personnel tax rates undermine the concept . When I first went to work I the 1970s I think there were ten or twelve tax brackets. That made sense to me as a system of progressive tax. I think the top rate at that time was 50% ( I am happy to be corrected on this )

Regarding Corporate Tax, the Economist Magazine in the 1970s was in favour of a no deductions flat rate turnover tax or an even lower flat tax rate on capital inflow. In the latter case the intent was to knock off inter corporate loans as a means of tax avoidance , and in the former case the intent was to raise a similar amount of company tax but expressed as a tax on turnover, with a special definition for financial institutions which are effectively profiting of differentials , so a normal turnover definition would not apply.

Whilst I cannot remember the actual rates discussed I thought the simplification and redefinition of what was taxed made a lot of sense, was cheap to administer , significantly reduced tax avoidance ( effectively made avoidance a form of fraud ) and everyone paid an appropriate share.

Without now knowing the maths behind it, I think it is  a concept well worth another look at.


For your consideration and thoughts,

Best wishes and regards, Radioman ( listening to Rachmaninoff Piano Concerto No2 )
Radioman
I think it was over 50c when I first started work in the 80's, maybe as high as 60c.

Personally I feel this is an insult to anyone to pay such a high rate of tax. Yes there are those born with a silver spoon in their mouth, but much of this income bracket are those who studied hard, worked hard and took personal financial risks and usually creating jobs for others in the process. This also drove a brain drain to the USA (my dad had a few friends who left Australia mostly due to excess income taxation) and other locations and makes seeking tax avoidance options highly profitable.

Personally I feel the govt should rely more on a tax of spending than a tax of earning to encourage money to move around the economy more and more difficult to avoid any taxation.

Anyway, yes I believe there was also more tax brackets but this made sense considering the huge variation.

My thoughts are today, keep it simple, set 4 income brackets

Medicare, to me the medical system should be fully funded by medicare levy, set the rate such that it must cover the projected budget for next year and any losses or profit from previous year. This is then outside govt influence and not some arbarity number, with govt only able to look at the cost of running the health system as a way to reduce the costs to taxpayer. I believe to be fully funded, the Medicare levy is around 10% and I'd extend to dental and corrective eyewear.

Bottom 25% - No tax and no Medicare. Whats the point they are dependent on mostly welfare anyway and encourages them to work as much as they can

25-50% of income earners - Tax at say 10-15%

50-75% of income earners - Tax at say 15-20%

75-100% of income earners - Tax at say 20-30%

(all are based on previous years income spread and adjusted annually)

Actual rates would vary based on other factors and what would take to balance the budget. As I said I would look at more taxing spending and thus increase GST to 12.5% for 100% of goods or 15% to those goods taxed now. The increased revenue enables the states to be more independent of the feds financially and in return their health portfolio's would be closed and handed over to the feds. Single Health department for the country funded by one source of revenue apart from Private insurance patients and gap fees etc.

I see what you mean about have no deductions to simplify but the issue is the deductions are often there for a reason, especially for employees who have to fund part of their own employment costs such as transport, tools and uniforms. Its also there to encourage wealthier income earners to channel their investments into areas that benefit lower income areas in the country and stimulate growth.  However I agree its not 100% perfect right now and there are numerous things that can be closed down such as negative gearing on existing properties.

Additionally it as interesting reading the data on govt welfare payments based on income on ABS site, clearly there are some issues that need to be resolved. For the above brackets, I would basically remove most welfare entitlements from average income earners and above and all welfare entitlements for 75% of income earners and above.

I'd also have reducing child welfare payments based on number of kids people have.
ie
- 100% for Child 1,
- 70% for child 2
- 50% for child 3
Zero beyond

Exception for multiple births, not applied retrospectively for existing children and pregnancies.  

We do not need taxpayers money to pay for people to breed (often from the lower end of the gene pool), its far cheaper to bring in cashed up and educated immigrants who usually have qualifications earned elsewhere and add more positively to the gene pool.

Sponsored advertisement

Display from:   

Quick Reply

We've disabled Quick Reply for this thread as it was last updated more than six months ago.