All the tax whingers

in the last 12 months we all got a lesson - or so I thought - in which ones we would miss quicker . some of the comments here are quite disappointing and demonstrate how quickly some appear to have forgotten that we rely very heavily on all kinds of people who don’t necessarily make big bucks. Front line workers ,for example . So I’m in complete agreement with you on this point @Lizzie .

I get that people see bracket creep as a penalty for earning more money . But I see the payment of more tax as the result of increasing success .
I pay more Income tax only if I earn more money
I pay more CGT if I earn more profit from the sale of an asset . Is that a disincentive to seek more profits? Of course it isn’t ... so the argument prosecuted above about higher marginal tax rates being a penalty or disincentive for earning a higher income is in that context , nonsense .
Let’s also not forget that we all have extremely generous options available to us to avoid or reduce large amounts of that tax if we structure finances correctly and invest wisely... so when all of that is balanced out I don’t see what anyone has to complain about, really . This is a first world country that largely gets it right . I like our slightly socialised version of capitalism . It isn’t perfect - aged care is a basket case as I said earlier , but Until and unless you have lived in a more “purist” version of a capitalist country like the USA and seen the poverty and crime that sits side by side with the wealth ..... well , be careful what you wish for . The last 12 months taught us that , too.

 

It’s actually 51.75% over ~67,500 Euro.... Sweden is even worse....

Actually, in Australia you can earn ~$100k and pay no tax.... just need to be 60, retired & income from super in pension phase....

 

Back in the day, I recall my father paying 75% top rate in NZ

 

As I have a few grey hairs I recall my well paying job in 1999 (I was 23) threw me into the top tax bracket. The tax brackets hadn't changed for a long time and I was very thankful when they made some significant changes in 2004/6. I used to pay more tax back then than I did in various jobs post 2004 where I earnt more money per annum.

I used to just think about nurses, hospitals, schools and roads that my tax was being spent on and tried to ignore various other wastes of money.

My DS21 pays next to no tax for his permanent part-time job whilst he's at Uni and I have no issues with that. He works in a supermarket and contributes greatly to society keeping Perth in toilet paper and frozen chips during all the lockdowns, being abused by customers and not being able to work from home. He'll eventually join the tax paying brigade and help support Oz financially.

If you want to take a walk down the path of historical tax brackets they are at Individual income tax for prior years

 

Also, more than happy that my taxes help fund the PBS so those with diabetes, high blood pressure, skin conditions, cancer and a zillion other debilitating health conditions, don't have to sell the house (or go bankrupt) simply to survive

 

@Vertigo , I congratulate you on earning enough to pay more tax. Why don’t we see that as an indication of your success rather than something negative.

Iceland’s tax rate is fairly comparable to ours. Moreover people subject to unlimited tax liability in Iceland on all their income, wherever earned.




Each to their own. There are people who take advantage of the system. But there are people taking advantage of any system. Be that drugs, tax, homework or relationships. It does take away that vast majority of those who benefit from our taxes are good people, who wake up, do their job and do it good.

Nurses, paramedics, teachers, social workers. They all are paid much less than to make it in top bracket.

Our taxes fund their salaries, they save our lives.

And as far as I know. Majority of those who take advantage of the system get a slap. Eventually. Sometimes it takes longer. Sometimes it takes less.

Each person is entitled to their opinion. Nothing personal. I think it’s fair to get upset when we see waste or fraud. But I don’t think it’s fair to generalise those who need help, who are sick, disabled or otherwise.

 

Australia is a highly taxed country and yet every crime you mentioned happens in Australia. OK OK we're not as bad as some other countries in terms of blatant criminal activity and corruption.

For example, a woman can walk down the street in Australia and feel confident she won't get raped and the matter hushed up. Although a can of capsicum spray may be handy if she works in Parliament House lol....that's enough datto.

 

Haven't you seen this one before?

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100...

If they paid their bill the way we pay our taxes, it would go something like this: The first four men (the poorest) would pay nothing. The fifth would pay $1, The sixth would pay $3, The seventh would pay $7, The eighth would pay $12, The ninth would pay $18, The tenth man (the richest) would pay $59. So, that's what they decided to do!!

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20". Drinks for the ten men would now cost just $80.

Being good mates and Australians they still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free.

Now what about the other six men? They were after all the paying customers. How could they divide the $20 windfall so that everyone would get his fair share? They realised that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each Man's bill by a higher percentage the poorer he was, to follow the Principle of the Australian Tax System they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% Saving). The sixth now paid $2 instead of $3 (33% saving), The seventh now paid $5 instead of $7 (28% saving), The eighth now paid $9 instead of $12 (25% saving), The ninth now paid $14 instead of $18 (22% saving), The tenth now paid $49 instead of $59 (16% saving).

The six are better off than before and the first four continued to drink for free. But, once outside the bar, the men began to compare their savings. "I only got a dollar out of the $20 saving," declared the sixth man. He pointed to the tenth man and said "but he got $10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more benefit than me!" "That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

So! Boys and Girls, journalists and government ministers, is how the Australian Taxation System. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up any more.

 

Just wondering did any of your companies benefit from jobkeeper? Plenty out their recording record profits - some profits that are so silly companies are paying it back e.g Toyota apparently handing back 18million in jobkeeper payments
Harvey Norman 22million in jobkeeper payments (not paying back) despite profits doubling to 450million.

 

With all the brains, modelling, data analysis, computer programmes etc, it’s fair to say there is no simple tax system which is perfect.

I would be happy if we could have a system where we didn’t need to have different/multiple structures for tax-saving strategies.

It has been mentioned that higher welfare payments are spent by the recipient, thus circulating through the economy. Similarly, if taxpayers are taxed less, those extra funds can be spent, boosting economic activity, and generating GST and profit for the business which then generates tax.

That’s how I justify my spending anyway

 

Never really understood why the big companies are exempt from paying tax. Companies like Murdoch News , Woodside petroleum ect
Billions in profits but no tax to pay. I'm sure there is a legit reason somewhere

 

Vertigo may be suffering a bit of vertigo, having seen the blow back to the bloviating

 

Why do you think they pay no tax? I used to work for Woodside and they certainly do pay tax
In 2019 Woodside (it's 3 companies/entities) paid A$447 million in Australian corporate income tax, and a further A$290 million in other taxes and royalties. Of note there is a number of companies that do makes up Woodside and one of them WPL sometimes has $0 payable after all deductions because it has the exploration side and the costs to explore are huge so are claimed as a deduction.

 

Woodside oil&gas 6billion revenue paid zero tax 2017 18. Read it somewhere

 

I'm ok with paying more tax for earning more, but there comes a point where putting in the extra hard yards makes it not worth sacrificing your life anymore only to pay most in tax.

I pay a hellof a lot in tax. Any more and there's really no more incentive.

There needs to be a balance and I think Australia mostly has something that is more or less swallow(able).

I'd hate for more taxing to occur. What I would like to see is more of our tax dollars diverted to the elderly, the seriously ill and those who are genuinely homeless.

A few less grants to do research on 'the adaptation of urban art to climate change'. Who the freak cares.

 

The revenue pie is only so big... the spending pie always has more mouths wanting to be fed.

We either raise more revenue to feed the extra mouths, which would mean higher income taxes or a higher consumption tax (GST) ...or we rule that option out and accept that we must feed less mouths as time passes... after all, demand for age pensions and disability support will grow aggressively in the coming years - or we rule that option out but reconsider which mouths get fed/or how much each mouth gets fed. The 3rd option seems to me to be the obvious choice if increased taxes are to be avoided and the costs for aged and dementia care are to be met - more so now that we have accrued so much debt in the last 12 months.

This is where discussions around things such as dividend imputation, neg gearing, family trusts , corporate taxes, carbon taxes / emissions trading schemes etc need to take place. Unfortunately, no one seems capable of discussing them without resorting to political ideology. There appears no capacity in this country for reasoned debate any longer , and less still for any sort of common sense to prevail. All debate is done from a position of rusted on ideology, it seems. No one seems willing to consider any idea from the other side to carry any merit- ever There is an incredible sense of entitlement from many - well, most really .

And what that has meant so far is very simple; when the rubber hits the road, more people than not don't actually seem prepared to pay for the things they say they are prepared to pay for..... by giving up something in column A to pay for something in column B . If more had been willing to do so, we probably would have seen the last election play out a little differently a couple of years back...

Unfortunately, removing a few grants here and there isn't going to pay for what is required in aged care. BIG money is needed. BIG restructuring of the pie and how it is allocated is needed. And that's going to require something ( well, probably several things actually) from Column A to change...if we actually want the Column B things we say we want

 

I still dont understand how someone can get a franking credit when they pay no tax, so a credit on unpaid tax. The whole "they are planning to steal our franking credits" line makes me shudder.

Unfortunately, it is not purely an Australian thing. People tend to be change averse until the absolutely must change. Until the point comes, where its change or die, little change happens. People just keep kicking the can down the road.

France has been trying to reform its pension system for ages, and each generation is hoping that the next generation picks up the bill. I doubt it will change until the system goes bankrupt, which would happen eventually.

Our state is not needy enough if it didnt implement franking credits reform, or land tax reform or any other reform. NSW only started to look into land tax after the large drop of stamp duty revenue.

 

Dividend imputation is purely Australian, in the form it was amended under Howard, at least.
Keatings version was that tax paid at the company level would be allocated to shareholders by means of imputation credits. But not to all of them. Non-resident (overseas) shareholders couldn't get them, and nor could shareholders whose dividends hadn't been franked.
The Howard government took what was sound policy and turned it into a budget time bomb by deciding it would start paying out franking credits in cash to shareholders whether they had taxable income to offset or not. The decided that they would refund money beyond the point of nil taxable income. Dividend imputation became a negative income tax in effect: instead of them or the company paying the government money, the government paid them money. Imagine we did that with property - you could run as much negative gearing as you wanted; well past the levels where your taxable income was NIL.... and you'd still get cash refunds for 30% of the surplus deductions.
People who argue for it will argue that it makes sense because it treats non-taxpayers the same as taxpayers by refunding them the same amount of company tax. What a complete nonsense. These types of people will have you believe money grows on trees and unicorns live in magical lands full of marshmallows and glittery sands...
People who do not have their heads placed somewhere they should not , will argue that it does not make sense because it means that instead of being taxed once (at either the company or the personal level) as was the original intention, company profits can escape tax altogether and no tax whatsoever is collected. Yes.... no tax is collected......

When Howard introduced this policy , it cost the budget just $550 million . But it was a sleeper..... it took years for the damage to show up in the budget. By 2018, long after he was gone and didnt have to pay the piper, the annual cost reached $5 billion and we're on track for $8 billion + this year..... and it's only going to get dearer and dearer after that. It will top 20 billion within a decade, according to treasury predictions. That's 20 Billion of company tax being handed back to individual taxpayers people who pay no tax already . And dont be fooled; someone who doesnt pay tax doesnt mean they are low income earners, as Govt would try and have you believe, because its not GROSS income we are talking about here, its NET income. It's a huge hugely expensive, ultimately unsustainable policy that has only just started to suck massive amounts of cash out of a limited pie to feed people who have plenty to eat already ( they already have tax free incomes) but the black hole will grow ever bigger and ever bigger .
But besides all of that it's also more than enough to cover the 9 billion per year that the aged care enquiry says is needed to provide the aged care system we SAY we want the Govt to provide. I personally believe that the people who already have NIL taxable incomes should be satisfied by having NO TAX TO PAY, and the 8 Billion + ( and soon enough 10, then 15, then 20 Billion + ) that we give back on top of that should go elsewhere ... like aged care and dementia care and I dunno.... nation building infrastructure that aids revenue growth rather than drains it . A classic Column A v Column B conundrum easily solved where no additional tax needs to be raised, but the needs of both columns can be well fed....but this is where the rubber hits the road and the "I strongly agree we need that" gets replaced with "but I wont pay for any of it" as it requires those in Column A to give up a little largesse in order for those in Column B to get a basic level of care

 

If they need more taxes to fund some of those worthwhile projects, I'd be ok with a one tax, same dollar amount for the entire working population. And not target those who are already paying the highest tax due to earning more.


Just because someone earns more does not mean they clicked their fingers and the money magically appeared in their hands.


There comes a point IMHO where having a safety net for those needy in society ( which I agree is essential) becomes a financial assualt on those who earn more, just because they earn more! It's ridiculous.

 

The problem $1 for someone earning $50,000 has very different impact to someone on $150,000. So flat, same rate, is often unfair.

Taxing success for the sake of it is not right. But taxing more those who can dispose more, is fairer than a flat rate system in my opinion.

Considering all the rebates, refunds and free services we get (like healthcare etc) our tax rate is significantly lower than the headline rate. This is in addition to the fact that the whole tax system is built to benefit the *brave* from negative gearing to many many other legal ways to minimise tax.

Though having a system where a person is taxed in excess of 50% is crazy!