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Call to Increase the GST

Discussion in 'Property Market Economics' started by Pistonbroke, 20th Jul, 2015.

  1. Pistonbroke

    Pistonbroke Well-Known Member

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  2. Hodor

    Hodor Well-Known Member

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    Why budget better and fix inefficiencies with what you have when you can just increase your pay to fix problems?
     
  3. Sashatheman

    Sashatheman Well-Known Member

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    I saw this article this morning in which Mike Baird is proposing the GST be increased to 15% to fund some of the national health care shortfalls he anticipates. Before this there has already been talk of increasing GST for a while now.

    What does everyone think about this plan? Is it a good idea? Does an increase in GST need to be offset with some other tax reductions?

    When GST was first introduced were there any tax reductions?

    http://www.smh.com.au/nsw/nsw-premi...t-to-rise-to-15-per-cent-20150719-gifxcm.html
     
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  4. Dan Donoghue

    Dan Donoghue Well-Known Member

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    From memory when GST was introduced they increased the range for each tax bracket.

    I heard many years ago that if we increased our GST to 17.5% (which I believe is what VAT in the UK is worth) and completely abolished income tax the Government would make MORE money from taxes. I like a GST over other taxes because we make money from visitors to our country and we catch cash in hand tax evaders.
     
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  5. Bayview

    Bayview Well-Known Member

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    I think it is a good idea, but a few other taxes will have to come off the table with it...namely reductions in personal tax rates across the board - to remove bracket creep.

    For me - as an average person - it is better; we only get taxed on what we spend (which is not much) and we don't pay extra for the Medicare levy (which they have proposed if there is no GST hike) which we hardly ever use.

    Stamp Duty is another disgrace that has to be changed - the folks currently looking at buying our PPoR will be up for a handy $90k approx in Stamp Duty.

    And get rid of all those perks that the frickin Pollies enjoy - such as what that frickin Bronny Bishop is currently being exposed for. What a frickin wench....and she's got loads of mates in that regard.
     
    Last edited: 20th Jul, 2015
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  6. Redwing

    Redwing Well-Known Member

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    Should it happen then watch the Black Market continue to escalate also, just like it did in the UK

     
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  7. Bayview

    Bayview Well-Known Member

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    It would be incremental. The black market activity is already still there and going along as it has done forever, so an increase in GST will not change folks' mindset about black money too much IMO.
     
  8. 2FAST4U

    2FAST4U Well-Known Member

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    I'm opposed for it for a couple of reasons. Firstly it's a regressive tax. Secondly it's going to lead to a higher cost of living, which will lead to a push for higher wages to counter it/make up for inflation. That flies in the face of making Australia more competitive when you have to pay people $20 an hour just to pour cups of coffee.
     
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  9. WestOz

    WestOz Well-Known Member

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    lol only the stupid ones, from my experience it only further promoted (marketed) the crap out of doing it, most small business service providers will be persuaded by the end user or have a "cash" price where no receipt is provided, e.g. how many lawn mowing blokes would be paying tax on all services provided (let alone paying child support requiring single parents to rely on welfare), home based beauty (etc) services, some taking 50+k pa non declared cash, even a tyre puncher repair, 10 bucks will cover it mate, no receipt.

    Then there's the Co's who have offshore methods etc...

    Annoys me no end that Govs mismanage so much their only response is to up taxes/living costs.

    IMO the only way to max benefit avoidance and simplify the system (including reducing the huge Gov labor overheads to police it etc) is to get rid of cash, with many electronic means now available we don't need it anymore.

    Scrap/replace near all the current taxes and simplify with 15% tax on all financial debits/credits, financial institutions in-charge of collection/distribution to ATO, mandatory that all transactions go through Australian financial institutions only (no offshore), ATO monitoring, massive penalties for any fraudulence.
    E.g;
    Employers deposit "gross" wages via electronic, employers debit transaction taxed 15%, employees (end users) credit taxed 15% (rather than current PAYG etc)
    End users purchase goods and services via electronic banking only, debit transaction taxed 15%, providers credit taxed 15%.
    Providers, wholesalers, manufacturers, freight etc etc all pay via electronic, transactions taxed 15%

    Want to purchase something OS via Amazon, Ebay, paypal or some offshore method etc etc, debit from Australian account taxed 15% (or more to encourage Aus buying/economy/employment).

    Property related, 15% on every sale/purchase financial transaction (more for OS purchasers), No more stamp duty. Tenant pays rent into account, 15%, owner pays mortgage, agent, R&M etc, 15%.

    Handyman puts a shelf up for me, sure I can pay him with a carton of Corona, but I had to purchase it, 15%, he can only drink/trade so many cartons, he nolonger has the cashies he used to live on so has to credit his account so he can debit it for living/service costs, ATO now has a more accurate account on his income for child support etc, dole bludgers and all others on welfare now also find it tougher to cheat the system via earning cashies.

    I'm no fiscal genius, perhaps 15% is too much or not enough, but surely there's merit in the system compared to what we have currently.
     
  10. Toon

    Toon Well-Known Member

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    15% would be WAY higher than current stamp duty :eek:
     
  11. WestOz

    WestOz Well-Known Member

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    lol yea... current convo's/debates are to abolish it, wont happen under current system, was more thinking all the other related F&C's.
    With no cash, everything done via electronic, there's far less avoidance therefore greater Gov revenue, they could perhaps balance many current arrangements differently provided efficient management/accountability, and all states receiving fair share, unlike GST.
     
  12. Pistonbroke

    Pistonbroke Well-Known Member

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    Stamp duty, land tax, medicare levy, council rates, water rates, car registration, excise, licence fees etc are all regressive taxes @2FAST4U

    Proposal provides or compensation (adjust payg tax scales) to make up for the upward pressure on some items. If you're not PAYG, tough, get it when you do your tax. Don't pay tax, pay gst.

    The tax free threshold is already at $18k. When gst was introduced, benefits (dole, pension etc) were all increased by more than 10% considering that gst would only add 10% to not the full category of expenses (ie fresh food, rent, rates etc are exempt), this was more than compensatory.
     
  13. Bayview

    Bayview Well-Known Member

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    We get a lot of those blokes through our shop for punctures, and the odd tyre replacement, etc.

    Most of them are paid by either a cheque in the mail, or a direct debit to their account, and of course; some cash. I don't know what they do with the cash, but no doubt there would be a little bit of play money.

    With our shop, most of them ask for receipts for their punctures, and with any tyre replacement.

    I have already had to pay a supplier via invoice for the tyres, so I cannot "hide" the transaction from my end, and/or cannot discount it off the invoice and pocket some of the cash - that is extremely rare for us to be able to do..
     
  14. wategos

    wategos Well-Known Member

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    Stamp duty, land tax and medicare levy do not fit the definition of a regressive tax. The GST is regressive in that people pay the same regardless of income or wealth. Land tax is very much a progressive tax.
     
  15. Pistonbroke

    Pistonbroke Well-Known Member

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    It gets a little difficult to explain during a tax audit where all of these tyres that you have purchased/been invoiced by suppliers are when you don't have anything in stock.
     
  16. WestOz

    WestOz Well-Known Member

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    Well to a point, likewise any solid item compared to others which can be easily split/diluted or written-off as damaged or stolen/lost, if audited a few missing tyres could be explained but many would be questionable without documented cause, likewise tubes, however the ATO is unlikely to question many valves and patches/plugs as there so easily damaged or lost, to minor to claim on supply warranty (documentation) etc.
    Balancing, alignments etc also have no material cost that can't be explained elsewhere so easily cashed.

    Another e.g. re splitting/diluting etc, soils-aint-soils and similar loose bulk suppliers etc, they buy-in semi loads, can let the odd sale go cash because they can short load trailers and account for lots of spillage.
    If no cash economy?
     
  17. Pistonbroke

    Pistonbroke Well-Known Member

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    Point taken....but. stamp duty has a minimum applicable and bottom rates would be rarely applied (up to $30k).

    Land tax can affect the asset rich/cash poor & is not evenly applied eg special trusts, Qld trusts having pwn thresholds etc.
     
  18. WestOz

    WestOz Well-Known Member

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    Since FBT businesses shouting the staff out to dinners at restaurants etc (supporting other small businesses/employment/revenue) dried up, cashies put a carton (etc) in the fridge on Friday arvo, funds the Christmas windup, pays end of year bonuses etc, pays for the owners wife's hair do, nails and nights out etc etc.
     
  19. Dan Donoghue

    Dan Donoghue Well-Known Member

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    I meant more along the lines of even though they will continue doing the cash in hand thing, when they go to spend the money they pay GST. GST is a way to catch everyone as everyone needs to buy stuff at some point.
     
  20. Pistonbroke

    Pistonbroke Well-Known Member

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    That's why food and rent shouldn't be exempt.

    In countries which have balls, they'll put an inspector in front of ahops, home businesses, servos etc and check that you've got a tax receipt - if not you and the business get fined.