The Tax System Explained in a Beer Analogy

Pelicannn on 06/10/2020 - 20:57

I'm sure you have probably read it before, I take no credit for the originality of the analogy. if you haven't read it, find it here: https://mannkal.org/downloads/rspt/beer.pdf

The thing is, I am in an upper tax bracket, and these new tax cuts do benefit me a lot, but so what? Should I feel bad for working hard in school and getting a well paying job?

I certainly understand that people have ambitions, to be teachers or paramedics etc, who work their asses off and get paid very little, but they knew what they signed up for. If the Governments voted to increase wages of some professions like those above i'd be 100% for it, but we know that isn't going to happen. I am really sick of feeling both annoyed and getting guilted by people saying "tax cuts are only for the rich", yet these are the same people who probably earn less per year than I pay total in tax, so how is that fair?

What i want to know is, is there any flaw in this analogy? If I sent it to a dole bludger who hasn't lifted a finger cause they know the centerlink payments will come anyway can they argue it's not a correct analogy?

Financial

Comments

    • Pelicannn on 06/10/2020 - 21:25

      Thanks :) it's good to read the otherside. I guess that makes more sense, its a very big generalisation to assume 10 people are the entire country, and $100 is the entire budget.

      • [Deactivated] on 06/10/2020 - 21:36

        Exactly. What a terrible analogy.

        There are more than 10 people in the country.

        There is more than $100 in the budget.

        The country is not a bar.

      • callum9999 on 06/10/2020 - 21:42
        +12

        I think it goes far beyond being a "big generalisation" - the entire scenario is nonsense and not how the taxation system works. And while it's an analogy, the disconnect between "buying a beer" and "receiving critical cancer treatment" or "getting food to stay alive" is so enormous it makes the whole thing redundant (in my eyes).

        Though this whole conversation is a complete waste of time as it's based on your personal ethics, which are not going to change. I believe in as much equality as practically possible, you want to enjoy wealth at the expense of other people (which you would argue that you deserve - I'd disagree but it's ultimately irrelevant to the point) - how is anything either of us are going to say going to change how either of us feel? It's a pretty fundamental building block to how we both see the world around us!

        • Pelicannn on 06/10/2020 - 21:47

          I think that's going a bit too far the other way. I am not talking about free healthcare or benefits per se, I am talking about paying $40,000 in tax dollars, and getting a $2400 tax cut, vs someone earning $40,000 a year and getting a $1200 tax cut.

          I am simply asking if the analogy is adequate for a tax reduction, not as a whole tax/welfare system.

          • [Deactivated] on 06/10/2020 - 21:49

            @Pelicannn: I don't think it is useful as an argument to change existing policy but is a good one to consider before changing policy.

            The short of the whole story is - increasing taxation of a group (in this case the rich) pushes said group to leave.

            • Pelicannn on 06/10/2020 - 21:53
              +1

              @[Deactivated]: Fair,

              I don't imagine I have any plans to leave Australia, even if my tax bracket was 50% or something silly so I won't be leaving haha. I am more concerned with how to approach people who complain that say I get a larger tax cut than they do. Not always is it directed at me either, but every time a budget comes out or something there is just constant "why does only the rich get tax cuts, why can't we get $2400 less tax etc"

              The only way I can see that being fixed is increasing the tax free threshold to a much higher number, like $50,000 or so, and leaving the upper brackets as they were.

              • [Deactivated] on 06/10/2020 - 21:58

                @Pelicannn:

                I don't imagine I have any plans to leave Australia, even if my tax bracket was 50%

                You may not and many may not as well but it doesn't take much to cause a brain drain.

                If your well traveled peer feels that the tax burden is too great, they may move. Then they may tell you of greener pastures. Perhaps you still won't move but another mutual friend is convinced.

                Eventually, you will move.

                Example - automotive manufacturing.

                Make conditions unfavourable enough and people will leave. The skillful and/of resourceful will always find reward. The risk adverse and unskilled may become jobless as a result.

                • Pelicannn on 06/10/2020 - 22:01

                  @[Deactivated]: Makes sense, so really, the tax cuts are probably a good thing to keep higher income earners paying tax?

                  Then again, I don't know what these tax cuts are going to cost in terms of deficit later on because surely the Government is behind in revenue due Covid.

                  • [Deactivated] on 06/10/2020 - 22:09

                    @Pelicannn:

                    Makes sense, so really, the tax cuts are probably a good thing to keep higher income earners paying tax?

                    I'm sure there are numbers-lovers working for the gummin that would crunch the figures to figure out the best tax rate to get the most cash.

                    Of course, other factors are at play and they're also working for theories and estimates so they won't get it exactly correct.

                    I wouldn't be salty if they reduced the tax all round either.

                • callum9999 on 06/10/2020 - 22:11
                  +3

                  @[Deactivated]: No, automotive manufacturing is not remotely an example of how individual taxes make rich people leave the country.

                  While your theory sounds great on paper (who doesn't want more money?), and is incessantly shouted whenever anyone tries to tax the rich more, are you able to back it up with any actual evidence? I see plenty of evidence of rich people NOT fleeing high tax jurisdictions - which makes a lot of sense if you actually think properly about why people migrate instead of just stopping when you get to "more money = good". One of the main benefits of being rich is that you have plenty of money to do things like live in expensive places.

                  • [Deactivated] on 06/10/2020 - 22:38

                    @callum9999:

                    automotive manufacturing is not remotely an example of how individual taxes make rich people leave the country.

                    I was referring to unfavourable conditions in general. You may have missed it but it's in the sentence following the part you are referring to.

                    Also pretty much every sentence preceding it.

                    (High tax rates is an unfavourable condition, just incase the relationship isn't apparent.)

                    • callum9999 on 06/10/2020 - 22:41
                      +3

                      @[Deactivated]: The passages both before and after specifically refer to "people" moving but keep digging…

                      Though regardless, I take it you have no answer to the rest of my post?

                      • [Deactivated] on 06/10/2020 - 22:47

                        @callum9999: It is gibberish but I was trying to be nice and keep that to myself.

                        • callum9999 on 06/10/2020 - 23:02
                          +1

                          @[Deactivated]: You… Trying to be nice… I guess you do have a sense of humour.

                          You're pathetic, but at least we all now know that no, you cannot back up anything you claim with facts.

                • Never Pay RRP on 13/10/2020 - 09:36

                  @[Deactivated]:

                  Make conditions unfavourable enough and people will leave.

                  For the beer analogy, individual workers leaving would not change the scenario. If it was a PAYG employee, sure they can go, but the position itself would presumably remain in the country and someone else would fill it and pay tax (i.e the rich person is replaced by another rich person)

                  So the only way the rich person can “leave and go to another bar and not be replaced” is if the entire role itself (or business) was relocated overseas. Most people’s incomes depend on being in the country

                • echelon6 on 15/10/2020 - 20:21

                  @[Deactivated]: averse not adverse, unless that's actually what you meant lol

              • Cheshire Cat on 07/10/2020 - 20:51

                @Pelicannn: "The only way I can see that being fixed is increasing the tax free threshold to a much higher number"

                yes thats exactly how tax cuts are supposed to work rather than applying to the top tax bracket (and i say this as someone in the top tax bracket)

                By increasing the tax free threshold EVERYONE gains the benefit and that benefit is then also more beneficial to society as those on lower incomes will spend it back into the economy directly as purchases (so others wages and thus the cycle continues) versus those on higher incomes who just invest it or lock it away.

          • callum9999 on 06/10/2020 - 21:53
            +1

            @Pelicannn: How do you think those things are funded? The attitude you express in your opening post makes it seem very clear that you feel hard done by and "dole bludgers who don't lift a finger" are the beneficiaries.

            Given the analogy supposedly distributes the tax reduction based on how the whole tax system works, I don't see how you could separate the two?

            • Pelicannn on 06/10/2020 - 21:57
              +1

              @callum9999: I have no issue with the amount of tax I pay, I have said that already. I have an issue with people complaining that I am getting the most benefit of a tax cut, when we are all getting a benefit and I already pay significantly more tax than them. The people who seem to complain the most are the people that pay the least amount of tax.

              For the record, I know plenty of dole bludgers who I went to school with who lift nothing and get paid, who chose not to apply for jobs because they would rather get the money for free, So i am more than qualified to comment on that part. If anyone doesn't get angry at people like that in our country who contribute nothing to society except take, then you're probably a liar, or one of them.

              • callum9999 on 06/10/2020 - 22:04
                +4

                @Pelicannn: I know you keep saying that - it's blatantly not true. People who have "no issue" with the amount of tax they pay do not try and devise strategies for arguing with people who pay less than them about how they deserve a tax cut. They also don't keep highlighting how much extra tax they pay than others.

                Perhaps if you left your bubble more often, you'd encounter far more people who don't just get angry at the poor - including famous billionaires… I don't believe for one second that you adequately comprehend the mental state or life circumstances of anyone apparently content to live on welfare their entire life. As much as you may dislike it, your argument is fundamentally no different to the old "poor people just don't try hard enough so deserve to be poor".

                • Pelicannn on 06/10/2020 - 22:11
                  +4

                  @callum9999: You need to take a chill pill. This is a forum and that's it. You don't know me or anything about me. So don't assume anything about me and I won't assume anything about you.

                  Never have I said i needed to "devise strategies" of anything… and you keep over generalising my statements. I have never said this applies to everytone, I have never said "everyone on welfare is a bludger". I'm more than aware that the majority of people on welfare are not there by choice. I am also more than aware there are plenty of people who are.

                  • callum9999 on 06/10/2020 - 22:23
                    +2

                    @Pelicannn: I'm aware it's a forum, that's precisely why I'm discussing the topic you've raised… If you think this is some kind of strong intensity then I question whether you're as hard working as you seem to think you are! Though I would genuinely like you to point out which assumptions I've made - I try not to make them but am clearly not infallible.

                    As interesting as your clarifications are, I've never said you have said those things either. Was the entire point of this thread not devising a strategy to argue against people who don't like the wealthy getting tax cuts? I've definitely not imagined it - you've said it many times!

                    • Pelicannn on 06/10/2020 - 22:26
                      +1

                      @callum9999: As I wrote below, I think this has blown a little out of context and I probably didn't word the original question correctly. I have no problem with tax rates but of course welcome lower, just as most would. I doubt anyone would say no to a tax reduction right? I just want to know why some people think it's unfair that richer people get larger tax cuts, what their thought process is.

                      • Pelicannn on 06/10/2020 - 22:29
                        +1

                        @Pelicannn: and i should clarify, that from my observation the "some people" are generally the ones paying the least amount of tax.

                      • SelfMade on 06/10/2020 - 22:52

                        @Pelicannn: They think it's unfair as they are envious…a lot of them anyway. They think 'richer' people get money by cheating others etc…they have a very poor relationship with money and a poor mentality, an entitled one, thinking they are owed by everyone and accept no responsibility for their current circumstances.

                      • Never Pay RRP on 12/10/2020 - 18:32

                        @Pelicannn:

                        I just want to know why some people think it's unfair that richer people get larger tax cuts, what their thought process is.

                        The system is designed so that people who have more capacity to pay (richer) are supposed to contribute more. I don't think anyone argues that point. So when you give bigger tax cuts to the rich, then you are reversing that model, even if only incrementally.
                        To be clear, I'm not complaining about it, just explaining to answer your question.

                        P.s. the beer analogy is terrible. I would have hoped a "high income earner" would have better critical thinking and analysis skills

          • macfudd on 07/10/2020 - 21:25
            +1

            @Pelicannn: From those figures I'm assuming you're referencing the 'stage 2 cuts' the government is talking about a lot currently- if so, then quite literally the tax cut is for the rich - in this case 'rich' being those earning $90,000 or more (top 14% of taxpayers).

            Those earning less than 90k aren't getting a tax cut worth $1200, instead the low & middle income tax offset is being extended for an additional year so they'll get a singular bonus (of $1080) in July 2021 when they submit their returns, but will continue to have the same amount of tax deducted from their payslips now and into the future.

            Meanwhile those of us earning over 90k (myself included) will start paying up to $2400 less tax as soon as the new tax tables are published. That's this fin year, next fin year, and all the following years - because we will receive an actual reduction in what we pay in tax every payday.
            Hence, the tax cut is only for the rich. That statement isn't an attack, its factually correct. There's a nice table at the below link which illustrates this.
            https://www.theguardian.com/australia-news/2020/oct/06/tax-c…

            Trying to fit that into that beer analogy, the barman is charging $20 less and the richest guy said 'hey, I'll pay $20 less from here on out, but I'll get the barman to give 5 of you a free beer once next visit'.

            Btw - feeling 'annoyed' and 'guilted' by people pointing out a fact is kinda on you, you have control over your own emotions and reactions, not them. Just smile and think of the fact that by 2024 (when those earning over 120k are due to gain even more from Stage 3 kicking in) that you'll have benefited nearly $10,000 to their $1080 and it'll just continue to grow.

  • [Deactivated] on 06/10/2020 - 21:32

    What i want to know is, is there any flaw in this analogy?

    Those that want someone else to pay won't like it.

  • mskeggs on 06/10/2020 - 21:36
    +17

    If you have been lucky and successful, you might earn a high income.
    If you aren't as lucky, you might earn much less.
    The tax system in Australia is progressive, so as you earn more, you pay an added amount of tax, but you always retain more than you pay as tax (there is no point in the tax system where your income taxes exceed your retained income).

    By all means send the silly little story off to the imagined dole bludgers, but right now there are hundreds of thousands more people battling Centrelink than usual, so don't be surprised if you find fewer believers that it is an easy existence than in past years…

    Perhaps you might try the dole instead of working if it is such a good deal? I think you would rapidly find that paying a bit of tax, and paying more when you earn more, is preferable to being on welfare.

    One of the really attractive elements of Australian society is very few people think they are better than others because of their earnings. You might be better in a lower tax place like the US or the middle east. But I think you will find that the lower tax burden leads to other problems.

    • Pelicannn on 06/10/2020 - 21:42
      -4

      Agree with most of your points, except this one:

      Perhaps you might try the dole instead of working if it is such a good deal? I think you would rapidly find that paying a bit of tax, and paying more when you earn more, is preferable to being on welfare.

      I never said it was a good deal, nor do I have any problem with the amount of tax I pay, I only have a problem with people who complain when they pay no tax in comparison. If I were to find that out, then surely those on welfare also would rather earn more and pay more tax? Except there are plenty who actively don't work because they don't want to and are happy on the benefits.

      • mskeggs on 06/10/2020 - 22:08
        +14

        There are lots of low income earners who would be very happy to have a high income. I suggest the vast majority. Unfortunately, most won't ever get the chance.

        I know you keep saying there are lots of people happy on welfare, but I don't think this is as true as you think. Centrelink treated people on Newstart pretty shabbily. They had activity and reporting requirements, could have their payment cut or suspended pretty easily, and are difficult to deal with. To be eligible you must have very few assets and no or very low income, so an error in your payment can be devastating. Your options in life are hugely diminished with a very low income, and it is very stressful just trying to make ends meet.

        Assuming you are ok with people getting unemployment while temporarily out of work, your beef seems to be with the long term unemployed. The ABS suggests this was around 1 in 250 people in the population last year (no doubt it has risen due to COVID).

        Presumably we can agree at least some of those people are genuinely trying to find work, but have been unable to. So the number of people you are unhappy with is fewer than 0.25% of the population.

        As it happens, I'm really opposed to people who are rorting unemployment because it tars all the people who desperately need help with the brush of "dole bludgers" - and it is such a small percentage of people, but sucks up so much oxygen and causes so many people to have a dim and punishing view of how to help unemployed people.

        • [Deactivated] on 06/10/2020 - 22:14

          There are lots of low income earners who would be very happy to have a high income.

          I mean, who wouldn't?

          There are lots of high income people who would be very happy to have less stress.

          The issue isn't that we shouldn't give the poor money. The issue is that the money comes from somewhere.

          If resources are infinite, go bonkers. If they have to go into your house and take it, I'd like them to stop.

          • mskeggs on 06/10/2020 - 22:18
            +6

            @[Deactivated]: The great privilege though, is if you are wealthy and stressed you can toss in your job and choose the unemployed life, but the reverse isn't possible.

            You always have the choice to select a lower income, but rarely the opposite.
            And you can always decline a pay rise if the thought of the tax it will incur is too upsetting.

            • Pelicannn on 06/10/2020 - 22:20
              +2

              @mskeggs:

              And you can always decline a pay rise if the thought of the tax it will incur is too upsetting.

              Haha I like this statement :)

            • [Deactivated] on 06/10/2020 - 22:21

              @mskeggs: And therefore the poor deserve to be subsidised by the rich?

              I don't disagree that part of the reason of a progressive tax is to pay off the mob but it appears you're trying to create a moral argument to justify taking from the rich.

              Pragmatically, I get your point. Morally, it's trying to take someone's problem and making it someone else's.

              • Cheshire Cat on 07/10/2020 - 21:07

                @[Deactivated]: what is this taking from the rich you speak of?
                no one takes anything from the rich. they didnt earn their wage all on their own. society provided the means for them to earn even a skerrick of it. no person in isolation ever built a mansion and a yacht…they just struggle to get food to live. they rely on a society to be efficient and make profit off the work of others

                even taxes as a whole arent taking from the individual. we decide we can do a job for X which is how much we take home….. after tax. in reality the company pays the rest for you and if you are lucky (or dodgy) you find ways to claw a little bit extra from the tax man. tax cuts are just society deciding everyone should take home a little extra..maybe account for inflation…or to stimulate spending like they are now.

                obamas 'you didnt build that' was completely correct and the right acted like he was insane and dismissing peoples hard work when all he really said was no man is an island and society allowed you to earn that much wealth…ebcause without the roads and ports and electricity and everything else you are all just subsistence farmers.

        • Pelicannn on 06/10/2020 - 22:19
          +2

          So would it be fair to say that the most vocal of complaining comes from the smallest minority?

          Speaking from experience from my school days, i know of many in my grade who ended up in jail (I'd say at least 10 people I could name went to jail for serious crimes like armed robbery, extortion etc), many who turned to drugs, etc which put them on the dole and now probably have no hope of getting anywhere off that. What do we do for those people? Tax cuts will never help them because you are right, they will never earn enough. From what I've seen though, most of those individuals who's lives sprialled out of control from my school always blame something else for the position they're in, rather than looking in the mirror.

          • arkie0 on 07/10/2020 - 09:06
            +1

            @Pelicannn: I'm similar to you, well off now and quite a few people I knew growing up aren't as fortunate.

            From what I've seen though, most of those individuals who's lives sprialled out of control from my school always blame something else for the position they're in, rather than looking in the mirror.

            Don't confuse luck with hard work, sometimes you are born into a good family, born with intelligence, born in a good country - all luck. You could be hit by a car tomorrow be disabled for life with 0 income and easily be on the disability pension. Why should then my taxes pay for your support.

            To answer the analogy question, the analogy only focuses on the tax savings component and how "unfair" it is but a progressive tax system if fair if you focus on the money people have left over to spend on other things after the 1 beer (1 beer being basics/necessities). The first 4 guys get their beer yes, but they will never be able to buy spirits (aka non essential goods and services), or wine (aka houses/shares). Now the rich person still has $50 approx, after tax cuts he may have $60.

            He uses the remaining $50 to buy wine and store it in his wine cellar. After a while, he now owns all the wines and as it ages the value goes up.

            Now as the tax system gets more regressive, inequality grows. The bottom 4 will have kids, their chances of having a favorable life is reduced although not impossible it requires more luck. The top person's kid will have a cellar full of wine.

          • Never Pay RRP on 12/10/2020 - 18:50

            @Pelicannn:

            So would it be fair to say that the most vocal of complaining comes from the smallest minority?

            This is very likely the case. Just ignore it, you don't personally influence government policy, so I don't see how they can be blaming you. Maybe don't go around telling people how much you earn and you won't be a target of these complaints

        • payton on 06/10/2020 - 22:28

          Centrelink treated people on Newstart pretty shabbily. They had activity and reporting requirements, could have their payment cut or suspended pretty easily, and are difficult to deal with

          I don't think that statement is representative. People receive what they dish out. Be nasty to Centrelink staff, get refused service till they calm down.

          At one point in my life, I was on Newstart. Reporting requirements on job searches & making contacts were clear and easy to meet within the timeframe. You got two weeks to fill one shortish form. Volumes of self help docs and guides on interviews, confidence etc were available, and they were legit guides with useful information. Help with mental wellbeing also available, as well as additional assistance if you have dependants, rent assistance and whatnot.

          As you can understand, these reqs and the fortnightly dollar figure need to be tight for many good reasons.

          There are lots of low income earners who would be very happy to have a high income. I suggest the vast majority. Unfortunately, most won't ever get the chance.

          I think its a bit self-limiting to conclude that people will never have a chance. Its like saying you'll never amount to anything!

          • mskeggs on 07/10/2020 - 19:53
            +1

            @payton:

            I think its a bit self-limiting to conclude that people will never have a chance

            Agreed. That's why I said only most. And while a bit disappointing, the reality is only a minority ever do earn a high income.

            requirements on job searches & making contacts were clear and easy to meet

            I also agree this is the case on many occasions. But consider if you have limited English, or poor reading, or the employment services person makes an error entering the appointment time, or any of a range of things that could go wrong. These have a disproportionately large impact if you have no money and are dependent on the welfare income, and have to deal with a large bureaucracy if something does go wrong (which again is made harder if you have poor English, or limited computer experience, or any of the things that often accompany people who struggle to find employment long term).
            And the "vibe" of Centrelink payments has increasingly become less about "here is a helping hand" to be more about compliance and checking for errors and omissions - theoretically to prevent welfare fraud, but I think a big motivation is just make it less appealing for people who could qualify for welfare to just make it a burden they will avoid wherever possible.

    • vikvance on 07/10/2020 - 08:10
      +2

      right now there are hundreds of thousands more people battling Centrelink

      These people are "battling" Centrelink to get their hands on my money. My money which has been taken from me by force. (The Government has men with big guns, and if I don't pay my taxes, then these men with guns will lock me in a cell until I empty my wallets as demanded.)

      This is the thing that's conveniently ignored by all the lefties shouting and demanding higher taxes.

      Taxpayers earn their money fair and square. We haven't stolen it. We earned it by turning up to work, and then spending a minimum 7.6 hours per day, doing as we are told by our managers. I mean, I would certainly prefer to spend the whole day smoking weed in my apartment and playing computer games, like a lot of these "unfortunate" people battling Centrelink, rather than going to work.

      And if we've earned the money, then it's our money, and we deserve to keep it, rather than having it stolen from us by men in uniforms with big guns.

      • ThithLord on 07/10/2020 - 12:55

        These people are "battling" Centrelink to get their hands on my money.

        Wrong. The Federal Government printed the entire $~1T debt themselves. Then taxes are used to pay that back.

      • Never Pay RRP on 12/10/2020 - 18:56

        lefties shouting and demanding higher taxes.

        Yep all those Greenies demanding higher taxes that definitely exist…

      • SlavOz on 16/10/2020 - 16:41
        -1

        This is the thing that's conveniently ignored by all the lefties shouting and demanding higher taxes.

        The left is descending into full-force Socialism. Why should I have to work hard when I can just outsource all my daily needs to the government? What could possibly go wrong?

        Thankfully saner minds continue to prevail at the ballots. Screw the Greens and their Socialist policies. We don't need another failed welfare experiment.

  • plmko on 06/10/2020 - 21:42

    Those that can pay should realise that those who can't pay were the ones who brewed the beer and ran the pub enabling the nice harmonious setting of 10 men of various economic statuses to enjoy the same beer at the same table.

    • [Deactivated] on 06/10/2020 - 21:47

      Nah, it's the guy who is employed and are paying taxes that brewed the beer and ran the pub.

      • mskeggs on 06/10/2020 - 22:14
        +1

        I guess the simplest way to think of it is the large majority of society allow the wealthy to maintain their wealth if they pay a good shake of tax.
        History is littered with examples where the wealthy failed to convince the majority to let them keep their wealth, and as a rule, it didn't end well for the rich.

        So the wealthy could argue to push their luck and reduce their tax bill, but when it has ended poorly so often in the past, and with current taxes the wealthy still remain wealthy, it would be pretty short sighted to upset the apple cart for a few extra dollars, when those most affected already have lots.

        • [Deactivated] on 06/10/2020 - 22:18

          In the past, geographic mobility came at great expense. I agree, they either paid the ransom or get robbed.

          Today, the wealthy can just leave.

          • mskeggs on 06/10/2020 - 22:23
            +3

            @[Deactivated]:

            Today, the wealthy can just leave.

            And yet, so few do. The super rich seem to gravitate to New York and London and Paris, and even Sydney, because those high tax locations offer a much higher amenity than Mogadishu.

            If anything, the tax havens of the past like Monaco and the Caribbean are declining, as global governments cooperate to limit their ability to operate.

            • [Deactivated] on 06/10/2020 - 22:30

              @mskeggs:

              And yet, so few do. The super rich seem to gravitate to New York and London and Paris, and even Sydney

              So perhaps we currently have a good balance.

              As per my comment above, the analogy should be considered when moving away from the current policy.

              If anything, the tax havens of the past like Monaco and the Caribbean are declining, as global governments cooperate to limit their ability to operate.

              You're kinda making my point here. People want to move where they can operate with less tax. It is not that operating with less tax has become less desirable, it is because it has become harder.

          • Pelicannn on 06/10/2020 - 22:25
            +1

            @[Deactivated]: Or find out ways to offload their tax off shore whilst still remaining in the country. Which I dissaprove of.

            I think this has blown a little out of context and I probably didn't word the original question correctly. I have no problem with tax rates but of course welcome lower, just as most would, I just want to know why some people think it's unfair that richer people get larger tax cuts, what their thought process is.

            • [Deactivated] on 06/10/2020 - 22:32

              @Pelicannn: It is actually perfectly in context.

              The guy picking up the biggest part of the tab is going to look for a different place to drink.

              As you can see, the thought process of those justifying skewing the taxation further against the one already paying more revolves around, "if you don't pay, we will hurt you."

  • tsunamisurfer on 06/10/2020 - 21:57
    +5

    I abhor people who complain about tax cuts benefiting the upper tiers whilst happily espousing the virtues of a progressive tax system.

  • Willco88 on 06/10/2020 - 22:40
    +1

    Well blame the govt for doubling the dole payment which in effect is more than most people get in a basic job so why would they work 40hrs being treated like crap to make less money, doesn't make sense does it….

    Same with single mothers who get free childcare and bonuses and loans why would they work? My auntie was paying $600 week childcare just to work, doesn't make sense either?

    You pay full price for everything including doctors and registration.

    so are you really better off working 50hrs a week never seeing your children or having them being brought up by nannies & then wonder why these children develop abandonment issues?

    My mate for instance was working his butt off breaking his back just to get a pittance and he said on jobseeker he gets more money now with the bonus then he did before working hard, again he's like what's the point killing myself?

    • Emerald Owl on 06/10/2020 - 23:47

      You raise fair points. However, you are talking about the exception, not most people on the payments, who genuinely need them. You can’t just sit on jobseeker and watch the money come in, you have to be applying for jobs and they will find you one. The govt should not have suspended the job application requirement like they did. Job keeper has also been too easy to rort.

      • Jolakot on 07/10/2020 - 00:04

        What jobs could they even apply for with lockdowns? Can't even get an under the table job cleaning puke and broken class off the floor of a dirty nightclub in most states right now.

        • Emerald Owl on 07/10/2020 - 00:06

          Go to seek.com.au

          • Jolakot on 07/10/2020 - 00:10

            @Emerald Owl: Tons of Christmas/seasonal jobs open now, so I'm glad the job application requirements are coming back in slowly as we open back up again, no excuse when all shops need more staff for the holidays.

            But a few months ago during the worst of it? I spent some time tracking applicants per job out of interest, and the ratios were horrendous. Worst I saw was 5000+ applications for a entry level clerk position.

            • Emerald Owl on 07/10/2020 - 00:12

              @Jolakot: Yea I suppose it saved some businesses from getting an even wilder number of applications. That said, even if it was a waste of time, I believe the practice of applying for jobs is better than not. It helps maintain motion instead of a ‘new normal’.

              • Jolakot on 07/10/2020 - 00:24

                @Emerald Owl: Good habit to stay in, but would hate to be the business that needs to sort through 1000s of low-effort applications from people who do it as a box ticking exercise. Why would any business raise their wages to be more competitive when their hiring practices involve taking 95% of the application stack and chucking it straight in the bin?

    • Jolakot on 07/10/2020 - 00:01

      I'm sorry but if your mate was breaking his back for at most $475 a week (maximum regular payments without dependents ($280) + covid supplement ($125) + maximum rent assist ($70 by yourself, $45 in a sharehouse)), then he really should have taken the adage of work smarter not harder to heart. Would get more with 3-4 minimum wage shifts depending on his age.

      I've never seen people who get high and mighty about how lucrative jobseeker is actually run their budget for $475 a week, let alone the usual maximum payment of $350. Or if you live in a sharehouse to save costs and you're down to $325. Or if you're not lucky enough to get rent assist then you're down to $280. At the constant mercy of the government to not cancel/screw up your payment because you or a centrelink worker messed up details on the constant forms that need to be filled.

      Should be enough to live on and no more than that. It's too much now, and was too little before, I hope the gov takes a page from goldilocks.

  • Gotchas on 06/10/2020 - 23:33

    Reason that determines tax cuts is both votes and Economic impact

  • Emerald Owl on 06/10/2020 - 23:34
    +1

    So the lesson is unless the rich guy shares his wealth, he will end up with nothing? I’m not saying it’s fair, it just is what it is.

    Why are there so many foreign investors and a whole foreign investor visa class if this country is so bad for the 1%?

    I support tax cuts generally but atm don’t. We are heading for a Great Depression and 1 trillion in debt. If we are going to spend so much money, it should be on the most effective economic stimulus possible. Like it or hate it, that is giving poorer and younger people money. This budget doesn’t give them 1 cent.

  • Jolakot on 07/10/2020 - 00:20

    Issue with the analogy is that it assumes the rich guy lives in a vacuum with an infinite amount of good bars.

    In reality all the good trendy bars in town charge that way, and if he wants to go to a pay-for-just-yourself bar he has to go to the shady part of town and drink alone.

    The missed point here is that the bars people most want to go to charge the rich person the most, and the bars people avoid charge them the least.

  • handyandy on 07/10/2020 - 09:59

    Gentlemen, I stumbled across this thread looking for a good deal on beer and am thoroughly impressed finding such a nuanced and honest debate about taxes on ozbargain.com.au! Kudos to all of you!

  • OzHunterNSW on 07/10/2020 - 10:04
    -1

    Wow… you certainly feel entitled upon your rickety stool, don't you?
    Dole bludger, people without foresight… oh, and paying more tax than their combined wages alone.
    It is these people who subsidised your catholic school upbringing because of a society that cares for all. The spinster, the retired, all without children, still paid taxes so as people likee you could get an education, and how do you pay them back… by viewing them all as common scum.

    • Pelicannn on 07/10/2020 - 10:11

      Clearly, the people who dole bludge don't pay taxes, so they don't subside anything.

  • ECE on 07/10/2020 - 10:20

    Nice read. Please spread this story and hope many will understand the analogy to our tax system 😷

  • ozbjunkie on 07/10/2020 - 11:42

    I think you deserve to be commended for at least looking at the issue.

    People generally feel like whatever is their lot in life, their issues should be considered seriously.

    This leads rich people to complain. Poor people to complain. Even non-attempting bludgers to complain.

    My opinion is, in this country, none of us have that much to complain about. The rich aren't taxed to death. And aren't in danger of crime from high income inequality like in South Africa. The poor can make ends meet, barely, but we have decent medical etc. Bludgers, well, I'd say there are some, but less than some people suggest, and really, those people would complain no matter what.

    If you think you're hard done by as a rich person because you pay more tax, ask yourself if you'd swap with the poor.

    If you think you're hard done by as a poor person, ask yourself if your honesty swap with a richer person, with all the extra study, work, and financial risk that entails.

    I'd like more money, but I don't want to work harder. I'd like to pay less tax, but I don't want to forgo my above average income. So I just enjoy, and try not to bemoan things that aren't happening for me, or to blame others with different life preferences.

    • Pelicannn on 07/10/2020 - 11:49
      +2

      Look i was always expecting a bit of hate to come my way, but I have tried to state I don't think the amount of tax I pay is unfair. I love Australia and always will, our healthcare is good, our community is safe and i know my taxes go to that.

      I agree with you everyone wants to complain. Im not necessarily complaining that I pay too much tax, I am merely complaining that I think it's unfair when people assume tax cuts for the rich are unfair because they saved $2500 and I only saved $500 etc.

      • ozbjunkie on 07/10/2020 - 12:01
        +1

        Yeah I think the argument often goes something like

        Poor man: "You benefit double in absolute terms"

        Rich man: "But I work for my money too, and benefit less in percentage terms."

        Even making it equal in absolute terms might not satisfy poor man, because he might validly argue than an extra 100 bucks means far more to him than rich man.

        Meanwhile, rich man is thinking, if you knew the things I had to do to get where I am, you'd take your hundred bucks and shout me a beer, knowing I darn well deserve one. Besides, I employ you, back to work.

        Good thread :)

        Acts a bit like bait for the idealogically over-committed. But that can be fun for the less idealogically over-committed among us.

      • SelfMade on 07/10/2020 - 15:32

        You're getting hate on here because the majority on OzBargain have an entitled mindset.

  • [Deactivated] on 07/10/2020 - 12:51
    +4

    Should I feel bad for working hard in school and getting a well paying job?

    No, you shouldn't. The people complaining are the same people who (profanity) around in school and did nothing with their life.

    • SelfMade on 07/10/2020 - 15:30

      Exactly right.

    • Pelicannn on 07/10/2020 - 19:39
      +1

      Well that’s kinda one of my points I made in a previous comment. So many people I went to school ended up in dead end jobs or jail because they didn’t give a shit about school. On the other hand I studied my ass off, never went to parties, never really drank, etc. I sacrificed a few years of my teens to make sure I was set up in life, plenty I knew chose those few years to party instead.

      Then again, I also came from a good middle class family, and my parents instilled from me at a young age the importance of a good job and life security.

      • iridiumstem on 14/10/2020 - 02:07

        I think there is definitely differences in where you start.

        I had a traumatic adolescence and childhood, and I had to be treated for my trauma, depression and anxiety. I failed some of my university classes, had to repeat a year or two. I did end up losing few years of my life, doing conscription, fighting anxiety disorder and severe depression. Granted, even with that I was fortunate enough that I still passed and had enough marks to get into honours which I am currently doing.

        My dad told me off while I was being treated for depression and trauma that I didn't try hard enough to pass the university courses and that I will regret this eventually. I think I was trying my damnest hard to just survive. To quote things that I've heard, I was being anti-social because I was avoiding people, I was not trying hard enough, not studying hard enough etc etc etc. I think my dad saw me as someone who was bludging on his money.

        What I am trying to say isn't that you didn't try. It's probably your hardworking that got you where you are. I just think the starting line for everyone is vastly vastly different. I think I am, to a certain extent, privileged. I have no debt, I have no financial ties or responsibilities. I had to take a year off to work and save up some money, but the fact that I have an almost clean slate to restart in my opinion is a privilege.

  • Pro-crastinator on 14/10/2020 - 01:24

    The analogy would benefit from starting by saying how much money each of the men 'have in their wallets'…

  • SlavOz on 16/10/2020 - 16:36
    +1

    OP you might enjoy this analogy too;

    https://youtu.be/BomQxCG5VG4

    I agree with you but you're seldom going to get much support on here when you refuse to take a knee and apologise for the sin of being financially independent. That's a big no-no these days.

    Most people choose to believe that wealth is all about luck and privilege yet the data on this actually says the opposite. Most wealth is earned and not inherited or gifted. The average Aussie inheritance is like $75,000 - not really enough to set someone up for life. If someone is well off the overwhelming odds are that they worked very hard and smart for it.

    The wealthy already pay most of our taxes so I'm frankly appalled at people who think we should just punish hard working people by taking away 60-70% of their income just so we can all live on in Soviet style government dependence.

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