Unpopular Opinion High Income Earners Pay too Much Tax

Trying2SaveABuck on 11/08/2022 - 12:48
Last edited 11/08/2022 - 13:17 by 1 other user

"3.6 per cent of Aussies account for more than 31 per cent of tax revenue.

The majority of tax revenue comes from those earning $90,001-$180,000 - which makes up 36.8 per cent of tax paid."

https://au.finance.yahoo.com/news/ato-reveals-how-much-tax-t…

According to the above source 2/3 of all tax collected come from 20% of the 'working' population. - that is an excessive amount of lifting from the top categorises and imho it is unfair but the media wont ever report it.

We need to change the system to tax 'wealth' and not 'earnings' no one should be paying more then 20-25 cents to a dollar of tax on money they earn to the ATO.

my unpopular opinion is higher income earners pay too much tax - change my mind?

Poll Options

  • 617
    High income earners pay too much tax (I agree)
  • 654
    I disagree with your opinion
Financial

Comments

  • [Deactivated] on 11/08/2022 - 12:52
    +162

    too many corporations rake in hundreds of millions, even billions per year and pay little to no tax here, but the problem is that politicians from all sides lack the courage to do anything about it, that is if they aren't on the take. we should be taxing them more, not people who actually work hard for their money.

    • jv on 11/08/2022 - 12:54
      +6

      too many corporations rake in hundreds of millions, even billions per year and pay little to no tax here

      well that needs to change then…

      • Xistn on 11/08/2022 - 12:57
        +31

        It's time to shine JV, become a candidate

        • djsweet on 11/08/2022 - 13:32

          How do you know he isn’t?

        • Jackson on 11/08/2022 - 20:26
          +11

          JV4PM

          • Dok on 12/08/2022 - 12:31

            @Jackson: @jv Available on ppq…
            note -
            That combination might be inappropriate. Our system has identified content in your plate that may need review by PPQ. You may proceed, but please ensure that your content is appropriate…

        • tonsta on 12/08/2022 - 12:23
          +3

          OZBARGAIN political party?

        • skittlebrau on 14/08/2022 - 10:37
          +2

          It would be a bold move, that’s for sure.

    • Gervais fanboy on 11/08/2022 - 12:56
      +17

      problem is that politicians from all sides lack the courage to do anything about it

      More like they are all incentivised to not do anything.

      These bloody election campaigns and the fundings that go with it, is what then drives the policies to come.

      • GrueHunter on 12/08/2022 - 21:15
        -1

        Yes, wealthy politicians who pay too much tax are incentivised to…

        …to…

        Wow, it's like you didn't think about this at all

    • netjock on 11/08/2022 - 13:50
      +3

      You are going off topic.

      OP needs to add corporations and politicians to the poll.

    • TheBird on 11/08/2022 - 17:23
      +6

      This is actually incorrect, but don't let me stop you from running with cherry picked numbers so you can tell a good story.

    • Willy Beamish on 11/08/2022 - 23:46
      +1

      You appear to have absolutely no understanding of tax whatsoever so here's an article you should read.

      https://time.com/5530386/aoc-amazon-new-york-hq2/

    • npnp on 12/08/2022 - 08:36
      +15

      Alasdair is absolutely correct. There should be a third option for the poll,

      "Some of high income earners pay more tax than they should have BUT some billionaires and top tier companies pay way too little tax and know their way around the subject of getting away paying little to no tax. While I'm okay with reducing the tax for those high income earners who don't try to pool the system and pay their tax, I strongly oppose of the cunning ways of the next level up people/firms getting away paying next to nothing but still maintaining their big brand names and wealth". I think most of the crowd here, regardless of the poll result would be similarly minded.

      • Ade99 on 12/08/2022 - 09:27

        Put up the tax rates incentivises every one to become more tax efficient. Lower taxes and that incentive disappears!

      • Griffindinho on 14/08/2022 - 14:05
        +1

        Most billionaires don’t have salaries.

    • Based Bargainer on 13/08/2022 - 16:42
      +7

      The greens are the only party that proposes billionaires taxes

    • ihbh on 14/08/2022 - 11:57
      +1

      Semi ignorant comment. Who do you think own these corporations? Shareholders, who are taxed whennthe receive their dividends.

      • Griffindinho on 14/08/2022 - 14:06
        +2

        And who’s the major shareholders in these multinational companies? Billionaires…..

        • donga100 on 29/08/2022 - 22:03

          Actually, no it is not billionaires, it is mostly superannuation which means regular wage-earning workers.

          • JohnHowardsEyebrows on 30/08/2022 - 12:41
            -1

            @donga100: Actually, a fair proportion of that superannuation pool is in fact millionaire SMSFs stealing the corporate tax back by way of franking credits, costing more to the budget than the aged pension.

    • Stingy Student on 15/08/2022 - 12:53
      +1

      One argument (from a government perspective) against big corporations paying high taxes is that they provide lots of job opportunities to Australians, and raising taxes may encourage them to relocate there business elsewhere or stunt the companies growth. I'm not sure of the ins and outs of this, but simply raising big corportation taxes also has negative implications.

    • DrSwag on 16/08/2022 - 09:43
      +1

      Excluding internet companies, which ones?

      Not withstanding the question^ I'd like to add that there is a difference in taking money (revenue) and keeping it (profit). At every step a corporation is paying tax from buying supplies (GST) to paying employees (PAYG).

  • jv on 11/08/2022 - 12:52
    +27

    3.6 per cent of Aussies account for more than 31 per cent of tax revenue.

    Ridiculous, isn't it?

    Everyone should pay the same rate of tax with just a tax-free threshold for low income earners.

    This would encourage people to work harder to earn more money (and pay more tax) without penalise hard workers…

    • Trying2SaveABuck on 11/08/2022 - 12:56
      +9

      Ridiculous, isn't it?

      it is 100% a joke the other issue is there is little accountability to rubbish governments that spend the money irresponsibility - in Victoria we are 150bn in debt and nationally we are over 1tr in debt and when MPs get voted out they just walk away with there fat pay cheques

      • Gervais fanboy on 11/08/2022 - 13:00
        +10

        Mate, most people don’t even know that we are in debt. Common theme throughout the West.

        • Griffindinho on 14/08/2022 - 14:08

          Not all debt is bad if it’s serviceable.

          • Gervais fanboy on 14/08/2022 - 15:04
            -3

            @Griffindinho:

            Not all debt is bad if it’s serviceable

            Step 1 in doing that - Knowing that you are in debt.

            Btw I didn’t say if it was good or bad.

            I made a point about the oblivious nature of the people living in the ‘first world countries’ and how the national debt has risen to the point where countries aren’t trying to pay anything back and are just happy to pay interest payments.

            • Griffindinho on 14/08/2022 - 17:40
              +3

              @Gervais fanboy: Australia has its natural resources yet we keep getting robbed by foreign multinationals.

              • Gervais fanboy on 14/08/2022 - 18:15

                @Griffindinho: I’m with you on that mate,
                These backdoor deals by our own elected representatives, emboldening CCP controlled organisations.

                As obvious as it is, public doesn’t give a damn about it.
                Basically, we kinda deserve everything we get.

      • KaTst3R on 11/08/2022 - 14:37
        +42

        when MPs get voted out they just walk away with there fat pay cheques

        Or they gift themselves a $500k pa position in New York.

      • darkmoss on 13/08/2022 - 15:18

        *their

    • Gervais fanboy on 11/08/2022 - 12:57
      +5

      Brilliant take jv, you are on a roll here..

    • burningrage on 11/08/2022 - 13:00

      AMEN to that!

    • netjock on 11/08/2022 - 13:52
      +7

      Everyone should pay the same rate of tax with just a tax-free threshold for low income earners.

      Flat tax rate in theory is good.

      Unfortunately you haven't accounted for if you go over tax free threshold and go straight to 30% tax rate.

      Better proposals have been a sliding scale instead of our tax brackets. For example 0% until $20k then liner (as it goes progressively up) until say 40% at $200k then a flat rate of 40%.

      But then who am I to talk.

      • kipps on 12/08/2022 - 07:55
        +10

        I don’t understand why our marginal personal tax rates are higher than corporate tax rates. They should both max out at the same, or at the very least, max out at an average of the corporate tax rate. High income earners with personal services income get shafted, and it creates games with how to distribute income.

        • RMBC on 12/08/2022 - 09:00
          +5

          Historically the corporate tax rate was the average of the personal tax rates paid. The argument for lower corporate tax rates is that they need to be lower to attract international businesses so they don't use various mechanisms to shift profits off shore (admittedly more often than not through legal methods)

          The complicating matter in Australia are our franking credits. As a result, corporate tax for an Australian tax resident shareholder is just like withholding from wages, ie the ultimate tax is born by the shareholder at their marginal tax rate, and corporate tax rates are only levied against non resident share holders

    • Donaldhump on 11/08/2022 - 14:46
      +11

      one rate of tax sucks, i lived in gibraltaar and they do this, it doesn't work as the rate of tax is too high for your avg punter

      imagine this
      0-$18000 0%
      $18000+ 27%

      • brendanm on 11/08/2022 - 16:55
        +4

        I'd appreciate that.

        • Donaldhump on 11/08/2022 - 17:15
          +8

          guess that is your humble brag that your earn heaps…well done

          it makes the middle class poorer

          the tax bracket for high earners was stupid being reduced by liberal

          • brendanm on 11/08/2022 - 17:24
            +5

            @Donaldhump: I don't earn heaps at all.

            it makes the middle class poorer

            I'm middle class, it would make me richer.

            I don't even care about paying tax if it goes where it's actually needed, so much is wasted. More money to education, health etc would be great, things that the government should actually be focussing on.

            • Donaldhump on 11/08/2022 - 17:50
              +2

              @brendanm: well imagine its more like

              0% 0 - 18k
              35% 18k+

              or even worse

              30% flat tax, sucks for those working part time whilst looking after families or studying etc. trust me it sucked, you work 3 months and then lose your job you pay 30% still.

      • TheBird on 11/08/2022 - 17:26
        +10

        It's good until you realise, you're going to increase tax on those who are least able to afford it: Those in the $18k-$45k bracket.

        • BobLim on 15/08/2022 - 07:30
          -1

          Income level is a poor proxy for "affordability" - sure, some may be struggling single parents barely scraping by with no savings, but plenty will be young adults living with their parents with a completely disposable income, or wealthy retirees consulting once a fortnight at $1200/day

          • TheBird on 15/08/2022 - 16:50
            +2

            @BobLim: Way to go. Find the fringe examples so you can tax the poor even more. You should go into politics.

      • Trying2SaveABuck on 12/08/2022 - 21:43
        -3

        one rate of tax sucks, i lived in gibraltaar and they do this, it doesn't work as the rate of tax is too high for your avg punter
        imagine this
        0-$18000 0%
        $18000+ 27%

        this would be a fairer system then we have now if anything the tax free threshold probably should be 25k but otherwise this would work

      • Korban Dallas on 13/08/2022 - 19:09

        I'd lose my shit if I earned $18,001 🤣

    • Shaddolf on 11/08/2022 - 22:21
      +21

      Not all high income earners are "hard workers"… There are plenty of people getting paid far more than they should be (and plenty working harder, earning much less).

      • Gotchas on 12/08/2022 - 00:05
        +1

        Define hard worker

        • Kangal on 12/08/2022 - 08:17
          +3

          You see when a man loves a woman…

      • Gervais fanboy on 12/08/2022 - 00:28

        That’s the nature of the beast.
        It’s a free and open market. You can apply wherever and work wherever.
        Of course there’s a bit of luck involved, as it is with almost everything else, ever.

      • mikekiwimike on 12/08/2022 - 08:04
        +8

        So salary is based on hard work?

        Forgive me but I have always found that salary is based on industry plus job function plus negotiation. I have never seen in any contract I have signed anything related to how hard I will be expected to work.

        Mileage may vary of course and I am not saying this is the best way to live, but you have the choice to live somewhere where you are controlled or you live in a ‘free’ market where things often seem not ‘fair’.

      • Gotchas on 12/08/2022 - 08:45
        +2

        Labourers are much harder workers then foreman, builders, engineers etc

        • cille745 on 13/08/2022 - 15:15
          +3

          With CFMEU, labourers make more money than all of them anyway

      • Brianqpr on 12/08/2022 - 23:02
        +7

        This. A lot of low income workers work very hard. I hate that attitude.

    • supersabroso on 12/08/2022 - 02:43
      -6

      Agreed, I know plenty of people who refuse to earn a cent over $180k because they don't want to be taxed at 47%. So they take it easy and earn less money. 47% tax is ridiculous and they should definitely focus more on taxing corporations properly and the filthy rich who are getting away with paying like 5% tax.

      • ruthlesskid on 12/08/2022 - 06:37
        +60

        Whilst I understand the mentality of not wanting to be taxed at 180k+ bracelet. It may lead to a common misconception the entire earning is taxed at higher bracket once you go over 180k.
        Just to clarify, every dollar earned after 180k is taxed at 47%
        The tax system only a side quest for the rich, but a ongoing grind for the commoner.

        • 400TX on 12/08/2022 - 07:54
          +7

          This! 100%! The number of otherwise-smart people I know who repeat this victimhood statement of "47% tax" would be funny if they weren't the types of people who then feel compelled to lead discussions on public policy.

        • jv on 12/08/2022 - 09:04
          +9

          Just to clarify, every dollar earned after 180k is taxed at 47%

          Basically, means that when earning any additional income, the government gets half.

          For many people, there is not enough incentive to put in extra effort because of that. That impacts our economy in many ways.

          • CaptainSharpe on 12/08/2022 - 16:14
            +3

            @jv: I mean, i'm not sure 180k is rewarding 'extra effort' in the way you believe.

          • PiratePete1911 on 12/08/2022 - 23:57
            +2

            @jv: I feel like I really dont understand how this all works, I thought by the time you were above 200k you were likely to be in a decision making or leadership role?

            "Sorry Barry, I dont want the extra 100k because the government will take 50k of that and its not worth the extra decision I have to make each week?"

            My promotions have all ended up with me having more responsibility but doing less actual work. I cant imagine not continuing to take these for extra money just because the goverment takes slightly more of it.

            • Miss B on 13/08/2022 - 00:24
              +2

              @PiratePete1911: They're okay with the $37k going to the government, it's the $8k they're not okay with.

          • Miss B on 13/08/2022 - 00:15
            +2

            @jv: Someone else would happily take the >$180k job so it's fine if some people don't want it. If the employer was having trouble finding someone because of the extra tax they'd just have to pay extra, or offer some other incentive.

            Going from > $120k to > $180k the tax goes from $37 to $45 out of every $100. So because of $8 out of every $100 over $180k being paid in tax people are turning down jobs?

          • MrJP on 14/08/2022 - 09:22

            @jv: Yeah, most of those people would feel equally 'lack of incentive' at the 2nd highest bracket, if the highest bracket didn't exist. Plus for most people it takes a lot longer for people to go from 50K to 100K in salary than going from 150k to 200k in salary. So for the rich, the absolute gains per year would likely still be bigger. What plays a way bigger role in lack of incentive is that absolute gains in money start to matter way less in terms of relative position to the rest of society and luxuries/goals people have in mind.
            If we want people to feel more incentive, an absolute gain needs to mean more, which means we need a smaller range of income/property disparity among the rich. That way it remains feasible to still get ahead (of others). More progressive tax is likely to help with that, rather than hurt. What's more needed though is policies around other forms of income and businesses.

          • crentist on 14/08/2022 - 10:47

            @jv: The tax difference there is not much more than the bracket below. And that only adds up to a lot of gross tax paid, because of the high income.

            So either they're paying too much tax, because so much money is coming out of their pockets, or they're doing well, because so much is still going into their pockets.

            A higher tax rate just means that people expect more money at higher incomes. Someone on $60 might negotiate hard for a $10k salary bump, a $200k earner would fight for much more than that. There's no personal loss to them

      • ESEMCE on 12/08/2022 - 08:04
        +10

        Do you doubt the intelligence of these people?
        Per @ruthlesskid comment, tax brackets do not work that way. If you earn more, you're still better off even if you pop above a bracket.

        If they're "taking it easy" and still pulling $150k+, it's a pretty nice life they have.

      • AlanHB on 12/08/2022 - 08:36
        +7

        I doubt those people are turning down promotions to make $250k or structuring their finances to reduce their tax liability. They are likely fictional.

        • dmcneice on 12/08/2022 - 20:21
          +7

          As someone who's employer frequently asks for overtime (healthcare), once I hit that top tax bracket, the marginal tax rate is too high for me and ill decline extra work because the extra effort isnt worth the "reward". I'm sure im not the only one in the country that think's like this.

          • PiratePete1911 on 13/08/2022 - 00:01
            +2

            @dmcneice: That doesnt sound like a tax issue it sounds like an issue that we dont have enough qualified people to do your role.

            • dmcneice on 13/08/2022 - 12:57

              @PiratePete1911: of course thats a major issue as well. I'm talking on a personal level, it does impact my decision to take on extra work. Two things can be true.

          • AlanHB on 13/08/2022 - 12:41

            @dmcneice: Kinda sounds like you are not being paid enough for your overtime hours.

            If you had your salary rise to 200k with no change in hours, would you take it?

            • dmcneice on 13/08/2022 - 13:04
              +1

              @AlanHB: I dont get that option though. I could take on an extra day a week (e.g. Saturday) and if I did that every week for 48 weeks I'd get an extra 30-40k. Problem with that extra day is its taxed at 47%. When I was on a lower tax bracket (around 30%), I never felt that way.

              Which sucks because I'd like to get ahead in this world, coming from a very low SES background. The harder/more I work to do that, the more I/workers get penalised

              • redfox1200 on 13/08/2022 - 16:49

                @dmcneice: instead of thinking about how much tax you are paying, you should think about it as how much extra savings/investments can i buy with the extra money.

                so yes you may be paying 47% tax, but you also might be able to save/invest 30-50% more money for the year

              • AlanHB on 14/08/2022 - 08:06

                @dmcneice: Yeah but all the hours in the band before then are taxed at 37.5%, so if we were to apply your logic, perhaps you should go part time to avoid the tax issue.

                My question was whether you would be happy to receive a salary of $250k with no current change in hours. If so, tax mustn't be as important as other factors here.

                • dmcneice on 14/08/2022 - 12:46

                  @AlanHB: Sigh… Obviously people would be happy to earn more (despite tax) for the same amount of work.. . You could make the marginal tax rate 75%. Most people aren't given such a hypothetical scenario, they either have to do a job that is harder/has more hours/has more responsibility etc.

                  My comment is based on my PERSONAL motivations, which change at the top tax bracket. There are definitely more people in the country whom would be in similar situations (e.g. Could earn more from an extra optional day or second job).

                  • AlanHB on 14/08/2022 - 13:06

                    @dmcneice: Sure, but according to your personal motivations as described above, your salary is currently $179k pa, and your issue is that you are being paid overtime at the same rate, so additional hours result in less pay per hour in your ultimate paycheck.

                    As we've now clarified that you are quite happy to be paid more, even if it does attract tax, isn't the real issue that you feel you are are being underpaid for overtime hours?

                    • dmcneice on 14/08/2022 - 13:45

                      @AlanHB: It doesnt even have to be overtime hours, Any side-hustle/second job is also taxed at the higher rate too, making those things activities less attractive than my main job. When I was on a lower income I did those activities because the tax rate wasnt as much of a disincentive.

                      • AlanHB on 14/08/2022 - 13:55

                        @dmcneice: But you're talking about overtime hours, and the fact that they are incurring an additional 8% tax when you cross the $180k barrier.

                        • dmcneice on 14/08/2022 - 13:59

                          @AlanHB: Why does it matter if its overtime hours or a second job…..Everyone will have a point at which they feel like the Effort is not worth the reward.

                          For me its when I hit that final bracket, it may not be for you..power to you. Sure you could say they arent paying enough for the overtime, but when someone on a lower tax band does the job, they get more "reward" for that extra work than someone on a higher band.

                          I don't know why your trying so hard to argue that the higher tax rate isnt a disincentive to some people.

                          • AlanHB on 14/08/2022 - 16:39

                            @dmcneice: Mostly because the issue you have could easily be addressed if overtime hours were paid at more than an increase over 8% over your regular hours. If it is paid higher than this amount, you're still getting more in pocket per hour, and your concerns are not justified.

    • BigBirdy on 12/08/2022 - 09:53
      +21

      The nub of this argument is that low income earners should pay more tax so high income earners can pay less, and bugger the social consequences (poverty, crime, etc). Not really surprising coming from someone claiming the media doesn't cover an issue he read about in the media. Shallow, ill-considered and self-serving.

      • jv on 12/08/2022 - 10:01

        The nub of this argument is that low income earners should pay more tax so high income earners can pay less

        No, it is about paying equal rates…

        Low income earners will always pay less tax.

        • BigBirdy on 12/08/2022 - 10:49
          +15

          Surely you aren't that simplistic, or are you? The only way for high income earners to pay a lesser share of taxation, is for low income earners to pay a higher share. There is no 'everyone wins'

          • jv on 12/08/2022 - 10:53

            @BigBirdy:

            There is no 'everyone wins'

            Surely you aren't that simplistic, or are you?

            I didn't say 'everyone wins'. I just said taxation should treat people equally…

            • SBOB on 12/08/2022 - 11:05
              +9

              @jv:

              I just said taxation should treat people equally…

              Equally with respect to % isnt necesarrily equally with respect to the burden the tax% makes to their portion of base liveable income.
              A person or household scraping by on $40-50k a year paying x% tax needs to sacrifice a lot more than a person or household on $250k a year paying the same x%.
              A large portion of the first persons income is taken up on basic non-elastic living expenses.

              We also dont 'flat' rate plenty of taxes.
              Rates are based on property values, not directly related to land size
              Vehicle tax kicks in a higher 'luxury tax' for higher priced vehicles
              Private health government offsets are a sliding scale based on income

              Seems strange to think a flat rate of income tax is some magic bullet towards whatever version of equality you think doesnt just mean those not earning 6 figures don't have to take on more burden at an 'impact to daily living expenses' level

              • jv on 12/08/2022 - 11:06

                @SBOB:

                Equally with respect to % isnt necesarrily equally

                Yes it is.

                • us3rnam3tak3n on 12/08/2022 - 12:52
                  +6

                  @jv: It's equal by the most simplistic measure but regressive in terms of ability to pay. People in the top bracket have far greater disposable income. Flat tax rates are always going to hurt low/middle income earners.

                  Marginal rates are expected to be adjusted for bracket creep in the next couple of years so that the rate for up to $200k will be 30%. That will be nice but in the meantime I'm happy to do some of the heavy lifting.

                • Intoxicoligist on 12/08/2022 - 14:49
                  +2

                  @jv: You're talking about equality, when we want equivalence. Someone who has to buy medicine for their child is disproportionately impacted when earning low wages (medicine cost as a % is higher as a low income earner). If costs were equivalent across all earners then a set % tax rate would make sense. However this isn't the case.

                  • jv on 12/08/2022 - 14:50

                    @Intoxicoligist:

                    You're talking about equality, when we want equivalence.

                    you might.

                    most want equality and an end to discrimination.

                    • Intoxicoligist on 12/08/2022 - 14:51
                      +1

                      @jv: Your version of "equality" means discrimination against low income earners. You're arguing against yourself.

                      • jv on 12/08/2022 - 14:55

                        @Intoxicoligist:

                        Your version of "equality" means discrimination against low income earners.

                        No, it treats them equally with everyone else.

                        Discrimination is where you treat people differently.

                        • Intoxicoligist on 12/08/2022 - 14:57
                          +3

                          @jv: So if I "equally" give everyone an orange, does it benefit everyone equally?

                          Of course not. People with no food will be incredibly benefited, whereas those with an overabundance of oranges would see it as a disadvantage to have to get rid of another orange.

                          • jv on 12/08/2022 - 15:00
                            +1

                            @Intoxicoligist:

                            does it benefit everyone equally?

                            It's not about benefits, it's about pay tax without discriminating between people.

                            • Intoxicoligist on 12/08/2022 - 15:00
                              +2

                              @jv: You just changed your argument though. You went from wanting equality for all, to wanting to get rid of discrimination? Which is it?

                              • jv on 12/08/2022 - 15:01

                                @Intoxicoligist:

                                You just changed your argument though.

                                No I didn't

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