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

- - djsweet on 11/08/2022 - 13:37
    
    +1
    
    No it doesn’t. The highest earners still pay the most tax.
    - boirganz on 11/08/2022 - 13:46
      
      +17
      
      Yes it does - taking 30% away from someone earning $1000 a fortnight has a much greater affect on their life than taking 30% away from someone earning even $3000 or $4000 a fortnight, let alone $10,000 or more.
      
      The higher earners (assuming you destroy all abilities to avoid taxation via trusts, deductions) would still pay the "most" as a raw $ , but they're not hurting proportionally the same.
      - djsweet on 11/08/2022 - 13:51
        
        +1
        
        @boirganz: Of course they aren’t hurting the same.. they have more money. But is the goal to make everyone hurt the same - to make everyone’s income equal? If it is then we would be a communist society.
        
        boirganz on 11/08/2022 - 14:10
        
        +11
        
        @djsweet: Not to make everyone's income equal - that only works on paper and never in reality.
        
        But once you start earning a certain amount, I think there is a moral imperative to contribute to society in a way that is more equitable and not about "equality" of taxation. See it as thinking more about other people and the greater good of society than just about "me and my $"
        
        djsweet on 11/08/2022 - 14:21
        
        -6
        
        @boirganz: It’s good to think of others and help financially if you can afford it. But it should be voluntary and done out of the goodness of your heart. If not, there is no merit in it. It just becomes mandatory wealth redistribution - aka stealing from the “rich” to give to the “needy”. Quotation marks required because very few people in Aust are really rich or really needy.
        
        boirganz on 11/08/2022 - 14:25
        
        +7
        
        @djsweet: If you have a roof, clothing, a job, food, and live in Australia you're one of the richest in the world. Millions of people would trade places with you in a heartbeat - even if you're living paycheck to paycheck.
        
        It is voluntary - we voluntarily vote in representatives/governments who support a democratic, capitalist system with welfare and social benefits.
        
        Thankfully the vast majority of Australians agree that we have a great system - albeit flawed - and willingly give up a proportion of their income to the benefit of others.
        
        SlavOz on 11/08/2022 - 21:01
        
        +1
        
        @boirganz:
        
        Millions of people would trade places with you
        
        So shouldn't you be grateful for what you have, rather than asking for more free stuff on top of already living in such a great country of immense opportunity?
        
        It is voluntary - we voluntarily vote in representatives/governments
        
        Voting is not voluntary, and taxation is rarely on the ballot.
        
        This flawed logic that everything we have in Australia must be because everyone supports it is silly. The will of the people rarely comes out looking the same after it goes through the political process.
        
        Eg - ADF troops involved in the murder of 39 civilians. They act on behalf of the elected Australian government - does that mean Australians support murdering civilians? No. We did not vote for that to happen, it was done without our input.
        
        Awoke on 11/08/2022 - 21:49
        
        @SlavOz: Typical lefty, believes everything in the guardian is true!
        
        Aweios on 11/08/2022 - 23:37
        
        +1
        
        @Awoke: You do realise that's just quoting a report right? It's not like The Guardian went out and found people, so if you're just here to deny the Bereton Report, that's on you
        
        Awoke on 12/08/2022 - 07:31
        
        @Aweios: Our defence personnel do an amazing job and we should be proud of them. War is tough and we sit back and judge them. Then we have people, like above, propagating this campaign to smear our soldiers, by quoting the guardian at that.
        
        Instead of thanking them for their service, this just continues a typical lefty witch hunt of our proud diggers.
    - Aweios on 11/08/2022 - 23:43
      
      +5
      
      That's just bad economics btw.
      
      Say you have 5 people earning 50k and one person earning 250k. Flat tax rate of 30% means the 5 people are now taking home 35k and 1 is taking home 175. And the 1 person is "burdened" with 70% of the taxes. In your flat rate world, the rich still get taxed a lot and now the poor are taking home less and are unable to spend their money in the economy.
      
      It's easier for 5 people to spend 75k than one person spending 75k+ every year.
    - mooney on 12/08/2022 - 15:47
      
      +1
      
      Yes it does. Progessive tax is the right approach for a reason. I will always be happy to move into a higher tax bracket, means my income is also rising and my take home pay.
      
      People should not think they pay too much tax, people should have low tolerance for government wastage.
      
      Among other things I want my taxes to go to education, healthcare, and to provide social security to those most disadvantaged. That builds a better society. For sure there will always be 'bludgers' but they are a small percentage of the population and I don't think policy should be driven by the worst of us.
  - FlyingMiffy on 11/08/2022 - 22:22
    
    This argument annoys me every time.
pegaxs on 11/08/2022 - 13:22

+22

Damn, need a deal on tiny violin strings for my tiny violin. Oh the poor rich people, won’t someone think of the rich?
- Gervais fanboy on 11/08/2022 - 13:28
  
  +3
  
  When you say ‘rich people’, if you are including people that earn six and somewhat 7 figure annual incomes.
  Well, a majority of them work tirelessly to get ‘rich’.
  These preposterous tax burdens actually disincentive people from working harder and going for that next dollar, almost making our tax policies a counter intuitive measure.
  You and I should rather be talking about the corporate giants that get away with paying 0 tax.
  Don’t be jealous of you fellow man, rather seek accountability from overlords above us all.
  - SBOB on 11/08/2022 - 13:47
    
    +10
    
    These preposterous tax burdens actually disincentive people from working harder and going for that next dollar,
    
    and yet those people earning such incomes still are somehow see an incentive to do so…
    - SlavOz on 11/08/2022 - 21:04
      
      +1
      
      Rate of tax evasion and offshore accounting would suggest otherwise.
tsunamisurfer on 11/08/2022 - 13:23

+2

The taxation rates should be flattened.

The tax free threshold back to $6000.

All GST exemptions removed, allow a broad based consumption tax to be a broad based consumption tax.

This way we can ensure a fairer distribution of the tax burden.

But this needs to be done in unison with a major reform of Welfare, that is way too high and we will forever be in deficit as long as the Welfare bill is more than Education, Defence and Health budgets combined.
- Trying2SaveABuck on 11/08/2022 - 13:28
  
  -6
  
  Welfare, that is way too high and we will forever be in deficit as long as the Welfare bill is more than Education, Defence and Health budgets combined.
  
  if we fixed up welfare who would vote in Greens? (LMAO)
  - Dane90 on 11/08/2022 - 14:53
    
    +23
    
    You watch too much 60 minutes, most of the welfare bill goes to the aged pension and disability/NDIS/carer payments. You've bought into the propaganda of the dole bludger sucking all our tax when they make up 1/10 of the total welfare payments.
    - Trying2SaveABuck on 12/08/2022 - 21:49
      
      You watch too much 60 minutes, most of the welfare bill goes to the aged pension and disability/NDIS/carer payments. You've bought into the propaganda of the dole bludger sucking all our tax when they make up 1/10 of the total welfare payments.
      
      if you cant get a job in the current employment environment i dare say you are not trying to get a job….
  - nedski on 11/08/2022 - 15:24
    
    +6
    
    You know that out of the personal amount of taxes you pay, about only $50 would go to unemployed benefits. However look at how much more goes to the aged pension.
    - Trying2SaveABuck on 11/08/2022 - 20:02
      
      -6
      
      good chance i will need the aged pension one day, i doubt i will ever get welfare as if i ended up unemployed i'd be means tested out of support and im not lazy enough to sit on my backside and not work for longer then a few weeks- thus why should i pay for something that till NEVER benefit myself and in that fact why should anyone pay for people who choose not to work welfare should not be means tested and but it should be time sensitive ie 6 mo
- mskeggs on 11/08/2022 - 13:30
  
  +17
  
  Not seeing how taking additional tax from people with little money compared to today is "fairer"?
  Maybe you mean "I have decided taking an equivalent percentage of income is desirable".
  
  If you tax me 20% so I cannot afford to eat, versus taxing a billionaire 20% so they cannot afford an eleventh holiday home, the percentage may be equivalent, but the result very unfair.
  
  This is how you end up with mobs with guillotines.
  - boirganz on 11/08/2022 - 13:34
    
    +3
    
    Let them eat cake!
  - tsunamisurfer on 11/08/2022 - 13:43
    
    If you tax me 20% so I cannot afford to eat, versus taxing a billionaire 20% so they cannot afford an eleventh holiday home, the percentage may be equivalent, but the result very unfair.
    
    The primary directive is to even out the taxation burden.
    
    However I can understand your point, special dispensation can be considered so that people do not fall below the poverty line.
    - tomfool on 12/08/2022 - 15:49
      
      +2
      
      Its called different tax rates based on income and the tax free threshold.
- boirganz on 11/08/2022 - 13:38
  
  +2
  
  If you want a fairer distribution of the tax burden, then we need reform on personal income taxation loopholes/deductions, business taxation, capital gains, family trusts etc.
  
  Flattening the rates would lead to greater society inequity. Which I guess is fine if you're happy with that?
- brendanm on 11/08/2022 - 18:06
  
  +2
  
  All GST exemptions removed
  
  Not a good idea.
  
  But this needs to be done in unison with a major reform of Welfare
  
  Cashless card thing would be good.
  
  Lots of the welfare budget is also the age pension, this expenditure should be reducing as people transition more to super than the pension.
  
  NDIS is also a budget black hole, a tonne of money wasted on bureaucracy, lots of providers making a lot of money, while not a lot of care being provided.
  
  The tax free threshold back to $6000.
  
  Making corporations actually pay their share of tax would be much better.
sane on 11/08/2022 - 13:29

+2

I think that everyone should be net contributors to society. If you are in a coma in a hospital bed - well maybe you get a pass - but the general view should be that there are no free goes. If you can't contribute in taxes, then you contribute in other ways.

And if you are in deficit, then you don't get to benefit from all the nice to haves. In fact you don't get to call yourself a functioning adult.
- mskeggs on 11/08/2022 - 13:33
  
  +6
  
  I don't know anyone who doesn't contribute to society. Some only contribute taxes, which is probably the least one should expect.
  - Trying2SaveABuck on 11/08/2022 - 13:44
    
    I don't know anyone who doesn't contribute to society. Some only contribute taxes, which is probably the least one should expect.
    
    i know loads of people who have never worked, parents and grand parents never worked etc they have milked the welfare and social housing system and contributed nothing but for some reason we have to continue funding their free ride? whilst they get high in the backyard and sniff paint…
    - GabrielB on 11/08/2022 - 16:29
      
      +15
      
      And I don't know a single one. In 2019, there were 28,444 who had been on the dole 10+ years. That's like 0.1% of the population - 1/1000 people. Hardly big fish and they live below the poverty line.
      - Dsquall on 11/08/2022 - 23:01
        
        +2
        
        @GabrielB: The other avenue is claiming the disability pension, 4% of Australians are on that. There are many with genuine disabilities but there are also a number who claim it to rip off the system.
        
        I come across this far more commonly than a “dole bludger”. It’s hard to go to Centrelink every month and convince them you’re unemployable.
        
        It’s a difficult subject to talk about as well because there are genuine people living with disabilities. Then there’s Joe Bloggs that had a fall from standing height at the age of 21 and hasn’t worked in 30 years. Partly to blame is the system that allows for this stuff to happen but it definitely does happen.
    - Brick Tamland on 12/08/2022 - 09:03
      
      +2
      
      Yeah but would you trade positions with them? No I dont think so.
      
      Although they maybe getting a free ride its not a great life stuck in shitty social housing that they probably had to wait 10 years to get into and then there's not much money for pleasure. These people aren't out and about having Smashed avo on toast at your local cafe. They're not driving around in cars that are less than 20 years old, if they have a car at all, and they most certainly dont have weekends away or go on holidays.
      
      Its easy to get annoyed at what seems like a free ride but its not a nice ride
      - Trying2SaveABuck on 12/08/2022 - 09:18
        
        @Brick Tamland:
        
        Yeah but would you trade positions with them? No I dont think so.
        
        the issue isnt the position they are in the issue is they dont want to change it and expect others who are trying to contribute to society to carry them
        
        Unemployment in Australia is record low and has been 'low' for decades if you cant get a job and are fit and able to work then you simply dont want one - thus i have no sympathy for you
        
        we also have one of the highest min wage in the world so even with no skills you can still live somewhat comfortably working full time
    - tetra on 12/08/2022 - 18:20
      
      +1
      
      i know loads of people who have never worked, parents and grand parents never worked etc
      
      Yeah, well my uncle works for nintendo
  - sane on 12/08/2022 - 07:57
    
    +1
    
    Note, I said NET contributors. I'd guess there are at least a good 20-30% of the population where society is taking a loss overall. And for most taxes aren't really where it's at, they need to be making contributions in other ways - but they do need to be acting to put themselves on the positive side of the equation.
    
    Let's say it costs at least $20-30k to keep someone ticking over in society at a minimum - that means they need to be making at least that in contributions (probably more to take account of schooling, retirement, etc.) That means anyone on below average wage isn't breaking even on taxes alone - either they need to pay more, or they need to contribute in other ways. Maybe you could make a case for someone doing essential/productive work is contributing more than their wage says - but there are plenty of leech jobs that offer society nothing.
    - aa on 14/08/2022 - 00:47
      
      Whilst i somewhat agree with you here i think the country won't be a very pleasant place to live if we treated everyone as a $ amount.
      
      I had an idea that everyone should have a certain $ value of social benefits when they become say a citizen, when they pay tax, this goes up, when they draw on benefits, this goes down and stops once they hit 0?
      
      But no system is perfect, someone will always game the system and there will be winners and losers, sometimes i guess we need to put our socialist caps on and give a little…
      - sane on 14/08/2022 - 11:10
        
        +1
        
        @aa: It actually derives from how tribes tend to work. Everyone is expected to contribute, and although there is some leeway - it has its limits. If you have someone who contributes nothing, but takes all, they are rapidly shown the exit as liabilities.
        
        It's questionable if those tribes are a pleasant place to live - but it does illuminate a fundamental limit to the amount you can ask people to give - and that's the important aspect; liabilities are limited.
orangetrain on 11/08/2022 - 13:44

+3

Empty houses are taxed at typical flat 2.5% council rates.

I too, would like a wealth tax to force contributions from hoarders beyond inflation/pumping money.

I like the flat tax if it comes with a UBI though.
squaredonut on 11/08/2022 - 13:48

+6

I kind of agree with you. I'm on a high tax bracket, and every time I get a pay bump, it's still more like wow now I have probably a ton more responsibilities but I get only like an extra $20-$30 a week after tax, it's kind of that feeling.

I think the issue compounds to the way the government spends our money. The fact that I'm seeing less and less bulk billing practices and seeing the healthcare seemingly turning into something out of the US really grinds my gears. Personally to me if our country got our shit together on Health Care, Education, and some other areas, then I'd be happier taxed at higher rates.

Also it doesn't help that a good portion of our tax revenue is spent on aged pension. I personally feel that this area needs to be reformed as a tax cut measure. I'm not saying that old people shouldn't get help and a pension, but old people whom own a high valued asset should dip into it's equity through a reversed mortgage first before going into the welfare bucket.
- ThithLord on 11/08/2022 - 16:29
  
  +4
  
  I kind of agree with you. I'm on a high tax bracket, and every time I get a pay bump, it's still more like wow now I have probably a ton more responsibilities but I get only like an extra $20-$30 a week after tax, it's kind of that feeling.
  
  Can you elaborate on this? Are you getting a pay increase of $60 a week, in this case? Or are you not completely across how tax brackets work?
  - Randolph Duke on 11/08/2022 - 22:30
    
    +3
    
    “Nah bro, I don’t want a pay increase, I’ll lose money per week if I get a pay bump cause I’ll be in the next tax bracket”
    - squaredonut on 11/08/2022 - 23:32
      
      +1
      
      Actually, depending on your situation you will lose money indirectly, if for example you're claiming child care subsidies or any rebates or subsidies that require you to fall below a certain taxable income.
  - squaredonut on 11/08/2022 - 23:30
    
    +1
    
    I understand how tax brackets work. But what I am trying to say is that. At the highest tax bracket, you're paying 45 cents for every dollar over. So effectively 45% of the pay increase I receive goes directly to tax. A 5k bump would net me a $2750 after tax in my pocket, gets me about $50 bucks extra a week, but then suddenly the business expects more of you.
    - Miss B on 12/08/2022 - 01:31
      
      +6
      
      Originally you were saying half that. So you get a $2.5k pay rise, when you're already on >$180k and you probably have a ton more responsibility? This isn't an issue with the tax system, this is an issue with your employer - 1.4% is a pay cut, even in a regular year, due to inflation. Why would you have any extra responsibility?
      
      But also is it really that important that you get $65/week (if your marginal tax rate was the same as someone on $45,001) instead of $53? How much does that $12 really help you? Or your original example, where it's about $6 difference per week.
    - ThithLord on 12/08/2022 - 08:17
      
      +1
      
      Sounds more like a back-pedal to me.
    - PiratePete1911 on 13/08/2022 - 00:22
      
      A 5k increase sounds like a keeping up with inflation payrise not an increased responsibility payrise.
Crow K on 11/08/2022 - 13:53

+3

Taxing wealth has far more problems than our existing system.

For instance, the guy that puts $20k of his $100k annual salary aside to invest in the stock market is now getting hit with a tax that his next door neighbour (who blows $20K a year on expensive booze, Rolexes and a trip to Bali) doesn't have. You've incentivised people to destroy their savings. Imagine how that pans out at retirement age, given how inadequate the pension currently is.

Also, the problem of taxing hard assets generally (you can't tear off 5% of a painting and put it in an envelope to pay a tax bill for it).

I haven't seen any convincing sums on where the "shortfall" on tax is going to be made up if we stop taxing the big end of town, either. "Maybe we can just squeeze the small tax payers, who by definition can least afford it, more" is a incredibly bad take on a tax system. The entire point to tax is to pay for government services (which includes the welfare that apparently disgusts so many). How would that work?

It doesn't, unless you apply tunnel vision and focus on specific parts of society to the exclusion of others (like Ayn Rayn was so fond of doing).

The hallmark of a society is how well they take care of those who can't take of themselves.
- netjock on 11/08/2022 - 16:17
  
  For instance, the guy that puts $20k of his $100k annual salary aside to invest in the stock market is now getting hit with a tax that his next door neighbour (who blows $20K a year on expensive booze, Rolexes and a trip to Bali) doesn't have
  
  I've heard the joke where certain communities don't believe in the government that they put gold into their walls and plaster over it (even thought they have moved to the UK). The gold in the walls is worth more than the house.
- Quantumcat on 11/08/2022 - 16:30
  
  +4
  
  For instance, the guy that puts $20k of his $100k annual salary aside to invest in the stock market is now getting hit with a tax that his next door neighbour (who blows $20K a year on expensive booze, Rolexes and a trip to Bali) doesn't have. You've incentivised people to destroy their savings. Imagine how that pans out at retirement age, given how inadequate the pension currently is.
  
  It would only start at a high amount of money, a low percentage after the first million, say, then creep up very gradually after that until it maxes out at say 50 million. The idea being that regular people saving would not get taxed at all, regular people who have been very good at saving and investing would get taxed a small amount (as it only starts after the first million), and the very wealthy who inherited their money, and whose money just keeps turning into more money because that's how assets and money seem to always work, get taxed decently. A side benefit is it would encourage people with excessive amounts of money to invest wisely and not just throw their money away on stupid projects because YOLO, or do nothing with it. If they're getting taxed they need to make sure their money is working for them so they gain a decent amount from it that is a lot more than the tax.
  
  Also, the problem of taxing hard assets generally (you can't tear off 5% of a painting and put it in an envelope to pay a tax bill for it)
  
  This is a good thing, if they can't come up with the liquid assets to pay the tax, they'll need to sell the painting and they can use the money to buy other stuff, which is keeping the economy moving. If capital is locked away in objects in someone's attic for 50 years it does nothing for the economy.
  - Crow K on 11/08/2022 - 16:58
    
    +1
    
    Figures seem a little (a lot) rubbery - let's not forget this is a proposed tax to replace our existing system. We now seem to have a society where anyone with under a million dollars in assets pays no tax at all? This doesn't seem serviceable.
    
    Let's say we figure out the 'right' number though in this scheme (somehow) and move on with the implementation, anyway.
    
    "A side benefit is it would encourage people with excessive amounts of money to invest wisely and not just throw their money away on stupid projects because YOLO, or do nothing with it. If they're getting taxed they need to make sure their money is working for them so they gain a decent amount from it that is a lot more than the tax."
    
    I don't think this is supported by anything. People currently are taxed on the income that they earn (and work jobs they mostly hate because they have to live, etc, I'm talking about the people who work shitty jobs like retail and so forth), are you saying that those people don't do stupid things with their money? That they don't go blow it at the pub on bourbons and cokes and buy stupid videogames they really haven't the time to play? They think "Oh, I worked so hard for this and it was taxed as well, better not waste it" etc?
    
    "This is a good thing, if they can't come up with the liquid assets to pay the tax, they'll need to sell the painting and they can use the money to buy other stuff, which is keeping the economy moving. If capital is locked away in objects in someone's attic for 50 years it does nothing for the economy."
    
    I wonder who they would sell the painting to. Presumably someone wealthier than them who does have more assets and liquidity. Does this seem like a step in the right direction?
    
    It's a fantastic disincentive to stop creating art, sure. Art becomes even more expensive (the added tax makes it even more of a luxury item), so fewer people buy it, fewer people create it. I guess we become a society of baristas, selling each other coffees with latte art and creating as little of permanence and future assets as possible? All to feed the ravenous economy. Sorry, I really can't visualise any of the benefits.
    
    Do we have any examples of functioning societies that actually work off a wealth tax?
    - Quantumcat on 11/08/2022 - 17:26
      
      It's a fantastic disincentive to stop creating art, sure. Art becomes even more expensive (the added tax makes it even more of a luxury item), so fewer people buy it, fewer people create it. I guess we become a society of baristas, selling each other coffees with latte art and creating as little of permanence and future assets as possible? All to feed the ravenous economy. Sorry, I really can't visualise any of the benefits.
      
      Art that is worth millions was created by people that are long dead. It is not going to stop anyone painting something today and selling it for $500.
      
      I wonder who they would sell the painting to. Presumably someone wealthier than them who does have more assets and liquidity. Does this seem like a step in the right direction?
      
      That doesn't matter, what matters is that money is moving. Staff at the gallery are being paid, auctioneers are being paid, people packing the art into crates are paid, the person owning the space the gallery is in is paid rent, transport people are paid.
      
      I don't think this is supported by anything. People currently are taxed on the income that they earn (and work jobs they mostly hate because they have to live, etc, I'm talking about the people who work shitty jobs like retail and so forth), are you saying that those people don't do stupid things with their money? That they don't go blow it at the pub on bourbons and cokes and buy stupid videogames they really haven't the time to play? They think "Oh, I worked so hard for this and it was taxed as well, better not waste it" etc?
      
      People with small amounts of money spend it, so they are already helping the economy tick over. It doesn't matter where they spend it, whether it is on a book or a bottle of alcohol, all spending keeps things moving, and they are already taxed by the income tax system. In terms of doing something smart with it, that only applies to people with mega amounts of money where the money generates more money. Whether being invested in a business, sitting in assets that passively increase in value, etc.
      
      Figures seem a little (a lot) rubbery - let's not forget this is a proposed tax to replace our existing system. We now seem to have a society where anyone with under a million dollars in assets pays no tax at all? This doesn't seem serviceable.
      
      It wouldn't replace the existing system, the numbers might be tweaked a bit but there would still be an income tax system. The wealth tax will only affect the quite rich up to the ultra rich, no effect on regular joes. Why does that not seem serviceable? It is the same with income tax. You aren't taxed on the first ~$25,000 because it is recognised people need that to meet their very basic, most fundamental needs and they have absolutely not a cent to spare. When people earn more and more and its generally accepted they can still meet their needs even with a little shaved off, they pay a little more tax. Increasing as they earn more and more as a smaller and smaller percentage of that is needed for their basic needs. Same with the wealth tax - people need savings to weather crises, have a comfortable retirement etc. And like you said you don't want to discourage people from saving at all. Plus when you have a smaller amount of money it is harder to get it working for you. It will earn a smaller percentage than a billionaire would with the same amount of money (cause of fixed fees, and benefits that attract people with more money to invest). It is only when they well and truly have enough to weather any crisis the imagination could come up with and have a lot more than they need for a comfortable retirement that they would start to get taxed (and only a tiny amount to start with, only on amounts over 1 million or whatever the figure is same as income tax is only on earnings over the ~$25k).
      - Crow K on 11/08/2022 - 17:36
        
        @Quantumcat: "Art that is worth millions was created by people that are long dead. It is not going to stop anyone painting something today and selling it for $500."
        
        Well alright, now that we've established that you know nothing about the art world ("It's all basically old Renaissance stuff from 400 years ago, no one is making million dollar paintings now"), I guess we can move on to the other points?
        
        If you're so keen on money moving in the economy at all costs, why not pay one man to dig a hole and another man to fill it in? They could even work in shifts. Sure, you're not actually creating anything of value but look at all the money moving! The economy is going to get on just fine without this bizarre level of prodding. It's actually OK to make assets that last longer than your lifetime. For instance, I didn't have to build my own house, someone else built it before I was born. It was a real timesaver.
        
        Also, the discussion is of replacing income tax with wealth tax. The "but we will also have a regular tax so the economy will be fine" isn't part of the parameters.
        
        Quantumcat on 11/08/2022 - 18:09
        
        @Crow K: People want what is hard to get, a wealth tax won't stop people wanting to own art. It'll just cost them a bit per year to own it. People don't spend millions on a piece of art (or any other exclusive object) just to decorate their living room, they are buying it for the exclusivity. This also won't stop people creating lower value art where people do buy it to decorate their living room, as it won't be worth enough to trigger the wealth tax.
        
        Crow K on 11/08/2022 - 18:12
        
        @Quantumcat: I agree!
- brendanm on 11/08/2022 - 18:14
  
  +1
  
  haven't seen any convincing sums on where the "shortfall" on tax is going to be made up if we stop taxing the big end of town
  
  Tax the corporations that currently dodge tax.
  - Crow K on 11/08/2022 - 18:15
    
    Not an argument for tax reform, really though, is it? It's "keep the rules, but enforce them".
    
    Which is fine for what it is. America's doing that right now, Biden's given the IRS a big budget increase so they can do precisely this.
    - brendanm on 11/08/2022 - 18:16
      
      +1
      
      It is, as under the current tax system, there are conveniently loopholes that corporations with enough money can exploit. The reform would be to change the rules so there are no outs, however I doubt our politicians have the balls (or integrity) to do so.
      - Crow K on 11/08/2022 - 18:17
        
        @brendanm: Yes. Sealing off loopholes is very different from "okay, now it's a wealth based tax and it will work like this".
        
        brendanm on 11/08/2022 - 18:19
        
        @Crow K: Correct, I don't agree with a wealth based tax, and wholeheartedly agree with your comments above regarding selling artwork etc to be able to pay the tax on it.
        
        I'm simply saying that these things wouldn't be an issue if the billions that should be collected from corporations, were actually collected.
        
        Crow K on 11/08/2022 - 18:20
        
        @brendanm: Thoroughly agree, in return. If everyone just paid what they were meant to there wouldn't be a need for any of this. But of course if everyone did what they were supposed to we wouldn't need prisons either, I suppose..
        
        brendanm on 11/08/2022 - 18:21
        
        @Crow K: Yes, the issue is that those in power allow this to occur, to the detriment of the majority of the citizens.
- belongsinforums on 11/08/2022 - 22:53
  
  who blows $20K a year on expensive booze, Rolexes and a trip to Bali) doesn't have…
  
  Booze, luxury goods and airfares are taxed plenty.
netjock on 11/08/2022 - 13:55

+2

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

Corner a small voting block and keep flogging them. Typical biting the hand that feeds them.

We need to change the system to tax 'wealth' and not 'earnings'

Reward those who live pay check to pay check.
- Trying2SaveABuck on 11/08/2022 - 13:57
  
  +1
  
  Reward those who live pay check to pay check.
  
  in my experience it is the opposite - those with wealth (usually inherited) refuse to work much because they have assets that make them rich and live off them
  
  I had a women i worked with inherit 5 houses when here dad died she never worked more then 2 days because she didnt want to pay too much tax and the rent she was getting already pushed her into a higher threshold….
  
  I would argue the ENTIRE FIRE movement is built on getting wealth to live off and not work any more
  - netjock on 11/08/2022 - 14:03
    
    +3
    
    those with wealth (usually inherited)
    
    You have no idea what you are posting then. Those with inherited wealth is entrenched wealth. Laws will be grandfathered to their advantage. Which is not according to your proposal.
    
    You are just creating a moat to new wealth. If I'm earning $100k and you are going to drop the income tax from current average of 27% to say 15% and wack a 30% tax on any accumulates savings then why don't I just spend it all? You are basically destroying the foundations of savings become money to lend to businesses so they could use to buy capital assets to expand. In the absence of any savings in the economy there is nothing to lend.
    
    You better go back to studying how the economy works.
    
    All wealth is accumulated from after tax income (unless it is illegally acquired). Except some people are just more frugal and better invested than others.
    
    You are actually proposing a form of double taxation.
    - Trying2SaveABuck on 11/08/2022 - 14:06
      
      Fair enough - i have never inherited anything and im probably explaining things way more simply for the sake of time
      
      you are basically destroying the foundations of savings become money to lend to businesses so they could use to buy capital assets to expand. In the absence of any savings in the economy there is nothing to lend.
      
      current foundations of 'saving' money are pretty dead boss you have been losing money to inflation via savings for decades now
      
      thus if you keep your money in the bank you are getting Poorer or did you not learn that in economics..
      - ForkSnorter on 11/08/2022 - 14:13
        
        @Trying2SaveABuck: It's a little more complicated than that. Between early 2020 and 2022, keeping money in the bank would have been a bad idea. But most people who save money do so to buy property. Between about 2016 and early 2020, property prices didn't rise much, if at all. So, getting a bit of interest (~2%) on your savings would have given you a boost, which would have helped you buy property if you bought by early/mid 2020.
      - netjock on 11/08/2022 - 14:19
        
        @Trying2SaveABuck:
        
        current foundations of 'saving' money are pretty dead boss you have been losing money to inflation via savings for decades now
        
        What about the money in your super? People on balanced and conservative options have fixed income which is money lent to companies.
        
        Same example as above. If you change the system to tax income at 15% and tax super at 30% of the balance not contribution or earnings you can tell what people would do right?
        
        thus if you keep your money in the bank you are getting Poorer or did you not learn that in economics.
        
        Nice personal attack but having a degree in accounting & finance, qualified accountant, MBA from a global top 10 university, worked in global retail, commercial and investment banks you are just making yourself sound like funny. Savings isn't just money in bank accounts.
  - tekisei on 11/08/2022 - 15:35
    
    Looking at everything you've written I think what you actually want is to have an inheritance tax with a threshold, say, above $2m AUD, above which inheritance is taxed at e.g. 50%+.
    - netjock on 11/08/2022 - 15:55
      
      +1
      
      Looking at everything you've written I think what you actually want is to have an inheritance tax
      
      How to have 9bn GBP and side step the tax:
      
      Having assets in a trust side steps that
      
      threshold, say, above $2m AUD
      
      You know in the UK the tax threshold is GBP600k per couple ($1.2m) but it hasn't been indexed for 17 years. It is going to be the same boat as property stamp duty and income tax bracket creep if you let them introduce it. UK example
      
      Governments are addicted to tax revenue. Basically they divide and conquer small sections of tax payers. They don't go after mums & dads because they will get a good return from that person, it is using them as an example for the rest to stay in line.
      
      With inflation at the moment the governments are laughing. $1tn of debt they are paying maybe 2% - 3% average coupon rates and inflation at 8% they are inflating their debts away and us tax payers are paying for it too (inflation leads to more GST revenue etc).
  - Crow K on 11/08/2022 - 16:02
    
    +2
    
    "I would argue the ENTIRE FIRE movement is built on getting wealth to live off and not work any more"
    
    Yes, that is indeed what the letters in FIRE stand for (financial independence, retire early).
    
    Are you forgetting that the 'wealth' is generating income, and it's the income that is taxed?
xdigger on 11/08/2022 - 14:00

+7

High personal income taxes can also cause a brain drain of our best and brightest. This is partly the reason why young highly paid and smart Aussies in key technical positions are choosing to work in advanced economies with lower taxes like US/Singapore/Hong Kong, and contribute to those economies instead of Australia's. Which in turns leads to Australia being only capable of digging dirt out of the ground and selling it, with no technical expertise to develop an alternative manufacturing and knowledge-based economy that is carbon-neutral.

There is a flow-on effect to the Australian economy most "tax the rich" voters do not understand. Tax big mining companies yes, because what, are they going to move elsewhere to mine when the resources they want are situated in Australia? I could never understand why Australia's mining profits mostly flow to individuals like mining billionaires Gina Rinehart and Andrew Forrest instead of the federal government coffers? A less corrupt country like Norway has all Norwegian oil profits flow to the Norwegian government and their national sovereign fund.

But raising mining taxes aside, high personal taxes will only kill productivity and incentivises us as a country to be content with being a carbon producing, polluting, mining-dominant economy.
- Trying2SaveABuck on 11/08/2022 - 14:01
  
  +1
  
  I agree 100%
- jv on 11/08/2022 - 14:08
  
  High personal income taxes can also cause a brain drain of our best and brightest.
  
  Also, all out top sports high income earners seem to now live in Monte Carlo thanks to the ATO…
- netjock on 11/08/2022 - 14:23
  
  +5
  
  High personal income taxes can also cause a brain drain of our best and brightest. This is partly the reason why young highly paid and smart Aussies in key technical positions are choosing to work in advanced economies with lower taxes like US/Singapore/Hong Kong, and contribute to those economies instead of Australia's
  
  Actually untrue.
  
  If you have a skill in demand the company will pay whatever. That is why they send ex pats down here and make sure their package is equalized to the same if not more than in their home country including taxes.
  
  Australia's problem isn't with income tax it is with the financial markets. The share market doesn't believe in tech. Look at the top 20 companies. Miners, banks and utilities. Only one biotech which is CSL.
- Donaldhump on 11/08/2022 - 14:50
  
  +1
  
  yes but if your an Australian Resident you pay the diff in top up tax in australia anyway.
  
  you cant go work in Dubai tax free and not pay any income tax in Australia, you can not declare it / do a tax return, but your f?d if the ato catches wind.
  
  https://www.ato.gov.au/general/international-tax-agreements/…
  - netjock on 11/08/2022 - 15:58
    
    +1
    
    you cant go work in Dubai tax free and not pay any income tax in Australia
    
    If you are not in Australia for more than 183 days of the year (one of the many rules), you are not tax resident test here
    
    You can work in Dubai and pay no tax provided you are not an Australian tax resident but you have to pay Australian tax on Australian derived income (ie property rented out)
    - Donaldhump on 11/08/2022 - 17:52
      
      +2
      
      Don'y know where you think the 183 day rule applies here, your not arriving in Australia, you have left Australia
      
      Australian resident if its your permanent home. Own a house here, born here its hard to argue. Unless you're a dual national, have zero ties to Australia and can demonstrate you have zero plans to return your an Australian Resident, or truly are a foreigner who came here for a short time. Other side affect if you trigger CGT on your PPOR pro rated from the day you leave if you claim to no longer be a resident.
      
      Domicile test
      You're an Australian resident if your domicile (the place that is your permanent home) is in Australia, unless we are satisfied that your permanent place of abode is outside Australia.
      
      could be wrong but if you search law cases vs the ATO comissioner you can see hand fulls of people getting bent over by the ATO
      
      A domicile is a place that is considered to be your permanent home by law. For example, it may be a domicile by origin (where you were born) or by choice (where you have changed your home with the intent of making it permanent).
      
      For more information about this test, see the domicile test.
      
      183-day test
      This test only applies to individuals arriving in Australia. You will be a resident under this test if you're actually present in Australia for more than half the income year, whether continuously or with breaks.
- belongsinforums on 11/08/2022 - 22:54
  
  carbon neutral? solar technology is here. the australian government doesn't want it
- tomfool on 12/08/2022 - 16:09
  
  This is partly the reason why young highly paid and smart Aussies in key technical positions are choosing to work in advanced economies with lower taxes like US/Singapore/Hong Kong
  
  Is the US really a lower taxing country?
  
  In Australia, the average single worker faced a net average tax rate of 23.2% in 2021
  In the United States, the average single worker faced a net average tax rate of 22.6% in 2021
  
  Are clever people really leaving in droves just for lesser tax? Maybe they are leaving for experience. Rent in Singapore and HK will likely eat away at any savings in tax.
seraphim2017 on 11/08/2022 - 14:48

+12

Alternative theory. 3.6% of people earn such a grotesque amount of money, that they end up being liable for 31% of all collected income tax? I'm sure a few people would want to earn such a large amount of money that they were liable to pay that much tax!

It seems similar to headlines such as "person x y sees $60bn wiped from fortune'. Instead of "person x loses GDP of small country and it doesn't impact their ability to put food on the table".
- Donaldhump on 11/08/2022 - 14:49
  
  +6
  
  100% those with that much money arent affected if they lose a large portion
- netjock on 11/08/2022 - 16:00
  
  +3
  
  3.6% of people earn such a grotesque amount of money
  
  Skewed by the people make multi million dollars a year like CEOs. I would hate to be making $350k, just enough to get nothing (when you make over $250k your super is taxed at 30%, no child care subsidy etc) and have a bulls eye on my back.
  - seraphim2017 on 11/08/2022 - 20:33
    
    Most people on an average salary probably wouldn't hate making 350k. Even after the larger tax you are ahead of 99% of the people, not accounting for CEO skew. Of course, if you then live the higher life on the larger salary it doesn't go far either, but living an average life on 350k, yes please!
    
    Avoid bullseye, don't advertise income or go "bling" too often, would rather be incognito financially secure in a kia than driving a Mercedes I had to do overtime to afford!
- ThithLord on 11/08/2022 - 16:31
  
  +3
  
  If the poor people have it so easy, these drongos can let us know if they'd gladly swap financial positions, hey
  - xdigger on 12/08/2022 - 09:09
    
    Its a free job market here in Australia, so if they feel inclined to swap positions they can just click apply for the $350k software engineer/surgeon/STEM jobs available ;)
- brendanm on 11/08/2022 - 16:59
  
  Lol, people with the "grotesque" money aren't working a payg job.
Richmond Tigers on 11/08/2022 - 14:49

+5

Our tax system makes me feel 0% guilt when I lie on my tax returns.

Allegedly.
Mechz on 11/08/2022 - 14:50

+3

If only we could get more tax out of corporates without them sending jobs OS. Then we could reduce personal tax rates.
- xdigger on 11/08/2022 - 15:27
  
  +1
  
  Increase mining taxes. They can't mine elsewhere when the stuff is here.
  - Mechz on 11/08/2022 - 18:16
    
    +1
    
    Yeah 100% agree. Or even better, don't sell the rights to mine and the government could mine and would have a continuous income that far outweighs the immediate 'profit'.
  - seraphim2017 on 11/08/2022 - 20:34
    
    They'd just buy the equipment to mine from their shell company in the Seychelles at $100,000 per hard hat, $200,000 per shovel etc.
ESEMCE on 11/08/2022 - 15:26

+7

Dumb logic.
Of course someone earning $100,000 pa is paying more tax than someone earning $50,000 pa who is paying more than someone earning $20,000 pa.
Even without tax brackets this logic would still come to a pretty similar conclusion.

Ultimately you appear to be proposing that everyone pay a flat rate as this is only "fair"…

The only way this would be possible would be for Incomes to also flatten out.
Otherwise you'd have the bottom third (or more) of the population destitute after paying their flat rate "fair" share.

This could actually be a good thing, there's no way for example a Sales Rep or Marketing Guru is doing more valuable work than say a Nurse, and yet they're probably "earning" double!
- netjock on 11/08/2022 - 16:04
  
  The only way this would be possible would be for Incomes to also flatten out
  
  Grads in professional roles in medium to large corporates are being paid $65k where as if you look at roles over $150k there isn't that many of them around. I was joking that if you get $20k jumping jobs every 2 years you've almost topped out in 8 years. Even if you think of a $250k role there aren't that many jumps at $20k a pop until you hit that limit too.
Kaz0551 on 11/08/2022 - 16:19

+2

I agree that something needs to change… just not entirely sure what.

Newly single dad here on a reasonable salary. I get a house payout from the ex but there's no point investing it due to the tax on it (and reduced child care and private health rebates.) It makes it hard to get ahead and recover from duckery. In an ideal word, mid-high income earning single parents with => 50% custody would get some more tax breaks. Parenting is hard. Single parenting is hard.
Benoffie on 11/08/2022 - 16:33

+3

I disagree with the premise that income under $200k is high income.

That needs to be fixed in terms of tax brackets
- mskeggs on 11/08/2022 - 16:41
  
  +2
  
  Add a 65% bracket starting at $300k?

Unpopular Opinion High Income Earners Pay too Much Tax

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