https://www.abc.net.au/news/2023-06-09/australian-taxation-o…
Some very interesting reading including how many claims and how many investment homes in OZ.
ATO Data Shows 66 Millionaires Paid No Income Tax in 2020-21, with Eastern Sydney Postcodes Home to The Richest People
CurlCurl on 09/06/2023 - 12:54
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Yeah, let them eat cake!
^ This is the stupidity that I was alluding to.
What they dont say is how many millionaires have paid TAX, but that might not match the narrative…
Like if 50000 Millionaires paid tax and 66 didnt then that's a different scenario to 100 Millionaires paid tax and 66 didnt. And then to add to this is how much did the 100 pay.
So other than knowing 66 millionaires didnt pay tax, thats all you can really glean from the announcement.
@RockyRaccoon: Exactly.
When people need to realise is that the upper rungs of society pay the most tax
https://www.ato.gov.au/About-ATO/Research-and-statistics/In-…
If we rank our 100 people by their taxable incomes:
people with the top 3 taxable incomes paid 30% of all net tax
the next 6 paid 18% of all net tax
the next 30 paid 40% of all net tax
the next 37 paid 12% of all net tax
the final 24 didn't pay any tax.The top 9% of taxable incomes pay almost half 48% of tax.
The bottom 61% bear only a 12% tax burden.
Yet people love to believe the rich dodge all taxes.
When people need to realise is that the upper rungs of society pay the most tax
No different a sweeping statement defending the rich than the same one you're complaining about in the article attacking them
It's just depends on which side of the fence you reside/wish to reside/think you reside/ pretend you reside/etc as to which broad sweeping statement you think is worse.
No different a sweeping statement defending the rich than the same one you're complaining about in the article attacking them
I provided the evidence literally in the same post you supposedly read.
The top 9% of taxable incomes pay almost half 48% of tax.
The bottom 61% bear only a 12% tax burden.
All those really shows is the wealth inequality in this country
Who would you rather be, the $1 million taxable income getting taxed $420k
Or earning $50k taxable income being taxed $6700?Despite the enormous tax bill this person still takes home over 13x the disposable income than the person earning 50k.
As far as dodging tax, everyone loves to dodge tax. But the rich have the resources to fully utilize tools to reduce their tax burden, whether that be super contributions, negative gearing or other clever accounting methods. Hell the 66 people they mentioned spent on average $220k managing their tax affairs, to justify that type of accounting bill these accountants are clearly saving them more in tax deductions and methods that are clearly more complex than $150 in laundry.
All those really shows is the wealth inequality in this country
Those stats don't come close to showing wealth disparity, its about tax paid.
Despite the enormous tax bill this person still takes home over 13x the disposable income than the person earning 50k.
The $1m gentleman earns 20x the amount of income a $50k person does, but pays 62 x more tax (accordingly to your numbers, I haven't checked myself).
That is not fair.
66 people in that bottom 24% earnt over $1m
But also incurred deductible expenses at a similar level as well.
@tsunamisurfer: Well, if the incurred deductible expenses were valid/legitimate, then sweet. But if they aren't, even sweeter because big 4 accounting firms will just sell you a "legal professional privilege" service to prevent ATO, and any other interested authorities and parties, asking questions and/or getting any information. And then those "services" would most likely be claimed as a deductible expense. Got to love circular expenditure.
https://www.afr.com/companies/professional-services/pwc-wron…
https://www.smh.com.au/politics/federal/pwc-stonewalled-tax-…
Those stats don't come close to showing wealth disparity, its about tax paid.
I agree here, that actual disparity is much worse than these tax stats show
The $1m gentleman earns 20x the amount of income a $50k person does, but pays 62 x more tax (accordingly to your numbers, I haven't checked myself).
That is not fair.
Sure it is, look at how much the person on 50k takes home after tax and after cost of living bear essentials then compare how much that person on a million has after tax and after that same cost of living bear essentials.
I agree here, that actual disparity is much worse than these tax stats show
Those tax stats show zero data on wealth disparity. I am not sure how you or any sane person get wealth from those stats.
Sure it is, look at how much the person on 50k takes home after tax and after cost of living bear essentials then compare how much that person on a million has after tax and after that same cost of living bear essentials.
I do not care about the $50k guy's take home. I care that the $1m gentleman shoulders disproportionately more tax burden (62x) in relation to his $50k contemporary.
Those tax stats show zero data on wealth disparity. I am not sure how you or any sane person get wealth from those stats.
You realize the tax stats are so disproportionate because the wealth inequality is so disproportionate, it's linked…..
I do not care about the $50k guy's take home. I care that the $1m gentleman shoulders disproportionately more tax burden (62x) in relation to his $50k contemporary.
Then that's quite ignorant. If you can't comprehend that the 50k individual as little scope to increase their tax burden. Look at it this way, the 50k person earns 1.5x the poverty line in Australia after tax, the $1 million individual earns 20x the poverty line after tax. I have know idea how you can't comprehend that 1 of these workers clearly needs to wear the tax burden because the other clearly can't afford to due to you know, surviving and all.
@tsunamisurfer: It also doesn't talk about how many hours these people are working or the life time spent getting the skills necessary/business acumen in order to earn that kind of money.
@tsunamisurfer: If it weren't for that millionaire paying the 24 poorest peanuts he wouldn't be a millionaire. They need the bottom rung, as much as the bottom rung needs them to pay taxes.
If it weren't for that millionaire paying the 24 poorest peanuts he wouldn't be a millionaire. They need the bottom rung, as much as the bottom rung needs them to pay taxes.
The tax free threshold is ~$18k, with the sky high minimum wage of today, it shows that they aren't doing that much.
I am not calling this sector of the community lazy or anything like that, it includes elderly and young part timers / casuals and many other cohorts that may not work full time for a reason.
@tsunamisurfer: Sky high minimum wage wow, let’s pass a legislation everyone will now earn the sky high minimum wage. That will fix all the problem.
@donkcat: Who would you rather be, the $1 million taxable income getting taxed $420k
Or earning $50k taxable income being taxed $6700?Depends on how many hours you have to work in order to get that kind of income .. the fact that your phone may be ringing at all hours of the night and you may not have any time to spend with your family .. or you may not even have a family because you have spent so much of your life focusing on getting a higher income.
@jazinger23: I guarantee the guy earning 1 million dollars has a hotter wife than the guy earning 50k
Despite the enormous tax bill this person still takes home over 13x the disposable income than the person earning 50k.
Can't believe I had to scroll this far for someone to point this out
Whenever people say "the rich pay most of the tax" yeah no shit, they also make 10x or more money.
Rich people also have ways to save on things eg cars
@coffeeinmyveins: They also probably worked 1000x more wisely and invested everything they had into their business instead of drugs, alcohol. cigarettes and hookers
They also probably worked 1000x more wisely
Some do, some get lucky. It's also much easier to make money when you have money via inheritance, lucky investments, timing etc.
invested everything they had into their business instead of drugs, alcohol. cigarettes and hookers
haha the most drugged up people that use hookers i've seen are the wealthy mate
@tsunamisurfer: It's a bit meaningless until you look at why this is
https://www.sbs.com.au/news/article/australians-are-the-four…
The top 10% control almost 50% of the wealth.
The bottom 60% only control 17% of it.Then there's the stats:
https://www.abs.gov.au/statistics/economy/national-accounts/…
When you look at how people actually live, the lowest 25% actually went backwards between 2021-22, their gross savings were negative $12b (vs positive $223b for the richest, not to mention the $66b in superannuation benefits received).I agree a beatup on 66 people paying no tax while earning millions is exactly that, a beat up, but let's not pretend the rich are doing much more than funding a barely sufficient set of social programs while becoming extremely wealthy off the back of the resources and labour in this country.
The top 10% control almost 50% of the wealth.
The bottom 60% only control 17% of it.Why are you looking at wealth?
This is about income tax, that is levied on….you know….taxable income.
I agree a beatup on 66 people paying no tax while earning millions is exactly that, a beat up, but let's not pretend the rich are doing much more than funding a barely sufficient set of social programs while becoming extremely wealthy off the back of the resources and labour in this country.
I have just demonstrated how the upper rungs of society bear the most tax burden. By default they are funding most of the welfare payments.
EVERYONE benefits from resources wealth in this country.
https://www.afr.com/policy/economy/how-mining-dominates-the-…
Australia’s big miners including BHP, Rio Tinto, Fortescue and companies controlled by Gina Rinehart paid more than $28.5 billion in tax in 2020-21, accounting for nearly a third of total corporate tax revenue.
The top 9% of taxable incomes pay almost half 48% of tax.
The bottom 61% bear only a 12% tax burden.
Now do a) income & b) assets.
@tsunamisurfer: Which is why it's important that our current socialist government honours the upcoming legislated stage 3 tax cuts
@tsunamisurfer: That’s because you’re measuring based on personal taxable income. The truly rich have means to shift their income away from their personal taxes whilst maintaining control. For example, holding the wealth in a company, and then paying PwC for inside r information to protect that from being taxed.
@end255: He's arguing completely in bad faith and has no idea idea how the real world works. He's a neoliberal that believes rich people are rich because they work hard while poor people are just lazy.
And actually, the poor pay the highest rate of tax in comparison to income. GST is on all products purchased and poor people actually spend their money instead of hoarding their wealth overseas.
And actually, the poor pay the highest rate of tax in comparison to income. GST is on all products purchased and poor people actually spend their money instead of hoarding their wealth overseas.
BOOM. Again, can't believe it took this long for someone to point it out.
If I pay 30% tax on $100k
You pay 50% tax on 500kGuess who has more disposable income, more money to spend on the other taxes and services we need to all buy?
If I need to spend $1000 on something with the money leftover from the above example, the poorer person will pay 1.4% of their disposable income vs 0.4% for the richer person.
@RockyRaccoon: According to wikipedia Australia has 2,177,000 millionaires
https://en.wikipedia.org/wiki/List_of_countries_by_number_of…
@Leadfoot6: A free standing house in most capital cities would get you close these days.
Anyhow my point on there being 2,177,000 millionaires yet the post talks about the 66 people that had a net tax of 0.
What they dont say is how many millionaires have paid TAX
Yes! I can't believe we aren't throwing these people a millionaire for paying their taxes. What a backwards society
@RockyRaccoon: Yerp, this.
You can pay no taxes this year, just means you could have losses in the previous year deferred, or realised losses this year or negative gearing. In all cases, you would have had to loose the money.
Just cause someone pays no tax this year, does not mean they didn't pay in previous or future years. Revenue isn't like wages, for richer people you can have several years of losses and then one profitable year once you realise your investment.
E.g., be making hundreds of thousands of losses on interest, then one day sell the property/development and then you would need to pay the 25-45% tax on that in that one year when the profits are realised.
For people who think when individuals you make money say $1 million in profit with not other deductions, that individuals can get around it by paying no tax, is ridiculous.,
I pay more tax in one year than my entire family made as income in my first year at uni.
When you're making over $100k, there is very little you do can do pay less than a 25% overall tax.
Assets v Income v Assessable Income V Taxable Income
Difficult concepts for a lot of people.
You gotta be pretty rich to carry over a million dollars in losses.
don't forget charity donations.
“Charity”
To the Human Fund.
Most donations are given too already rich established ones,
And should giving money to religious things be considered donations or power corruption?
And yet they were able to spend "an average of $219,000 to manage their tax affairs". Wonder what that $219k buys them.
A $0 tax bill is what it buys
Click bait as usual. ABC is counting on stupid people being stupid or ignorant.
MSM in a nutshell.
The people that get rich from PAYG or business income pay tax while accumulating, then hardly any after that. The people that are born into wealth pay no tax.
After a person is very wealthy, let's say 10mil+, there are so many ways for them to avoid paying tax. I have worked within finance for HNWI.
What are some ways for them to avoid paying tax .. and keep the profit?
- 'Gift' money to a family trust your children are beneficiaries of.
- Get a large loan from said trust to buy a rental property in your own name ie $1.5 mil loan with 5% interest
- Charge enough rent to cover the non loan expenses plus a little say $10k net revenue.
- the interest you pay to your family trust puts the rental into a loss reducing your taxable income. ($10k - $75k = -$65k) reducing your tax by $30.55k
- 'distribute' the income to your children (an account you control in your children's names.)
- The example I'm using they had 3 kids on no income so splitting $65k 3 ways leaves income of $21,666 which is taxed $658.54 saving you a total of $28.5k You end up with more because of the 10k rental profits absorbed.
Thats just one way I have personally seen but I'm confident in saying there are other and better ways to do it.
Rules only apply to those without enough money.
It's the good old class warfare. When news is slow, bring in the classic anti-wealthy class warfare line.
Kind of refreshing actually, usually it's dole bludger rhetoric.
What would be shocking is how many of these people were PwC clients. I'd be appalled too if I was their customer and product at the same time.
Clients? They're all PwC partners!
The rich are paying a disproportionately high share of taxes. It is how the system was set up.
There is zero context provided on how they reached this assessment
The 66 people reached this assessment by spending on average $219,000 each to manage their tax affairs. (It is in the story).
This tells you that if you are rich then you can afford complex solutions to reducing your tax. (My pitchfork take)
The point of the article is to highlight the very systems that you mentioned that makes it easier for people in higher tax brackets to reduce, and even eliminate, their tax obligations (whether legal or otherwise).
Obviously these people aren't just failing to fill out their yearly tax return on the expectation that it won't be followed up. Your comment has come immediately in bad faith as you seem to think that the article is suggesting this.
As someone in the top 2% of earners, it's not even debatable that the system is completely rigged. One thing that's always left out is the fact that those in the highest tax brackets also receive the full benefit on any deductions, as opposed to those in the lower brackets. Also, your comment could not have come at a worse time considering the investigation into PwC for leaking tax strategies to the rich.
Obviously those people in the higher tax brackets can afford to offshore their money overseas, limit any tax liabilities in Australia, and reduce their taxable income to as low as 0 (legally or illegally); that's the whole point of the discussion: to raise awareness that it still continues to occur. And this is despite people in the lowest brackets paying the highest percentage of tax in comparison to income (their real income, not the made up number that they tell the ATO that you for some reason believe is real).
It's a very small proportion and really only applies to the super rich that can afford the accounting fees to have off shore accounts and the costs of those accounts in the first place. You would need to be making ten to hundreds of millions to make it worthwhile and when you're at that level, you don't go paying 50% of everything you earn in taxes, so yes, you would have off shore companies like every multinational in which you would pay a much lower rate of say 5-15% corporate tax rate.
If you talk about deductions such as, for example a luxury car, remember they can only claim up to roughly $70k of that $500k car. (There are other methods if you have a lot of luxury cars). But bear in mind when they buy that luxury car, they're paying huge amounts of luxury car tax that go to the government.
Limiting tax liability in Australia only applies to the super rich as above, or maybe even the $10m+ guys but if you start doing a france Australia would just become even less of a preferred spot for business investment.
For things to happen you need big money for that to happen, scare away the super rich or make it so painful and penalise being rich in Australia and you'll simply find an exodus of capital from the country, France/China etc.
The off shore tax havens are things that happen all over the world and you would essentially be diminishing the competitive capacity of our local businesses that may expand further if they have to pay significantly greater amounts of tax compared to their international competitors.
It's a complex situation.
At the end of the day, taxing the rich further, won't make those in the lower tax brackets any richer.
Give a man a sandwich, you feed him for a day. Teach a man how to fish, he eats for a lifetime.
Nope, stop spreading Corporate propaganda.
Taxing the rich is absolutely the answer.
@Fuego: You'd get much more tax revenue out of the tax gained from forcing welfare leeches off long term Centrelink benefits and into whatever basic low level jobs need filling.
There's 3 manual labor jobs available out there right now for every person claiming they can't find a job.
You forgot Negative Gearing.
You're right, quick everyone let's organize a whip around and see if we can't raise some money for these poor underprivileged underdogs!
Just saying someone earned $1m tells us SFA, and does nothing but get the pitchfork and torch crew riled up.
Yes, that's how the ABC operate. Their just a poor man's Tumblr with a free broadcasting license and an absurd billion dollar taxpayer-funded budget.
Why are property investors allowed to claim deductions but home buyers can't? Investors shouldn't be able to claim loans as deductions over home buyers. What a massive handout to the wealthy.
Ummm….because they are deriving a revenue stream from it and thus can claim expenses against that income?
Do you expect Coles to pay tax on their revenue and not claim a deduction for staff and the price of the products from suppliers?
I would like home loan deductions specifically allowed for PPOR. Those people don't deserve to lose their life savings.
It's a bad idea. It outright destroys the amount of tax collected (suddenly every home owner with a mortgage gets free deductions, and the ATO isn't collecting any additional income). At least investment properties were taxed when they were sold - but PPOR's aren't taxed on disposal so, yeah, terrible idea.
Also, it would make housing even more expensive and hard to get (you've driven up demand and you've given people more money to bid with, people will be factoring their free tax deductions into the housing prices now).
I guess you could also give people tax deductions for eating lunch if you wanted to make the idea a bit worse?
I would like home loan deductions specifically allowed for PPOR. Those people don't deserve to lose their life savings.
Your solution is to make mortgage payments tax deductible, meaning they will likely never pay tax again for many years.
How will that work for government revenue?
How will that work with the price of homes after that comes into effect?
@tsunamisurfer: Price of homes would no doubt go up since buyers who want to become home owners can now also afford to pay more if their interest payments on the load are tax deductible.
Price of homes would no doubt go up since buyers who want to become home owners can now also afford to pay more if their interest payments on the load are tax deductible.
He didn't say the interest payment he said the home loan payments.
@tsunamisurfer: You would have to change other taxes as well, remove stamp duty, add a federal land tax. The net result would be about the same in gov revenue, with home owners paying more tax. Unlikely to ever happen without social change.
Be careful what you wish for. Deductions are associated with revenue. If you want to deduct your mortgage payments, get excited to pay CGT on your PPOR when you dispose of it.
Yes actually, the entire idea of deductions is crap. Tax should be simple, and it could be. The complexity only serves (ultimately) to benefit the rich, and create expensive bureaucracy. Plenty of tax, like social welfare, is a barely veiled carrot & stick system used to herd us masses into desirable behaviors and classes.
Do you expect Coles to pay tax on their revenue and not claim a deduction for staff and the price of the products from suppliers?
Yes? Cost of staff and products should be built into their sell price - it's what every place I've ever worked at has done.
And it's not like Coles is only breaking even… https://www.abc.net.au/news/2023-02-23/supermarket-profits-s…
This is amongst the most idiotic statements I have ever read.
Don't hate the players, hate the game.
I do however agree that property investors do get a leg up with all the benefits.
I guess they are treated similar to business expenses. They are using the property investment to generate income, so any expenses are deductible.
Don't hate the game either. Play it.
How does one play it? Cut back on 1000 lattes per day?
How does one play it?
upskill, work harder, find partner with good salary meanwhile don't make kids, don't apply for credit card (as they reduce your borrowing power), then buy 1st, 2nd, 3rd.. properties.
@OrangeBJ: maybe a good idea before the largest property bull run ever. if you did that a year ago, you would now be without any assets.
@orangetrain: Get an education.
Work hard. Take multiple jobs.
Sacrifice.
Pay tax.
Reduce your expenses
Borrow as much as the bank will allow.
Invest.
Beg to borrow more.
Pay tax.
Reduce your expenses
Invest
Reduce your expenses
Take another job
Pay tax
Watch your capital appreciate
Become moderately wealthy
Continue working multiple jobs to pay the debt interest
Die.@orangetrain: Hello, first gen immigrant, with a physical disability, came to this country with a primary school education and no english.
I studied and got 2 degrees, worked 2-3 jobs while I studied. I now own a dozen properties, and run my own accounting and financial advisory firm. I employ ~30 people.
I played the game. What's your excuse?
@xavster: Could you do it again in today's environment?
Parents were also successful 1st gen immigrants in the 70s, but if they were to arrive tomorrow, I don't think they'd be able to climb. Many more snakes, much fewer ladders.
@buckster: Hello,
One of my client is an international student, came to Aus in 2021, Covid, blah blah, he was broke. Started cleaning business, now employ ~10 of his uni friends. makes $1m+ a year now.
He still in uni, hehe…
Another client, female, no degree, works as a make up artist, making ~250k a year, hires an assistant, does events, weddings and some photography studio work.
The economy is different now, much more self employment than traditional job market.
@xavster: By your calculations each student cleaner is generating $100,000 in profit each year for the boss by cleaning.
I suppose if they charge $500/hour for cleaning and each clean 4 homes/week that would make sense.
What would also make sense is that the story is B.S.
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I absolutely hate articles like this because people will use this to say the rich don't pay tax when the opposite is true.
They paid no tax because their taxable income was low.
There is zero context provided on how they reached this assessment, there could be :
Just saying someone earned $1m tells us SFA, and does nothing but get the pitchfork and torch crew riled up.