Why Is No-One Pushing for ATO Income Threshold Increase?

gfjh567gh3 on 15/09/2023 - 15:28

Posting this as I am unsure why there's no popular pressure to push this policy:

Why has the ATO not increased the individual income tax threshold?

Inflation has raged, and is by no means stopping. We need multiple periods of NEGATIVE inflation to return to a 2020 baseline, and personally I believe that won't happen, these costs are now baked in until we have demand destruction.

For those lucky enough to get a wage increase (which surely hasn't met your true cost of living increases) the taxman eats straight into it. I can assure you that my cost of living has increased MORE than 7% ANNUALLY, and my wage increase YoY is less!

I don't even know why we tolerate paying income tax when the Government prints money, effectively double dipping on our buying power.

Perhaps the number of middle class voters getting bent over by PAYG is insignificant compared to non-taxpayers, be it by evasion or simply not being a productive citizen.

https://www.ato.gov.au/rates/individual-income-tax-rates/

Financial

Comments

  • boomramada on 15/09/2023 - 15:34
    +19

    Maybe because lots don't have high income?

      • Gildea on 16/09/2023 - 10:56
        +60

        Given that the top 10% pay around 50% of the total tax revenue, I don't see how? In fact the bottom 50% in the tax system ay less than 10% of the Toal tax revenue. The way it's structured is the higher earning individuals bear most of the tax burden.

          • Gildea on 16/09/2023 - 12:09
            +34

            @Vanceer: vid_ghsot was suggesting that the majority of the tax revenue comes from the poor and middle class, I was merely disputing this with facts that it wasn't. The government could give the "poor" a larger tax break without having a huge impact on the tax revenue given the larger contribution buy the people that are earn more.

            I wasn't stating anything around who should or should not pay more tax. There are benefits to reducing the taxation amounts on higher income earners as well - things such as reinvestment into the economy from higher discretionary sending can lower unemployment and provide more wealth into areas other then those defined by government, just like there are also benefits of giving lower income people tax reductions (less burden on welfare systems, greater ability to pay for essential services etc).

          • rumblytangara on 17/09/2023 - 13:01
            +18

            @Vanceer: Needs to boost reading comprehension before flipping the moral outrage switch.

        • CommuterPolluter on 16/09/2023 - 16:43

          So give us a tax break cos we can use it more than the Govt can

      • drfuzzy on 18/09/2023 - 01:04
        +4

        Rubbish. The top 10% of income earners support the weight of the bottom 50%.
        The poor contribute very little to income taxation.

        • JohnHowardsEyebrows on 18/09/2023 - 02:18
          -4

          You don't really understand who those top 10% are, champ. The very rich pay nothing, because they're parasitic in every aspect of their lives.

          • rumblytangara on 18/09/2023 - 11:25
            +11

            @JohnHowardsEyebrows: If you think the top 10% are "very rich" and so wealthy as to be able to not pay tax at all, you're the one who doesn't understand.

            To make it into the top 10% of income earners, you're making 128k a year. Hardly the realm of owning corporate tax structures and using overseas tax havens to minimise tax.

            https://www.abc.net.au/news/2021-06-20/are-you-middle-income…

            Even the top 2 percentile of income earners (250-350k) are unlikely to be able to do this unless they are working with an inherited wealth network.

            I know someone who sets up tax structures incorporating overseas havens, they do not piss about wasting their time with the "top 10%". The top ten percent are too busy worrying about their mortgages.

            • JohnHowardsEyebrows on 18/09/2023 - 15:24
              -5

              @rumblytangara: Read my comment again. I'm referring to the people who report next to no income, while raking in millions. Much like the parasites who buy 30 houses, and use negative gearing to report moderate taxable incomes.

              • rumblytangara on 18/09/2023 - 15:43
                +5

                @JohnHowardsEyebrows:

                You don't really understand who those top 10% are, champ. The very rich pay nothing, because they're parasitic in every aspect of their lives.

                Yeah, I read it multiple times because it was such a comically off-base assertion. You really should learn how to string sentences together. How much of that 10% that you are talking about own 30 houses? How much of top income earners report no income… remember here that top income earners we're talking 128K.

                The super rich (which is what you are trying to talk about, not some run of the mill 10%) don't just piss about with multiple residential properties and negative gearing. They're holding corporate structures and offshore accounts, and if there is property it's more likely to be commercial. And they are well less than 1% of the population. Sure, it's unfair, but it's a different topic to what you're going on about. Seems like you're tilting a windmills here.

      • R4 on 18/09/2023 - 12:35
        +5

        The poor get plenty of tax breaks - those that take more out of the system than they put on are well over half of all taxpayers.

    • baldur on 17/09/2023 - 15:13
      +1

      What?
      Obviously you didnt get what this is about.

  • Protractor on 15/09/2023 - 15:35
    +45

    RISE UP !

    About your last sentence>
    You do realise how big the 'evasion' is at the top end of town and via big business,foreign corps and scamming tax evasion via ppl who can afford trust funds and other techniques.
    There's only so much blood you can get from a stone, so how about going after the diamonds for a change

    • Switchblade88 on 15/09/2023 - 15:44
      +7

      There's only so much blood you can get from a stone, so how about going after the diamonds for a change

      Truer words have never been spoken

    • dtc on 15/09/2023 - 15:50
      +10

      The ATO disagrees with you, tax evasion is far more of an issue with small business and individuals than 'the top end of town' https://www.ato.gov.au/about-ato/research-and-statistics/in-….

      Of course this is tax evasion, not tax minimisation (which you seem to have mixed up in your comment)

      • Protractor on 15/09/2023 - 16:32
        +22

        The ATO doesn't list how much $$$ is avoided by the mega tax avoiders, because they don't go after them as a priority. The real people fronting up are the 'stones'. Easy pickings. The diamonds are untouchables.
        The reason the ATO can and does happily quantify the plebs impacts is because the offenders are 'more' on the RADAR.

        • ColtNoir on 17/09/2023 - 08:18

          The do quantify it. Look up Harry Dell Tax Lawyer on TikTok/other platforms, he used to work at the ATO and now has his own firm.
          He quoted the gaps in a video I watched the other day, it’s $2billion for corporations.
          The biggest gap from memory was either small biz or ‘Mum and dad’ investors at something like $8billion.

          • Protractor on 17/09/2023 - 08:56
            +7

            @ColtNoir: We need to be careful the numbers are compared like for like. As per annual ripoff VS cumulative.Look on the ATO page.The fact is multi nationals are exploiting the crap out of us AND manipulating policies. The resources sector is gaming us in multiple ways. The former tax rorts and fleecing us for our own gas. America owns our asses. Also look at how much of our water and best ag and urban real estate is owned by offshore entities. We are basically a trough in a parking area.
            I suggest looking at ATO's own website for the numbers. The reality is Mum and Dad will cough up, the scum at the top will engage lawyers or hide the $$$ away from scrutiny.
            It's all too easy to chase,catch and prosecute the plebs.

            • ColtNoir on 18/09/2023 - 09:17

              @Protractor: Stop telling the ATO to do what it’s already doing. With limited resources they’re going to target the biggest, easiest pie.

              If you want big corporations to pay more, go lobby politicians as the law needs to change.

              Why do we need to be careful? It’s how any business, including the ATO would prioritise their finite resources.

        • Harold Halfprice on 17/09/2023 - 09:12
          +1

          The ATO doesn't list how much $$$ is avoided by the mega tax avoiders, because they don't go after them as a priority

          The ATO has their own department that deals with high wealth individuals and businesses. So they do go after them.

          But I can tell you a lot of them have the resources to drag out a case, challenge it and settle for paying a lot less than they owe.

          • Protractor on 17/09/2023 - 09:18
            +1

            @Harold Halfprice: This is a good point. ATO knows what the plebs owe and can publish it. The corporate debt is floating in space and is likely to be way, way bigger than the published data anyway.

        • Zondor on 18/09/2023 - 08:50

          IKEA

      • outlander on 16/09/2023 - 13:28
        +5

        Technically correct, in a way that's almost meaningless. You don't need to break rules when you can do what you want "legally".
        All it means is that the law needs to change, to make it illegal to do what they're currently doing.

      • nobro25 on 17/09/2023 - 21:09
        -1

        It's not about Evading tax. Those who make a lot find a loop hole to get a mad return. They're able to cook the books to generate $50k plus returns making their tax payments almost zero.

    • vid_ghost on 16/09/2023 - 10:33
      +16

      Easier to go after the poor.. the rich are friends of those in power and look what happened to kevin rudd when he tried to go after the mining magnets… he was out within months of attack adds paid for by the billionairs with fake actors as mining workers saying they will lose their jobs… what a joke.

      • Protractor on 16/09/2023 - 11:05
        +3

        spot on.
        Gina,Twiggy etc. Now buying 'humanitarian' browny points with the blood they sucked from the ppl and the country.
        Bullying at it's highest execution.

      • CommuterPolluter on 16/09/2023 - 16:47
        +1

        That was a dark time in our history. My father had a beautiful ‘BHP Olympic Dam’ magnet on the fridge. On day Kevin Rudd shows up with the AFP, steals the magnet and chucks a dead bloke in our roof.

      • locknuts on 17/09/2023 - 08:38

        Well BHP are selling their QLD coal mines after the royalty increase. This means less tax revenue for the state. I guess it's not just talk when they threaten to pull out.

        • greatlamp on 17/09/2023 - 15:09

          So someone else will buy it and pay the tax.

          • locknuts on 17/09/2023 - 19:06

            @greatlamp: If they do.

            • tomfool on 19/09/2023 - 10:08

              @locknuts: They will, no one seems to mind paying the 55% petroleum tax in Brunei or the 70+ in Norway.

      • 2ndeffort on 19/09/2023 - 09:53

        He should have left those mining magnets holding up a Pizza Menu on the fridge door of his Negatively geared Canberra Investment property.

    • mungas on 16/09/2023 - 14:28

      This is absolutely incorrect, and I’ll explain why: tax advisers.

      As a poster linked below, the ATO estimate the gap in tax for small businesses and individuals ($20bn) far exceeds the estimated gap tax for large corporates at $2.6bn.

      Most individuals and small businesses have no interest in paying tax and will not spend money hiring a tax specialist to support their compliance with tax law. They will take this into their own interpretation and will commonly get this wrong.

      Large corporations are audited and have a public image to uphold. On top of that, they’re directly subject to various ATO review programs where the ATO engages directly with specific agenda items to review their compliance with law.

      • ChupaCabra on 16/09/2023 - 16:40

        Link to article for evidence? Does the big corporate tax figure include how big companies like Apple effectively pay no tax on profits by shifting their profits legally to other oountries where the tax rates are small? Eg Apple just lists their iPhone patents overseas under different company then charges their profit margin on an IPhone sale as the cost to use the patents to produce the iPhone. I'm dubious your figures can calculate that cost

        • mungas on 16/09/2023 - 20:11
          +1

          Evidence: https://www.ato.gov.au/about-ato/research-and-statistics/in-…

          And your Apple example is great, however I don’t expect you to understand the intricacies of transfer pricing and the complexities of tax law based on your response.

          They don’t “charge” and pay no tax, especially given BEPS 2.0, minimum taxes and OECD alignment on tax principles including thin capitalisation.

      • plmko on 16/09/2023 - 17:23
        +7

        Did you literally miss one of the biggest scandals of the year how PWC used confidential Gov drafts to advise multinationals years in advance to change their Corporate structures to avoid tax?

        The gap is small because they've all out maneuvered the Gov. They're 'legal' if you count them by the book.

        • ColtNoir on 17/09/2023 - 08:19

          That’s different to the person saying evasion.

          • Diji on 19/09/2023 - 10:56

            @ColtNoir: Presumably they put evasion in quotes to include both the legal definition of evasion and the techniques that allow them to legally avoid paying the full amount of tax

            • ColtNoir on 23/09/2023 - 07:28

              @Diji: If they’re going to try and make a point they should use proper terminology.
              If they can’t figure out how to use evasion vs avoision, they should probably do some more education.

              • JohnHowardsEyebrows on 23/09/2023 - 15:33
                +1

                @ColtNoir: Avoision isn't a word we use in Australia, champ. There's avoidance and there's evasion. What PwC was engaged in had elements of both, at least in the eyes of anybody with honesty.

                • ColtNoir on 25/09/2023 - 14:07

                  @JohnHowardsEyebrows: No need to call me champ. I was using a term as I was taught here in Oz as part of curriculum.

      • bio on 18/09/2023 - 20:01
        +1

        When I log in to the ATO portal my tax return is usually prepopulated for me. I just press submit. There is nothing I can do to avoid taxation as a PAYG employee. Even if I can, the 1% profit I will make is meaningless.

        Large corporations can set up sophisticated company structures that lets them use any loophole in the legal system. In contrast with my case, paying 1% less tax is a huge amount of money for them.

    • Scantu on 17/09/2023 - 17:07
      +1

      You do realise how big the 'evasion' is at the top end of town and via big business,foreign corps and scamming tax evasion

      What are your thoughts on the spread of misinformation online? Because this is verifiably false. Tax gap for large corporations is effectively zero, and huge for personal income and small business.

      So like… you just go around sharting out these sorts of comments or what?

      • Protractor on 17/09/2023 - 18:35
        -1

        The fact is that big slab of parasites up top and overseas can and do hide, bribe and in every way possible manipulate the system so they claim all sorts of crap, on paper. Multi billion dollar enterprises putting numbers in columns to effectively cheat their way out of paying tax. Much like the rort of negative gearing on steroids.
        The point is do they pay their fair share. Shit no. That's how capitalism is designed to keep the plebs on the treadmill spinning. If you think the top end is paying it;s fair share, good for you. I'd call that wishful thinking information.
        They may pay a 'nominal amount' for sure, but it's nothing compared to what they could and should.Just look at the billions of $$ made from gas exports. Half of these 'raiders' don't even rehab their footprints.
        Not many plebs use Cayman Is. Or sit back in Yankaslovakia chuckling at our porous economic firewall

        • Scantu on 17/09/2023 - 18:57

          Keep chuggin the sh it people feed you, every fact-based report on big multinational tax avoidance results in the same finding: There is almost 0 tax gap for big business.

          Maybe you feel like they don't pay enough? That's cool - but it's also just your feelings. If you feel like they should pay more, write to your local legislature or something idk. But there is virtually no evasion occuring.

      • Diji on 19/09/2023 - 11:06
        -1

        https://michaelwest.com.au/foreign-fossil-fuel-juggernauts-d…

        I think it's pretty clear the person you're replying to is talking about this kind of thing. The ATO methodology doesn't account for it, as far as I can tell.

        • Scantu on 19/09/2023 - 16:16

          "Dodging" is a feelings words.

          It's actually not pretty clear, at all. If they mean that they feel like they should pay more tax, then they need to say that.

          Furthermore this isn't something where you just go "Oh I'll offshore it", doesn't work like that IE ATO v BP Singapore tax.

          • Diji on 19/09/2023 - 18:42
            -2

            @Scantu: Not interested in semantic debate. Corporate tax structures are a massive rort.

            • Scantu on 19/09/2023 - 19:02

              @Diji: "As soon as there is nuance, count me out 😤" Wow you must really know what you are talking about - everyone should listen to your knowledgeable views on this topic!

              Corporate tax structures are a massive rort

              "If it starts to get more complicated than I can be bothered to understand that means it's a rort 😤"

              God you sort of people are boring

              • Diji on 19/09/2023 - 19:03

                @Scantu: I'll trust a reputable independent journo like MW over some lad on OzB. But sure go off

                • Scantu on 19/09/2023 - 19:07

                  @Diji: He's ok, but he's not by a long stretch of the means impartial. His views are pretty socialism-adjacent and he has a strong left leaning.

                  Important to see bias, and if you don't see it, it most likely means you've found exactly what your bias is.

                  some lad on OzB. But sure go off

                  I'm correct independent of the forum I'm using, and I will :)

                  • Diji on 19/09/2023 - 19:11

                    @Scantu: So what's your favourite egg recipe?

    • frewer on 18/09/2023 - 09:10

      True, however gotta go for low hanging fruits first [small business and individuals] coz they are juicy & ez. Who want to fight an army of lawyers of google heh ?

    • frewer on 18/09/2023 - 09:57

      Maybe someone can help us understand this, why ATO is registered as a business entity https://abr.business.gov.au/ABN/View?abn=51824753556

      • Protractor on 18/09/2023 - 09:58

        Maybe they pay tax on kickbacks?
        ; )

      • larndis on 18/09/2023 - 11:01

        Why wouldn't they be registered?

  • Mokr on 15/09/2023 - 15:36
    +12

    Inflation is rising

    Let's give people more money to combat it

    • gfjh567gh3 on 15/09/2023 - 17:45
      -8

      A few extra dollars to me is a drop in the bucket compared to the deficit spending from the Government, which eventually finds its way into the economy

    • liongalahad on 16/09/2023 - 19:50
      +8

      Lol exactly. The whole point of increasing interest rates is to reduce the spending power of people , cutting taxes would be just dumb

  • Duckie2hh on 15/09/2023 - 15:37
    +2

    paymoretax

  • lubos on 15/09/2023 - 15:45
    +10

    I don't even know why we tolerate paying income tax when the Government prints money, effectively double dipping on our buying power.

    So what do you propose. Abolishing income tax so you get instantly 30% more dollars in your pocket?

    What do you think will happen to prices of goods and services? They will go instantly up 30% to match increased demand.

    Just because government puts more money in your pocket, it won't make hairdresser work extra hours to accommodate extra demand. They will work the same hours, just increase the prices to reach equilibrium.

    You will end up in the same position in the end. Stop thinking of dollars and think how much value you create for this society. That's how much value you will get back in return.

    • Protractor on 15/09/2023 - 15:47
      +2

      It almost seems like an imported mindset to me

    • loropy9 on 15/09/2023 - 17:05

      “Ask not what your country government can do for you – ask what you can do for your country government”

    • gfjh567gh3 on 15/09/2023 - 17:47
      -8

      30% into the pocket of mum and dad consumers is preferable to billions in deficit spending that the big end of town then need to find a return on, typically with huge asset inflation.

      The low and middle class reduced tax volume is a drop in the bucket compared to the deficit spending from the government

      • spaceflight on 17/09/2023 - 18:16
        +1

        So where will non profitable (free) public services come from?

        You know things you probably take for granted like schools, hospitals, roads etc.

    • RefusdClassification on 17/09/2023 - 06:47

      In the future there will be massive service cost inflation. Why? Because superannaution will ensure that there are lots of cashed up retirees, but there will be hardly any workers to service them. Hair dressers will end up earning 1 million a year. Superannuation saves money but not the services people need. I would advice people to study biology and get a job in health care; future demand will be enormous.

      • onceupon8 on 17/09/2023 - 17:47

        You are forgetting about immigration. To avoid this, Australia just needs to keep increasing the number of young immigrant workers - especially temporary ones.

      • Protractor on 17/09/2023 - 18:36
        +2

        Too many humans> P E R I O D
        Everywhere

      • JohnHowardsEyebrows on 17/09/2023 - 18:47

        Yeah I've wondered about that. What use is money if there's nobody to produce goods and services in exchange for it?

  • EightImmortals on 15/09/2023 - 15:50
    +15

    The stage three tax cuts are supposed to kick in next July, unless labour screws us over.

    • GG57 on 15/09/2023 - 16:06
      +1

      …labour…

      ???

      • EightImmortals on 15/09/2023 - 16:21
        +2

        Yeah yeah….

      • megadeth on 15/09/2023 - 19:09
        +2

        Yes, they’ll rather prefer to transfer the cuts to Alan Joyce’s bank account for serving them free drinks in the chairman’s lounge. Suckers… :)

        • Protractor on 16/09/2023 - 12:25
          +2

          and let's be real clear. There's as many LNP pond scum in that very lounge as there are ALP. Joyce knew what he was doing when he handed out the QANTAS show bags…
          Some (if not all) of those LNP seantors, on the senate enquiry panel had to declare that situation, while they tried to stitch ALP members up for 'doing favours'.. Hypocrisy.

    • filmer on 15/09/2023 - 16:08
      +3

      Screws over the top 20%?

      • EightImmortals on 15/09/2023 - 16:23
        +7

        "meaning everyone earning between $45,000 and $200,000 will pay the same 30% tax rate."

        You hate equality?

        At present, Australia’s tax brackets look like this:

        up to $18,200 – no tax

$18,201 to $45,000 – pay a 19% tax rate

$45,001 to $120,000 – pay a 32.5% tax rate

$120,001 to $180,000 – pay a 37% tax rate

$180,001 plus – pay a 45% tax rate

        Under stage three, the tax brackets would look like this:

        $18,200 – no tax

$18,201 to $45,000 – pay a 19% tax rate

$45,001 to $200,000 – pay a 30% tax rate

$200,001 plus – pay a 45% tax rate
        • SBOB on 15/09/2023 - 16:26
          +9

          You hate equality?

          4 tax brackets is equality but 5 isnt?

          • locknuts on 17/09/2023 - 08:39
            +3

            @SBOB: 1 bracket is actually equality. Any more is equity.

        • TooSerious2 on 15/09/2023 - 16:39
          -3

          Doesn't equality mean we're all left with the same amount to spend after tax? I think I'd vote for that, though few others would.

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