The Election - Just in case you don't know who to vote for

The Garage
#61

I know that Labor ultimately supported these tax cuts, after (if I recall) initially disputing them. I’d put this in a different basket to some of their more Labor-centric promises… but yes, I appreciate what you are saying. They ultimately made a big song and dance over this issue… so backflipping now would be a lot of political egg on their face.

Ironically however of course - The Libs are backing the idea of scuppering the tax cuts! I am sure that if Labor did scrap them, Libs would still then dig the knife in because they went back on their commitment…

Ultimately - our Personal Tax system needs a massive overhaul. Company tax, too. I know these aren’t light matters. I know business is struggling. I just want a fairer world, starting with Australia.

#62

Whether they scrap them or not (I think they should) if they get the economy going and most people are slightly or more better off by the next election, most people won’t remember what they did. Or care probably.

I am a big believer in those who can afford it should pay their way. However, it always seems that those on the higher incomes have more resources to minimise their tax. I think someone already alluded to this…

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#63

I’m not a fan of class warfare which is where these discussions go. If you’re a low-income earner, then you typically think the high-income earners should pay more, and if you’re a high-income earner, you’re typically frustrated that others want you to pay more despite Australia having some of the highest tax rates in the world.

Australia is the fourth highest income taxed country in the world and the second highest in the OECD. As far as I am concerned, if the government can’t make their finances work with taxes that high, they need to be fired. The Henry Tax review confirmed this when they confirmed that Australia raises too much tax from personal and corporate tax and not enough from more efficient tax bases like land or consumption.

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#64

I agree that the timing is not ideal. It should have been done closer to the stage 1 and 2 changes. Or ideally, just all at once. The spacing out always seemed weird to me. I assume it was to buy time for something else indirectly linked. But with current economic circumstances, it is not the best time.

From discussions I’ve had with people sitting above the $200k mark, many of them aren’t in the situation where it’s worthwhile enough to hire a financial consultant / accountant to really go into minimizing their tax. At least those that receive that income as a salary. For business owners it makes a lot more sense and there are more options available.
Most of the creative accounting / tax avoidance for higher income earners involves shuffling funds to different entities, trusts, maximizing benefits from charitable contributions, etc. They generally have multiple sources of income or need to be sitting on a significant bank balance to make these things work.
Stats can be deceiving in some cases. There is not really any breakdown given into those earning above $200k. And while someone of $250k is well off, they don’t necessarily have the same means at their disposal as those on $500k, $750k, etc. Especially when it comes to rearranging finances for tax reduction.

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#65

But they do have a lot more wriggle room than someone that doesn’t own their home and earning less than $60k.

#66

Of course. Would never argue that.
It was more in relation to the point that those earning $180k or $250k are pretty unlikely to have a high end accountant on call to help them restructure their income sufficiently enough to reduce the tax they pay well below the tax rate their income dictates. I am sure they make certain claims when they submit their taxes and probably have some more eligible expenses for claiming tax back. But they aren’t dropping their effective tax rate from 42-45% down to 10% by doing this. That is really reserved for those in the 0.1% of incomes. Not just anyone in the top 1%.

#67

There isn’t a lot you can do working for someone else unless you own your own business. Even then, the actual costs to do it via an accountant are high. Unless you’re earning $500K-$1M plus, the costs may not actually make it worthwhile.

As a business owner you can take franked dividends vs salary but the net tax is the same. It looks like you’re paying 20% tax but you are still paying the rest via the business so the net effect is the same.

There is a possibility of splitting your salary with another family member but that Suns your family member isn’t already earning an income or that you have a supply of family members to offset your tax to.

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#68

I was getting myself confused… apologies.

The above article cites how if you are earning over $1m you can pay very little tax. I was thinking the article cited people earning over $250k.

I’ve been pondering @MissionMan words the past few days… and admit - it’s wrong to think someone earning more should pay a higher % of tax. Tax should be equal (as a percentage), regardless of income. But, the problem stands that tax concessions tend to favour people with more money, which means the more you earn the more likely you are accessing tax discounts.

Yes, I accept Australia taxes people heavily, and the whole system needs an overhaul. Not just personal tax. Federal and State.

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#69

There are so many misunderstandings about tax in Australia. We enjoy and expect extensive social services, (free education, free health care, job seeker, NDIS, etc.) but appear to expect that we do not have to pay for them.

The average person pays tax in the form of income tax and GST.

GST: our GST rate of 10% is low by OECD standards. Even NZ pay much more (15%)

Income Tax:
“We have one of the highest rates in the world”. True, but this may not mean what you think. It is talking about the 45% marginal rate of tax paid for that part of your income earned above $180,000. The average person does not earn $180,000 or above.

The OECD shows Australians actually pay a low amount of income taxes as a percentage of their wages

Some countries levy social security contributions separately to income tax, so appear to have a lower income tax rate. Similarly, other countries levy state income taxes as well as federal income taxes, but the country comparisons do not show the state taxes.

Maybe we should be paying more GST and even less income tax.

Tax is complicated!

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#70

I forgot to include the comparison of GST/VAT rates

So, despite what many say, Australian’s enjoy a relatively low tax burden that funds a generous array of free, or low cost, social services.

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#71

My point was about higher-income earners and the tax they pay which you validated. i.e. those earning over $180,000. People seem to feel they don’t pay enough tax, but people earning over $180,000 already pay a lot of tax by international standards. Add to this that they get minimal childcare subsidies and many of other benefits other taxpayers get despite paying very high tax rates and it’s easy to understand why there would be a level of animosity from higher-income earners about paying more.

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#72

I get that, I really do. And that isn’t my concern, what I have an issue with is how flat the tax scale is before that point.

There should be more step points between $40,000 and $180,000 than there are now to reduce the regressivness of the tax system.

#73

Back on the topic of people telling you how to vote… I just got a message from my son’s public high school titled “Liberal Funding Announcement”. It stated that the Liberal candidate for the upcoming Vic election, and the shadow minister for education, visited his school today, and they have committed to fund the first stage of the school’s long-planned rebuild.

I have just tried to confirm the fact, but my understanding is that statistically public schools do much worse under Liberal governments than Labor… so I was kinda shocked to be receiving what is basically a how to vote card from the school’s acting principal… (and - to vote Liberal.)

—
Yet to sight it but wife says when Andrews visited, he pledged the same thing, and it was also communicated to us parents. Guess I’m just blatantly biased….

#74

I think that’s a bit of a fallacy these days.

#75

There are both federal and state level funding, but there are also agreements for funding based on local representatives who may win so it’s not unusual to see schools act in this manner if they have been promised funding based on a candidate winning. My understanding is that local candidates can influence funding.

#76

Wasn’t sure where to post this so thought I’d revisit this old thread.

So after yesterday’s election in NSW, we now have Labour in power in all states and territories except for TAS… as well as Federal…

I don’t recall this happening before… usually we tend to have a pretty varied split with the states, and often Federal at odds with the states…

I wonder if this will make for less fighting at GST division time… :}

And I wonder how long til we flop back the other way.

#77

I doubt it! :flushed:

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#78

*Labor

2002-02-09 to 2007-11-24
Labor in office in every state and territory

2007-11-24 to 2008-09-06
As above, plus federally

2008-09-06 to 2010-11-27
Labor in office everywhere but WA

2023-03-25 to at least 2024-08-24 (NT)
Labor in office everywhere but TAS

#79

Thank-you @kerr !

Interesting stats. I know we have historically tended to flip flop back and forth - I mean, that’s what happens when you have 2 major political parties… eventually people get sick of the party in charge… but - wouldn’t it be good if parties could actually genuinely compromise and work together instead of just bickering…

#80

Looks like the Libs are making a bit of a comeback in some seats & Labor might not get to govern in their own right now.