Hi fellow investors!
As Melbear alerted to me the tax brackets have changed this year, i dunno about all you guys, but my dad and i were not aware of the changes so i thought i’d post them ust in case some of you hadn’t seen them yet
0-6000 nil
6001-21600 17%
21601-52000 30%
52001-62500 42%
62501+ 47%Regards
Fudge111[8D][
][][^]It basically means that for every person in the top tax bracket they save $602 in tax annually
Fudge111[
]Thanks for the pay rise.
Joy
Big deal…
I don’t make what i’d call a huge wage but i’m still going to be in the top bracket before shift penalties or overtime – where’s the incentive to work harder for financial gain ??
No wonder i’m making my money work for me, rather than working for my money… old Mr. Kiyosaki has got one thing right… [
]Having said that if any overtime hours were taxed at 20c in the $ i’d be more inclined to do some, if only to pay my PPOR off quicker…
Cheers,
Paul…“I want to be rich, and stupidly happy – so far i’ve only managed to achieve the stupid part…”
Hi
When do these new rates come into force.
regards
alfThey are already in place, as of June 2003 those are the official tax rates. If you’ve been paying last financial years taxes, well, you can look forward to a nicer tax return
Sincerely,
MalFatBoy,
I hear you about wondering why would one bother to work harder if we pay taxes.
I kind of see it as, I’m happy to pay taxes if they spend it on the stuff that’s important to me- public schools, hospitals, education. But when they spend money on war machines and weapons of mass destruction, I resent paying my taxes too.
kay henry
I agree Kay,
I mean who in this world wants to see the rich get richer and the poor get poorer, we should tax high income earners like we do in Australia.
Yes, malpatti is correct, they are in force as of 2003-04
regards
Fudge111[
]Everyone out there!
I would like to hear opinions about the tax brackets
ie. do you think the highest tax bracket is too low, ($62500)
basically, what is your opinion on the income tax rates in Australia,
Cheers
Fudge111[
][][^]The base level rate is I feel at the moment too high… inflation has pretty much eroded the tax cuts we got as a result of the GST.
Compared to some countries in Europe, we are definately better off, especially with our quite reasonable tax offsets for things like gearing etc. However in a direct comparison with the U.S. (which is difficult – they have much more of a population, economy etc) our soon to be ‘free’ trade partner, on income tax we’re far worse off… there would be another civil war over there if they charged 48.5 cents in the dollar for earning money above what, $US40k. But they have all sorts of state taxes etc.
Basically, I reckon we can shave a few percent off all the tax brackets.
Sincerely,
MalThanks Mal
I think that as long as the government gets its act together and spends its money on worthwhile causes the tax brackets are not so bad, i think especially that if we keep up the maximum tax brackets as they are it is not so bad, the rich should be taxed more heavily and the poor less heavily, that way we keep that gap between the rich and the poor as small as possible
Any other opinions?
Fudge111[]I reckon we definately need more money spent on essential services, especially when it comes to healthcare and education (sometimes I’m suspicious the government deliberately keeps these services poor just to get people on private cover/education!).
However, I don’t believe intrinsically that the higher income earners should be taxed disproportionately higher than lower income earners… to further explain, I certainly don’t believe in a ‘flat tax’ system, where everyone pays the same rate of tax no matter how much you earn, I believe that the wealthier among us do get to take more advantage of the priviledges that this country has to offer and should contribute an *appropriate* amount back to society.
However, we do live in a market capitalist economy (certainly less socialist than the heavily subsidised U.S. economy) and the market is willing to pay the wage the higher income earners earn. Should these people be *penalized* for their success? At what point do these penalties start to destroy natural innovation and the strive to excel by removing incentives to work harder?
I believe in a fair balance of the system… certainly everything should be done to help the low income earners out who haven’t been able to take advantage of a lot of opportunities, but we should weigh that evenly with the need to make sure we don’t discourage motivation to work harder.
Sincerely,
MalThanks Mal but I disagree,
A person who earns say $80,000 a year still gets the first 6000 tax free, the next 15600 at 17%, etc etc, so it is fair on everyone.
It would be unfair if your whole salary was taxed 47%, but this is not he case,
Fudge111[
][]
A person who earns say $80,000 a year still gets the first 6000 tax free, the next 15600 at 17%, etc etc, so it is fair on everyone.
Is that right? I thought you payed the percentage bracket your in on the whole amount.Yes mikeej, that is correct. Everyone is equal, everyone should just stop complaining
Fudge111[
]Yeah, mike- it’s why when I hear people saying they are paying half their income in tax,m it just ain’t true. For example, someone on 80k would pay about 20k tax all up- that is hardly half tax- it’s 25% all up.
Fudge and Bro- nice topic :o)
kay henry
Very true Kay,
Everyone in the top tax bracket pays $16,182 + 47% of their wage that is over $62,500.
therefore if you made $63,500, you are only getting taxed $16,652 in tax, that is hardly 47%
however as you get higher and higher income it will climb closer to 47%, say $150,000, the tax would be something like 40% of your income due to $87,500 of your salary is being taxed at 47% and the other 62,500 at the lower rates.
Fudge111[
]Mike, Fudge is right with regards to the tax scale.
However I do disagree with Fudge on taxing high income earners more. I don’t think it will work. As Mal mentioned a balance must be achieved, sure if you earn more you should pay more. But there is a point where creativity/motivation will be killed off. I mean lets say for example if you were taxed 90c to the dollar would you bother working? (I know its a bit extreme but there is a limit.)
Secondly, many of the people who do earn more also do generate more jobs/ improve the economy which benefits everyone.
You will also find that many on higher incomes will also find more effective ways to avoid taxs:
ie. trusts or plowing profits back into a company.Now I know I may get flamed for this but here goes…..
Why do the poor get poorer and the rich get richer… I believe most of it is attributed to people’s choices. People become poor because of the choices they make. Recently in the Sunday Mail in QLD there was a big blow up about these people living in tents not being able to afford rent, lots of people wrote in complaining about the lack of gov help and so on. Now the lady on the front page complaining about housing was holding a cigarette in her hand, and a friend of mine noted beer bottles in the background. At a pack a day at $15 thats $105 a week going up in smoke. Are you telling me that their choices aren’t making them poorer? I mean if I counldn’t afford housing I sure as hell wouldn’t be smoking my rent away.
Why do you think we are all here on this forum? Because we have made a decision to cut back on some of our spending to buy assets and hopefully get richer. I see lots of people at work who complain that they don’t have enough money but as soon as you mention something like housing or the stockmarket they instantly lose interest and say things like it’s too risky, I never earn enough and then continue to go on expensive holidays or expensive cars on credit.
Now I realise that this is not everyone, there are many genuine people out there who are unfortunatly disadvantage and as far as I am concerned I am happy for all my tax dollars to help them but there are at least as many who have no desire to work or learn to improve their life but would prefer to live off gov hand outs.
Perhaps education may fix this but do people want to learn? I don’t think increasing taxes on the high income earners would work.
Anyway my 2c, I’d welcome opinions/discussion, this is something that really does get me worked up!
Josh
I agree with you totally Josh on people’s choices, someone on a base salary, say $25,000 could end up rich if they were smart, you make a good point about decisions.
I think you may have mis-interpreted what i said about the income rates, the rates should never climb over the current 47%, that should remain the same for sure, it is just all these people saying that this bracket starts too low ($62,500) i mean, come on, you never go above this limit, it is worth taxing people the top bracket at $62,500, because they “Should” have enough money to live a prosperus life (if they are smart) and of course you wouldn’t want to tax anyone over 50% of their salary or the motivation to make more would suffer.
Basically i am saying that i agree totally with the current tax brackets, and i think we should keep the top bracket at a low level (62,500) instead of lifting rates up in really high incomes 100k+. to over 50%
Sorry if I’ve confused people, tried my best
Fudge111[
][][]Sorry fudge should have probably read a bit better but…..
Keeping the threshold low has a similar effect but to a much lesser degree to raising the %, it’s the dollar amount thats important. I mean I would hope to increase my wealth through capital gains as opposed to earning a higher income as it is taxed less.
You will tend to find that many of the rich will divert their incomes so that they have lower taxable income through income tax and may build up more assets which are taxed a bit more favourably. ( I don’t know whether you’ve read the millionare mind but in a some ways we are similar to the US with regards to assets over income)
Josh
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