Hi fellow taxpayers,What are your thoughts on an even simpler tax system?
Double the tax free threshold to $12,000 and pay a flat rate of tax after that amount regardless of personal income. No claimables, no rebates, income derivation is up to the individual.
I agree in principal, I’d rather have the option of hanging onto my money rather than have it distributed back to me after I’ve payed my taxes… it adds an unnecessary layer of paper-shuffling and wastes a lot of money.
However, people are inherently stupid. More money in their pockets is just more spending money, and it won’t be long til the low income earners are crying poor again because they can’t manage their own finances.
I agree kk I think a tax cut will generally only benifit those who are already have made the choice to become rich. Those who choose to be poor will spend it.
I think education is the key, we have to try to motivate people to make them want to learn.
JOsh
Kkowalsk and Fatboy,
“They” can cry all they want .. the point is, as Fatboy refers to is equity of effort and risk.
The poorer have a doubled break in tax, and the richer must get smarter because nothing is tax deductable. Reward for effort is then more equitable and encouragement to work is more attractive with a reasonable flat tax rate. “Bracket creep” will disappear from the language.
As for Child Support, Fatboy is correct. In fact, I end up with 32 cents in my pocket after I earn my next dollar. And that’s supporting only one child. This is because the 18% is based on gross income. After tax is taken out, this turns into around 25% of nett.
No father would begrudge payments (hopefully) for their own child’s welfare. However, this is
another inequity in the system whilst attempting to build an assett to leave that very same child.As Richmond pointed out, it’s a problem to be solved within the laws of the Child Support Agency. However, the CSA is simply another tentacle of the ATO.
Whatever laws exist, we can only use them to the best of our advantage. Utopia in Taxland will never arrive to satisfy the wants of all. We need our common infrastructure, and each of us need to contribute in a fair way.
Kind regards, Phil
KK and Josh,
The response time on site is now negative and getting slower. The letters appear only after the sentence is written. Please excuse any slow responses to your thoughts.
Points taken. However, if a poor person starts spending the disposable income, what do you think this will do for the economy?
If spent, surely we will see growth, more jobs.
If saved, will the financial institutions then be flush with funds for further lending, leading to even further growth?
If you agree, is this not a win-win circumstance for the economy?
Kind regards, Phil
I would argue that for many at the really low end of the wage spectrum, any little extra goes into cigarettes/alcohol/gambling. Certainly, it’s a very generalistic statement, but probably not far off the mark for a broad cross-section of people of that socio-economic background.
Those goods contribute little to the economy, but are nice little revenue earners for the government. OTOH, higher income earners spend more on ‘toys’. These products do generate economic growth, as is clearly demonstrated by our economy/credit levels.
Monkey Magic.
The impression I got from your post was that you thought people “choose” to be poor. That is where the ivory tower bit comes in, because it came across that you were sniping from whatever position in life it is that you hold. I can’t see how you’d take it personally, because I know bugger all about your background etc… It was the arrogant tone of your post that rubbed me up the wrong way.
Your follow-up comment to another post: “tax cut will generally only benifit those who are already have made the choice to become rich. Those who choose to be poor will spend it.” – is another elitist bit of nonsense. Do you honestly think people choose to be poor? Really? I know people on 150k a year who can’t save a penny… put that up against Fudge and Broz’s example of raising 5 kids on a paltry sum… who chooses what and who are you or I to judge them?
as for kkowalsk’s comments: “it won’t be long til the low income earners are crying poor again because they can’t manage their own finances.” Are you for real?
Can you guys tell me your background so I know where you’re coming from? I’m 29, from average working class family in the eastern suburbs of Melbourne, now in a good full time job… wish I’d learnt more about investing years ago (which means I back up the comments made about educating people re: investing… it’ll be a priority for my kids when they come along… I have a good perspective on life and where the subject of money fits, and believe me, I know what it is to struggle… and I also know that not all the battlers are there by choice… in fact, most I know aren’t…
r
(by the way, this is a completely different argument to the whole family law thing… I empathise totallly with what LuckyPhil is saying re Dads when families split up… it’s very very unfair)
hey, kkowalsk – “many at the really low end of the wage spectrum, any little extra goes into cigarettes/alcohol/gambling. Certainly, it’s a very generalistic statement, but probably not far off the mark for a broad cross-section of people of that socio-economic background.” – what section of the socio-economic landscape do you sit in to make such grandiose, sweeping statements? Do you many people in that strata of society? How do you come to your conclusion?
How do you automatically assume that someone earning 50k a year has worked harder than someone earning 25k a year? Some of the guys I work with earn 500k + a year and they do bugger all compared to guys earning 5% of that…
Good luck to your parents for starting with nothing, but aren’t you LUCKY they pulled their finger out and built a foundation for you? Open your eyes. As I said before, be thankful for what you have, because others might not be as fortunate, and it’s NOT their choice to be where they are…
r
Guys and girls,
Well constructed arguments by both parties here. Richmond, well put, no one chooses to be poor. And I say that not just because you showed me empathy re the Child Support issue.
To balance that argument however, (forever a fence-sitter I am, as I see valid points in most any debate, perhaps I should be a Diplomat), I would like to share a real life example of expenditure vs income.
KK and MM, perhaps I can express your views by example in more eloquent terms. Richmond, take note, these guys have a point, but your point about choice is the over-riding factor. You are correct.
I had 3 jobs, 7 days at age 17. One of which was the Mr.Whippy Ice Cream truck. The largest sales came from the poorer suburbs. I even learnt that I should look for the most number of milk bottles by doorsteps to target the best streets. This meant more kids. Yep, the poorer suburbs spent a few dollars on instant gratification. That was their reward, as is cigarettes and alcohol .. instant. A poor family could not consider the concept of long term investment gratification with marginal disposable income.(Yes, I hear echoes of “The Richest man in Babylon”). Most of these people are hard workers from my experience. That is what they know. They do their best, and have the same wishes for their kids as any other parent. Due to circumstance by which ever method you wish to describe, these same people place their children first. Their “choice” then becomes instant gratification in a small way, as that is what they can afford today.
Children come first, be it long term or short term.
Kind regards, Phil
AAAAHHH TAX,
Well F&B another can of worms you’ve opened here.
This thread has some excellent posts. There I was complaining about the 10% tax rate on the 10% I have to declare and then I found out I only have to pay 5%. Now why is it I’m O/S again?
I don’t think people really chose to be poor as some one commented. I think it is more based around materialistic measure and values. Instant gratification on buying an ice cream is not a good example of people choosing to be poor. Not everybody wants to have a million dollars. Some parents are happy to work minimal hours for minimal pay as long as they can spend quality time with their children. Also that ice cream once a week made up for all the hand me down clothes and toys.
In regards to the CSA and the bloke on 70K. Have more kids. Every child allows you to keep an extra 6-7K that you don’t have to pay to the ex. My best mate keeps himself just under the top tax bracket and has 3 kids to the first and now has 4 with the 2nd. Thats an extra 28K he gets to keep.
Finally, the tax threshold should be increased to about 20K and then a flat tax rate for every one of between 20%-30%. I don’t like any form of discrimination and a tiered tax level is definitely one. I know by suggesting a tax threshold that that in itself is a form of discrimination.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi C2,
I agree, not everyone wants to be a millionaire.
My point on the ice-cream example was not clear.
I am not suggesting that people are poor because they choose instant gratification. I am saying that because they are poor for whatever circumstance, finances often limit them to the small luxuries. Home ownership for many might be an ellusive dream.
Kind regards, Phil
hey, kkowalsk – “many at the really low end of the wage spectrum, any little extra goes into cigarettes/alcohol/gambling. Certainly, it’s a very generalistic statement, but probably not far off the mark for a broad cross-section of people of that socio-economic background.” – what section of the socio-economic landscape do you sit in to make such grandiose, sweeping statements? Do you many people in that strata of society? How do you come to your conclusion?My family arrived in Australia as refugees in 79, without a cent to our names. We went from living in a migrant centre at Villawood, one parent working 14hr days, the other unemployed, to both parents owners of a successful business who have done quite well for themselves in the last 20-odd years. So, IMO, I’ve been exposed to quite a broad cross-section of socio-economic groups.
As for myself, I’ve been in uni for 9 years getting undergrad and postgrad qualifications (not much other option if you want a career in science). I’ve worked damn hard to get there, the starting pay isn’t exactly anything to write home about despite the fact that I will usually work well in excess of 40hr/wk despite no overtime being possible. So when I hear about someone who drives a bus for a living for example, and is bitching that they want 40k/yr for that job and going on strike for it, yes, it gets up my goat.
How do you automatically assume that someone earning 50k a year has worked harder than someone earning 25k a year? Some of the guys I work with earn 500k + a year and they do bugger all compared to guys earning 5% of that…And I totally agree, there are a number of people earning ridiculous sums for not particularly difficult work. That isn’t true of everyone or even most on middle incomes, and I don’t know many (if any) people earning in excess of 100k/yr. As far as comparing people earning 25k to 50k, to get the 50k, people had to work harder in school. I can tell you I worked my butt off. I chose to forego a social life and popularity in high school and focus on doing well, well enough to open a few doors for me. Meanwhile, those from school that spent most of their time mucking around and not taking it seriously are in dead-end jobs with not much hope for higher salaries. That was their choice.
Hi kkowalsk,
(caution, long post following)
Thanks for the response…
The point I’m trying to make is that stereotypes of whatever section of society do not work. I don’t like lines being drawn in the sand that pretty much set an “us” and “them” theme to a debate (ie rich and poor)… The gap in the divide between rich and poor is getting bigger all the time in this country, but I’d like to think people still give a damn about each other, however it definitely seems we’re less tolerant than we used to be. The topic of this thread started out as tax, and I don’t think anyone here would mind paying taxes if they were better used. I’m sure people don’t mind paying for health, schools, roads, public transport etc. We all benefit from that. I, like everyone else, hate seeing public funds being misspent.
I’m not sure if this example will show what I mean about stereotypes, but I’ll give it a go. In my after school job years ago I used to work with a guy from a south east Asian country, I can’t remember which one in particular, but he had a lot of qualifications in his homeland to do engineering (or something along those lines) but when he came to Australia, his qualifications were worth jack. I think he may have been one of the Vietnamese boatpeople, so staying at home at the time was not an option. When I knew him, he had been working as a supermarket clerk for a number of years. He had a couple of kids and a wife. So here is this very smart guy working his butt off for a meagre sum. There’s no point for his wife to go to work because whatever she earns would basically go in childcare. He can’t go back to uni and get Australian qualifications because he’s got a family to support… he can’t speak English very well, so that rules out other options… so what is left? At the time he was doing the best he could and was happy. I know nothing of his whereabouts for the last 10 years, but I hope he’s doing well. He wasn’t dumb, he didn’t smoke, drink or gamble, but he was just getting by. Your parents obviously did well… but not everyone can, and it’s not always about choice.
By the way, the traditional 40 hour week went out the door long ago. There’s a lot of people who do unpaid overtime. More than ever, in fact.
When I have children I won’t be expecting them to forgo a social life or friends, because school is one of the best periods of growing up, and helps kids become socially adjusted with a less blinkered view of the world in a lot of cases… I want my kids to form relationships, have fun, and well… be kids. Of course I’ll encourage them to study, but I won’t be disappointed if they choose not to go to uni, as long as they find a field of endeavour where they are happy, and are good honest people that is enough for me. I know I had fun, and ended up doing well. Degrees aren’t the be all and end all even though they’re necessary in a lot of high paying jobs (but certainly not all of them). My fiance’s father almost disowned her when she quit university and pretty much labelled her a failure, but she’s now a paramedic, and I think he knows he was pretty silly to have such a narrow minded view on the issue. I’m sure there are many people who would love to have the chance to go to university for 9 years getting stacks of degrees, but the facts are that a lot of people can’t afford to do it, because Austudy isn’t enough, there aren’t enough casual jobs to go around, and a lot of people don’t have the parental financial support that would enable them to do so. I went to uni and earned a degree while doing 25 hours a week of casual work, but the fact I did so and then had to slog my guts out working in regional newspapers and tv for 9 years to get where I am now doesn’t mean I begrudge other people their lot in life be they allegedly “upper” or “lower” class. I know I’m not the first person to work hard, and I know I won’t be the last. kkowalsk, I just think it’s different strokes for different folks, and perhaps instead of complaining when bus drivers strike in their push for some paltry pay claim, just be thankful that you’ve clearly worked hard and are going somewhere in your life, because you’ve had the chance to do so for a whole lot of reasons.
To me, labelling all, or even most, “poor” people as this or that is just as bad as being a racist, and just as narrow minded.
I hope you do well in your chosen field.
cheers
r
The point I’m trying to make is that stereotypes of whatever section of society do not work. I don’t like lines being drawn in the sand that pretty much set an “us” and “them” theme to a debate (ie rich and poor)… The gap in the divide between rich and poor is getting bigger all the time in this country, but I’d like to think people still give a damn about each other, however it definitely seems we’re less tolerant than we used to be.I’d have to agree. But, I think one of the things that causes that intolerance is that there are far more people than ever in that grey area between poor and rich, earn enough to no longer qualify for substantial assistance, but certainly not enough to be care-free financially. Unfortunately, the govt class this group as ‘well off/rich’ even though they aren’t. As a result, people are far more likely to want to look out for their own interests and not care too mcuh about those with less.
Let’s face it – the govt have done a good job of making it a user-pays system for all the major things like healthcare/education/retirement. Naturally, people want more accountability as to how their tax dollar is spent when they are no longer receiving much benefit from it.
The topic of this thread started out as tax, and I don’t think anyone here would mind paying taxes if they were better used. I’m sure people don’t mind paying for health, schools, roads, public transport etc. We all benefit from that. I, like everyone else, hate seeing public funds being misspent.I totally agree. I’m disgusted by the govt’s terrorist/defence smokescreen, trying to take our minds off the fact that they collect more from us than, while cutting back on spending on us.
I’m not sure if this example will show what I mean about stereotypes, but I’ll give it a go.<snip>
It just so happens, my dad is a qualified vet, whose qualifications were not recognised in Australia. He gave up a good job as a government vet. Being from a communist country, although things like pay were irrelevent, if you worked for the government there were good perks/advantages. He chose to give them up and try his luck in another country. I’m just using him as an example…. if the will is there, it is entirely possible. It’s a question of whether you want to take the risk. We’ll have to agree to disagree on this one, I don’t believe it’s impossible to make something more of your life if you don’t have much. It’s more a question of what you’re prepared to do to improve your situation.
By the way, the traditional 40 hour week went out the door long ago. There’s a lot of people who do unpaid overtime. More than ever, in fact.If you’re on salary, yes. You try getting a wage-earner to put in extra hours without offering overtime…
To me, labelling all, or even most, “poor” people as this or that is just as bad as being a racist, and just as narrow minded.And IMO, political correctness is a sure-fire way of stifling healthy debate…. and it’s funny how many PC people play the ‘racism’ card nowadays… if you genuinely took offence, I apologize.
no worries kkowalsk, all’s well that ends well, and as someone else said, a bit of healthy debate never hurt anyone.
cheers
rHi everyone,
Terrific posts!
Well apparently i am a naive 20 year old that knows nothing about the real world. Oh well, we’ll just have to wait and see how it all pans out for Broz and I, lol.
Fudge111[
][][^][8D][][]Interesting!
Well Fudge111, as they say “It’s not how much you earn but how much you save!”We are trying to close the gap between the rich and poor and make this country a more equal society. I agree that that’s how it should be and people are still rewarded for wise saving plans. (INTEREST). So save, save, save!!!
Broz00[
]Interesting!
Well Fudge111, as they say “It’s not how much you earn but how much you save!”We are trying to close the gap between the rich and poor and make this country a more equal society. I agree that that’s how it should be and people are still rewarded for wise saving plans. (INTEREST). So save, save, save!!!
Broz00[
]I have an example of choice for you,
i am dating a 30 yr old lady with a 6 yr old son. and i love them both dearly, my girlfriend (kylie) comes from a working class back ground (as do most of us i assume) any way she has 20 k in the bank and wants to buy an IP. she is in no way financially literate. i mean she is really hopeless. any way ive given her rich dad poor dad, we’ve played the game. and she sort of understands that she needs to learn but couldnt be bothered.
the scenario, last night having a glass of red.
she tells me she want to buy an IP but only something she would want to live in, in a couple of years. I explain to her that the numbers have to add up first to make it effective. i explained neg geared, pos geared etc. i also explained about reducing tax through depreciation. her reply was thats too hard and she just wanted someone to pay off the mortgage for a couple of years. did not want to listen at all. in the end we ended up in a fight over it. boy talk about someone who just doesnt want to listen.
I guess what i’m saying is,
there will always be people out there, although they dont choose to be poor, they dont know how to change, and as ive heard
“if you always do, what you’ve always done
you will always get, what you’ve done”
(or something like that)
Interesting!
Well Fudge111, as they say “It’s not how much you earn but how much you save!”We are trying to close the gap between the rich and poor and make this country a more equal society. I agree that that’s how it should be and people are still rewarded for wise saving plans. (INTEREST). So save, save, save!!!
Realistically, saving is not enough. You need to save save save, then use those savings to invest invest invest
Relying on interest alone is crazy with rates not even 5%.People DO make the choice to be rich or poor. Maybe its not a conscious one, but the result is the same. If you choose to max out your credit cards and have the flash car and no/little assets, thats your choice isn’t it?
As for the tax debate, what about turning it upside down and putting the emphasis on taxing expenditure rather than income. Streamline the income tax rates and reduce them putting more after tax income in peoples pockets and raise taxes on what they “choose” to buy with this money.
This to me would be more fairer. Choose to spend or choose to invest.
Craig
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