Society/Culture The tax system explained in beer

[geelong_crazy26]

But now extrapolate your question to everyone on median income...

Plenty of room in Australia, the USA has a population 15 times the size we do with around the same amount of land and they have no issues.

 

[geelong_crazy26]

To put this in perspective, say if there are currently 100,000 people/families on median income and wanting to buy a house. The government builds 100,000 dwellings and sells them to these people at a value relative to median income. The government does nothing else, they do not take anyone’s houses away from them, they do not tell people to sell their houses etc. when these 100,000 houses are sold, they are sold back to the government at the relative to median income value. There is no communism, the rest of the housing market stays free market.

This would send the value of peoples property down dramatically and wipe a fortune out of our economy.

There simply is no way to make houses more affordable in the short term in Melbourne and Sydney. Every option you can come up with will have very bad consequences. Unfortunate but it is the reality of the situation.

 

[RupieDupie]

Plenty of room in Australia, the USA has a population 15 times the size we do with around the same amount of land and they have no issues.

So your argument is that cities don’t need teachers (including private school ones), police, nurses, soldiers, builders, administrators, etc etc

 

[RupieDupie]

This would send the value of peoples property down dramatically and wipe a fortune out of our economy.

There simply is no way to make houses more affordable in the short term in Melbourne and Sydney. Every option you can come up with will have very bad consequences. Unfortunate but it is the reality of the situation.

So the real reason this won’t work is because rich people lose munny?

 

[Lebbo73]

Has had everything handed to him I suspect.

This type of attitude explains a lot really!

 

[owen87]

So the real reason this won’t work is because rich people lose munny?

Is every home owner a rich person?

 

[RupieDupie]

Is every home owner a rich person?

I think we’ve gone over this before a person who owns a house that is now valued at $1M is not responsible for this, and if they sell it they will still need $1M to buy another house. Hopefully you can understand this point now, I don’t know how I can better articulate it.

The reason GC is upset at the proposition I presented above is the housing market and therefore people investing in housing they don’t utilise will lose their value. That is, these people will not want other working Australians, who are and have worked just as hard as they did, own their own house, else these people’s houses will lose their inflated value. Seems greedy to me.

People who own and live in their house wouldn’t even notice the difference between their house being valued at $2.5M vs $140K.

 

[Taylor]

Plenty of room in Australia, the USA has a population 15 times the size we do with around the same amount of land and they have no issues.

30% of North America is considered desert.

70% of Australia is considered desert.

How much of the is Canada? That is the question.

 

[owen87]

People who own and live in their house wouldn’t even notice the difference between their house being valued at $2.5M vs $140K.

What about when they go to sell their house? $140k has a lot less buying power then $2.5m

With $140k they can buy another house - assuming your socialist utopia allows it - but can't then afford to live without relying on welfare.

I guess in socialist utopia you don't need savings though, this gubmint of yours would take care of it all.

 

[Taylor]

What about when they go to sell their house? $140k has a lot less buying power then $2.5m

With $140k they can buy another house - assuming your socialist utopia allows it - but can't then afford to live without relying on welfare.

I guess in socialist utopia you don't need savings though, this gubmit of yours would take care of it all.

So far every attempt at socialist utopia across nations and cultures and not propped up by third party powerhouses has kicked off by taking a bunch of property from a group, a huge amount of people getting killed/dying then the concept of a redistribution where everyone now averages better off.

If the wealth of Australia was picked up off it's people, then 4 million people died, then the wealth was dropped back onto the people there would be a collective average increase too. It's just that awkward, forgotten, middle step that keeps hitting the snag.

But, we don't need to go that far for a fair system. Personally I think we should have a minimum standard of living enshrined in a constitutional amendment - that level itself would need to be determined but it would mean that a minimum level would be provided to every resident/citizen of the nation but if you chose to work hard and put your money towards an objectively better quality of life then you're free to -what could be more fair than that?

 

[RupieDupie]

What about when they go to sell their house? $140k has a lot less buying power then $2.5m

With $140k they can buy another house - assuming your socialist utopia allows it - but can't then afford to live without relying on welfare.

I guess in socialist utopia you don't need savings though, this gubmint of yours would take care of it all.

I think this is pretty basic economics, how did people manage to buy and sell houses in the 90s? If the housing market is valued at $2.5M they will need to sell and buy houses for $2.5M, if the housing market is valued at $140K they will need $140K to sell and buy houses, that is, their $2.5M in a $2.5M housing market is the same as $140K in a $140K housing market. If I have $1B, and loaves of bread are priced at $2B the money has less buying power than $1B where loaves of bread are $5.00. The people who lose out under the hypothetical example (when supply increases) are the people who want their $2.5M to spend outside of the housing market at the expense of other people wanting to enter the market being able to own a home. I give exactly the same amount of concern to them as they do the rest of Australians.

Free market failed, there needs to be another alternative. But no need to worry, just look at the dickheads in charge and there is no danger the housing market value will decrease, all these idiots seem to carry on about is how when dickhead A was in charge they screwed the country and then the other mob carry on about how when dickhead B was in charge they screwed the country. Even they admit they’re a bunch of incompetent jerk offs. At the end of the year median house prices could be valued at $100M.

Your last sentence is just a knee-jerk reaction with zero truth or thought behind it. What people usually get when they read the Daily Terrorgraph or watch ACA. But I’m not a pleb, so you’ll need to articulate the reasonings behind your argument. In my hypothetical society people working for median salary with superannuation will be paying off their houses in 10 years, and will require exactly the same proportional welfare as every other previous generation (except the baby boomers where there is a relative larger number cf the remainder of the population), in the current dickhead-run real world people on median income will finish their working lives and will still be required to pay rent with no savings and only have their superannuation and will require a proportionally larger amount of welfare in a future Socialist state.

 

[RupieDupie]

So far every attempt at socialist utopia across nations and cultures and not propped up by third party powerhouses has kicked off by taking a bunch of property from a group, a huge amount of people getting killed/dying then the concept of a redistribution where everyone now averages better off.

If the wealth of Australia was picked up off it's people, then 4 million people died, then the wealth was dropped back onto the people there would be a collective average increase too. It's just that awkward, forgotten, middle step that keeps hitting the snag.

But, we don't need to go that far for a fair system. Personally I think we should have a minimum standard of living enshrined in a constitutional amendment - that level itself would need to be determined but it would mean that a minimum level would be provided to every resident/citizen of the nation but if you chose to work hard and put your money towards an objectively better quality of life then you're free to -what could be more fair than that?

<like> for the last paragraph, but just to avoid any further confusion I’m only hypothesising that the government build houses to create a supply to meet a demand that cannot be met with the current free market. There is zero implication of taking people’s houses away from them or even increasing their taxes to support this.

 

[11sjw]

<like> for the last paragraph, but just to avoid any further confusion I’m only hypothesising that the government build houses to create a supply to meet a demand that cannot be met with the current free market. There is zero implication of taking people’s houses away from them or even increasing their taxes to support this.

Total BS, how is it financed?

 

[geelong_crazy26]

I think we’ve gone over this before a person who owns a house that is now valued at $1M is not responsible for this, and if they sell it they will still need $1M to buy another house. Hopefully you can understand this point now, I don’t know how I can better articulate it.

The reason GC is upset at the proposition I presented above is the housing market and therefore people investing in housing they don’t utilise will lose their value. That is, these people will not want other working Australians, who are and have worked just as hard as they did, own their own house, else these people’s houses will lose their inflated value. Seems greedy to me.

People who own and live in their house wouldn’t even notice the difference between their house being valued at $2.5M vs $140K.

This will trigger a recession within a week. What do you think will happen with all these people who have home loans of over a million$ on a asset that is suddenly worth $140 ?

No short term solution to house prices exists.

 

[11sjw]

This will trigger a recession within a week. What do you think will happen with all these people who have home loans of over a million$ on a asset that is suddenly worth $140 ?

No short term solution to house prices exists.

Short to mid term would be to make plenty of land available, make it cheap and incentivize people to build there (even investors as I believe negative gearing should be maintained for those that build new properties rather than those that speculate on existing properties). However, given it would be on the fringes of cities it wouldn't be the most desirable and the uptake of this might not be enough but it would help.

 

[RupieDupie]

This will trigger a recession within a week. What do you think will happen with all these people who have home loans of over a million$ on a asset that is suddenly worth $140 ?

No short term solution to house prices exists.

Are you stating these people were conned? Wouldn’t be due to rich people by any chance?

 

[RupieDupie]

Total BS, how is it financed?

Errr... the people are buying the houses the government would be selling them not giving them away. Now let’s not lose our senses here even though houses are valued at $1M nowadays they cost nowhere near as much to build.

 

[Bombermania]

30% of North America is considered desert.

70% of Australia is considered desert.

How much of the is Canada? That is the question.

Which is why by all means we can have a larger population but we could never have a population size on par with the U.S or any of the other large populated countries but then again we don't need to have that many.

 

[Funkalicous]

People who own and live in their house wouldn’t even notice the difference between their house being valued at $2.5M vs $140K.

And what about the 1M dollar bank loan debts of home owners and investors? If you've crashed the market overnight you've effectively wiped millions in assets from everyday Australians. Or would you suggest further Goverment intervention?

There's a reason why capalist countries keep Goverments out of markets. A market based on supply and demand is predictable and relatively safe for investors. In a socialist state the rules can and often do change mid-flight, causing great uncertainty for investors. This is one reason (but not the only reason) why you typically see massive economic recessions in socialist countries. And if you think the 140K is uncompetitive in a global market, just wait for the inflation to kick in like seen in other socialist countries (e.g. Venezuela). Now you're completely screwed.... cheers Government!

 

[RupieDupie]

And what about the 1M dollar bank loan debts of home owners and investors? If you've crashed the market overnight you've effectively wiped millions in assets from everyday Australians. Or would you suggest further Goverment intervention?

There's a reason why capalist countries keep Goverments out of markets. A market based on supply and demand is predictable and relatively safe for investors. In a socialist state the rules can and often do change mid-flight, causing great uncertainty for investors. This is one reason (but not the only reason) why you typically see massive economic recessions in socialist countries. And if you think the 140K is uncompetitive in a global market, just wait for the inflation to kick in like seen in other socialist countries (e.g. Venezuela). Now you're completely screwed.... cheers Government!

Free market has already failed. Building houses to meet demand isn’t socialism, would you describe the car industry as socialist?

 

[RupieDupie]

And what about the 1M dollar bank loan debts of home owners and investors? If you've crashed the market overnight you've effectively wiped millions in assets from everyday Australians. Or would you suggest further Goverment intervention?

There's a reason why capalist countries keep Goverments out of markets. A market based on supply and demand is predictable and relatively safe for investors. In a socialist state the rules can and often do change mid-flight, causing great uncertainty for investors. This is one reason (but not the only reason) why you typically see massive economic recessions in socialist countries. And if you think the 140K is uncompetitive in a global market, just wait for the inflation to kick in like seen in other socialist countries (e.g. Venezuela). Now you're completely screwed.... cheers Government!

If you look at your car, if all car manufacturers do not make cars next week your car will be worth more - Oh noes! That can only mean... God no! Look out everyone the Communists are in the car industry! Inflation! Call the police, fire brigade and other assorted emergency service units, the Communists have integrated themselves into Capitalist industry...!”

 

[Funkalicous]

Free market has already failed. Building houses to meet demand isn’t socialism, would you describe the car industry as socialist?

You will have to explain how the housing market has failed (I'm guessing that's what you're referring to when you said "free market"). The only "crises" in Australia is happening in Sydney and Melbourne, and that has a direct link with the fact that 2 out of every 3 immigrants are choosing to live in those 2 cities. That's an unprecedented growth in population. If the Government builds houses with the intention of selling them for $160K then that puts them into competition with current home owners, investors and everyone else that has a stake in the housing market. Government's duty is to provide security and a level playing field for its citizens, not compete with them.

 

[RupieDupie]

You will have to explain how the housing market has failed (I'm guessing that's what you're referring to when you said "free market"). The only "crises" in Australia is happening in Sydney and Melbourne, and that has a direct link with the fact that 2 out of every 3 immigrants are choosing to live in those 2 cities. That's an unprecedented growth in population. If the Government builds houses with the intention of selling them for $160K then that puts them into competition with current home owners, investors and everyone else that has a stake in the housing market. Government's duty is to provide security and a level playing field for its citizens, not compete with them.

How ironic, when median income earners (not welfare recipients - the people who do most of the work in the society) cannot compete against investors and people with two houses it is called Capitalism but when people with two houses cannot have $1M value for both these houses because other people need places to live it is called Communism. How come the government isn’t stepping in to provide security and a level playing field for median income workers?

It has failed because there is a demand that cannot be met (and for an essential commodity) in the open market.

 

[Funkalicous]

How ironic, when median income earners (not welfare recipients - the people who do most of the work in the society) cannot compete against investors and people with two houses it is called Capitalism but when people with two houses cannot have $1M value for both these houses because other people need places to live it is called Communism. How come the government isn’t stepping in to provide security and a level playing field for median income workers?

It has failed because there is a demand that cannot be met (and for an essential commodity) in the open market.

You're making the mistake of anecdotally applying the problems unqiue to Sydney and Melbourne to the broader Australia. In my own backyard we've only just seen some growth comimg back out of a very lean period beginning with the GFC. I'm an owner/occupier on a middle income supporting a young family. Pretty typical situation up here to be honest.... We also see reasonable pay increases up here just by the way... Unfortunately the Government has let citizens down in Sydney and Melbourne by allowing too high a level of immigration, often skilled, that has moved in and priced the younger generation out of the market. Now so long as citizens have the right to own private property, sellers (citizens) will always sell an asset for what the market is willing to pay. Even if the Government sells you a property for 160K what's stopping the next owner from pricing the property back to its market value that's on a supply and demand equilibrium? Eventually the Government will run out of properties that it can sell off, effectively exiting the market. Unless Governments never really lose ownership of properties and citizens lose the right to own private property, AKA socialism.

 

[Howard Littlejohn]

Depends what you consider rich people?

Owning shares or a property and being a wage earner doesn't make a person rich yet many seem to think that it does because they still see shares or property as the domain of the rich which really isn't the case these days.

Actually owning property is more the domain of the better off (not necessarily "rich") than ever. That's why home ownership is at all time lows across almost every age group.
Shares, not so much, thanks to compulsory superannuation and online trading accounts. But outside of super, its still only the better off who have the money above rent and groceries to actually invest.