What is wealthy?

[Nuggs Bunny]

For all the whinging about the burdensome tax rates for the rich in Australia, the ones who typically pay the highest portion of their income in tax are the asset-poor middle class who are on a PAYG scheme. When you're well-off enough to afford to make use of tax shelters which appreciate in value over time, like a negatively geared investment property, your tax rate is substantially less than what your true income is.

 

[nut]

For all the whinging about the burdensome tax rates for the rich in Australia, the ones who typically pay the highest portion of their income in tax are the asset-poor middle class who are on a PAYG scheme. When you're well-off enough to afford to make use of tax shelters which appreciate in value over time, like a negatively geared investment property, your tax rate is substantially less than what your true income is.

And they are the people who are pushing asset prices up….

But who actually wins….. it’s always the Banks.

Forget taxes….. the problem is how money is actually created.

 

[Bombermania]

Many people confuse wealthy and rich, being on a high income can make a person rich, but if that person has to go to work they are not wealthy. A wealthy person's money goes to work for them.

A wealthy person can walk into any high end fashion boutique, and buy without looking at the price tag, or can transfer large amounts of money with a private banker on call 24/7.

 

[liz]

Many people confuse wealthy and rich, being on a high income can make a person rich, but if that person has to go to work they are not wealthy. A wealthy person's money goes to work for them.

A wealthy person can walk into any high end fashion boutique, and buy without looking at the price tag, or can transfer large amounts of money with a private banker on call 24/7.

Except a lot of that comes down to lifestyle choices. I have zero interest in walking into a high end fashion boutique and buying anything, whether or not I take a peek at the price label. Or owning several flash cars, or flying first class around the world.

So are the assets I would need to be considered wealthy be different to those someone with frivolous lifestyle desires?

 

[Seeds]

For all the whinging about the burdensome tax rates for the rich in Australia, the ones who typically pay the highest portion of their income in tax are the asset-poor middle class who are on a PAYG scheme. When you're well-off enough to afford to make use of tax shelters which appreciate in value over time, like a negatively geared investment property, your tax rate is substantially less than what your true income is.

Not all high income earners negative gear homes (cos some are smart enough to realise its a really dumb gamble that has paid off historically because of high price rises but will eventually destroy those when it prices go flat for a while). Your analysis also doesnt account for means tested services which are a huge adjustment in terms of child care. They also dont account for capital gains discounts which benefit older people over younger people.

The people who unfairly pay too much tax are high income earners under 40 who earn all their income through wages and spend it all on childcare and expensive housing in inner cities cos thats where most of the high income wage based jobs are. Although work from home is slowly changing that equation thankfully.

 

[Chief]

expensive housing in inner cities cos thats where most of the high income wage based jobs are

Public transport?

 

[Seeds]

Income allows you to accumulate assets and reduce liabilities. They are linked. Hence why a company has a P&L and balance sheet to measure fin performance.

Yes it does. But its the assests that make you wealthy. Income is a means to wealth. Its not wealth itself.

 

[Seeds]

Public transport?

What about it? People catch buses , trains and trams in their inner city houses to their place of work.

 

[Chief]

What about it? People catch buses , trains and trams in their inner city houses to their place of work.

The immense urban sprawl of Melbourne kind of means they don't HAVE to spend it on inner-city housing.

Housing prices being a factor of bad planning and wealth concentration, anyway.

UK reports showing large housing builders slow down projects when they look like causing prices to flatten or drop. They share non-public pricing amongst a market oligopoly.

The same happens here, but I don't think we have that volume and concentration yet.

 

[Seeds]

The immense urban sprawl of Melbourne kind of means they don't HAVE to spend it on inner-city housing.

Housing prices being a factor of bad planning and wealth concentration, anyway.

UK reports showing large housing builders slow down projects when they look like causing prices to flatten or drop. They share non-public pricing amongst a market oligopoly.

The same happens here, but I don't think we have that volume and concentration yet.

But why should high income earners live further from their work then other people? Studies have shown that having a long daily commute is one of the clearest drivers of unhappiness.

 

[Chief]

But why should high income earners live further from their work then other people? Studies have shown that having a long daily commute is one of the clearest drivers of unhappiness.

If they want cheaper rent?

But that's a band aid. Better to work on reducing the attractiveness of buying up properties to rent out. Work on breaking up cartels and unfair rental situations.

 

[kickazz]

Pretty much everyone in Australia is wealthy, but I know we don't really care to compare ourselves with poorer countries. We are wealthy but things are expensive.

But I'll say this - if you were given 10 random people in the world that you could switch places with from a wealth perspective, I can almost guarantee that everyone on here would opt to not switch at all.

 

[kickazz]

I kind of question why people have $10 million dollar homes.

Quantitative easing.

 

[Chief]

Pretty much everyone in Australia is wealthy, but I know we don't really care to compare ourselves with poorer countries. We are wealthy but things are expensive.

Well, if we could have a country where beer costs a dollar a pint but you have the same services and job opportunities, great.

But distribution would mean a lot of people working for $2 an hour and the people in nice houses telling them to work harder.