Who deserves a tax cut? Sqotty's people working hard in difficult jobs on $200k or more.

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May 2, 2007
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I am one of those people. there are no loopholes. No deductions.

And the tax advice from experts is that there are no loopholes and deductions.

I pay tax today on super i can’t touch for 30 years. I pay full child care fees while everyone else I know gets massive subsidies.

it’s fake news that workers on high incomes avoid paying tax. We don’t. At least not in this country.

high income owners on 200 plus thousand a year pay the same marginal tax rate as those earning 20-30 million a year.


the People who can avoid paying their full extent of taxes are the extremely rich Capital owners. Not the high income workers.
It's the vibe.
 

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Bestbird

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I am one of those people. there are no loopholes. No deductions.

And the tax advice from experts is that there are no loopholes and deductions.

I pay tax today on super i can’t touch for 30 years. I pay full child care fees while everyone else I know gets massive subsidies.

it’s fake news that workers on high incomes avoid paying tax. We don’t. At least not in this country.

high income owners on 200 plus thousand a year pay the same marginal tax rate as those earning 20-30 million a year.


the People who can avoid paying their full extent of taxes are the extremely rich Capital owners. Not the high income workers.

I use to manage an executive payroll and many were claiming a 221d tax variation to reduce there tax to a fixed percentage
 
most people think a rich person is someone who earns triple of what they do At their peak wage.

someone on the median income thinks somone earning 200 thousand is rich. Likewise someone on 200 thousand thinks someone earning 600 thousand is rich.


what income do you think is rich?
Dunno mate. I am sure there is a complicated definition that I would agree with.

"On 200k" or "on 600k" isn't really a good definition. "Rich" is not really based on wage. The richest guy I know once had about $200 in his bank account, but several properties on the go. His income from one year to the next would fluctuate wildly but he was still rich. He is now super-rich, like, a few hundred million bucks or so.
 
Sep 15, 2007
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Dunno mate. I am sure there is a complicated definition that I would agree with.

"On 200k" or "on 600k" isn't really a good definition. "Rich" is not really based on wage. The richest guy I know once had about $200 in his bank account, but several properties on the go. His income from one year to the next would fluctuate wildly but he was still rich. He is now super-rich, like, a few hundred million bucks or so.
Exactly. Wealth isn’t determined by income. Yet for some reason we only tax income. Not wealth.

this discriminates against people who create all their wealth themselves (as compared to those who inherit) and it also discriminates against the young who have no starting assets.
 

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Nov 14, 2012
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Exactly. Wealth isn’t determined by income. Yet for some reason we only tax income. Not wealth.

this discriminates against people who create all their wealth themselves (as compared to those who inherit) and it also discriminates against the young who have no starting assets.

Yes.

Income is quite often determined by the capacity to derive rents from capital.

The differential tax rates applied to income derived from gain on capital is part of the problem, but the main issue for me is the proportion of returns directed to capital rather than creative or innovative labour.
 
Exactly. Wealth isn’t determined by income. Yet for some reason we only tax income. Not wealth.

this discriminates against people who create all their wealth themselves (as compared to those who inherit) and it also discriminates against the young who have no starting assets.

Absolutely

I’m stunned so many are adverse to wealth taxes

We desperately need it



And we should have lower income taxes and encourage wealth creation



Changing the mindset of supporting wealth creation and penalising wealth hoarding is a challenge
 
Absolutely

I’m stunned so many are adverse to wealth taxes

We desperately need it



And we should have lower income taxes and encourage wealth creation



Changing the mindset of supporting wealth creation and penalising wealth hoarding is a challenge
whats the point of creating wealth if you can't save it for when you may not be able to earn - though I note the thresholds you have proposed do allow for that ($5 million in assets iirc)

the other is that it encourages spending which both activates economy (good) but also then overheats economy leading to inflation as well.
 
Sep 15, 2007
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Absolutely

I’m stunned so many are adverse to wealth taxes

We desperately need it



And we should have lower income taxes and encourage wealth creation



Changing the mindset of supporting wealth creation and penalising wealth hoarding is a challenge
The problem is too many people think wealth tax is an additional tax On top of incomes taxes and are thus automatically against it. instead it should be marketed as a tool to reduce income taxes. A tool to reduce the overall tax upon workers.
 
The problem is too many people think wealth tax is an additional tax On top of incomes taxes and are thus automatically against it. instead it should be marketed as a tool to reduce income taxes. A tool to reduce the overall tax upon workers.
Yep

simple examples for me:

1) Andrew Forrest earns $2B but puts his earnings into Mindaroo (a charity) and pays no tax on $2B. He also gets FMG to pay for "their" plane, which only he uses.

This is pulling the piss.

If he has $30B in assets, a wealth tax of 30% on a 6% return on the $30B should be applied. Why 6%, that's about what he would get on dividends from a bank stock. $30B x 6% is $1.8B. 30% of $1.8B is $540m.

Now on his income, if he were to pay 30% on his $2B in income, his tax would be $600m. He has already paid $540m thus his additional tax would be only $60m.

In this example, this sets a floor as how much he can mitigate tax.

2) Apply the same concept on foreign investment in Oz, you mitigate transfer pricing for the same reason.

3) Apply the same concept on the 1 million vacant homes in Australia, and suddenly there is pressure on the landlords to lease out the property.

4) As you highlight, we could lower income tax rates just as we did with the introduction of GST
 
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whats the point of creating wealth if you can't save it for when you may not be able to earn - though I note the thresholds you have proposed do allow for that ($5 million in assets iirc)

the other is that it encourages spending which both activates economy (good) but also then overheats economy leading to inflation as well.



Please refer above as an example of how a well designed wealth tax avoids your concerns. A well designed wealth tax only sets an income tax floor and a floor based on a 12 year old financial wisdom of buying bank stocks.
 
Sep 15, 2007
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whats the point of creating wealth if you can't save it for when you may not be able to earn - though I note the thresholds you have proposed do allow for that ($5 million in assets iirc)

the other is that it encourages spending which both activates economy (good) but also then overheats economy leading to inflation as well.
you could say whats the point of working if they tax your income.

a wealth tax only taxes a small percentange of wealth. You still benefit from saving. And if that wealth was accumulated from income earned through work then you end up with more wealth because you kept more of your post tax income enabling you to save more.

if we move from income taxes to wealth taxes but keep the overall tax base the same then the people who benefit from a wealth perspective are:

workers, people who didnt have rich parents, young people who earn income but have little assets.

the people who are worse off with a wealth tax are:
inheritors, people who got lucky with capital gains on housing, income tax dodgers. Note i dont list old people as some old people may be better off depending on the source of their wealth.

i.e. Wealth taxes replacing income taxes provides more incentives for people to work and even up the playing field in terms of wealth accumulation. it creates both a richer and more just society. A more meritocratic society.
 
Please refer above as an example of how a well designed wealth tax avoids your concerns. A well designed wealth tax only sets an income tax floor and a floor based on a 12 year old financial wisdom of buying bank stocks.
Can you show us your proposed design?
 
Can you show us your proposed design?

1) Andrew Forrest earns $2B but puts his earnings into Mindaroo (a charity) and pays no tax on $2B. He also gets FMG to pay for "their" plane, which only he uses.
This is pulling the piss.


If he has $30B in assets, a wealth tax of 30% on a 6% return on the $30B should be applied. Why 6%, that's about what he would get on dividends from a bank stock. $30B x 6% is $1.8B. 30% of $1.8B is $540m.


Now on his income, if he were to pay 30% on his $2B in income, his tax would be $600m. He has already paid $540m thus his additional tax would be only $60m.
In this example, this sets a floor as how much he can mitigate tax.
 
1) Andrew Forrest earns $2B but puts his earnings into Mindaroo (a charity) and pays no tax on $2B. He also gets FMG to pay for "their" plane, which only he uses.
This is pulling the piss.


If he has $30B in assets, a wealth tax of 30% on a 6% return on the $30B should be applied. Why 6%, that's about what he would get on dividends from a bank stock. $30B x 6% is $1.8B. 30% of $1.8B is $540m.


Now on his income, if he were to pay 30% on his $2B in income, his tax would be $600m. He has already paid $540m thus his additional tax would be only $60m.
In this example, this sets a floor as how much he can mitigate tax.
i mean what is your floor for when a wealth tax kicks in
theres only one Andrew forrest, would if affect those with $500k? $1m
 
Sep 15, 2007
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i mean what is your floor for when a wealth tax kicks in
theres only one Andrew forrest, would if affect those with $500k? $1m
why does the floor need to be so high? Currently people who have zero wealth pay income tax. You could make the floor 50 thousand but with an extremely low wealth tax rate, or 100 thousand, or 1 million or 5 million but with a much higher starting wealth tax rate. The mechanics of the rates and levels are less important then the consideration of having a wealth tax in general.
 
why does the floor need to be so high? Currently people who have zero wealth pay income tax. You could make the floor 50 thousand but with an extremely low wealth tax rate, or 100 thousand, or 1 million or 5 million but with a much higher starting wealth tax rate. The mechanics of the rates and levels are less important then the consideration of having a wealth tax in general.
no. I need to know if I'm gonna get screwed before I decide to support or not
(mind you my initial impression was that it was going to be a flat tax off the prinicpal asset)
 

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