Preface: this thread has been prompted by a heated tangent on another thread (see http://www.ozpolitic.com/forum/YaBB.pl?num=1279677842/120) - and I wasn't sure whether it would be more apt to post it in General or Politicians Suck. For the sake of broadening the debate here, I shall post something similar to my initiating post on that other thread.


I, for one, am concerned about the increasingly-regressive nature of our taxation system on individuals and families - and the associated opportunity costs to the nation as a whole.

So, as a matter of interest, I suggest that people utilise the following tables to calculate the comparative WEATH-fare BENEFITS to middle-high income Aussies over the past decade (and quarter century)...

I suggest that people first calculate relative tax payable (for FY86, FY01, and FY10/11) on, say: -

* Diferent $25K income increments up to $150K, then jump by $50K to $250K, and then calculate the tax on $500K and $1M

* Or use the latest FY10 or FY11 thresholds for a more direct comparison

Then: -

Take a look at the current annual Newstart and Aged Pension rates...

IM(not-so)HO, the results will surprise most and alarm some - not least because the Libs are carrying on so much about the post-2007 Federal debt and deficit, despite being the proud architects of the biggest budget black holes in Australian history...


http://www.ato.gov.au/individuals/

Quote:



Of course, income tax breaks have been but one of many regressive taxation and WEALTHfare measures - and many middle-high income individuals now have an effective marginal tax rate of only 15%, thanks to the effectively-exclusive Superannuation Tax Concessions scam.

The past decade has been really good for some Aussies - and not others, eh!?

On that other thread, I suggested that we should restore a semblance of progressivity, by reintroducing one or more high-end thresholds - either 60% at, say, $250K or maybe 50% at $250K and 60% at $500K (and, given that the lower thresholds are remarkably close together, why not have additional threshold/s at, say, $750K, $1M, etc.!?).

Of course, taxation is but one of many socio-economic engineering tools but I think that it is time to address both the growing income and wealth inequity and other opportunity costs - especially in terms the Federal Govt's crucial roles in providing equitable access to affordable essential services and infrastructure and ensuring long-term socio-economic stability and environmental sustainability.

Discuss.

ParkesACT 2600

20’th Nov.2008
Submission for the tax Review

In the last four decades all the tax-changes have been for the benefit of the top 20% of the population.
e.g.
1)Death Duty abolished in the 1970’s
2)Estate Duty abolished 1979
3)Gift Duty abolished  1979
4) Probate abolished in the 1970-1980’s in all states
5)Huge tax concessions for super.
6) Last but not least, now tax-free super for the over sixties, if paid from a taxed super fund.
7)Tax rates have progressively been reduced
8)Dividend imputation introduced. When the company pays 30% tax and the shareholders receive the imputation credit, it is almost a zero numbers game, eg: company pays tax and the Government returns most, if not all back, to the shareholders.
How many countries have Dividend imputation?
The UK has recently abolished it.

The changes to the tax rules for super-pensions from taxed super for the over sixties must be really the icing on the cake.
Much of accumulated super assets have been accumulated with generous tax concessions, and at times no tax was paid in the accumulating stages; due to dividend imputations, negative gearing, etc.
Is there any country which has such generous provisions for the very rich?
As almost 78% of the people over the pension age receive some part of Centrelink pension, this people pay the highest tax rate, namely 40% in loss of Centrelink pension, plus marginal tax rate, if income is above the tax threshold.

The loss of Centrelink pension has increased from $0.40 in the dollar to $0.50 since this submission was made; e.g. the part-pensioners will pay for the recent increase of the age pension.

What should be the first priority in changing the tax system:
1)       Abolish all tax concessions for super and abolish the compulsory super contributions, increase the wages by the amount of the compulsory super, because the super was only granted to the workers to forfeit any wage increase at the time of introduction.
2)      Abolish all the means-testing of the age pension, but retain the tax offsets for seniors. The reason for the tax offsets is, that the aged are not able do certain tasks which a person of younger age can do and have to pay for that. The means test of the age pension is the meanest in the whole developed world. The Government just uses it to keep the pensioners just above the poverty, with no chance of the pensioners improving their conditions.
The compulsory super and all the tax concessions for super is turning Australia from a Democracy into a Plutocracy.

Equitist wrote on Jul 24^th, 2010 at 5:25pm:


and those bad precedents woudl be...

1) lower taxes
2) higher welfare
3) no debt
4) deficit
5) increased savings for retirement

and your problem with these is what? since we can manifestly afford them what is your problem - other than an ideological attachment to high taxes and punishment for high earners?

Quote:


Are you sure it is actually getting more regressive? Goods taxes are not new. Historically there have been a lot of them. Also, government spending is trending more 'progressive'. You cannot look at income tax alone. You have to look at the whole package. Your table also brushes over inflation. It would be more meanigful to quote the % of people in each bracket.

freediver wrote on Jul 24^th, 2010 at 6:07pm:


Geeze, FD, you don't ask for much...LOL

I really wish I could readily find the stats on the relative proportions of people in each tax bracket over time - but I suspect that our pollies have strongly vested interests in making such difficult to find...

For starters, I know for a fact, that the 'Median Income' of Aussie Adults has been slipping further and further below the headline 'Average (Full-Time) Wage' - it is currently remarkably close to the Minimum Wage - but we rarely hear of that figure from our pollies because it highlights the rapidly-growing inequality in our society and economy...

Yup, about 50% of all Aussie adults have annual incomes of the Minimum Full-Time Wage or less - FACT!

Clearly, that is not enough to them to live on, much less provide for their own retirement!

Curiously, tho': the Howard Govt (and probably the Labs since) always made its submissions to the annual Minimum Wage case based on the Median Wage rather than the headline Average (Full-Time) Wage...

Similarly, the determination of Child Support payments has revolved around Median and not the Average wage...

So, do you not find it strange, that we don't routinely hear the headline Median Income and Median Wage as well as the Minimum Wage and Average Wage!?

I digress...again...

Even allowing for inflation and welfare transfers, I am certain that our entire system has become far more regressive over the past quarter century - and that's without the various new and effectively-exclusive WEALTHfare payments introduced over the last decade in particular...

There have been a number of commentators (with different perspectives from all sides of politics) who have highlighted these regressive trends, in the past few years - including in recent weeks. I shall try to dig some of their articles up...

Equitist wrote on Jul 24^th, 2010 at 6:41pm:


and not a supported fact in sight...

longweekend58 wrote on Jul 24^th, 2010 at 5:51pm:


Crikey, Longy, don't let your fellow Libs catch you dogmatically denying that we have major, unprecedented, catastrophic, urgent and life-threatening Federal Govt Debt and Deficit problems!

And, no, I am not about punishing high income earners - rather I am concerned about the risks and opportunity costs of fiscally, socially and environmentally reckless policies.

Notably, since the turn of the century (in particular), our progressive tax and transfer systems have been stealthfully bastardised, by dogmatic and elitist short-term-thinkers - for the benefit of the very same elite few, whose income and wealth levels also benefitted disproportionately from the most recent extended boom.

Moreover, this has been at the expense of both the living standards of the majority of Australians and the ongoing conservation of our environment and the maintenance and upgrading of First World essential services and infrastructure.

Given the looming intergenerational and environmental crises, and associated budget strains, I believe we need to restore a semblance of scoio-economic equity and fiscal and environmental responsibility to our national budget.

Clearly, Longy, and despite your petty protests, you appreciate that such can and should be done without widespread pain - purely by restoring personal taxation levels closer to where they ought to have been left in the first instance...

longweekend58 wrote on Jul 24^th, 2010 at 6:47pm:


That is either a lie or an assumption - so I challenge you to prove it if you can!

As for your false claims about the absence of facts - ye and me both know that I have provided them on Yahoo previously and that I can and will find present same here in due course...