Talking Politics

[Baloo]

I'd love to see this government tackle the middle class welfare / entitlement problem we have. But if the ALP weren't brave enough to do it I doubt the Libs are.

 

[Hugo]

I'm always surprised that people expect the government to keep them in their retirement.

The below quote from Christine Milne is reflective of this type of thinking.

"Apart from asking people, especially those who've worked in a physically demanding jobs all their lives to keep working until they're 70 - if they can't they'll have to go onto New Start which won't in any shape or form be able to support them," she said

 

[KnightersRevenge]

I'm always surprised that people expect the government to keep them in their retirement.

The below quote from Christine Milne is reflective of this type of thinking.

"Apart from asking people, especially those who've worked in a physically demanding jobs all their lives to keep working until they're 70 - if they can't they'll have to go onto New Start which won't in any shape or form be able to support them," she said

What is your prescription Huge?

 

[AngryAnt]

I'm always surprised that people expect the government to keep them in their retirement.

The below quote from Christine Milne is reflective of this type of thinking.

"Apart from asking people, especially those who've worked in a physically demanding jobs all their lives to keep working until they're 70 - if they can't they'll have to go onto New Start which won't in any shape or form be able to support them," she said

They do expect it. Currently it's the policy and has been for many many years, so not sure why you are surprised that people "expect" it. The quote from Milne is around the retirement age, not about whether the old age pension is a good or bad thing. Do you really expect 70 year olds to pound the pavement looking for work?

 

[Rosy]

I'm always surprised that people expect the government to keep them in their retirement.

....

They have every right to expect it. It's the system they've grown up under. They can't suddenly put super aside to support themselves in their retirement. It wasn't an option for most of their working lives. Can't believe people would have issues with old age pensioners but not with massive pay cheques handed out for people to have babies. The retirees some are down on actually paid to raise their families themselves. What a novel idea.

 

[bullus_hit]

They have every right to expect it. It's the system they've grown up under. They can't suddenly put super aside to support themselves in their retirement. It wasn't an option for most of their working lives. Can't believe people would have issues with old age pensioners but not with massive pay cheques handed out for people to have babies. The retirees some are down on actually paid to raise their families themselves. What a novel idea.

I wonder if these cuts extend to the extraordinarily generous pension scheme afforded to politicians? It's just so typical of the conservatives to trample on those less privileged, amazing how a AAA rated country is suddenly becoming the new Greece, the spin of Hockey knows no bounds. But I doubt this will wash well the general electorate, we are an aging population and many will be affected. All this indicates political poison to me. Whoever came up with the idea to spruik unaffordable maternity leave whilst taking a sledgehammer to pensions is either incredibly dumb or worse, so ideologically driven that public sentiment no longer matters. Governing for all Australians couldn't be further from the truth.

 

[Legends of 2017]

I wonder if these cuts extend to the extraordinarily generous pension scheme afforded to politicians?

This is what I'm interested in finding out, since hockey said the pain should be shared by ALL.
Won't be holding my breath though

 

[Hugo]

What is your prescription Huge?

Planning and personal responsibility for a start. I understand for many there is simply no way for them to save enough to be self funded but the less reliant on gov't we are the better. Would leave more for those who are really in need.

I don't have an issue with old age pensioners, although the changes flagged (raising the pension age) are somewhat inevitable and have been mooted and investigated by both parties. Funding the pension with an ageing population that is living longer is a big issue.

Agree with others that those in physically demanding jobs would need more support and assistance to continue in the workforce in some capacity. Mature age employment would defnitely require planning and resources.

This is a good article on the issue.

http://www.smh.com.au/comment/before-raising-the-pension-age-to-70-tackle-discrimination-among-employers-20131204-2yr34.html

 

[Wildride]

So the levy tax on high earners is not a broken promise because it's temporary, but the carbon tax was a broken promise, even though it too was temporary (moving to an ets)? :spin

 

[Hugo]

So the levy tax on high earners is not a broken promise because it's temporary, but the carbon tax was a broken promise, even though it too was temporary (moving to an ets)? :spin

I reckon there'll be a fair bit of silence on PRE in regards to the tax/levy on "high" income earners

 

[bullus_hit]

I reckon there'll be a fair bit of silence on PRE in regards to the tax/levy on "high" income earners

Really? 'High earners' to me would be the top 1% who generally pay less tax than Jo Blow because they are able to find loopholes in the system, this tax will hurt most people I would have thought. But it beckons the question, why were people so scared of a mining tax when it was the one area which could have been utilised without lowering the standard of living for the general population? Once again, people have been conned by a baseless scare campaign and now they are paying price. This is just another great big tax levy.

 

[Hugo]

Really? 'High earners' to me would be the top 1% who generally pay less tax than Jo Blow because they are able to find loopholes in the system, this tax will hurt most people I would have thought. But it beckons the question, why were people so scared of a mining tax when it was the one area which could have been utilised without lowering the standard of living for the general population? Once again, people have been conned by a baseless scare campaign and now they are paying price. This is just another great big tax levy.

It's a common cry, are you able to provide some evidence to support this statement?

Given it starts at $80,000 it will definitely impact on a lot of people but I would have thought many posters on this board would have approved of a revenue raising scheme/levy/tax that did not impact on lower income earners and hit some of those in receipt of middle calss welfare.

You think it should have started higher?

 

[K3]

It is the Libs sheltering their big business mates.

Mining tax targeted multi-billion dollar companies (largely not Australian) who are digging up our country
Carbon tax targeted, often, massive companies who were polluting the planet

This tax hits people who are earning less than what I would consider to be 'high income' levels. IMO high is $250k and up, not $80k.

 

[mld]

Given it starts at $80,000 it will definitely impact on a lot of people but I would have thought many posters on this board would have approved of a revenue raising scheme/levy/tax that did not impact on lower income earners and hit some of those in receipt of middle calss welfare.

Not at all. I'd rather that the middle class welfare was simply scrapped.

 

[Hugo]

Not at all. I'd rather that the middle class welfare was simply scrapped.

I agree. But plenty of people in receipt of this type of benefit will be impacted.

 

[Hugo]

This tax hits people who are earning less than what I would consider to be 'high income' levels. IMO high is $250k and up, not $80k.

The stats around income levels/tax etc are easily available on the ATO website.

Not sure if Bullus is aware but in 2009-2010 only 1% (91K) of individuals (9.1M) who lodged tax returns by 31st Oct 2011 had a taxable income of over $264,000. And these people (those with taxable income of over $264,000) paid 17% of total tax paid by individuals - $20.5B of $120.3B collected. Doesn't necessarily coincide with the statement about them paying less tax than Joe blow.

Only 18% of the 9.1M had taxable incomes over $80,000. But these 18% paid $70.3B or 57% of the tax take from individuals.

 

[bullus_hit]

It's a common cry, are you able to provide some evidence to support this statement?

Given it starts at $80,000 it will definitely impact on a lot of people but I would have thought many posters on this board would have approved of a revenue raising scheme/levy/tax that did not impact on lower income earners and hit some of those in receipt of middle calss welfare.

You think it should have started higher?

The poor are getting slammed too with welfare cuts and the like but my original point stands, the mining tax in it's original form would have been a far better solution, slapping a levy on middle class Australia merely exacerbates an already ominous income divide. But of course Tony Abbott has a mandate to protect his rich mates at the expense of the general population.

The stats around income levels/tax etc are easily available on the ATO website.

Not sure if Bullus is aware but in 2009-2010 only 1% (91K) of individuals (9.1M) who lodged tax returns by 31st Oct 2011 had a taxable income of over $264,000. And these people (those with taxable income of over $264,000) paid 17% of total tax paid by individuals - $20.5B of $120.3B collected. Doesn't necessarily coincide with the statement about them paying less tax than Joe blow.

Only 18% of the 9.1M had taxable incomes over $80,000. But these 18% paid $70.3B or 57% of the tax take from individuals.

This is declared income, there's plenty of ways to hide earnings - negative gearing, superannuation concessions, ploughing money into one's primary residence, setting up dummy companies, deferring capital gains tax, dividend franking and so on. We are fast becoming a clone of the US when it comes to income inequality and as Warren Buffet put it, there is simply no justification for the wealthy to pay a lower tax rate than the middle class. The rich are getting richer, the poor are getting poorer, those are the cold hard facts.

It is the Libs sheltering their big business mates.

Mining tax targeted multi-billion dollar companies (largely not Australian) who are digging up our country
Carbon tax targeted, often, massive companies who were polluting the planet

This tax hits people who are earning less than what I would consider to be 'high income' levels. IMO high is $250k and up, not $80k.

Agree, and this would apply to roughly 1% of the population who's median income is in excess of 500k a year. At a very minimum, this group should exempt from the excessive 26 billion dollar maternity leave scheme. I just find the Abbott government completely out of touch with a fair and reasonable Australia, it's dogma in it's worst form and I'm betting the electoral backlash will be savage.

 

[Ian4]

Given it starts at $80,000 it will definitely impact on a lot of people but I would have thought many posters on this board would have approved of a revenue raising scheme/levy/tax that did not impact on lower income earners and hit some of those in receipt of middle calss welfare.

You think it should have started higher?

yes.

while there are probably better ways to raise revenue than this, i must admit i am not 100% against this tax... i just don't like that it kicks in at 80k.

Not at all. I'd rather that the middle class welfare was simply scrapped.

yes, yes and yes. no more handouts to families thankyou.

 

[Hugo]

This is declared income, there's plenty of ways to hide earnings - negative gearing, superannuation concessions, ploughing money into one's primary residence, setting up dummy companies, deferring capital gains tax, dividend franking and so on. We are fast becoming a clone of the US when it comes to income inequality and as Warren Buffet put it, there is simply no justification for the wealthy to pay a lower tax rate than the middle class. The rich are getting richer, the poor are getting poorer, those are the cold hard facts.

You do understand negative gearing actually involves risk? I think you'll find a few properties on the market if interest rates were to increase a few %.

Superannuation concessions are available to all. (salary sacrifice, transition to retirement pensions) and some concessions (the co-contribution) are only available to low income earners. The more people that can end up self-funded in retirement the better.

Ploughing money into one's primary residence - not sure how that benfits one from a tax perspective. One of the smartest decisions you can make is to pay as much off your home loan as quickly as possible. Interest on primary residences are not tax deductible, nor are payments on your mortgage.

Setting up dummy companies - plenty of dodgy operators did exploit this (phoenix companies I think is the term), but rules have been tightened surrounding debts to the ATO for liquidated companies (transferring some liabilities to Directors personally) so hopefully this type of behaviour is reduced. Most companies are set up for legal/liability/asset protection reasons through which people run businesses.

Deferring CGT - there are some pretty generous concessions for small business owners. Some involve deferring CGT (in some circumstances such as re-investing the proceeds of business sales into new businesses) whilst some actual reduce CGT to $0 (small business retirement exemption). But there are conditions around these exemptions.

Do you understand how dividend franking works? Companies pay tax on profits and can pay dividends to shareholders from these profits. Shareholders effectively get a credit for the tax paid by the company and declare the dividend and imputation credit as income. In many cases they may be required to pay some further tax.

In regards to your comments on tax rates do you understand how they work? Not sure how the wealthy pay a lower tax rate than those on lower incomes. Don't agree with your cold hard facts.

BTW I agree that the Libs PPL scheme should be scrapped, as should other beneifts that go to those that don't necessarily need them (some FTB payments) and that Abbott has been poor in his first year.

 

[bullus_hit]

You do understand negative gearing actually involves risk? I think you'll find a few properties on the market if interest rates were to increase a few %.

Part of the reason we have a property bubble is that investors have saturated the market, such a policy has forced first time buyers out of the market. We now have a whole generation who will never get the opportunity to own a home. Whether there are risks involved is irrelevant, what we are seeing is an entrenchment of a class system. What makes it worse is that many investors are from overseas, government policy on both sides of the spectrum has basically decided to sell out Australian sovereignty.

Superannuation concessions are available to all. (salary sacrifice, transition to retirement pensions) and some concessions (the co-contribution) are only available to low income earners. The more people that can end up self-funded in retirement the better.

Yes it benefits all but for those in the top tier claim the lions share of the benefits. In 2012-13 the top 5 per cent of contributors received 20.3 per cent of contribution concessions. The top 1 per cent received 5.3 per cent of contribution concessions. The Coalition have also indicated they plan to scrap the super tax offset for low-income earners, which effectively targets 3.6 million Australians on salaries of $37,000 or less.

Ploughing money into one's primary residence - not sure how that benfits one from a tax perspective. One of the smartest decisions you can make is to pay as much off your home loan as quickly as possible. Interest on primary residences are not tax deductible, nor are payments on your mortgage.

Nothing wrong with paying off your mortgage but given this primary asset is immune from means testing, it then becomes a great place to park all your money without impairing your ability to claim government benefits.

Setting up dummy companies - plenty of dodgy operators did exploit this (phoenix companies I think is the term), but rules have been tightened surrounding debts to the ATO for liquidated companies (transferring some liabilities to Directors personally) so hopefully this type of behaviour is reduced. Most companies are set up for legal/liability/asset protection reasons through which people run businesses.

All valid points but the Abbott government are planning to eradicate all the supposed 'red tape' when it comes to business operations. No details have been released as yet but one can only assume that there will be more tax evaders, not less. I hope I'm wrong but the manner in which consumer protections are being shelved at the behest of the financial sector is also a worrying sign. Then there's the mysterious tax write-off for Rupert Murdoch who owed the tax office 700 million, maybe that's just the going rate for the media junk squad to squeal about ditching the witch & dressing Kevin Rudd up in some Nazi garb. By the way, News corp pay about 10% tax and Warren Buffett even went public demanding that he be taxed more. I find it amazing that you cannot acknowledge that the uber wealthy are also uber smart at finding loopholes in the system. That to me is classic head in the sand stuff.

Deferring CGT - there are some pretty generous concessions for small business owners. Some involve deferring CGT (in some circumstances such as re-investing the proceeds of business sales into new businesses) whilst some actual reduce CGT to $0 (small business retirement exemption). But there are conditions around these exemptions.

Once again, we find a great vehicle to avoid paying tax. This also ties in with the dummy company paradigm which allows many to simply rinse their profits away in loss making subsidiaries. Highly paid accountants are highly paid because they find ways to help their clients avoid paying tax. Joe Blow usually isn't privy to such intricacies, that's just a fact of life. As for fines and other deterrents, most are but a drop in the ocean when the curtain finally falls. Even the dodgiest operators are usually back on their feet after a brief hiatus. I don't know what the answer is but what I do know is that the income divide is becoming more pronounced. We aren't in the realms of the US yet but we are catching up at a rate of knots.

Do you understand how dividend franking works? Companies pay tax on profits and can pay dividends to shareholders from these profits. Shareholders effectively get a credit for the tax paid by the company and declare the dividend and imputation credit as income. In many cases they may be required to pay some further tax.

No need to get all high & mighty on me like I'm a financial illiterate. I know fully well how franking works and I also know fully well that it's used as a method to offset capital gains. Buy in prior to a company going ex-dividend and then sell at a loss, it's one of the oldest tricks in the book.

As for my cold hard facts about income distribution, are you honestly suggesting the gap is narrowing? Seems to me you are blind to the realities of a world where the rich are taking more than their fair share & the poor are being left behind. Maybe I'm just being a little harsh on the likes of Gina Rinehart and her modest 28 billion dollars. She's obviously stretched at the moment otherwise she wouldn't be needing $2 a day Africans to do the heavy lifting. Silly me, I'm just so out of touch, let's just tax people on 80k instead.