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Stage 3 tax cuts

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think positive Libra

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Joined: 30 Jun 2005
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PostPosted: Tue Oct 11, 2022 2:00 pm
Post subject: Stage 3 tax cutsReply with quote

<split from the "Are we on the brink of another recession?" thread: https://magpies.net/nick/bb/viewtopic.php?t=91231. Thanks, BBMods.>

David wrote:
while it's easy to understand the political reasons Albanese is clinging on to his promise to move ahead with Stage 3 tax cuts, it's kind of extraordinary to think that a Labor government might be cutting taxes for the wealthy while delivering austerity politics in other areas (with potentially even more pain to come down the track). Hopefully things aren't as bad as feared, and some common sense can win out.


Very glad my daughter locked in the interest rate on her house for 4 years! She bought it about 14 months ago!


re the tax thing, i had no idea whats what, so i googled it:

FROM THE GUARDIAN:
At present, Australia’s tax brackets look like this:

up to $18,200 – no tax
$18,201 to $45,000 – pay a 19% tax rate
$45,001 to $120,000 – pay a 32.5% tax rate
$120,001 to $180,000 – pay a 37% tax rate
$180,001 plus – pay a 45% tax rate
Under stage three, the tax brackets would look like this:

$18,200 – no tax
$18,201 to $45,000 – pay a 19% tax rate
$45,001 to $200,000 – pay a 30% tax rate
$200,001 plus – pay a 45% tax rate


so anyone on under $200k a year has received a break of some sort,
so my question for your question: who do you consider are "the wealthy"?

45k to 200k will pay the same rate, sounds huge but my eldest daughter in IT has been working post uni about 5 years, she will be eligible for a 6.5% tax break already. id hardly call Her wealthy.

taking inflation into consideration, average housing prices in victoria March this year $780k, NSW $1.177million, Her house is well under the average price, Shes starting small rather than having a big mortage. shes just inside the 37% level, and personally i think thats bullshit! the other in her first year is in the 32.5% bracket, personally i think there should be a 25% after $45K to maybe 90K. and the 45% should now kick in higher too.

and this is why people spend the money to get family trusts and things set up!

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David Libra

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Joined: 27 Jul 2003
Location: Andromeda

PostPosted: Tue Oct 11, 2022 2:20 pm
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The average yearly income for workers in Australia (including casual and part-time) is just under $70,000, and only 4% of Australians earn more than $156,000 a year. So yes, the wealthy are benefiting from this – particularly those in the $180,000–$200,000 bracket, who have had their tax rate reduced from 45% to 30%.

https://www.news.com.au/finance/economy/australian-economy/average-annual-earnings-for-working-australians-revealed-as-92000/news-story/2ddccfc55182b32b499c41fd236799d2

https://www.news.com.au/finance/money/wealth/census-data-reveals-how-many-aussies-are-earning-more-than-3k-a-week/news-story/119d36cfebcf557427411bc51155c015

And the cost of these changes to the budget (from the same link you're quoting above: https://www.theguardian.com/australia-news/2022/oct/09/the-stage-three-tax-cuts-what-are-they-how-do-they-work-and-why-do-they-exist) is almost a quarter of a trillion dollars.

This is the perplexing thing about all this: it would be wasteful budgetary policy at the best of times. But as it is, it's wasteful budgetary policy at a time when our economy seems at risk of considerable strain, which may well involve cuts to essential infrastructure and services and perhaps even welfare. It really is taking from the poor to give to the rich, and doing so at the worst possible time.

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think positive Libra

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PostPosted: Tue Oct 11, 2022 3:27 pm
Post subject: Reply with quote

didnt answer my question, what equates to wealthy in your mind? total worth? income?
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Skids Cancer

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Joined: 11 Sep 2007
Location: Joined 3/6/02 . Member #175

PostPosted: Tue Oct 11, 2022 4:12 pm
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David wrote:

The average yearly income for workers in Australia (including casual and part-time) is just under $70,000, and only 4% of Australians earn more than $156,000 a year. So yes, the wealthy are benefiting from this – particularly those in the $180,000–$200,000 bracket, who have had their tax rate reduced from 45% to 30%.



Sorry, that's way off. They've had their tax rate reduced from 45% to 30%, on up to, $20,000 of their taxable income.
So, the most anybody in that bracket can save in tax, is $3000 more than those on under $180,000.

I can also tell you that most people in that bracket, are working long and hard hours, in skilled positions and are far from 'wealthy', they deserve a break!

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David Libra

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PostPosted: Tue Oct 11, 2022 4:50 pm
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Don't forget the rate for $120,000 to $180,000 was 37% before. So if I'm reading that correctly the upper bracket's rate has gone from 45% to 30% for earnings above $180,000 and 37% to 30% for earnings between $120,000 and $180,000. So for someone on $200,000 a year that's a total saving of around $9075 a year in taxes. For someone on $50,000 a year, in contrast, the total annual tax cut is just $125. Four times the salary, eighty times the tax reduction. Nice if you can get it!

I don't buy into the mindset of the deserving rich and the underserving poor. Many people on relatively low incomes work damn hard in positions they've trained for. What's the average salary for an aged care worker, or a primary school teacher? Some corporate consultant or financial adviser taking in a six-figure wage is hardly a harder worker. They're just in a more lucrative industry. And they're already earning enough to live a far more affluent lifestyle, so even if I accepted that they "deserve" a break, they hardly need it any more than those struggling on a quarter of their wage.

think positive wrote:
didnt answer my question, what equates to wealthy in your mind? total worth? income?


One of the articles I posted above suggests that someone is rich if they're earning $156,000 a year or more. That sounds fair enough to me.

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stui magpie Gemini

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Joined: 03 May 2005
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PostPosted: Tue Oct 11, 2022 6:15 pm
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Earnings are relative. You don't need to disrespect people on low wages to also make the valid point that most people earning between $100-200k work frikken hard for that money.

1 example, an executive manager at a Metro health service would be getting between $200-300k, next level down $120-160k. For that, they hold responsibilities that have them working after hours and weekends. You don't get overtime in those roles, you don't get a nice neat 7.6 hour day where you can go home and switch off until your next shift.

I've worked with lots of people earning good money, when I was in health I was on $160k and not by any measure would I have been considered rich in reality.

All these tax changes do is compensate for bracket creep. You want people to be aspirational, want to improve their lot and earn more money. Tax brackets need to regularly move to reflect people's growing salaries not penalise them.

Having a 30% tax bracket for everyone between $45-200k then a hike to 45% for over $200k is fair to me.

If I was doing it I'd have 40% between $200-500k and 50% over that

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David Libra

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PostPosted: Tue Oct 11, 2022 7:52 pm
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I don't get a neat 7.6 hour day or get to switch off on evenings or weekends, and I'm on less than $50,000 at my main job. I'm not getting my violin out over that – I made a choice to work for an arts nonprofit and I know full well I could be earning two to three times as much doing the exact same job for a big company. But it is a reminder that wages very often bear little relation to how laborious your job is, how skilled you are or even the degree of responsibility you wield.

I totally agree with leaving room for aspiration and avoiding bracket creep. But the existing tax system hardly made that a problem, in my view. If anything, I'd like to see the tax rate going up to 75% for those on seven figures and some gradations in between. I don't think 45% for $180,000 is exorbitant at all.

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think positive Libra

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PostPosted: Tue Oct 11, 2022 8:15 pm
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So you reckon someone should only get 25% of their pay packet! I don’t care if it’s tom cruise, that’s bullshit! And you wonder why people find loop holes!

You say you choose to earn much less than you can, do you claim any benefits? Are you paying back your HECS bill? Why do you expect someone on a higher income to pick up your slack?

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David Libra

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PostPosted: Tue Oct 11, 2022 9:10 pm
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Not sure I understand your questions, TP. What slack are people with higher incomes picking up on my behalf, exactly?
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think positive Libra

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PostPosted: Tue Oct 11, 2022 10:53 pm
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So I wrote my answer, then deleted, we have done thus enough times.
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Last edited by think positive on Tue Oct 11, 2022 11:29 pm; edited 1 time in total
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eddiesmith Taurus

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PostPosted: Tue Oct 11, 2022 11:28 pm
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David’s figures of just 4% of people earning more than 156,000 is interesting and yet Labor think upsetting 4% of the population would be disastrous? How many of those would vote for them anyway?

Plus the 4% obviously includes those over 200,000 so the amount of people actually affected must be quite small? Hardly seems a vote loser to dump it?
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David Libra

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PostPosted: Wed Oct 12, 2022 12:54 am
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think positive wrote:
So I wrote my answer, then deleted, we have done thus enough times.


It’s news to me! I wasn’t sure we’d discussed my personal finances at length. Laughing

But if you’re curious about my HECS repayments, I’ve been slugged pretty hard last few years. I’m talking a couple of thousand in debt after each tax return that I have to spend the next twelve months paying off. My mistake is having two jobs and just being over the repayment threshold when they’re combined. Obviously I’m not crazy about the system regardless of how it affects me and would like to see it abolished.

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think positive Libra

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PostPosted: Wed Oct 12, 2022 4:44 am
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but you have the ability to earn more, and solve that problem quicker, and maybe get out of the renting cycle. yes you want a free education system, and cheap quality rent. nothing is free, someone pays for it, stop expecting others to foot the bill because you have chosen to work at a lower rate than you can.
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Skids Cancer

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Joined: 11 Sep 2007
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PostPosted: Wed Oct 12, 2022 6:26 am
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You use very selective sets of figures David.
Let's not forget, someone on $50k only pays $7k tax to start with and a person on $180k pays almost $60k.
The person on the higher income will also pay 250% more for Medicare, for the same service.

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pietillidie 



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PostPosted: Wed Oct 12, 2022 7:31 am
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Skids wrote:
You use very selective sets of figures David.
Let's not forget, someone on $50k only pays $7k tax to start with and a person on $180k pays almost $60k.
The person on the higher income will also pay 250% more for Medicare, for the same service.

Obviously; that's why Australia is not the Democratic Republic of the Congo. Or would you prefer to be a citizen of the Democratic Republic of the Congo?

David, you make the same mistake every time in that you conflate social policy with personal morality, which is silly. Morality is social and always and ever about the greatest good for the greatest number. And that means societies need a balance between incentive and broad-based productivity.

It's not about you and your guilt complex, nor the delusional twat who reckons he's so superior to you he deserves a palace and you a cardboard box, destroying the possibility of your children being productive and ultimately wrecking his own society and market.

It is, however, about trying to make the whole of society maximally productive and successful, and that takes a balance between access and possibility, as well as further incentive for the disproportionately successful.

Destroy the ability of lower-income people to succeed and have the hope of being successful, and they wreck society. Destroy the ability of the ambitious to achieve more by their own standards, and they turn to persecuting others and wrecking society.

Both directions make everyone worse off and wreck the whole.

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