# Should millionaires pay  the same % of tax as middle income taxpayers?



## basilio (12 May 2012)

Interesting idea from Warren Buffett/President Obama that proposes that if households earn $1m a year that have to pay tax at at least the rate that middle income earners are currently paying.

What they are suggesting is to cut through the creative accounting, special tax breaks, whatever and ensure that the wealthiest people in our society contribute to the tax base at least proportionally the same as middle income tax payers.

What do you think ?


> After comments from Mr Buffett that some millionaires paid a smaller percentage of their incomes in taxes than many middle-class families ”” he pays a lower effective tax rate than his secretary ”” the Obama administration has proposed the Buffett Rule.
> 
> The White House's website describes the rule that no household making more than $1 million should pay a smaller share of their income in taxes than middle-class families pay.
> 
> ...




Read more: http://www.theage.com.au/victoria/u...onaires-tax-20120511-1yil5.html#ixzz1ubUZAaL5


----------



## tech/a (12 May 2012)

*Re: Should millionaires pay  the same percentage of tax as middle income taxpayer?*



basilio said:


> Interesting idea from Warren Buffett/President Obama that proposes that if households earn $1m a year that have to pay tax at at least the rate that middle income earners are currently paying.
> 
> What they are suggesting is to cut through the creative accounting, special tax breaks, whatever and ensure that the wealthiest people in our society contribute to the tax base at least proportionally the same as middle income tax payers.
> 
> ...




*Why?*

These people generally employ many and take the risks of few.
Personally I generate massive taxes.

*Personal Tax
Company Tax
Payroll Tax
GST.
Land Tax *

Then each year I have to pay tax in advance.

Encourage growth and get more people involved in entrepreneurial enterprise and increase those paying these taxes

*Personal Tax
Company Tax
Payroll Tax
GST.
Land Tax *

Support them.
Dont tax them to death

_*If you created 1 more potential millionaire you'd gain far more potential tax than increasing the tax on 1 existing Millionaire---think about it!!*_


----------



## McLovin (12 May 2012)

Australia's tax system is not as skewed as America's. The middle class there do _all_ the heavy lifting. There are so many holes in the system that if you have enough money for lawyers you can cut your tax bill to almost nothing.

Having said that, my Mum will earn over $1m in fraked dividends this year and will pay zero in tax (obviously excluding tax paid by the company before the dividend). That came from her inheriting half my grandfather's estate, which again caused no tax to be paid on that transfer. By most definitions that would make her either wealthy or rich and yet she pays no tax. I think it's things like that that WB was talking about.


----------



## drsmith (12 May 2012)

McLovin said:


> Having said that, my Mum will earn over $1m in fraked dividends this year and will pay zero in tax (obviously excluding tax paid by the company before the dividend). That came from her inheriting half my grandfather's estate, which again caused no tax to be paid on that transfer. By most definitions that would make her either wealthy or rich and yet she pays no tax. I think it's things like that that WB was talking about.



Her tax has been paid at the corporate level. To tax at the corporate level and then at the individual level is double taxation.

As for the topic at hand, loopholes in income taxes should be removed and marginal rates lowered. The ideal would be a single rate of income tax the same as the corporate rate with a tax free threshold and a negative tax (welfare benefit) for incomes below the tax free threshold at the same rate.


----------



## McLovin (12 May 2012)

drsmith said:


> Her tax has been paid at the corporate level. To tax at the corporate level and then at the individual level is double taxation.




I understand that. But in the end, if she was working and earning that money PAYG her tax rate would be significantly higher than the 30% already paid. There are plenty of arguments as to why dividends should be taxed at the individual's marginal rate, but that's probably for another thread.

Not that I'm complaining.


----------



## prawn_86 (12 May 2012)

Personally i'm all for a flat (or severely flattened) tax. Say 2 or 3 brackets based on incomes, no other taxes, and no deductions. Would make things a lot easier and fairier, but put a whole ****e load of ATO staff and accountants out of jobs...

IE 0 - 20k = 0% tax
20 - 80 = 25% tax
80k + = 35% tax

Pure hypothetical figures but no creative accountancy, no other state (etc) taxes and thats that.

A gov should figure what they NEED (not want for pork barrelling) and then charge that and stick within that budget or need a referendum to increase (and explain why the need more) taxes


----------



## drsmith (12 May 2012)

McLovin said:


> I understand that. But in the end, if she was working and earning that money PAYG her tax rate would be significantly higher than the 30% already paid.



If her marginal rate of income tax is higher than the corporate tax rate, she would still pay the difference on a franked dividend.

This is after offsetting the inputation credits accumulated from the tax-free threshold and the marginal rate below 30% with the marginal rates above 30%.


----------



## drsmith (12 May 2012)

prawn_86 said:


> IE 0 - 20k = 0% tax
> 20 - 80 = 25% tax
> 80k + = 35% tax



The old DLP proposal was,
0 - 30k = -30% tax (effectively a welfare benefit for incomes below $30k).
30k+ = 30% tax (corporate tax rate).

It's debatable where the tax free threshold should be set, but, that combined with no deductions on salary income would really put a lot of ATO staff and tax accountants out of work.


----------



## McLovin (12 May 2012)

drsmith said:


> If her marginal rate of income tax is higher than the corporate tax rate, she would still pay the difference on a franked dividend.
> 
> This is after offsetting the inputation credits accumulated from the tax-free threshold and the marginal rate below 30% with the marginal rates above 30%.




All the shares are held by a private company of which she is the largest shareholder. Essentially, she only pays tax if she draws a dividend over the 30% marginal tax rate (I don't think she ever does). In effect, she pays a reduced rate of tax on any amount she chooses to save, whereas a PAYG employee does not have that luxury, outside of the super system.


----------



## McLovin (12 May 2012)

drsmith said:


> The old DLP proposal was,
> 0 - 30k = -30% tax (effectively a welfare benefit for incomes below $30k).
> 30k+ = 30% tax (corporate tax rate).
> 
> It's debatable where the tax free threshold should be set, but, that combined with no deductions on salary income would really put a lot of ATO staff and tax accountants out of work.




That last dollar from $29,999 to $30,000 will cost me $10k in tax.


----------



## drsmith (12 May 2012)

McLovin said:


> All the shares are held by a private company of which she is the largest shareholder. Essentially, she only pays tax if she draws a dividend over the 30% marginal tax rate (I don't think she ever does). In effect, she pays a reduced rate of tax on any amount she chooses to save, whereas a PAYG employee does not have that luxury, outside of the super system.



Clever lady.

Kerry Packer would be proud.

The problem here is the tax system. If the highest marginal income tax rate was the same as the corporate tax rate, there would be no underlying need to corporatise passive income to minimise tax.


----------



## medicowallet (12 May 2012)

It should apply to wages/salary only, as it CURRENTLY does.

Passive income is generated by investing money that was ALREADY subject to income tax.

So, the tax on the capital has already been paid for and the tax on the income is done at marginal tax rates anyway (assuming they are working)


What is all the fuss about?  The current system is VERY fair for low-middle income people.  Perhaps people should get out there, educate themselves or upskill and work insanely long hours to make the money the "lucky" have.  Instead they invest their efforts into whining and wailing. 

Companies are another matter, and yes, some Mickey Mouse companies (such as tradies subcontracting and writing off their personal use items are crap, or trustees to limit tax may be targets for reform)  I see NO problems in income splitting with trusts.  There is no problem with using super at the current rules not the new rules that don't affect politicians, just everyone else.

Smells of a broke labor to me.


In all, only the "mega rich" can arrange their affairs, anyone without 10s of millions really is no better off than joe blogs.


----------



## drsmith (12 May 2012)

McLovin said:


> That last dollar from $29,999 to $30,000 will cost me $10k in tax.



No, the tax free threshold would operate as it does now.

If you earn $30k, you pay no tax.
If you earn $40k, you pat $3k tax (30% of $10k ($40k-$30k))
If you earn $20k, you get a welfare benefit of $3k.

Starting at a welfare benefit of $9k at no income, you effectively contribute 30% of every dollar you earn, but you don't start paying tax until you earn over $30k and then only on that portion of income over $30k.


----------



## Calliope (12 May 2012)

Millionaires and their business corporations and the big banks should be hounded out of the country. They serve no purpose excect to fund the wealth to be re-distributed to "working families." They can be found living in luxury with their ill-gotten gains on the North Shore.


----------



## McLovin (12 May 2012)

drsmith said:


> Clever lady.
> 
> Kerry Packer would be proud.




I think clever lawyers and accountants is more apt.

The company was set up in the 1950's and was designed to get around the death taxes that existed at the time (the famous case was by the Robertson choclate family), hence the structure is probably a little bit out of date (a trust would be somewhat cleaner) but it works well enough. Iirc, its historical state registration was in the ACT, which was again done for some tax benefit, don't ask me what though.



drsmith said:


> The problem here is the tax system. If the highest marginal income tax rate was the same as the corporate tax rate, there would be no underlying need to corporatise passive income to minimise tax.




I agree. That's often highlighted as a key issue, the spread between individual and company taxes. Personally, I think individual taxes are too high in Australia, not so much at the top but in the middle, but I doubt we are going to be seeing any tax cuts for the forseeable future. Australia has a high cost of living and wages have been rising fast, which has pushed a lot of people in to rates that are not equitable for what they are earning, given CoL pressure.


----------



## McLovin (12 May 2012)

drsmith said:


> No, the tax free threshold would operate as it does now.
> 
> If you earn $30k, you pay no tax.
> If you earn $40k, you pat $3k tax (30% of $10k ($40k-$30k))
> ...




Oh ok, I understand. You had me worried for a bit there.


----------



## Glen48 (12 May 2012)

If every one paid more tax nothing would change the feds would only spend more and most likely get deeper into debt as they know they have a bigger taxpayer funded income. 
WB tax would only fund the USA Fed's over draft for a short time and USA is paying 2.5 Million a second interest so they are going to need a lot of WB's.
More money for the OZ Feds in both partied would mean more pink bats, (inset loony ideas here ).
 Avoid pay any more than you have to and protect your wealth the feds are always working on ideas to take it from you with super being high on the list.


----------



## drsmith (12 May 2012)

Broad based tax reform can only be achieved by strengthening the tax base.

Deductions from salary income (including negative gearing) could potentially be eliminated by incremental change over time, for example, by reducing the percentage of total deductions a taxpayer can claim from one year to the next.

Simple example:

Current: 100% of deductions.
year 1: 80% of deductions.
Year 2: 60% of deductions.
Year 3: 40% of deductions.
Year 4: 20% of deductions.
Year 5: no deductions.

Thus, after 5 years, deductions would be eliminated from salary income. A combination of redirection into reduced marginal rates and the taper above would would help eliminate any sudden post tax income disruption. To that end, the period need not necessarily 5 years. It could be longer if desired.


----------



## johenmo (12 May 2012)

Heck Yeah!!  And when I get there then the laws will suddenly become absurd and require instant change.


----------



## So_Cynical (12 May 2012)

prawn_86 said:


> Personally i'm all for a flat (or severely flattened) tax. Say 2 or 3 brackets based on incomes, no other taxes, and no deductions. Would make things a lot easier and fairier, but put a whole ****e load of ATO staff and accountants out of jobs...
> 
> IE 0 - 20k = 0% tax
> 20 - 80 = 25% tax
> ...




Agree with above..but would prefer my numbers.




 0 > 20k = 0% tax
 20 > 60K = 25% tax
 60 > 100K = 35% tax
 100k+ = 50% tax


----------



## VeryGreen (12 May 2012)

Homer: "Arrhhgg! Bear tax?! Let the bears pay the bear tax, I pay the Homer tax!"
Lisa: "No dad, you pay a HOME OWNER tax"


----------



## BradK (12 May 2012)

*Re: Should millionaires pay  the same percentage of tax as middle income taxpayer?*



tech/a said:


> *Why?*
> 
> 
> _*If you created 1 more potential millionaire you'd gain far more potential tax than increasing the tax on 1 existing Millionaire---think about it!!*_




It'll trickle down, hey?


----------



## Tyler Durden (12 May 2012)

medicowallet said:


> It should apply to wages/salary only, as it CURRENTLY does.
> 
> Passive income is generated by investing money that was ALREADY subject to income tax.




I agree. I think it's completely stupid to tax us on our wages, then tax the interest we receive on the wages we put in the bank! It's double taxation. What the F do they expect us to do with our money, put it under our bed?!?!


----------



## McLovin (12 May 2012)

Tyler Durden said:


> I agree. I think it's completely stupid to tax us on our wages, then tax the interest we receive on the wages we put in the bank! It's double taxation. What the F do they expect us to do with our money, put it under our bed?!?!




How's it double taxation? The principal isn't taxed only the interest.


----------



## medicowallet (13 May 2012)

McLovin said:


> How's it double taxation? The principal isn't taxed only the interest.




Yes, but it should not be taxed at a "guaranteed" rate being the average of Joe Bloggs or whatever.

If I choose to invest this and generate passive income, I should be able to minimise it in any way that anyone else could.  Just because marginal rate is higher, does not mean that passive income should be taxed at that if a vehicle is available to get it taxed at a lower rate.

So, what I am saying is, yup, keep taxing high income earners more for their incomes, but let high income earners do what they please with their investments..

I just cannot believe that the lower class whine about this, most of them pay zero tax or get a net benefit, whereas people in the highest marginal bracket get drilled.

The system is fine as it is, Labor just needs to spend our $$$ more wisely.


----------



## tech/a (13 May 2012)

*Re: Should millionaires pay  the same percentage of tax as middle income taxpayer?*



BradK said:


> It'll trickle down, hey?




????????????


----------



## BradK (13 May 2012)

What I was questioning was your assumption that millionaires beget millionaires ... the old Republican 'trickle-down effect' which says that if you cut taxes for the rich, they will create jobs and the benefits will 'trickle-down' to the lower classes. 

It was the mantra of the 1980s, became somewhat out of fashion in the 1990s, and has been shown to be completely ridiculous post-2008. 

It only plays among Republican audiences in the United States now. Its like one of those last little doctrines among the rich and the aspirational rich. 

It was famously sneered at by a New Zealand politician recently (I forget who) as the 'rich pissing on the poor'

Brad


----------



## Tyler Durden (13 May 2012)

McLovin said:


> How's it double taxation? The principal isn't taxed only the interest.




Yes but we must put our money _somewhere_ - and for most people that is in banks.

Imagine if you're the triad, you go to all the restaurants and say you're going to take a % of their earnings. Then you pretty much force them to store any leftover money in your safe, and you charge them a fee for doing so.


----------



## wayneL (13 May 2012)

McLovin said:


> How's it double taxation? The principal isn't taxed only the interest.




Because they are effectively taxing inflation.


----------



## wayneL (13 May 2012)

BradK said:


> It was famously sneered at by a New Zealand politician recently (I forget who) as the 'rich pissing on the poor'
> 
> Brad




Yeah, sure was, Damian O'Conner IIRC. But you forgot to add that it was a Labour politician practicing the politics of envy. Pure socialist rhetoric.


----------



## McLovin (13 May 2012)

Tyler Durden said:


> Yes but we must put our money _somewhere_ - and for most people that is in banks.




Put the money in the bank, tell them you don't want any interest. You won't need to worry about tax. Simple.


----------



## wayneL (13 May 2012)

McLovin said:


> Put the money in the bank, tell them you don't want any interest. You won't need to worry about tax. Simple.




Great! Then really let inflation eat up your capital.


----------



## Tyler Durden (13 May 2012)

McLovin said:


> Put the money in the bank, tell them you don't want any interest. You won't need to worry about tax. Simple.




That reasoning is along the same lines of declining a pay rise because it would otherwise move you into a higher tax bracket.


----------



## McLovin (13 May 2012)

wayneL said:


> Because they are effectively taxing inflation.




That's not double taxation, that's a stealth tax.


----------



## BradK (13 May 2012)

wayneL said:


> Yeah, sure was, Damian O'Conner IIRC. But you forgot to add that it was a Labour politician practicing the politics of envy. Pure socialist rhetoric.




Ooops. Labour politician. Ouch. :

Trickle down must have worked a treat then! 

Sorry for any misunderstanding 

Brad


----------



## McLovin (13 May 2012)

Tyler Durden said:


> That reasoning is along the same lines of declining a pay rise because it would otherwise move you into a higher tax bracket.




Yes, it's as bizarre as claiming taxing passive interest earned is "double taxation". I'm still unsure of how you reached the conclusion that it is double taxation.


----------



## jet328 (13 May 2012)

McLovin said:


> Australia's tax system is not as skewed as America's. The middle class there do _all_ the heavy lifting. There are so many holes in the system that if you have enough money for lawyers you can cut your tax bill to almost nothing.




*USA*
http://en.wikipedia.org/wiki/Progressivity_in_United_States_income_tax#Tax_distribution


> The Congressional Budget Office breaks down the 2007 share of the tax burden according to each segment of the population as follows:[19]
> 
> The highest quintile in total earned 55.9% of all income. It paid 86.0% of federal income taxes




*Australia*
http://www.taxreview.treasury.gov.a...l/publications/papers/report/section_3-03.htm


> In contrast, the top 20 per cent of taxpayers accounted for 45 per cent of taxable income and 59 per cent of tax paid.


----------



## drsmith (13 May 2012)

So_Cynical said:


> 0 > 20k = 0% tax
> 20 > 60K = 25% tax
> 60 > 100K = 35% tax
> 100k+ = 50% tax



With regard to your top marginal rate, it wouldn't suprise me if after taking means tests into acount that there are taxpayers both above an below above your $100k income threahold that heve EMTR's of over 50%.

Out of curiosity, what do you consider is an appropriate corporate tax rate ?

If materially different to your top marginal income tax rate, how would you manage tax minimisation strategies ?


----------



## Glen48 (13 May 2012)

it  is not millionaires you should worry about it is the 1% of the 1% who thrive in bad times and have the ear of rules.
 They can make the rules and tell those in power what they want, the Colombian dug lord pushed the feds into not hounding them or they would withdraw their loot  they by closing banks.
 Drugs kept Miami afloat during the 80 depression and created a boom in building, luxury cars sales and condo's.
This is were the problem lies people with this much money and power.
 USA  is stopping overseas banks from dealing with the rich from USA.


----------



## McLovin (13 May 2012)

jet328 said:


> *USA*
> http://en.wikipedia.org/wiki/Progressivity_in_United_States_income_tax#Tax_distribution
> 
> 
> ...




The difference between those two stats is that the first includes total tax burden (even indirect taxes), the second only includes income tax.

FWIW, from your link in Wikipedia, the top 1% pay on average 20% in federal income tax, the 4th quartile (60-80%) pay 16%. That is very, very flat.


----------



## drsmith (13 May 2012)

Below is an example of the difference between interest on a corporate deposit account and a personal deposit account offered from the same bank.

https://www.anz.com/small-business/products-services/savings-accounts/online-saver-account/ 

http://www.infochoice.com.au/banking/savings-account/anz/anz-online-saver/10740

Of interest is the difference in interest rates between the two accounts of 0.25%.

One possible explanation for this is that the bank has to offer a higher interest rate to high net worth individuals outside the corporate structure because of higher marginal income tax rates relative to the corporate rate ?

If that is the case, then this tax differential has implications for borrowers as it increases the bank's overall cost of funds.


----------



## numbercruncher (13 May 2012)

wayneL said:


> Because they are effectively taxing inflation.





True story - folks should be taxed only on interest that exceeds the inflation rate me thinks -

But they wouldnt want to encourage people to save cash in this new world economy would they ....


----------



## Starcraftmazter (14 May 2012)

The buffet tax is a really stupid idea for many reasons.

One is that it is a great big lie conducted by the Obama/Buffet duo, it is designed to hit entrepreneurs so that the big guys (like Buffet) don't have to worry about competition. Buffet wouldn't actually pay anymore tax himself.

Second is that it is generally a really stupid idea. The amount of revenue it will generate is insignificant in every way.

Finally, nobody should pay any tax anyway.


----------



## Glen48 (14 May 2012)

Some thing WB was mixed up in was fighting the IRS in court over tax due  he is just a mouth piece for the feds, think his days are numbered now he has to start thinking how to fight the depression.


----------



## prawn_86 (14 May 2012)

Starcraftmazter said:


> Finally, nobody should pay any tax anyway.




OK i'll bite...

I agree we are overtaxed, but how should governments have funds for health etc if no-one payed tax?


----------



## CanOz (14 May 2012)

prawn_86 said:


> OK i'll bite...
> 
> I agree we are overtaxed, but how should governments have funds for health etc if no-one payed tax?




Prawn, we don't need government. :twak:

The old people can support us by collecting cans and bottles while they sweep the streets with tiny brooms.ld:

The physical and mentally handi-capped can maintain the peace, for free! they need something to do anyway...:cowboy:

Silly...:shake:

CanOz


----------



## Starcraftmazter (14 May 2012)

prawn_86 said:


> I agree we are overtaxed, but how should governments have funds for health etc if no-one payed tax?




I don't recall asking the federal government to provide me with any healthcare services or etc.


----------



## drsmith (14 May 2012)

numbercruncher said:


> True story - folks should be taxed only on interest that exceeds the inflation rate me thinks -



Horrendously complex.

IIRC, Ken Henry suggested a 40% discount on tax from interest. At his suggested top marginal rate of 45%, that would reduce the effective maximum tax rate on interest to 27% which is very similar to his corporate tax rate of 25%. 

That at least would remove the incentive to corporatise interest income.


----------



## drsmith (14 May 2012)

Starcraftmazter said:


> I don't recall asking the federal government to provide me with any healthcare services or etc.



You do when you use your medicare card.


----------



## prawn_86 (14 May 2012)

Starcraftmazter said:


> I don't recall asking the federal government to provide me with any healthcare services or etc.




So why not go and live in a country where there is minimal taxes and services? If you think you can truly make it in a society like that, there are a lot out there (though none without any tax whatsoever)

 I suppose you dont or haven't used any of the roads, public transport, education, health etc at any point in your life?

It's easy to spout on about being overtaxed when in a healthy Western economy, try going to a 3rd World one and building everything up yourself and see what you think then


----------



## McLovin (14 May 2012)

drsmith said:


> Horrendously complex.




Of course. And what about the inverse. Should companies be taxed on their inflation adjusted taxable profit at the end of the FY? Afterall, what they earn in July, will be worth more in June the following year.



drsmith said:


> IIRC, Ken Henry suggested a 40% discount on tax from interest. At his suggested top marginal rate of 45%, that would reduce the effective maximum tax rate on interest to 27% which is very similar to his corporate tax rate of 25%.




That would make more sense. I don't see it happening anytime soon.


----------



## drsmith (14 May 2012)

McLovin said:


> Of course. And what about the inverse. Should companies be taxed on their inflation adjusted taxable profit at the end of the FY? Afterall, what they earn in July, will be worth more in June the following year.



I'll leave opinion on that level of detail in corporate taxation to others, but as a general principal, complexity in one area of taxation does not justify complexity in other areas.

At the very least, non-entity taxation should be radically simplified so individuals are not encouraged to engage time and economic resouces into tax minimisation strategies.



McLovin said:


> That would make more sense. I don't see it happening anytime soon.



I can't see any meaningful tax reform anytime soon. Labor is reduced to saving it's own political furniture and there's no fresh meat on the Coalition's vision.


----------



## McLovin (14 May 2012)

drsmith said:


> I'll leave opinion on that level of detail in corporate taxation to others, but as a general principal, complexity in one area of taxation does not justify complexity in other areas.




Yes, I agree with you, it was a somewhat rhetorical question. The tax system doesn't need anymore complexity added to it. In a low inflation economy, a simple discount, like Henry was advocating, would achieve 99% of the outcome.



drsmith said:


> At the very least, non-entity taxation should be radically simplified so individuals are not encouraged to engage time and economic resouces into tax minimisation strategies.




100%.


----------



## Starcraftmazter (14 May 2012)

drsmith said:


> You do when you use your medicare card.




I don't think I even have one.



prawn_86 said:


> So why not go and live in a country where there is minimal taxes and services? If you think you can truly make it in a society like that, there are a lot out there (though none without any tax whatsoever)




That's the plan buddy!



prawn_86 said:


> I suppose you dont or haven't used any of the roads, public transport, education, health etc at any point in your life?




Most of these are funded by *state* and *local* governments. The ones that are not, are not necessary.

I also don't know if you noticed, but Australia actually has the worst infrastructure in the OECD. Very bad roads, woeful public transportation, not the best education system, and clinics are stuffed full of old people (inefficiency).

I would prefer the private sector handled these things without government intervention, since the government clearly fails to deliver - even as they collect ridiculous amounts of tax money.


----------



## prawn_86 (14 May 2012)

Starcraftmazter said:


> That's the plan buddy!
> 
> I also don't know if you noticed, but Australia actually has the worst infrastructure in the OECD. Very bad roads, woeful public transportation, not the best education system, and clinics are stuffed full of old people (inefficiency).




So why are you still in Aus? I'm sure you have circa 2k for a plane ticket.

You obviously havent travelled much if you beleive the info about our infrastructure. 

Yes things could (always) be better, but it sounds to me you are just whinging and not actually doing anything about it (IE moving when you already can)


----------



## Starcraftmazter (14 May 2012)

prawn_86 said:


> So why are you still in Aus? I'm sure you have circa 2k for a plane ticket.




Why is it that some people tend to suggest that moving countries is as simple as buying a plane ticket. Do you really think there isn't anything more to it than that? Are you so naive?



prawn_86 said:


> You obviously havent travelled much if you beleive the info about our infrastructure.




Believe? Even some 3rd world countries have better infrastructure than Australia.



prawn_86 said:


> Yes things could (always) be better, but it sounds to me you are just whinging and not actually doing anything about it (IE moving when you already can)




I would much prefer that things get better here, as you know....moving is not as simple as buying a plane ticket.


----------



## prawn_86 (14 May 2012)

Starcraftmazter said:


> ....moving is not as simple as buying a plane ticket.




If fixing a country is as simple as not paying taxes then i dont see why moving isnt as simple as a plane ticket. If you want a true 'capitalist' experience then that is the best way to go about it; move somewhere that has a large cash economy, with nothing but the clothes on your back...

I know plenty of people who have bought one way plane tickets and ended up living where they travelled


----------



## McLovin (14 May 2012)

Starcraftmazter said:


> Believe? Even some 3rd world countries have better infrastructure than Australia.




How many third world countries have you visited?


----------



## DB008 (14 May 2012)

McLovin said:


> How many third world countries have you visited?




LOL. 
Let me guess his answer? 0?

McLovin, l thought that you'd know by now that SCM doesn't answer all questions, only selected ones. Have you looked at his Singapore thread, which he started, my questions are still unanswered, dear-oh-dear...

He's one of those fresh out of uni persons, who is in a 'we don't need a Government' stage of his life. This will blow over in a few years. Takes time.

Here is an example; wait until he is a in a car crash or similar accident (driver/passenger, doesn't matter), and he'll be begging for an ambulance faster than you can spell the word. 
Let me guess his answer, l don't travel cars? 

Another one, "I don't use Medicare, l don't even have a Medicare Card"
Let me break your arm/leg and see what happens?


----------



## McLovin (14 May 2012)

DB008 said:


> LOL.
> Let me guess his answer? 0?




And I'm guessing he doesn't even know what a AONE6 is. Or even a LONE6, if we have to slum it. 



DB008 said:


> Have you looked at his Singapore thread, which he started, my questions are still unanswered, dear-oh-dear...




You got off lightly! I was told I didn't understand English in that one.


----------



## DB008 (14 May 2012)

McLovin said:


> And I'm guessing he doesn't even know what a AONE6 is. Or even a LONE6, if we have to slum it.



LOL!!
Good point.



McLovin said:


> You got off lightly! I was told I didn't understand English in that one.



Again, LOL. No real world experience.

Even if you set up your own community, and it grew, you'd need someone to be head and take responsibilities, delegate duties and so on. So, in essence, you become a small council/Gov anyways, so what's the difference? Roads, hospitals, teachers, utilities, etc, etc, etc, who pays for that I wonder?


----------



## Julia (14 May 2012)

DB008 said:


> LOL.
> Let me guess his answer? 0?
> 
> McLovin, l thought that you'd know by now that SCM doesn't answer all questions, only selected ones. Have you looked at his Singapore thread, which he started, my questions are still unanswered, dear-oh-dear...
> ...



 +1.  
Prawn, you are wasting precious minutes of your life when you attempt a rational discussion with SCM.  An exercise in futility.


----------



## BradK (14 May 2012)

Julia said:


> +1.
> Prawn, you are wasting precious minutes of your life when you attempt a rational discussion with SCM.  An exercise in futility.




+2. I always have felt a bit of a tinge of sorry for SCM when he gets hammered on here. However... gosh. Sometimes it just gets a little bit silly. 

Oh... I have a new son in the house now (10 days old)  and he too would like to register his frustration 

+3


----------



## Julia (14 May 2012)

Congratulations on the new arrival, Brad.  Hope he's a good sleeper.


----------



## BradK (14 May 2012)

Julia said:


> Congratulations on the new arrival, Brad.  Hope he's a good sleeper.




Julia, we call him our 'healing baby' ... he is PERFECT, 11/10 for sleeping, feeding and no crying. Almost perfect as can be... 4 to 5 hour sleeps, 1 hour feeds around the clock. 

Although we love our little missy to death, she was a horrible sleeper - and had to go to sleep school - tresillian... thus, this baby is 'healing the scars' of the last one! LOL 

Brad


----------



## Starcraftmazter (14 May 2012)

prawn_86 said:


> If fixing a country is as simple as not paying taxes




Where did I say that? Not paying taxes cannot possibly leave us in a worse place than we already are though.



prawn_86 said:


> then i dont see why moving isnt as simple as a plane ticket.




Well I guess you must be completely disconnected from society then.



McLovin said:


> How many third world countries have you visited?




We don't live in the 19th century buddy, you don't need to waste time, money and effort going to another country to find out about it.



BradK said:


> +2. I always have felt a bit of a tinge of sorry for SCM when he gets hammered on here. However... gosh. Sometimes it just gets a little bit silly.




I think to the contrary it's funny how people here don't know how to argue and love tax so much. Must be a lot of communists on this forum. One wonders why they don't move to Cuba.


----------



## BradK (14 May 2012)

Starcraftmazter said:


> \
> I think to the contrary it's funny how people here don't know how to argue and love tax so much. Must be a lot of communists on this forum. One wonders why they don't move to Cuba.




Manners, mate. Manners. I ain't getting involved in no debate with you.


----------



## McLovin (14 May 2012)

Starcraftmazter said:


> We don't live in the 19th century buddy, you don't need to waste time, money and effort going to another country to find out about it.




I think you'd find it quite enlightening to visit the third world. It might give you some perspective. Something that is glaringly deficient in most of your arguments.

How's the tax in Singapore going, figured that one out yet?


----------



## Starcraftmazter (14 May 2012)

McLovin said:


> How's the tax in Singapore going, figured that one out yet?




The lowest in any decent country I know of? Figured what out?


----------



## McLovin (14 May 2012)

Starcraftmazter said:


> The lowest in any decent country I know of? Figured what out?




Whether you have to pay capital gains on trading profits. You haven't forgotten have you!


----------



## Starcraftmazter (14 May 2012)

McLovin said:


> Whether you have to pay capital gains on trading profits. You haven't forgotten have you!




The law clearly says you do not.

However as I have explained several times now, Singapore has the *lowest* tax rate of any developed country. Whether capital gains are counted as income or not is irrelevant. I know some people are not good at maths here, but surely it cannot be _that hard_ to understand that regardless of anything, you will still be taxed a lot less in Singapore than anywhere else.


----------



## McLovin (14 May 2012)

Starcraftmazter said:


> The law clearly says you do not.




No. It doesn't. But you keep believing that. 

Over and out.


----------



## Starcraftmazter (14 May 2012)

McLovin said:


> No. It doesn't. But you keep believing that.




What difference does it make what I "believe"? I don't actually have any beliefs; it is a simple fact that tax law in Singapore says that capital gains are not taxed.

But what is the difference? This is what I ponder. Why do you keep pushing the issue as though it is relevant? What is the end result of having to pay income tax on capital gains, if it is taxed significantly less than in Australia or anywhere else?

Do you care to provide an answer to this question? Or are you just trolling around without any particular purpose?


----------



## Ves (14 May 2012)

Doesn't Singapore have different taxes instead of capital gains (such as property tax etc)?


----------



## Starcraftmazter (14 May 2012)

Ves said:


> Doesn't Singapore have different taxes instead of capital gains (such as property tax etc)?




Who cares? 

It's some insignificant amount of money. Doesn't stop you from making millions in trading and having it taxed at a top of 20% (17% for companies) - rather than the barbaric 45% (and 30% for companies) here in Australia.


----------



## Ves (14 May 2012)

No point whinging about tax if you're never going to make _millions_ trading if you ask me.  If you were doing it, you certainly wouldn't be on here.


----------



## Starcraftmazter (14 May 2012)

Ves said:


> No point whinging about tax if you're never going to make _millions_ trading if you ask me.  If you were doing it, you certainly wouldn't be on here.




Well the topic _is_ about millionaires and how much tax they should pay! What can I say? I'm a very forward-looking person. Not to mention that you only need to make over $37,000 (in any sort of employment) to be screwed over by the Australian tax system, and for it to be more profitable to live in Singapore. Of course you have to consider higher rents, but apart from that...


----------



## Trembling Hand (14 May 2012)

Starcraftmazter said:


> Well the topic _is_ about millionaires and how much tax they should pay! What can I say? I'm a very forward-looking person. Not to mention that you only need to make over $37,000 (in any sort of employment) to be screwed over by the Australian tax system, and for it to be more profitable to live in Singapore. Of course you have to consider higher rents, but apart from that...





hey SCM one day when you make money from a trading, or start trading, you will find out what you really pay in tax. It isn't 48%.


----------



## Starcraftmazter (14 May 2012)

Trembling Hand said:


> hey SCM one day when you make money from a trading, or start trading, you will find out what you really pay in tax. It isn't 48%.




I didn't say it's 48%, I said 45%. And that's what it is, check the ATO site for 2012-2013 taxes if you don't believe me.


----------



## Intrinsic Value (14 May 2012)

Starcraftmazter said:


> Well the topic _is_ about millionaires and how much tax they should pay! What can I say? I'm a very forward-looking person. Not to mention that you only need to make over $37,000 (in any sort of employment) to be screwed over by the Australian tax system, and for it to be more profitable to live in Singapore. Of course you have to consider higher rents, but apart from that...




That is part of the reason I am working and living in Singapore now.

Yeah I pay a lot more for housing but I no longer pay 100k tax a year.


----------



## Starcraftmazter (14 May 2012)

Intrinsic Value said:


> That is part of the reason I am working and living in Singapore now.
> 
> Yeah I pay a lot more for housing but I no longer pay 100k tax a year.




See, I can tell his guy is a total bauss - he knows the right way to live such that your hard work isn't taken away by the communist party and redistributed to bogans who have too many children.


----------



## Trembling Hand (14 May 2012)

Starcraftmazter said:


> I didn't say it's 48%, I said 45%. And that's what it is, check the ATO site for 2012-2013 taxes if you don't believe me.




Again you cannot think about how anything actually works in practicality. All you know is 1 page deep of *basic *information. Zilch experience. 

Unlike you I trade and do pay tax. 30% after expenses. Thats what it is.


----------



## Starcraftmazter (14 May 2012)

Trembling Hand said:


> Again you cannot think about how anything actually works in practicality. All you know is 1 page deep of *basic *information. Zilch experience.
> 
> Unlike you I trade and do pay tax. 30% after expenses. Thats what it is.




Sure you can set up a company to trade. But in Singapore you'd be paying 17% versus your 30%. Justify that.


----------



## Smurf1976 (14 May 2012)

Tyler Durden said:


> That reasoning is along the same lines of declining a pay rise because it would otherwise move you into a higher tax bracket.



Along similar lines you'd be amazed at the level of misunderstanding about how the tax system actually works.

Ask any blue collar worker about working overtime and they will usually choose (for example) to work two full days a fortnight apart rather than do both days on the same weekend. The reason is simple - most are of the understanding that by getting paid the full amount in the one pay period they will pay more tax than if they worked the same time spread over two weeks. I've even had workers agree to work a full weekend strictly on the condition that I allow them to fudge the dates, being paid one day in the next pay and the other day a fortnight later rather than getting the whole lot all at once.

I'd guess that more than 80% of such workers think it works this way. It's a very common belief I've encountered in utilities, councils, building trades etc and a reason many decline to work overtime or otherwise increase their income.


----------



## Trembling Hand (14 May 2012)

Starcraftmazter said:


> Sure you can set up a company to trade. But in Singapore you'd be paying 17% versus your 30%. Justify that.




Again unlike you I've been to Singapore. Please go and live there by all means.


----------



## So_Cynical (14 May 2012)

Starcraftmazter said:


> Why is it that some people tend to suggest that moving countries is as simple as buying a plane ticket. Do you really think there isn't anything more to it than that? Are you so naive?




The last time i looked it was pretty darn easy and very cheap to pull up stumps and move to West Africa or Kenya...from memory 10K USD will get you the local equivalent of a permanent residency visa for Ghana.

So yes depending on where you want to go...it can be almost as easy as just buying a plane ticket.


----------



## Starcraftmazter (14 May 2012)

Trembling Hand said:


> Again unlike you I've been to Singapore. Please go and live there by all means.




I was actually wondering if it would be possible to have my investments in a Singapore incorporated company while still living here. Of course if I ever bring that money back to Australia I will still have to pay 45% on most of it. Nevertheless, it seems like a better place to live in anyway. No crime I hear - no wonder since they don't have millions of bogans. What's so bad about it? Please pray tell.


----------



## Trembling Hand (14 May 2012)

SCM tell us how much you will be taking over and how much you expect to be making based on previous returns and then will know how suited it is?


LOL


----------



## BradK (14 May 2012)

Trembling Hand said:


> SCM tell us how much you will be taking over and how much you expect to be making based on previous returns and then will know how suited it is?
> 
> 
> LOL




Why do you even bother arguing with scm?


----------



## Julia (14 May 2012)

Ves said:


> No point whinging about tax if you're never going to make _millions_ trading if you ask me.  If you were doing it, you certainly wouldn't be on here.


----------



## Starcraftmazter (14 May 2012)

Trembling Hand said:


> SCM tell us how much you will be taking over and how much you expect to be making based on previous returns and then will know how suited it is?
> 
> 
> LOL




It's hard to say, I haven't even been trading a year. Hell, I haven't even began. Just wait till I finish my stock analysis software. I will probably sell the recommendations in some stock newsletter or something.


----------



## Ves (14 May 2012)

I guess if you can't make any real money trading, then by all means sell black box software and "tips" to the plebs! Good plan, reckon the intelligentsia over in Singapore will buy it though?


----------



## Trembling Hand (14 May 2012)

Starcraftmazter said:


> It's hard to say, I haven't even been trading a year.




Nah its not mate. You're the only one that seems deluded here.

Carry on.........


----------



## Intrinsic Value (14 May 2012)

Starcraftmazter said:


> Sure you can set up a company to trade. But in Singapore you'd be paying 17% versus your 30%. Justify that.




Nope you dont even pay 17 percent no where near it.

If you set up a company and pay yourself a minimun salary and then redistribute your profits as tax free dividends then effective tax rate is about 4 percent on 400k. . 

Even if you are paye employee earning say 200k a year your effective tax rate is only 10 percent roughly.


----------



## Starcraftmazter (14 May 2012)

Intrinsic Value said:


> Nope you dont even pay 17 percent no where near it.
> 
> If you set up a company and pay yourself a minimun salary and then redistribute your profits as tax free dividends then effective tax rate is about 4 percent on 400k. .
> 
> Even if you are paye employee earning say 200k a year your effective tax rate is only 10 percent roughly.




Wow, that is absolutely amazing - no wonder Singapore is one of the best countries in the world. I'll be sending you some PMs.


----------



## skc (14 May 2012)

BradK said:


> Why do you even bother arguing with scm?




Lol. I was going to ask the same thing.

Arguing with SCM has to be up there in terms of being the top time-wasting pursuits on ASF (along with topics like FA vs TA debate).


----------



## BradK (14 May 2012)

Starcraftmazter said:


> It's hard to say, I haven't even been trading a year. Hell, I haven't even began. Just wait till I finish my stock analysis software. I will probably sell the recommendations in some stock newsletter or something.




Hell I havent even began???


----------



## Starcraftmazter (14 May 2012)

skc said:


> Lol. I was going to ask the same thing.
> 
> Arguing with SCM has to be up there in terms of being the top time-wasting pursuits on ASF (along with topics like FA vs TA debate).




My dear, you flatter me.


----------



## Intrinsic Value (14 May 2012)

Starcraftmazter said:


> Wow, that is absolutely amazing - no wonder Singapore is one of the best countries in the world. I'll be sending you some PMs.




You can set up a company online cheap and easy only takes a few days.

Then for the first couple of years new companies can distribute tax free dividends.

You  need to pay yourself a minimun wage and then the rest as i said you can distribute tax free.


----------



## Starcraftmazter (14 May 2012)

Intrinsic Value said:


> You can set up a company online cheap and easy only takes a few days.
> 
> Then for the first couple of years new companies can distribute tax free dividends.
> 
> *You  need to pay yourself a minimun wage and then the rest as i said you can distribute tax free*.




This will surely silence those here without a proper understanding of the marvellous god-like Singapore tax system.

I am very honoured to be in the company of such an intelligent individual such as yourself, so that you may confirm to us the correct way to go about not having your hard-earned money stolen.

If you could please PM me with information about how to start a company incorporated in Singapore from Australia, I would be eternally grateful.


----------



## DB008 (14 May 2012)

Starcraftmazter said:


> It's hard to say, *I haven't even been trading a year. Hell, I haven't even began.*




Bwahahahahahahahhahahahahhahahahahahahahah



Finally, my question has been answered! A complete armchair amateur trying to tell seasoned traders (stock and real estate) on ASF how the world revolves and how easy it is going to be to make millions and millions out of trading and pay no tax. 

THIS I GOTTA SEE!


----------



## basilio (14 May 2012)

All absolutely fascinating but I'm interested in going back to the first question :

Should the tax system be set up to ensure that  millionaires pay at least the same % as middle income level taxpapers.  For arguments sake say 40%.

Theoretically of course millionaires would be paying  48% tax (on the marginal income levels)  but in reality clever accountants generally sidestep this result.

The idea would be to *lower the overall rate *of tax by ensuring the wealthiest pay their fair share.


----------



## McLovin (14 May 2012)

Starcraftmazter said:


> it is a simple fact that tax law in Singapore says that capital gains are not taxed.




Correct. Unfortunately you don't know the difference between a capital gain and a trading profit. You'll find out once you start doing things in the real world, kiddo.


----------



## Starcraftmazter (15 May 2012)

basilio said:


> Should the tax system be set up to ensure that  millionaires pay *at least *the same % as middle income level taxpapers.  For arguments sake say 40%.




At least? They pay 45% (as of the coming financial year). I don't buy the whole "accounting tricks" argument. If you make your money through non-investments, I don't see how you can minimise it that much.



basilio said:


> The idea would be to *lower the overall rate *of tax by ensuring the wealthiest pay their fair share.




Let's be clear about this - there is only one way to make sure that *everyone pays their fair share*. Can you guess what it is?

No tax, let everyone pay individually for all services currently provided by the federal government on a as-needed basis.



McLovin said:


> Correct. Unfortunately you don't know the difference between a capital gain and a trading profit. You'll find out once you start doing things in the real world, kiddo.




I've been trading since last June or so. No secret society has sent me a pamphlet to explain the difference between a "trading profit" and a "capital gain". Is there some website I should set my contact details on or something? Let me know.


----------



## McLovin (15 May 2012)

Starcraftmazter said:


> I've been trading since last June or so. No secret society has sent me a pamphlet to explain the difference between a "trading profit" and a "capital gain". Is there some website I should set my contact details on or something? Let me know.




You don't need a secret society. Everyone with money on the table knows how CGT v tax on ordinary income works. For someone with an opinion on everything else, I'm surprised you're not teaching us about it.

Saying "I didn't know that" isn't that hard, is it?


----------



## Starcraftmazter (15 May 2012)

McLovin said:


> You don't need a secret society. Everyone with money on the table knows how CGT v tax on ordinary income works. For someone with an opinion on everything else, I'm surprised you're not teaching us about it.
> 
> Saying "I didn't know that" isn't that hard, is it?




Capital gains counts as income in Australia does it not? I have read that at least a hundred times, not sure why you're making a big deal of it.


----------



## McLovin (15 May 2012)

Starcraftmazter said:


> Capital gains counts as income in Australia does it not? I have read that at least a hundred times, not sure why you're making a big deal of it.




Capital gains for CGT purposes in Australia count as capital gains for CGT purposes. In Singapore capital gains for CGT purposes count as capital gains for CGT purposes. 

You don't understand the difference between that and ordinary income. I'm making a big deal of it because you profess to be the font of knowledge on all things.


----------



## Starcraftmazter (15 May 2012)

McLovin said:


> Capital gains for CGT purposes in Australia count as capital gains for CGT purposes. In Singapore capital gains for CGT purposes count as capital gains for CGT purposes.




I just don't see what you are saying here. Whatever money I make through trading, it will eventually be taxed at 45% if I make enough of it. Correct? Yes it is. And this is my chief issue with the tax system in Australia. I couldn't care less about the semantics and naming conventions.

Likewise in Singapore, it seems you pay barely anything in tax. That is my main attraction to it.



McLovin said:


> You don't understand the difference between that and ordinary income. I'm making a big deal of it because you profess to be the font of knowledge on all things.




Not at all; for instance, I don't know much about aeronautical engineering.


----------



## bellenuit (15 May 2012)

Starcraftmazter said:


> I just don't see what you are saying here. Whatever money I make through trading, it will eventually be taxed at 45% if I make enough of it. Correct? Yes it is. And this is my chief issue with the tax system in Australia. I couldn't care less about the semantics and naming conventions.




Income from share trading is taxed differently to income from share investing. The latter comes under the capital gains regime and has some special rules, like for instance, if you held the asset for more than a year, you only pay tax on 50% of the capital gain. Another rule is that losses from investments can only be written off against current and previous year capital gains from investments. It cannot be written off against normal income.

If you are a share trader (you need to refer to ATO for what constitutes a share trader, as opposed to an investor) you do not come under the capital gains system. Your income from trading (and there are special rules for working out your income from trading) is added to your other income to arrive at your taxable income. There is no 50% discount for 1 year+ held assets. You can even have trading income (or losses) due to the movement in the share price, even if you do not sell the particular shares.


----------



## Starcraftmazter (15 May 2012)

bellenuit said:


> Income from share trading is taxed differently to income from share investing. The latter comes under the capital gains regime and has some special rules, like for instance, if you held the asset for more than a year, you only pay tax on 50% of the capital gain. Another rule is that losses from investments can only be written off against current and previous year capital gains from investments. It cannot be written off against normal income.




I'm well aware of all of that, and I fail to see how it's relevant to the fact that you are taxed at 45% for your profits - which is really the central issue, and the only thing of any importance.


----------



## skc (15 May 2012)

Starcraftmazter said:


> I just don't see what you are saying here. Whatever money I make through trading, it will eventually be taxed at 45% if I make enough of it. Correct? Yes it is. And this is my chief issue with the tax system in Australia. I couldn't care less about the semantics and naming conventions.
> 
> Likewise in Singapore, it seems you pay barely anything in tax. That is my main attraction to it.
> 
> Not at all; for instance, I don't know much about aeronautical engineering.




Please go grace them with your presence...

www.singaporestockforums.com.sg


----------



## Intrinsic Value (15 May 2012)

Starcraftmazter said:


> This will surely silence those here without a proper understanding of the marvellous god-like Singapore tax system.
> 
> I am very honoured to be in the company of such an intelligent individual such as yourself, so that you may confirm to us the correct way to go about not having your hard-earned money stolen.
> 
> If you could please PM me with information about how to start a company incorporated in Singapore from Australia, I would be eternally grateful.




Just do a search online for setting up a company in Singapore. I did it from here so not sure if it is different if you are based in Oz.


----------



## McLovin (15 May 2012)

Intrinsic Value said:


> Just do a search online for setting up a company in Singapore. I did it from here so not sure if it is different if you are based in Oz.




Yes, it's very different. That pesky little DTA between the countries doesn't allow you to set up a company in one country while resident in another to minimise tax.



			
				Starcraftmazter said:
			
		

> I just don't see what you are saying here. Whatever money I make through trading, it will eventually be taxed at 45% if I make enough of it. Correct? Yes it is. And this is my chief issue with the tax system in Australia. I couldn't care less about the semantics and naming conventions.




I could have sworn your main issue was with paying tax on your capital gains from trading. Which you will do in Singapore.

You'll really enjoy the first time they audit you and slap you with a big bill for back taxes. I wonder how many spanks with the rotan they dole out for tax evasion over there. FWIW, ignorance of the law is not a defence.


----------



## Chasero (15 May 2012)

prawn_86 said:


> Personally i'm all for a flat (or severely flattened) tax. Say 2 or 3 brackets based on incomes, no other taxes, and no deductions. Would make things a lot easier and fairier, but put a whole ****e load of ATO staff and accountants out of jobs...
> 
> IE 0 - 20k = 0% tax
> 20 - 80 = 25% tax
> 80k + = 35% tax




It's a common misconception on the work accountants do.

We don't JUST do personal income tax. 

The majority of the work lies in preparation of accounts for companies, trusts, SMSF's, etc. Tax rates won't affect our workload 

As for the Australian tax system, it's pretty harsh as it is.

I think the issue with the american system is that dividends and capital gains are taxed entirely differently.

Hence Warren Buffett making statements such as he pays less tax (as a %) than he's receptionist...

Is that fair? If you are rich and only have income from shares in America, you are taxed at what... 15%?


----------



## drsmith (15 May 2012)

Chasero said:


> As for the Australian tax system, it's pretty harsh as it is.



When we look at EMTR's, we can see how harsh.

http://afr.com/rw/2009-2014/AFR/201...1dc31b_tax_forum_next_steps_for_Australia.pdf

The table on page 16 shows the tax impact on a second income earner when their spouse earns $110k. For most of the range $0 to $90k, the EMTR is above 50% and at one point reaches 100% as the means tests on various forma of assistance are applied.


----------



## bellenuit (15 May 2012)

Starcraftmazter said:


> I'm well aware of all of that, and I fail to see how it's relevant to the fact that you are taxed at 45% for your profits - which is really the central issue, and the only thing of any importance.




Well you are not taxed at 45% of your profits, is they are from capital gains on assets held for more than one year. Your are effectively taxed at 22.5% if your marginal rate is 45%.  I was responding to your statement that capital gains vs trading profits are just a matter of semantics.


----------



## qldfrog (15 May 2012)

So_Cynical said:


> Agree with above..but would prefer my numbers.
> 
> 
> 
> ...




you might not believe me, but at 50% tax, I stop working!;
I did that at the start of my career when we had 48% plus medicare +
I refuse to work for less than half what i get: 10% gst on all money spent [unless you go O/S..wise one]
and I am taking a day off every week till end of FY
cause we are at the 50% tax currently already when considering gst on purchases
life is too short to waste it slaving with more than half going to the latest labor corrupt scheme


----------



## Julia (15 May 2012)

McLovin said:


> Correct. Unfortunately you don't know the difference between a capital gain and a trading profit. You'll find out once you start doing things in the real world, kiddo.






Starcraftmazter said:


> I've been trading since last June or so.






> I haven't even been trading a year. Hell, I haven't even began.



??????????


----------



## Starcraftmazter (15 May 2012)

McLovin said:


> Yes, it's very different. That pesky little DTA between the countries doesn't allow you to set up a company in one country while resident in another to minimise tax.




Those bastards! Who gave them the right to dictate which countries I'm allowed to set up a company in? I don't recall giving them such a privilege - do you recall yourself giving it to them?



McLovin said:


> I could have sworn your main issue was with paying tax on your capital gains from trading. Which you will do in Singapore.
> 
> You'll really enjoy the first time they audit you and slap you with a big bill for back taxes. I wonder how many spanks with the rotan they dole out for tax evasion over there. FWIW, ignorance of the law is not a defence.




If they send me a bill, I'll just pay it. 4% tax there versus 45% here - what's the problem?



Chasero said:


> Hence Warren Buffett making statements such as he pays less tax (as a %) than he's receptionist...
> 
> Is that fair? If you are rich and only have income from shares in America, you are taxed at what... 15%?




Taxation of dividends doesn't even make any logical sense. Company profits are already taxed by company tax - why tax it again with individual tax when they are paid out?

It is immoral.



bellenuit said:


> Well you are not taxed at 45% of your profits, is they are from capital gains on assets held for more than one year. Your are effectively taxed at 22.5% if your marginal rate is 45%.  I was responding to your statement that capital gains vs trading profits are just a matter of semantics.




it is for me, as I do not plan to ever hold anything for anywhere near a year.



qldfrog said:


> life is too short to waste it slaving with more than half going to the latest labor corrupt scheme




+1, completely agree.


----------



## bellenuit (15 May 2012)

Starcraftmazter said:


> Taxation of dividends doesn't even make any logical sense. Company profits are already taxed by company tax - why tax it again with individual tax when they are paid out?
> 
> It is immoral.




Maybe we should have a dividend imputation system. That will correct that wrong. Oh wait..... we already have one.


----------



## wayneL (15 May 2012)

bellenuit said:


> Maybe we should have a dividend imputation system. That will correct that wrong. Oh wait..... we already have one.




I love it when smartarses highlight their own ignorance.


----------



## McLovin (15 May 2012)

Starcraftmazter said:


> Those bastards! Who gave them the right to dictate which countries I'm allowed to set up a company in? I don't recall giving them such a privilege - do you recall yourself giving it to them?




I don't recall giving them the privlege to use my tax dollars to pay for your degree. Such is life.


----------



## Julia (15 May 2012)

bellenuit said:


> Maybe we should have a dividend imputation system. That will correct that wrong. Oh wait..... we already have one.






wayneL said:


> I love it when smartarses highlight their own ignorance.



+1.


----------



## Starcraftmazter (16 May 2012)

bellenuit said:


> Maybe we should have a dividend imputation system. That will correct that wrong. Oh wait..... we already have one.




Dividend imputation doesn't stop company profits from being taxed twice, it merely reduces said double tax relative to how high it would be without it.

If dividends weren't double-taxed, then all dividends paid would not even have to be reported for tax reasons. I don't see how this is not obvious to anyone with half a brain.



McLovin said:


> I don't recall giving them the privlege to use my tax dollars to pay for your degree. Such is life.




I don't recall anyone having paid for my degree. Last time I checked, I paid for all of it.

If we were both charged for the same thing, then I think someone stole your money or mine - or both of ours.


----------



## bellenuit (16 May 2012)

Starcraftmazter said:


> Dividend imputation doesn't stop company profits from being taxed twice, it merely reduces said double tax relative to how high it would be without it.
> 
> If dividends weren't double-taxed, then all dividends paid would not even have to be reported for tax reasons. I don't see how this is not obvious to anyone with half a brain.




Not quite.  Dividend imputation recalculates the tax on company profits that are distributed to shareholders as if those profits went directly to the shareholder without the company paying any tax on them. In other words, it reimburses company tax paid  on the pretax profit distributed as dividends, so that the pretax profit is effectively only taxed ONCE - at the recipient's (shareholder's) marginal tax rate. 

One reason for reporting the dividends paid for tax reasons is that if one is on a marginal rate less than the company rate of 30%, then you are actually reimbursed the excess tax paid by the company over and above that which you would have paid.

But in any case, the net effect is that the pretax profits are only taxed ONCE and at YOUR marginal tax rate. People with a quarter of a brain would understand that that is not double taxation.



Starcraftmazter said:


> Dividend imputation doesn't stop company profits from being taxed twice, it merely reduces said double tax relative to how high it would be without it.




Think about what you have just said. _it merely reduces said double tax relative to how high it would be without it._ You have just conceded that dividend imputation reduces the double taxation to the amount it would have been if there was no double taxation. SO WHAT ARE YOU COMPLAINING ABOUT????


----------



## Starcraftmazter (16 May 2012)

bellenuit said:


> Not quite.  Dividend imputation recalculates the tax on company profits that are distributed to shareholders as if those profits went directly to the shareholder without the company paying any tax on them. In other words, it reimburses company tax paid  on the pretax profit distributed as dividends, so that the pretax profit is effectively only taxed ONCE - at the recipient's (shareholder's) marginal tax rate.




Haha what, without the company paying any tax on them? But they *did* pay tax on them. I know how dividend imputation works, and I don't see how explaining it is a justification for it.

Pure and simple this is how it works:
1. Company pays tax on profit
2. The remaining of the profit is paid out as dividends
3. Those dividends are then taxed again

That's all there is to it - it's a double tax. How they want to calculate it, and what bull**** excuse they want to use is irrelevant to the fact that the money a company earned which goes to their shareholders is taxed twice before it is spent by said shareholders.

And that is completely immoral and unjustifiable. It's almost as bad as welfare.



bellenuit said:


> One reason for reporting the dividends paid for tax reasons is that if one is on a marginal rate less than the company rate of 30%, then you are actually reimbursed the excess tax paid by the company over and above that which you would have paid.




That's just the cherry on the cake isn't it? Just another piece of evidence towards the fact that company tax is idiotic.



bellenuit said:


> But in any case, the net effect is that the pretax profits are only taxed ONCE and at YOUR marginal tax rate. People with a quarter of a brain would understand that that is not double taxation.




It is, I just showed you how. And what does my marginal tax rate have to do with profit made by any company who's shares I hold? I fail to see the connection. It's government-legislated fraud.


----------



## wayneL (16 May 2012)

Some advice Grasshopper.

When in a hole, stop digging. You are looking more foolish with every word you type.


----------



## Starcraftmazter (16 May 2012)

wayneL said:


> Some advice Grasshopper.
> 
> When in a hole, stop digging. You are looking more foolish with every word you type.




Maybe you should try pointing out where I am wrong? Clearly I am correct - or have you never paid tax on dividends? That's ok, I haven't either - but I know how it works, and it is immoral.

How can it be justified that profits which were already taxed at the company level are taxed again at the individual level? If that is not the definition of double tax, then I really don't know what is.


----------



## wayneL (16 May 2012)

Starcraftmazter said:


> Maybe you should try pointing out where I am wrong?



Bellanuit has already done so.


> Clearly I am correct



Clearly you have no idea.


> or have you never paid tax on dividends?



LOL


> That's ok, I haven't either-



Mate, I doubt you have even filed your first tax return.


> but I know how it works, and it is immoral.



Again, clearly you have no idea.


> How can it be justified that profits which were already taxed at the company level are taxed again at the individual level? If that is not the definition of double tax, then I really don't know what is.



Read bellanuit's post.


----------



## Starcraftmazter (16 May 2012)

wayneL said:


> Read bellanuit's post.




Let's be clear here; my claim is that company profits are taxed twice.

Let us use a simple example with one company making a profit of $1000, and one shareholder paying a marginal of 45%.

So....

1. Company makes a profit of $1,000 in Australia
2. It pays $300 in company tax - First instance of profit being taxed
3. Company decides to pay out the $700 it has left to it's sole shareholder.
4. Shareholder receives $700 dividend payment.
5. Shareholder pays $150 in tax on the payment -  Second instance of profit being taxed


*End result under current double-tax system:*
Shareholder ends up with $550.

*End result if company profit was not double-taxed:*
Shareholder ends up with $700.


Thus, the same company profit is taxed twice - once at the company level, and again at the individual level. I even make the font bigger just in case you missed it.


All makes sense now buddy?


----------



## wayneL (16 May 2012)

Starcraftmazter said:


> Let's be clear here; my claim is that company profits are taxed twice.
> 
> Let us use a simple example with one company making a profit of $1000, and one shareholder paying a marginal of 45%.
> 
> ...




We are not buddies.

Rework your example if the taxpayer's marginal rate is less than 30% and report back.


----------



## Starcraftmazter (16 May 2012)

wayneL said:


> Rework your example if the taxpayer's marginal rate is less than 30% and report back.




Why? how is that relevant? My tax marginal rate is not 30%.


----------



## wayneL (16 May 2012)

Starcraftmazter said:


> Why? how is that relevant? My tax marginal rate is not 30%.




Just do it Grasshopper, it will be good for your education.


----------



## Starcraftmazter (16 May 2012)

wayneL said:


> Just do it Grasshopper, it will be good for your education.




But why? It is a situation which does not apply to me personally, and I would presume to the vast majority of shareholders. To those people whom it does apply, I do not particularly care about.

Do you admit that company profits are taxed twice?


----------



## wayneL (16 May 2012)

Starcraftmazter said:


> But why? It is a situation which does not apply to me personally, and I would presume to the vast majority of shareholders. To those people whom it does apply, I do not particularly care about.
> 
> Do you admit that company profits are taxed twice?




Do you admit that: 

1/ Your refusal to rework the example 
2/ Your use of logical fallacy

is a tacit admission of defeat?

Let's try again.

Let's say you're marginal rate on your main income is 48% (OR WHATEVER)

Scenario one: You earn $1000 in dividends from share holdings.

Scenario two: You earn $1000 hawking yourself as a rent boy to guys at The Cross (and declare the income  )

Can you tell me the total tax payable for each of these two scenarios?

Just a simple answer will suffice; no bobbing or weaving.


----------



## tigerboi (16 May 2012)

never mind the millionaires? what about the singles taking home $69,000 per year PAYING $2,000 more net tax than husband on same as me $69,000 plus wife bringing in $30,000 making a total of $99,000.

the single pays about $15,000 & the other 2 pay about $12,500- $13,000 ish. combined

looks like singles are carry the heaviest tax load,

suppose i will get taxed to buggery when i get a lump sum workers comp payout?

we need to get this crimminal labour party away from this countrys money as the debt they have put us in is about to get ugly & dont say we are rich & lucky...

first 2 things that need to be slashed,foreign aid & welfare.tb


----------



## Starcraftmazter (16 May 2012)

wayneL said:


> Do you admit that:
> 
> 1/ Your refusal to rework the example
> 2/ Your use of logical fallacy
> ...




No, why would it be? I have demonstrated how the money is taxed twice.



wayneL said:


> Let's try again.
> 
> Let's say you're marginal rate on your main income is 48% (OR WHATEVER)
> 
> ...




$480 for hawking and $257 for the shares?

This further proves my point you see; the money you "earned" from share holdings was already taxed. Why should it get taxed again? It doesn't make sense for you to pay any additional tax beyond what the company already paid in tax on it.



tigerboi said:


> never mind the millionaires? what about the singles taking home $69,000 per year PAYING $2,000 more net tax than husband on same as me $69,000 plus wife bringing in $30,000 making a total of $99,000.
> 
> the single pays about $15,000 & the other 2 pay about $12,500- $13,000 ish.
> 
> ...




Buddy, as a young, hard-working taxpayer I could not agree with you more.

As if child support isn't bad enough, apparently we now have to pay for *everyone* else's children.

This is basically communism.


----------



## bellenuit (16 May 2012)

Starcraftmazter said:


> Let's be clear here; my claim is that company profits are taxed twice.
> 
> Let us use a simple example with one company making a profit of $1000, and one shareholder paying a marginal of 45%.
> 
> ...




Don't be such an idiot. You said the shareholder's marginal rate is 45%, so if he were to get a dividend of $700 and if he was double taxed, he would pay an additional $315 in tax. But he is only paying an additional $150. Why?  Because the NET EFFECT of dividend imputation is that he ends up being taxed as if the company profits were taxed just once at his marginal tax rate of 45%. So, as per your figures, the company paid $300 tax and he paid just $150 tax, which is 45% of the company profits of $1000. 

What you in your idiocy is now trying to say is that because the process goes through 2 iterations, company is taxed and shareholder is taxed, that it is double taxation. But  the shareholder is reimbursed the company tax paid, so it is not double taxation, just single taxation at the shareholder's marginal rate, as your figures show.

If your issue is that you do not want to have to report dividends received because they are already taxed, then that is not the same as double taxation. The reporting is needed to ensure that the shareholders are taxed at their marginal rate, rather than the company's rate. Individuals are not companies, so they pay their taxes at their respective rates.

Reimbursing the company tax means you are only taxed ONCE, not DOUBLE TAXED.


----------



## Starcraftmazter (16 May 2012)

bellenuit said:


> Because the NET EFFECT of dividend imputation is that he ends up being taxed as if the company profits were taxed just once at his marginal tax rate of 45%. So, as per your figures, the company paid $300 tax and he paid just $150 tax, which is 45% of the company profits of $1000.




Yes I understand this - but why? How is that fair or logical? I just don't get it. He did not make this money - the company did - and the company was already taxed for it.

Why should he then be taxed so that the total amount of tax is equal to his marginal rate? What is the justification for that?



bellenuit said:


> If your issue is that you do not want to have to report dividends received because they are already taxed, then that is not the same as double taxation. The reporting is needed to ensure that the shareholders are taxed at their marginal rate, rather than the company's rate.* Individuals are not companies*, so they pay their taxes at their respective rates.




I agree - individuals are not companies. So why are individuals taxed for company profits? It is nonsensical. I don't see how it's not the same as double taxation. What do you call it?


----------



## wayneL (16 May 2012)

Starcraftmazter said:


> No, why would it be? I have demonstrated how the money is taxed twice.
> 
> 
> 
> ...




Correction on my part. 

$1000 *Grossed up* dividend.

$1000 Rent boy.

I'll answer for you, in both cases it is $480


----------



## Starcraftmazter (16 May 2012)

wayneL said:


> Correction on my part.
> 
> $1000 *Grossed up* dividend.
> 
> ...




Okey, so do you see my point though? Why do I pay $480 in tax for an amount of money which was already taxed once? 

What's next, are they going to tax it a third time when I spend it somewhere?

OH WAIT HAHA THAT'S PRECISELY WHAT THEY DO, HOW SMART OF THEM.


----------



## wayneL (16 May 2012)

bellenuit said:


> Don't be such an idiot. You said the shareholder's marginal rate is 45%, so if he were to get a dividend of $700 and if he was double taxed, he would pay an additional $315 in tax. But he is only paying an additional $150. Why?  Because the NET EFFECT of dividend imputation is that he ends up being taxed as if the company profits were taxed just once at his marginal tax rate of 45%. So, as per your figures, the company paid $300 tax and he paid just $150 tax, which is 45% of the company profits of $1000.
> 
> What you in your idiocy is now trying to say is that because the process goes through 2 iterations, company is taxed and shareholder is taxed, that it is double taxation. But  the shareholder is reimbursed the company tax paid, so it is not double taxation, just single taxation at the shareholder's marginal rate, as your figures show.
> 
> ...




It is similar in effect to GST, which might go through several iterations before reaching the final consumer, yet the net result is 10% no matter how many iterations (although value is added on the way through).


----------



## wayneL (16 May 2012)

Starcraftmazter said:


> Okey, so do you see my point though? Why do I pay $480 in tax for an amount of money which was already taxed once?




Oh FFS!

You do not pay $480 on an amount already taxed. You receive $700 because $300 has already been paid. Your additional taxation (or credit as the case may be) is to bring the total tax into line with your marginal rate as an individual.


----------



## wayneL (16 May 2012)

Starcraftmazter said:


> OH WAIT HAHA THAT'S PRECISELY WHAT THEY DO, HOW SMART OF THEM.



And here is the only point where I concur.


----------



## Starcraftmazter (16 May 2012)

wayneL said:


> Oh FFS!
> 
> You do not pay $480 on an amount already taxed. You receive $700 because $300 has already been paid. *Your additional taxation (or credit as the case may be) is to bring the total tax into line with your marginal rate as an individual*.




Why? What does does my company's profit have to do with my marginal tax rate?


----------



## wayneL (16 May 2012)

Starcraftmazter said:


> Why? Does does my company's profit have to do with my marginal tax rate?




Because dividends are personal income, just like your income from Kings Cross.

If the company retains earnings, they are only be taxed at the company rate.


----------



## Starcraftmazter (16 May 2012)

wayneL said:


> Because dividends are personal income, just like your income from Kings Cross.
> 
> If the company retains earnings, they are only be taxed at the company rate.




It seems to me that "income" is a magical word that the government slaps onto any money you are capable of receiving so that you get less and they get more (for doing nothing).

My chief difference of opinion is that because the money is already taxed, I do not see why it has to be taxed further. I do not see what benefit or service the government provides in between the point where the company income is taxed at 30% and where it is taxed a further 18% points at the individual level. Do you?


----------



## wayneL (16 May 2012)

Starcraftmazter said:


> It seems to me that "income" is a magical word that the government slaps onto any money you are capable of receiving so that you get less and they get more (for doing nothing).
> 
> My chief difference of opinion is that because the money is already taxed, I do not see why it has to be taxed further. I do not see what benefit or service the government provides in between the point where the company income is taxed at 30% and where it is taxed a further 18% points at the individual level. Do you?




That is entirely another can of worms, perhaps company and individual tax should be closer.

But don't forget company tax is flat, individual tax is progressive.

Would you be happy for instance, if your main income was taxed at the flat company rate? 

For all but the highest earning Australians, this would mean a greater tax burden.


----------



## bellenuit (16 May 2012)

Starcraftmazter said:


> Yes I understand this - but why? How is that fair or logical? I just don't get it. He did not make this money - the company did - and the company was already taxed for it.
> 
> Why should he then be taxed so that the total amount of tax is equal to his marginal rate? What is the justification for that?
> 
> ...




Basically because the shareholder is a part owner of the company. So what the dividend imputation system is saying is that the portion of profits distributed as dividends is income for the end recipient, the shareholder. 

Your example was based on a shareholder who had a marginal rate of 45%, so the net effect is that shareholder paid an extra 15% of the company pre-tax profit so that his portion of pretax profits were effectively taxed at his rate of 45%, rather than the company's rate of 30%. This to you may seem unfair as the company has already paid tax. But for shareholders whose marginal rate is 30% or less, they effectively pay no extra tax (for those on 30%) and actually get additional tax reimbursed for those whose rate is less than 30%.

So, using your example, if a taxpayer was in the lowest tax bracket (0%) and they remained in that bracket after receiving the $700 dividend, they would actually get a tax rebate of $300. The ATO would assess their tax as Other Income + $1,000, tax due is $0, tax paid = $300 (e.g. the imputation credit on the dividend), so they get $300 back. How can you call this double taxation when they are getting an additional tax rebate rather than paying more.

The ATO _*effectively*_ taxes dividends at the shareholders rate to ensure that the system isn't abused. For example, those on the top marginal rate would abuse the system by only paying the company rate on dividends, rather than their marginal rate. Ditto for overseas investors. It seems pretty reasonable to me and a hell of a lot better than before the dividend imputation system was introduced (than you Paul Keating for introducing it).

You mentioned that the company already paid 30% so why should the shareholder pay more (for those on a higher marginal rate than 30%, as those on less get reimbursed). One reason is you do not want people setting up companies purely as an investment structure to avoid tax. If a 45% marginal tax individual were to set up a company to hold his investment assets, then that person would only pay 30% on dividends received through the company (on your preferred system) than if he held the investments in his own name. That is clearly inequitable and favours those who are wealthier and can afford accounting resources and professional advice. The dividend imputation system ensures that the end recipient receives the same tax treatment irrespective of whatever intermediate structures may exist between him and the investments.


----------



## jancha (16 May 2012)

Cant believe someone who supposedly has had a good education can be so thick. It has taken how many posts in order to get the gist of it? 
I'm glad you brought up the point of getting a rebate on the company tax if your personal income doesn't meet the criteria but what if the following year you made a profit would you then have to pay back the 30% + the 15% from the previous year? 

Setting up a company in Singapore to pay 4% tax is just a way of laundering money ( it's illegal) unless your living or going to live in Singapore in the near future the ATO would be looking very hard at you. Risky business.


----------



## McLovin (16 May 2012)

Starcraftmazter said:


> I don't recall anyone having paid for my degree. Last time I checked, I paid for all of it.




That's pretty dumb. You plan on moving overseas, wouldn't you have been smarter to have used HECS and then once you left you'd never have to pay it back? 



			
				jancha said:
			
		

> I'm glad you brought up the point of getting a rebate on the company tax if your personal income doesn't meet the criteria but what if the following year you made a profit would you then have to pay back the 30% + the 15% from the previous year?




No. It would be like having to return your tax refund.


----------



## Chasero (16 May 2012)

bellenuit said:


> Your example was based on a shareholder who had a marginal rate of 45%, so the net effect is that shareholder paid an extra 15% of the company pre-tax profit so that his portion of pretax profits were effectively taxed at his rate of 45%, rather than the company's rate of 30%. This to you may seem unfair as the company has already paid tax. But for shareholders whose marginal rate is 30% or less, they effectively pay no extra tax (for those on 30%) and actually get additional tax reimbursed for those whose rate is less than 30%.




@starcraft
Yep, such a great system to capture tax for rich individuals.

Dividends are grossed up by 30/70. Then everyone gets a rebate of the franking credit (30/70).

i.e. if you are on a tax rate >30%, you will be taxed once only as your marginal tax rates are higher.

Everyone earning less than $80,000 in 2011 will be on the 30% tax bracket. Meaning they will get the full franking credit offset.

Everyone earning more than $80,000 will still get the 30% franking credit offset, however since you have grossed up the dividends, a portion will be paid at the 38% tax rate or the 45% tax rate.

These individuals are already rich... pay up!!   (they are only paying an additional 8-15% tax anyway due to the imputation system)

I've done tax returns for individuals only having passive income. e.g. have >2m share portfolio.

They should be taxed at 45% no?

Tax is already paid at the company level for dividends, meaning they only have to fork up another 15%. Sounds right to me.

Let's not forget about medicare level +1.5%
And floody levy in 2012 +1 to 1.5%? Means that rich australians are paying tax close to 50% of their taxable income. 

Not really fair comparing out system to the U.S.


----------



## Starcraftmazter (17 May 2012)

wayneL said:


> That is entirely another can of worms, perhaps company and individual tax should be closer.
> 
> But don't forget company tax is flat, individual tax is progressive.
> 
> ...




I would be happy, it only seems fair. Does an individual use more government services if they make more money? Probably not, they are in fact more likely to use private healthcare, private education, private infrastructure, etc. If anything they should pay less tax.



bellenuit said:


> So, using your example, if a taxpayer was in the lowest tax bracket (0%) and they remained in that bracket after receiving the $700 dividend, they would actually get a tax rebate of $300. The ATO would assess their tax as Other Income + $1,000, tax due is $0, tax paid = $300 (e.g. the imputation credit on the dividend), so they get $300 back. How can you call this double taxation when they are getting an additional tax rebate rather than paying more.




This is just a crazy side-effect of the current system, and only shows how insane it is. This side-effect could be removed with the removal of company tax.



bellenuit said:


> You mentioned that the company already paid 30% so why should the shareholder pay more (for those on a higher marginal rate than 30%, as those on less get reimbursed). One reason is you do not want people setting up companies purely as an investment structure to avoid tax. If a 45% marginal tax individual were to set up a company to hold his investment assets, then that person would only pay 30% on dividends received through the company (on your preferred system) than if he held the investments in his own name. That is clearly inequitable and favours those who are wealthier and can afford accounting resources and professional advice. The dividend imputation system ensures that the end recipient receives the same tax treatment irrespective of whatever intermediate structures may exist between him and the investments.




I disagree here, I think it would be great if I could do that in Australia and not have to move to Singapore just so that I can avoid paying tax on money which the government did not earn, and through the taxation of which, it provides me with no services at it's federal level which I require.



McLovin said:


> That's pretty dumb. You plan on moving overseas, wouldn't you have been smarter to have used HECS and then once you left you'd never have to pay it back?




Who said I have HECS debt? And no it wouldn't be dumb, it would be the responsible thing to do. I didn't ask the government for anything, and I want nothing from them but to go away and leave me free to conduct my private affairs as a private citizen.



Chasero said:


> These individuals are already rich... pay up!!




Why? Also, I don't consider $80k+ rich in the world's most expensive country, with the world's most overpriced property.

And that's just for a single guy like me. What if you had someone with a wife and 3 kids?



Chasero said:


> They should be taxed at 45% no?




Why?



Chasero said:


> Tax is already paid at the company level for dividends, meaning they only have to fork up another 15%. Sounds right to me.




Why?


----------



## Ferret (18 May 2012)

Starcraftmazter said:


> with the world's most overpriced property.




Wait till you get to Singapore.  You'll change your mind on that one.


----------



## Starcraftmazter (18 May 2012)

Ferret said:


> Wait till you get to Singapore.  You'll change your mind on that one.




I know, but here's the thing - Singapore has a valid excuse for expensive property, the lack of land. Australia does not.

And Singapore makes up for it with extremely low taxes - Australia does not.


----------



## wayneL (18 May 2012)

Starcraftmazter said:


> I would be happy, it only seems fair. Does an individual use more government services if they make more money? Probably not, they are in fact more likely to use private healthcare, private education, private infrastructure, etc. If anything they should pay less tax.



Ideological considerations aside, it would mean although those on say $200k would pay only $60k in tax, someone on 60k would pay 18k and someone on 30k would pay $9,000.

That doesn't strike me as reasonable for those on the lower pay rates.

Also, the rich do have means to minimize tax which the poorer do not.

Right or wrong, they are the facts.


----------



## rumpole (18 May 2012)

How much 'risk' to the Clive Palmers & Co actually take ? Mostly they build businesses with borrowed money either from the banks or the shareholders. I wouldn't lionise them for taking risks, they are doing it with your money.


----------



## Smurf1976 (18 May 2012)

wayneL said:


> Ideological considerations aside, it would mean although those on say $200k would pay only $60k in tax, someone on 60k would pay 18k and someone on 30k would pay $9,000.
> 
> That doesn't strike me as reasonable for those on the lower pay rates.



I think that effort expended in order to gain that income also ought to be taken into account somehow.

Eg Person A works 35 hours a week in a well paid job and earns $140K a year.

Person B works 80 hours a week and earns $140K a year.

I'd argue that person B has already made a massive sacrifice in order to earn that money and that, relative to hours worked, $140K is not a high income in that context whereas it clearly is for someone who works 35 hours a week. I think the tax system ought to reflect this (And before anyone says "nobody works 80 hours a week" - I've been there, done that and I'm certainly not the only one).


----------



## Glen48 (18 May 2012)

Every one seem to think a millionaire is rolling in money and living the life of a movie star and by them paying more all the world problems will be solved.

Even if all the millionaires did pay more than their share nothing would change the feds have more money to waste:

 I've been in the US for a little more than 24-hours. And having flipped through the TV channels trying to figure out what useless drivel big media is passing off as 'news', I realized that I'm going to vomit if I hear the word "fair" one more time. 

This concept of 'fair' seems to be dominating discussion of the US government's dismal fiscal condition. The talking heads say that it's 'fair' for wealthy Americans to pay higher taxes and bail the country out... or that everyone needs to pay his/her 'fair' share. 

The whole logic is absurd: you do not 'fix' the country's fiscal imbalances by giving the idiots in charge even more resources to squander... it's like dumping gasoline on a forest fire. Somehow the debate seems to have missed this point. 

This 'fair' nonsense is also very dangerous.  Just ask any three-year old-- 'fair' is completely arbitrary. It's like a Wiki version morality... if enough people agree on it, it's fair. 

In this case, 'fair' is defined in the sole discretion of those who are the direct beneficiaries of confiscating other people's money. But let's look at the numbers: 

According to the IRS statistical database, the top 1% of income earners in the United States pays roughly 40% of all US individual income tax. They also get audited at least 5-times more than anyone else. Fair? 

The other major complaint seems to be that the wealthy are 'abusing' capital gains rules in order to pay a 15% rate instead of a 35% rate. Duh. That's why they're wealthy, and stay wealthy... they don't WORK for a living, they OWN assets which are subject to capital gains. 

It seems so bizarre that a country once regarded as the freest, most economically enviable in the world would treat its productive citizens with such hostility. 

This is where Eduardo Saverin comes in. The Facebook co-founder, who finds himself a few billion dollars richer this week, recently renounced his US citizenship. And, to the intelligentsia, it's not 'fair'. 

'Saverin needs to pay his fair share! He owes America more,' they whine, completely ignorant that the 30-year old is already forking over a $500+ million exit tax (which may end up in the billions). 

Apparently it's not good enough that the company Saverin co-founded has created tens of thousands of jobs, spawned entire industries, and produced oodles of new millionaires. Oh yeah, it's also made things damn easy for the CIA, NSA, and FBI. You'd think Uncle Sam would pin a medal on his chest. 

But no. Saverin left behind a lot of value and decided to move on to greener pastures in Singapore. Now the do-gooders in Congress are cooking up new legislation (the EX-PATRIOT Act) designed to permanently bar 'renunciants' like Saverin from re-entering the United States. 

It's interesting that, rather than change their ways of doing business and introducing legislation that provides incentives for productive people to come here and stay here, they maintain policies that chase people away, and introduce new ones to lock the door after they're gone. 

The lesson here (especially for natural-born citizens) is this: simply by accident of birth, you are born with a lifelong obligation that you never signed up for to finance the corrupt misdealings of the political class. And if you choose to abandon this obligation, they will bar you from ever entering your homeland again. 

Regardless of what the propaganda says, this is not how a free society treats people. It might look and feel like a representative democracy on the surface, but under the hood it's the modern day equivalent of feudal serfdom. 

The land of the free has certainly fallen a long way.
Until tomorrow,
 from Simon Black

turns out MR Saverin has decided to stay ,more fool him when 750 yanks are leaving each day.


----------



## Joules MM1 (23 July 2012)

*Super rich hiding up to $32 trillion offshore*
Up to $280bn is lost in tax revenues as wealthy individuals park financial assets in offshore tax havens.
22 Jul 2012 16:35

excerpt


> The study estimating the extent of global private financial wealth held in offshore accounts - excluding non-financial assets such as real estate, gold, yachts and racehorses - puts the sum at between $21 and $32 trillion.
> 
> This amounts to roughly the US and Japanese GDP combined. Roughly 10 million people worldwide have offshore accounts, with 100,000 people owning half of those secreted assets.




http://www.aljazeera.com/news/europe/2012/07/2012722145418435676.html


----------



## basilio (19 January 2022)

Turkeys voting for Thanksgiving ?? 

Millionaires call on governments worldwide to ‘tax us now’ ​Group of 102 wealthy people say tax would help tackle gulf between rich and poor





Gemma McGough, a British entrepreneur and founding member of Patriotic Millionaires UK. Photograph: PA

Rupert Neate Wealth correspondent

@RupertNeate
Wed 19 Jan 2022 11.01 AEDT
Last modified on Wed 19 Jan 2022 16.11 AEDT



More than 100 members of the global super-rich called on Wednesday for governments around the world to “tax us now” to help pay for the pandemic response and tackle the gulf between rich and poor.
The group of 102 millionaires and billionaires, including Disney heiress Abigail Disney, said the current tax system is rigged in their favour and needs to be rewritten to make taxation fairer for hard-working people and restore trust in politics.

“As millionaires, we know that the current tax system is not fair,” they said in an open letter published on Wednesday. “Most of us can say that, while the world has gone through an immense amount of suffering in the last two years, we have actually seen our wealth rise during the pandemic – yet few if any of us can honestly say that we pay our fair share in taxes.”

The super-rich signatories, who brand themselves as “patriotic millionaires”, called for the introduction of “permanent wealth taxes on the richest to help reduce extreme inequality and raise revenue for sustained, long-term increases in public services like healthcare”.
“Restoring trust requires taxing the rich,” they said in the letter, published as world leaders and business executives meet for a virtual Davos World Economic Forum. “The world – every country in it – must demand the rich pay their fair share. Tax us, the rich, and tax us now.”









						Millionaires call on governments worldwide to ‘tax us now’
					

Group of 102 wealthy people say tax would help tackle gulf between rich and poor




					www.theguardian.com


----------



## SirRumpole (19 January 2022)

basilio said:


> Turkeys voting for Thanksgiving ??
> 
> Millionaires call on governments worldwide to ‘tax us now’ ​Group of 102 wealthy people say tax would help tackle gulf between rich and poor
> View attachment 136108
> ...




One thing is for sure, you can't get money out of people who don't have it in the first place.

A tax on the rich seems to be the best way of paying off government debt, but it will take a lot of international cooperation as its only going to take a few tax havens to break ranks and there will be a lot of money flowing out of the rest of the nations.


----------



## moXJO (19 January 2022)

Why not just give your money to the government if you want to be taxed so bad?


----------



## macca (20 January 2022)

moXJO said:


> Why not just give your money to the government if you want to be taxed so bad?




Plenty of worthy charities will accept it as well


----------



## basilio (20 January 2022)

moXJO said:


> Why not just give your money to the government if you want to be taxed so bad?



Indeed!  In fact most billionaires operate on a "Tax me if you can" basis anyway.  Whats the point of having Tax havens, pollies in your pocket and legions of bent accountants if you can't squirrel away your hard won billions ?

I suggest the call by the Patriotic Rich for fairer taxation on the obscenely wealthy was a direct dig at the current tax systems. If in fact billionaires of this world pulled their weight tax wise collectively there would be the resources to tackle the problems that are raised in their open letter.  But that can only happen if *all* the xuckers rather than the "Patriotic" few are brought to account.


----------



## wayneL (20 January 2022)

Ain't gonna happen @basilio.

They will always go for the easy target, i.e. the middle class.

This is why I western economies are doomed to descend into economic fascism, whether by accident or design.

One can join the dots to where that eventually leads... And we are pretty damn close to it now.


----------



## Humid (20 January 2022)




----------



## SirRumpole (20 January 2022)

wayneL said:


> Ain't gonna happen @basilio.
> 
> They will always go for the easy target, i.e. the middle class.
> 
> ...




Yes. Governments are either in bed with or scared stiff of people like Gina, Twiggy, Clive & co that they will never be touched except as a facade and diversion for tax increases elsewhere ("we must all play our part " etc).


----------



## wayneL (20 January 2022)

Humid said:


> View attachment 136179



This principle pretty much applies to a whole host of issues.... As Pfizer well knows.


----------



## moXJO (20 January 2022)

basilio said:


> Indeed!  In fact most billionaires operate on a "Tax me if you can" basis anyway.  Whats the point of having Tax havens, pollies in your pocket and legions of bent accountants if you can't squirrel away your hard won billions ?
> 
> I suggest the call by the Patriotic Rich for fairer taxation on the obscenely wealthy was a direct dig at the current tax systems. If in fact billionaires of this world pulled their weight tax wise collectively there would be the resources to tackle the problems that are raised in their open letter.  But that can only happen if *all* the xuckers rather than the "Patriotic" few are brought to account.



 A lot of new taxes simply get slugged to middle class. Billionaires simply move to better tax havens.

Not saying they shouldn't be taxed. Just make sure it hits the mark. Didn't France try something?

As for donations they start a lot of charities and donate to themselves or something like that.


----------



## Humid (20 January 2022)

Yeah start your own charity get the tax advantage by donating and control where the money goes


----------



## SirRumpole (20 January 2022)

Humid said:


> Yeah start your own charity get the tax advantage by donating and control where the money goes



A few sportsmen might have got in on that dodge.


----------



## Knobby22 (20 January 2022)

moXJO said:


> A lot of new taxes simply get slugged to middle class. Billionaires simply move to better tax havens.
> 
> Not saying they shouldn't be taxed. Just make sure it hits the mark. Didn't France try something?
> 
> As for donations they start a lot of charities and donate to themselves or something like that.



Steve Vizard got caught on that.


----------



## moXJO (20 January 2022)

Humid said:


> Yeah start your own charity get the tax advantage by donating and control where the money goes



A lot of people do it. Then pay themselves $250k a year wage out of it. Then sprout how saint like they are.


----------



## macca (20 January 2022)

SirRumpole said:


> A few sportsmen might have got in on that dodge.




Some put money in charity to buy vaccines, buy shares in Pharma Co, announce usage of vaccine.................................


----------



## The Triangle (20 January 2022)

Meanwhile their private jets and yachts keep getting tax exemptions, pollution exemptions, carbon exemptions....   they don't complain about that do they?   Over here there should be another 2 tax brackets.   Put one in around the 750k at 50 cents on the dollar, put one in at about 5 million at around 55 cents.   It's not unreasonable enough that the wealthy would flee the country, 

A wealth tax is one of the most awful ideas in human thinking.  It would never pass, these millionaires know it.  Funny how they never actually present a workable solution in these MSM sponsored puff pieces.  Start with eliminating trusts.     

On a side note I recon if they made people choose between reading 5 guardian articles or getting vaccinated that we'd have 100% vaccination rates.


----------



## moXJO (21 January 2022)

We did have something from Joe hockey (can barely remember one single detail or result)
Something about taxing large firms so the profits paid in Australia were taxed. No idea if it was bs or not.


----------



## Investoradam (21 January 2022)

SirRumpole said:


> Yes. Governments are either in bed with or scared stiff of people like Gina, Twiggy, Clive & co that they will never be touched except as a facade and diversion for tax increases elsewhere ("we must all play our part " etc).











						Gina Rinehart 'pays more tax than any other Australian'
					

Iron ore magnate Gina Rinehart says she is now Australia's single-biggest taxpayer after her private company reported a big jump in annual profit to $1.37 billion.




					www.afr.com
				




thinking like the leftist there! zero understanding of economics or taxation, just repeat what the idiot leftist MPS and leftist rag pieces produce!
 why only target those mining giants?...i  mean they invest billions in infrastructure, equipment and have lots to depreciate like every busiuness can do, but just more of it

why not target other compenies, those software & tech  companies? who have not much more than some servers, building space and computers to depreciate


----------



## SirRumpole (21 January 2022)

Investoradam said:


> Gina Rinehart 'pays more tax than any other Australian'
> 
> 
> Iron ore magnate Gina Rinehart says she is now Australia's single-biggest taxpayer after her private company reported a big jump in annual profit to $1.37 billion.
> ...




Sure tax em all ! None of those filthy rich companies deserve anything they earn ! Facists !


----------



## Investoradam (21 January 2022)

SirRumpole said:


> Sure tax em all ! None of those filthy rich companies deserve anything they earn ! Facists !



muppet


----------



## SirRumpole (21 January 2022)

Investoradam said:


> muppet



Ha ha. Someone else who can't recognise satire.


----------

