What does the Carbon Tax mean for me?

[LostMyShirt]

Hi everyone.

I have been reading various information about the CTax since someone had mentioned thresholds being increased or something along those lines.

Well, I earn over 37K and under 80K, and the original tax is X amount plus 30%. The threshold for $0 Tax will be increased to 20K respectively. The tax amount, however, will now be 32.5%.

Does this mean that I will be paying even more tax at the end of 2012 then the previous year? It just seems to me that there will be no change for people earning around my bracket, and the only change being paying even more tax than before.

So, what's happened here? We are paying for Carbon that we don't emit, as well as having company cost added to goods?

I am no good with taxes so I beg for someone to enlighten me on this...

 

[sails]

I don't think anyone knows. Think Pink Batts, BER and every other Rudd/Gillard fiasco - what hope is there of this being done properly?

Costello said recently that the easy part is the legislation and the most difficult is the actual implementing of a new complex tax.

Treasury has done computer modelling, but I'm not so sure that they've got it any where near right according to this article:

From Henry Ergas: Swan hides his dodgy carbon model

 

[medicowallet]

Hi everyone.

I have been reading various information about the CTax since someone had mentioned thresholds being increased or something along those lines.

Well, I earn over 37K and under 80K, and the original tax is X amount plus 30%. The threshold for $0 Tax will be increased to 20K respectively. The tax amount, however, will now be 32.5%.

Does this mean that I will be paying even more tax at the end of 2012 then the previous year? It just seems to me that there will be no change for people earning around my bracket, and the only change being paying even more tax than before.

So, what's happened here? We are paying for Carbon that we don't emit, as well as having company cost added to goods?

I am no good with taxes so I beg for someone to enlighten me on this...

even IF you break even on this.

There is no doubt going to be a ramping up of the tax as we "fail to meet targets"

or a decrease in compensation.

MW

 

[LostMyShirt]

Sorry?

I am trying to figure out why the threshold is being increased for $0 tax, but the tax rate is increasing for everyone else. How is this a Tax break?

Am I correct in saying that for those who earn over 37K are going to be paying 2.5% more tax by next year? Threshold increase from 16K to 20K respectively; but why is my tax going up?

This would be my first year in business (quite small), and yet I feel as if I am being gouged.

 

[sails]

Here is another interesting article on Treasury modelling by Peter Gallagher who is a leading Australian consultant on trade and public policy:

An excerpt:

The exchanges between Ms Gillard and Mr Abbott in the past day or so about modelling “compensation” for the proposed carbon tax suggest that the Prime Minister believes modelling is sufficiently accurate to guide the fine-tuning of her tax and “compensation”. But if the Treasury’s 2008 modelling of the proposed ETS are an indication of the sort of advice she is getting about the impact of her tax then I can’t agree.

Full article - worth reading: Treasury modelling of a carbon tax

 

[Julia]

I feel as if I am being gouged.

Congratulations. You have it in one.
Good luck.

 

[Knobby22]

Sorry?

I am trying to figure out why the threshold is being increased for $0 tax, but the tax rate is increasing for everyone else. How is this a Tax break?

Am I correct in saying that for those who earn over 37K are going to be paying 2.5% more tax by next year? Threshold increase from 16K to 20K respectively; but why is my tax going up?

This would be my first year in business (quite small), and yet I feel as if I am being gouged.

You won't be paying more tax directly, it is an indirect tax i.e. you will be paying more for electricity and gas.
If you live at home you will hardly notice the difference.
However you will be compensated by a tax break that will come as a lump sum. You will do OK. It is the people over 80K that lose out.

 

[LostMyShirt]

You won't be paying more tax directly, it is an indirect tax i.e. you will be paying more for electricity and gas.
If you live at home you will hardly notice the difference.
However you will be compensated by a tax break that will come as a lump sum. You will do OK. It is the people over 80K that lose out.

Well it was those breaks I was looking at that didn't make sense.

Earners who earn more than $37,001 will end up paying 32.5% and the threshold for $0 tax is being pushed up to $20,000 respectively. So, all in all, I will end up paying tax on the entire NET including that $20,000?

This just doesn't make sense - why on Earth would the Government do something like this when the Tax is aimed at Carbon producers? I will not only pay a higher tax but increased costs?

This just doesn't make sense - surely I am severely mistaken... Am I?

 

[danbradster]

Sorry?

I am trying to figure out why the threshold is being increased for $0 tax, but the tax rate is increasing for everyone else. How is this a Tax break?

Am I correct in saying that for those who earn over 37K are going to be paying 2.5% more tax by next year? Threshold increase from 16K to 20K respectively; but why is my tax going up?

This would be my first year in business (quite small), and yet I feel as if I am being gouged.

It is to get votes and to make it sound positive, it allows for them to have more tricky wording.

 

[LostMyShirt]

o...k...

So I will be paying more tax, as well as more on certain other things through increase in price of goods....

That doesn't make sense to me.... And how exactly are they going to get more votes? Everyone is being gouged, not just the pensioners...

This ISN'T a CTax Rage thread - I seriously want to know how it is going to affect my income tax as per some crap I read about threshold increases.

I'll just call an accountant in the morning....

 

[Julia]

Well it was those breaks I was looking at that didn't make sense.

Earners who earn more than $37,001 will end up paying 32.5% and the threshold for $0 tax is being pushed up to $20,000 respectively. So, all in all, I will end up paying tax on the entire NET including that $20,000?

No. The $20K tax free threshold is just that. You pay nothing on the first $20K.
Then you pay according to your marginal rate on any amount thereafter.

It's not actually much of a change, in that the $20K tax free threshold wipes out the previously claimable low income tax offset which amounted to around $18,000, I think.

The above is as I understand it, but I'm happy to be corrected.

But don't be under any illusions that any compensation from the government will actually compensate you for all the increased costs. We will all have not only increased household electricity accounts (plus the amount the energy companies whack in as they claim "the uncertainty still pertaining to the whole carbon tax situation will result in higher prices which will have to be passed on to the consumer"),
but also everything you buy/consume has electricity as a component.

Prices will be able to rise exponentially with the gougers compassionately telling you there's nothing they can do about it as "it's all due to the carbon tax".
Good luck proving it's not.
We will be ripped off big time.

 

[LostMyShirt]

No. The $20K tax free threshold is just that. You pay nothing on the first $20K.
Then you pay according to your marginal rate on any amount thereafter.

It's not actually much of a change, in that the $20K tax free threshold wipes out the previously claimable low income tax offset which amounted to around $18,000, I think.

The above is as I understand it, but I'm happy to be corrected.

But don't be under any illusions that any compensation from the government will actually compensate you for all the increased costs. We will all have not only increased household electricity accounts (plus the amount the energy companies whack in as they claim "the uncertainty still pertaining to the whole carbon tax situation will result in higher prices which will have to be passed on to the consumer"),
but also everything you buy/consume has electricity as a component.

Prices will be able to rise exponentially with the gougers compassionately telling you there's nothing they can do about it as "it's all due to the carbon tax".
Good luck proving it's not.
We will be ripped off big time.

Julia, how is it that this odd scheme has made it through parliment? Surely this is a joke...

 

[Julia]

Julia, how is it that this odd scheme has made it through parliment? Surely this is a joke...

A reasonable suggestion, Lost My Shirt.
Not sure why you're surprised, however, given the overall quality of decisions made by this government.

I doubt many were aware of the low income tax offset which has existed for years, thus enabling the government to claim a magnificent benevolence in offering a whole $20K tax free threshold as part of the compensation for the carbon tax. This, of course, is pure bull**** and all they are offering is around $2000 p.a. extra, as i understand it.

I believe I have heard just one economist pull the government up on their spin on this.

 

[sails]

...However you will be compensated by a tax break that will come as a lump sum. You will do OK. It is the people over 80K that lose out.

What about a separated parent earning over $80k who have been screwed with massive legal fees to gain time with their kids plus stung again heavily by child support on which they pay tax but is tax free to the non-income parent. While these are mostly dads, it is more to do with the higher income earner who cops it. I would imagine there will be no relief for people like this doing it tough.

 

[LostMyShirt]

Julia; well, this is not going to be fun...

 

[moXJO]

Julia; well, this is not going to be fun...

For labor it will be
Now bend over and grab your ankles while labor saves the planet by screwing you

 

[tothemax6]

This would be my first year in business (quite small), and yet I feel as if I am being gouged.

Lol, we are all getting gouged my friend.
Tax should be half what it already is, not even bigger. I'm afraid there aren't that many choices to be had though - not all of us can run away to Switzerland.

Julia, how is it that this odd scheme has made it through parliment? Surely this is a joke...

It was insane the moment it was suggested, it's still insane now. But then again, most of the things politicians suggest and do are completely insane and incomprehensible. I just say '2+2=5' to myself, shrug it off, and think about something else.

 

[danbradster]

o...k...

So I will be paying more tax, as well as more on certain other things through increase in price of goods....

That doesn't make sense to me.... And how exactly are they going to get more votes? Everyone is being gouged, not just the pensioners...

This ISN'T a CTax Rage thread - I seriously want to know how it is going to affect my income tax as per some crap I read about threshold increases.

I'll just call an accountant in the morning....

They advertise the tax break and never mention the passed on costs from businesses, that is how they try to get votes, and that is what allows for the tricky wording.

"Nine out of 10 households will get tax cuts or payment rises and more money will flow into clean energy as Australia's 500..." Notice the 9/10 figure used, while the majority of them will only see tiny tax breaks, which will be drastically outweighed by cost of living increases.

 

[Calliope]

Julia; well, this is not going to be fun...

With a name like yours surely you are not surprised at being screwed.

 

[LostMyShirt]

With a name like yours surely you are not surprised at being screwed.

..... That is an odd response.

Julia; Thank you very much for responding to the thread with viable information - you answered the questions I needed to be answered.

I am dissapointed really....

Well, all of you progressives have gotten your wish. You want to be modern, rational and scientific - good luck to you all, as you have been fleeced by cloak and dagger tax covered in irrational informations and pseudo-sciences.

I'll end this with a common spew that I usually divulge to those "progressives"; just because if makes you feel warm and fuzzy within your skin, does not mean you are correct nor does it indicate your view is Universal. Using your dogmatic sciences, you have ffectively fleeced the entire populas. Those who boast rationality, have accepted the irrational. those who bow to the scientific dogma, have been fleeced with pseudo-science - welcome to the modern day society, where we pay for non-existant effects. Australia has become a semi-free country. We may not pay for the air we breath, but we will certainly pay for the air we breath out....