Abbott/Hockey tax cuts

[Junior]

I'm not over 60, get your facts straight, before you run off at the mouth.

Your supposed to be the knowledgeable one.

Also regarding life expectancy, the next generation haven't died yet.

From age 60 onwards you will pay no income tax, and no medicare levy on your pension income. Your SMSF will pay zero tax on earnings, and be refunded all franking credits.

Although, I'm pretty sure you already know this.

 

[sptrawler]

From age 60 onwards you will pay no income tax, and no medicare levy on your pension income. Your SMSF will pay zero tax on earnings, and be refunded all franking credits.

Although, I'm pretty sure you already know this.

Thanks for that Junior and appologies to McLovin, going through a tough time ATM. Best not to post.

 

[Junior]

Thanks for that Junior and appologies to McLovin, going through a tough time ATM. Best not to post.

Haha no worries trawler. Mine was a grumpy pre-coffee post as well.

Keep at it, hope you push through the tough times.

 

[sydboy007]

I'm not disagreeing with you, just saying it takes a lot more thought than we can afford it.

For example the land tax, superannuation pension tax, could be replaced with a death tax, as the U.K does. It would be much more efficient, than trying to guess what level of tax needs to be applied.

Just apply a % estate tax on the death of the individual, then the person isn't disadvantaged on their efforts to save and can enjoy the fruits of their labour.

How would a death tax work when most wealthy people have various trust structures? In a discretionary trust just how much does the dearly departed actually own?

Considering how the issue surrounding trusts and legalised tax avoidance, I doubt any Govt would have the ticker to sort that mess out.

I'd also say that even if a death tax was brought in tomorrow, it would take a considerable amount of time to generate much in the way of revenue. You'd also have the same complaints you're making where people made their plans under the old rule sand it's not fair to be taxing them any more, though what they really mean in I don't like my inheritance being reduced by tax.

If the ATO came to you and said, based on your income level and proposed government spending you're tax bill is $10000 for the year. We have various taxation methods to use that determines how much tax you need to remit to us.

For example, if paid via a land tax you will need to pay $10000

You could pay it via stamp duty, but due to the inefficiency of the tax you will need to pay $17,000 for the Govt to receive the $10000 in revenue.

A cheaper option would be to tax you via the GST, meaning you'd need to remit just $12,000.

Which option would you like to choose?

I'd prefer the tax system to be made a lot simpler and especially a lot more efficient. The latest tax white paper has recommended removing CGT concessions. Various policy groups have recommended major NG reforms, with debate on totally removing it to quarantining it to the asset income and new housing builds.

There has been much analysis and thought on this. I am not plucking ideas out of my ass so to speak, but thoughtfully reading what those smarter than mean in this area have proposed and weighed up the various option proposed. Simplicity, efficiency seems the best way forward. It takes half a forest to print out our tax code these days. Crazy.

Over the 2012-13 financial year $12.8B was collected in stamp duty, the ABS estimates that as at June 2013 there were 9,226,900 residential dwellings. Based on this dwelling count, land tax of ~$1400 annually per residential dwelling would cover the cost of this foregone revenue. Keep in mind that stamp duty is collected from any property transaction so revenue would be higher when you include land sales and sales of other property types. This would potentially allow for a reduction in the overall land tax rate per household.

I don't think $1400 is an onerous tax to be paid, especially if it was raising extra revenue so that income and corporate taxes could be cut, and some of the extra revenue used to fund increase benefits for the poor and pensioners. I'd prefer a tiered system. Provide a tax free limit - say the bottom 15% of land valuations are tax free. Then have a rate for next 16-80%, with a slightly higher rate for any value over that. Should help to alleviate the tax minimisation of the ultra wealthy.

Due to the efficiency of the land tax compared to SD, that $12.8B of SD converts into just $7.52, but would increase to 14.22B via land tax. It's the closest thing to free money we have.

Fairness is in many ways a political issue, and can be handled via the tax and transfer systems, as it has been in the past with the GST and Carbon tax. taxing land and consumption, while lightly taxing profits and income, seems to match your argument for rewarding hard work and risk taking.

 

[sptrawler]

How would a death tax work when most wealthy people have various trust structures? In a discretionary trust just how much does the dearly departed actually own?

Considering how the issue surrounding trusts and legalised tax avoidance, I doubt any Govt would have the ticker to sort that mess out.

I'd also say that even if a death tax was brought in tomorrow, it would take a considerable amount of time to generate much in the way of revenue. You'd also have the same complaints you're making where people made their plans under the old rule sand it's not fair to be taxing them any more, though what they really mean in I don't like my inheritance being reduced by tax.

If the ATO came to you and said, based on your income level and proposed government spending you're tax bill is $10000 for the year. We have various taxation methods to use that determines how much tax you need to remit to us.

For example, if paid via a land tax you will need to pay $10000

You could pay it via stamp duty, but due to the inefficiency of the tax you will need to pay $17,000 for the Govt to receive the $10000 in revenue.

A cheaper option would be to tax you via the GST, meaning you'd need to remit just $12,000.

Which option would you like to choose?

I'd prefer the tax system to be made a lot simpler and especially a lot more efficient. The latest tax white paper has recommended removing CGT concessions. Various policy groups have recommended major NG reforms, with debate on totally removing it to quarantining it to the asset income and new housing builds.

There has been much analysis and thought on this. I am not plucking ideas out of my ass so to speak, but thoughtfully reading what those smarter than mean in this area have proposed and weighed up the various option proposed. Simplicity, efficiency seems the best way forward. It takes half a forest to print out our tax code these days. Crazy.

Over the 2012-13 financial year $12.8B was collected in stamp duty, the ABS estimates that as at June 2013 there were 9,226,900 residential dwellings. Based on this dwelling count, land tax of ~$1400 annually per residential dwelling would cover the cost of this foregone revenue. Keep in mind that stamp duty is collected from any property transaction so revenue would be higher when you include land sales and sales of other property types. This would potentially allow for a reduction in the overall land tax rate per household.

I don't think $1400 is an onerous tax to be paid, especially if it was raising extra revenue so that income and corporate taxes could be cut, and some of the extra revenue used to fund increase benefits for the poor and pensioners. I'd prefer a tiered system. Provide a tax free limit - say the bottom 15% of land valuations are tax free. Then have a rate for next 16-80%, with a slightly higher rate for any value over that. Should help to alleviate the tax minimisation of the ultra wealthy.

Due to the efficiency of the land tax compared to SD, that $12.8B of SD converts into just $7.52, but would increase to 14.22B via land tax. It's the closest thing to free money we have.

Fairness is in many ways a political issue, and can be handled via the tax and transfer systems, as it has been in the past with the GST and Carbon tax. taxing land and consumption, while lightly taxing profits and income, seems to match your argument for rewarding hard work and risk taking.

The biggest problem I can see with the land tax idea, is getting the politicians to vote for it, several politicians have numerous houses. The actual tax could be easily collected with rates, and has a lot of merit,.

Removing the CG discount alone, would take a lot of steam out of the property market, as most are in it. for the CG.

NG could be more difficult I think, as removing all the encouragement for risk taking, could have a huge impact. Just my opinion, which according to the missus, isn't worth much.

As you say with death taxes, trusts would need sorting.lol

 

[Smurf1976]

I can't confirm how true (or otherwise) it is but I just saw a Facebook post which says that Gina Reinhart's wealth grew by $19 billion last year.

Now, if that were subject to a level of taxation comparable to what ordinary workers pay then we'd have quite a few extra $ billion coming in from one individual alone. Then there's the others.

I'm not opposed as such to any particular tax that has been put forward but it's time to close the loopholes and stop the excuses which see a fortune of potential tax revenue given away each year. Only then does it seem fair to worry about households.

 

[sinner]

I can't confirm how true (or otherwise) it is but I just saw a Facebook post which says that Gina Reinhart's wealth grew by $19 billion last year.

Take a quick squiz at Google, search "Gina Reinhart wealth rises" or "Gina Reinhart wealth drops" and note that the articles correlate perfectly with the Iron Ore price.

The problem with most journos in this case is they don't understand market cap is a valuation, not a wealth/worth.

Even if they work at the AFR...

http://www.afr.com/news/economy/tra...n-australia-into-a-new-greece-20150719-gifyxh

Ms Rinehart, whose family have accumulated vast wealth from iron ore mining, has seen her fortune dwindle since commodity prices began their inexorable slide last year. The Australian mining mogul has seen her estimated wealth collapse to around $11bn from a fortune that was thought to be worth around $30bn just three years ago.

i.e. it went from $11bn plus $19bn to $30bn and then back to $11bn, just like the iron ore price.

Alas for the journos and those fooled into making facebook memes based on those journos articles, sanity prevails once again and we pay tax on the cashflows, not on valuations...

I don't like Gina Reinhart at all, but facts is facts.