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

[drsmith]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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.

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]

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.

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]

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.

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]

You do when you use your medicare card.

I don't think I even have one.

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!

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]

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]

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?

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

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

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]

....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]

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

How many third world countries have you visited?

 

[DB008]

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]

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.

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.