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

[DB008]

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]

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]

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]

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.

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.

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]

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]

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]

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]

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.

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]

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]

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]

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]

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]

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.

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]

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]

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]

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]

Agree with above..but would prefer my numbers.

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

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]

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.

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

??????????

 

[Starcraftmazter]

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?

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?

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.

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.

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

+1, completely agree.

 

[bellenuit]

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.