Should the GST be raised?

[white_goodman]

Should the GST be raised and managed by the RBA similar to IR... the only reason i suggest this is surely a tax that will curb EVERYONES spending ie GST will surely slow down inflation pressures better then affecting just those people with a mortgage through lowering and raising IR... i know IR has flow on effects but still worth a discussion i think..

thoughts?

 

[nioka]

Should the GST be raised and managed by the RBA similar to IR... the only reason i suggest this is surely a tax that will curb EVERYONES spending ie GST will surely slow down inflation pressures better then affecting just those people with a mortgage through lowering and raising IR... i know IR has flow on effects but still worth a discussion i think..

thoughts?

Interesting thought. It would take the politics out of the equation if an independent body like the RBA were involved. Not only would it control spending by individuals but it would go some way towards controlling the amount of funds available to state governments.

Personally I'd like to see some control on the amount of credit that consumers were allowed. It is easy personal credit that is behind our problems.

 

[Whiskers]

Should the GST be raised

How dare you even mention such tabo. :

****, if the polies get wind of any support for such an idea... well, what's life like in the Bahamas.

and managed by the RBA similar to IR...

You don't mean that do ya! Did you say you worked for the treasury!

 

[Julia]

Well, it won't happen because Rudd & Co. have categorically ruled out any increase in the GST.
However, it does seem a reasonable suggestion except that it would unfairly penalise those on the lower income levels, i.e. if GST is applied to all basic requirements of everyday living, people on low incomes incur a greater percentage increase on their spending with a GST rise.

Btw high interest rates don't just affect homeowners with mortgages.
Business also has to borrow at the higher rates and this has a widespread effect.

 

[Beej]

Personally I'd like to see some control on the amount of credit that consumers were allowed. It is easy personal credit that is behind our problems.

That's *exactly* what the RBA is meant to be controlling via the movements/control of official interest rates!

Cheers,

Beej

 

[Macquack]

Should the GST be raised and managed by the RBA similar to IR... thoughts?

Your kidding, right.

Lets have the GST rate changed every month at the whim of a bunch of ex-school prefects.

I agree with Whiskers, this thread should be deleted immediately.

 

[Stan 101]

Initial thought is no. Purely because we have a multitude of people who can't work out 10% GST on an item. Imagine 18.5%?

More import issues at hand though.

 

[jonnycage]

probably easier the better for most, instead of mass confusion

anyones guess

 

[Mike Trader]

Yes I think the GST should be like interest rates raised and lowered,according to the demand -supply situation ,it would have much more immediate impact than Interest rate changes that take a while to filter through the economy,except that governments would be reluctant when lowering it, because of the impact on revenue.

 

[doogie_goes_off]

The GST already killed off Micro-business and Small business would go the same way with variable GST, also the changes would be subject to shifting sales from month-month or quarter to quarter giving even more failed economics students a job at the tax office, which is already a monster.

 

[Family_Guy]

HOW THE TAX SYSTEM WORKS

Suppose that every day, ten people go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth (the richest) would pay $59.

So, that's what they decided to do.

The ten drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four were unaffected. They would still drink for free. But what about the other six - the paying customers? How could they divide the $20 windfall so that everyone would get their "fair share"?

They realised that $20 divided by six is $3.33. But if they subtracted that from everyone's share, then the fifth and the sixth would each end up being paid to drink their beer. So, the bar owner suggested that it would be fair to reduce each drinker's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:

The fifth person, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the drinkers began to compare their savings.

"I only got a dollar out of the $20," declared the sixth. She pointed to the tenth man, "but he got $10!" "Yes, that's right," exclaimed the fifth. "I only saved a dollar too. It's unfair that he got ten times more than I did" "That's true!!" shouted the seventh. "Why should he get $10 back when I got only two? The wealthy get all the breaks" "Wait a minute," yelled the first four in unison. "We didn't get anything at all. The system exploits the poor"

The nine drinkers surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill.

And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

For those who understand, no explanation is needed. For those who do not understand, no explanation is possible!

 

[doogie_goes_off]

Agreed, top marginal tax rates are too high and the GST is a killer on everyone. I'd really like to see the government lower the GST, that would shut the States up and put a hole in the never ending surplus that is dished out for able bodied lazy buggers and bonus welfare.

 

[nomore4s]

Yes I think the GST should be like interest rates raised and lowered,according to the demand -supply situation ,it would have much more immediate impact than Interest rate changes that take a while to filter through the economy,except that governments would be reluctant when lowering it, because of the impact on revenue.

You can't be serious.

As if we aren't already over taxed. Also our tax system is incredibly complicated as it is and you want to play around with the GST rate every quarter. You got to be kidding me.

Have any of you thought about how difficult this would be for businesses trying to adjust GST rates every 1/4? Think about all the extra work for small businesses trying to admin this?

And how will this affect our lower income earners & what about pensioners? It's hard enough for them to budget now let alone if prices change every 1/4 due to GST.

What will the Government do with the extra money from GST if it's raised or where will the short fall come from if they are lowered? Especially if the decision to raise or lower GST is made by an "independent body".

Not a vey well thought out idea imo.

 

[nioka]

You can't be serious.
Have any of you thought about how difficult this would be for businesses trying to adjust GST rates every 1/4? Think about all the extra work for small businesses trying to admin this?

Not a vey well thought out idea imo.

You are right. While I think the idea has some positives I agree that it would be an administrative nightmare, especially for small business. Take it off the list for future implementation.

 

[Stan 101]

Why not abolish income tax for the individual, raise the GST to a flat rate, adjust payroll tax, and come up with a fair rebate system for investment? Simplistic for sure, but must have merit.

Having the GST fluctuate would be an absolute nightmare. Imagine how hard it would be for just a small retail business to reconcile the end of month with GST changes.

You can't be serious.

As if we aren't already over taxed.

Nomore4s, how can it be we are overtaxed when we still have poor roads, ordinary infastructe in transport, mediacal and education?
We benefit by living in a large country with low population. The down side of this is servicing things like our national highway. Maintaining highway one alone is a huge burden on our kitty. Where else will the money come from for all the improvements and maintenance to our services?

 

[numbercruncher]

Yes they should raise it, be proactive , do it now before the perverbial hits the fan.

August 28, 2008 12:00am

THE NSW Government's finances are at risk of collapse with almost $1 billion worth of stamp duty forecast to be wiped from the NSW Budget over the next year as the global financial crisis hits home.

The Daily Telegraph has obtained confidential NSW Treasury data showing that in the first two months of the current financial year alone, $180 million has vanished from expected stamp duty revenue as property sales slumped.

If the trend continues as predicted, the Budget will plunge into deficit by the middle of next year, chalking up a $1 billion revenue shortfall - and putting at risk a raft of projects.

http://www.news.com.au/dailytelegraph/story/0,22049,24252263-5001021,00.html

 

[nomore4s]

Nomore4s, how can it be we are overtaxed when we still have poor roads, ordinary infastructe in transport, mediacal and education?
We benefit by living in a large country with low population. The down side of this is servicing things like our national highway. Maintaining highway one alone is a huge burden on our kitty. Where else will the money come from for all the improvements and maintenance to our services?

They could double our taxes and we still won't have any improvement in any of those areas.

IMO it has more to do with how much money governments throw away. Look at the surplus the government has had and yet none of those things have improved, infact most have deteriorated. Paying more tax won't fix those problems.

If you don't think we're overtaxed fine, but I do and judging by the tax cuts we've received over the past few years, so does the government. Even just updating the tax system to make it easier for everyone involved would be a start.

 

[aacantona]

Just out of curiosity can anybody remember the last time we had a budget deficit?

 

[bassmanpete]

Family_Guy, that's exactly what happened in the UK in the '50s and '60s. The highest rate of tax (super tax it was called) was 19/6 in the pound. This was the inspiration for George Harrison to write Taxman with the lines:

There's one for you, nineteen for me.
'Cause I’m the taxman,
Yeah, I’m the taxman.

If you spent more than 6 months in the country you paid the tax. All the wealthiest people spent 6 months in the UK and the other 6 months in their villas in the South of France, the Bahamas, or wherever.

 

[Stan 101]

Just out of curiosity can anybody remember the last time we had a budget deficit?

When have we not had a budget deficit? Just because the Government declares a surplus for the fiscal year, does not mean we are debt free. Are we simply paying IO on our world bank loans or are we going hard at P&I? Don't fall for the "surplus" line.

This country needs to pour some of this "surplus" into something grand, something monumental. Lets start our next snowy river style project. A 20 year plan.


Beaurocracy costs us for sure, and will always do so. The bigger it gets the harder it is to hold in the reins.