The Elephant in the room - Taxation

[divs4ever]

Ah, I see what you mean here. Perhaps the money is handed down with an applicable CGT being withdrawn as the 'death tax' but then the assets your nephew receives is tax free and can't be later taxed when sold. Can't imagine any complications there.

not me , i see it as the thin end of a new wedge ( thresholds will creep down , inflation will erode the buying power )

'them ' today , possibly you next week

 

[Smurf1976]

Many of the people with large fortunes don’t pay income taxes and capital gains to the same extent as the middle class.

As a practical observation, if I look at most taxes in Australia, or most proposed reforms to taxation within living memory, then in political terms it's "tax the rich".

Just one thing - "the rich" in this context means people like teachers, police, cleaners, run of the mill public servants, nurses, shop assistants, delivery drivers, tradies, white collar professionals and everyone else who'd sensibly be referred to as working class or at most middle class. Rarely if ever are the true actual rich a target.

 

[Value Collector]

but where did those fortunes come from ( not counting the ones who acquired through generations of 'public service ')

they EARNED it , aka produced something ( or a service ) that was valuable , they also probably paid several staff on the way up the ladder , helping them up the ladder

Just because “they earned it” doesn’t mean it shouldn’t be subject to taxation.

Secondly, if the fortune was earned by “Uncle Ken” and a large portion of it hasn’t been taxed yet because it accumulated capital gains, why shouldn’t it be clipped by say 10% on the way through to Nephew Jimmy.

 

[Value Collector]

Ah, I see what you mean here. Perhaps the money is handed down with an applicable CGT being withdrawn as the 'death tax' but then the assets your nephew receives is tax free and can't be later taxed when sold. Can't imagine any complications there.

I would suggest that when the assets hit the Nephews balance sheet, they get taxed at say 10% of their face value at that time, and that face value becomes his new cost base from which his future capital gains are calculated.

Eg

Assets worth $50 M are taxed $5M and $45 Million gets past along to the Nephew.

Then I’d say 20 years when he sells them for $90M, it’s treated as if he bought them for $50 Million, and he is taxed only on the $40 Million growth.

But if he hands them along to a third generation they get taxed at 10% again.

 

[Value Collector]

As a practical observation, if I look at most taxes in Australia, or most proposed reforms to taxation within living memory, then in political terms it's "tax the rich".

Just one thing - "the rich" in this context means people like teachers, police, cleaners, run of the mill public servants, nurses, shop assistants, delivery drivers, tradies, white collar professionals and everyone else who'd sensibly be referred to as working class or at most middle class. Rarely if ever are the true actual rich a target.

Yes it’s marketed as “tax the rich”, but generally it’s really “tax the high income earners” which is a different thing.

As I mentioned, the real rich people often have many ways to reduce and avoid paying the run of the mill income tax, and the “dynasties” can even avoid capital gains taxes.

As I said, the middle class and the moderately “rich” are generally forced sell and incur CGT and part of their life plan, the super rich don’t really have to.

———————
But any suggestion of a death tax would be met with a lot of resistance, even though it would be a good thing, so probably not much point even discussing it.

 

[farmerge]

of course they would .. providing their family was exempt

Stupid me. Totally forgot the rules for the peasants and the rules for pollies and bum polishing mates.

 

[farmerge]

but but , weren't the members of that dynasty paying tax along the way ( pay as you go ) , if not WHY not ??

Ahh smart accountancy shades of Kerry Packer and his 1c in the dollar, and that was too much.

 

[farmerge]

No, it’s not about capitalism, capitalism works just fine with taxation, it’s about spreading the tax burden as fairly as possible across all participants.

And Mr Value Collector therein lies the problem. The tax burden is not spread evenly. multi nationals with their off-shore tax havens, extra smart accountancy keeping the super wealthy from paying a fair and equiable share, while the poor peasants shoulder the burden and are always pushing that bogged wagon out of a bog trying to earn a quid.
Unfortunately in this very lucky country we are over governed and over taxed.

 

[farmerge]

There’s plenty of half dead, dim witted pollies so I reckon we will see the Albo clowns raise this for discussion within the next 12/18 months

Hmm I'm just wondering if it was brought up and actually was passed would the peasants have an uprising and boot out one mob of duds only to replace them with another lot of duds.

 

[divs4ever]

Ahh smart accountancy shades of Kerry Packer and his 1c in the dollar, and that was too much.

he only followed the loopholes left by others ( make stuff complicated and there is usually a weak point )

besides that he allegedly deposed Paul Keating ( and educated the Senate )

 

[farmerge]

he only followed the loopholes left by others ( make stuff complicated and there is usually a weak point )

besides that he allegedly deposed Paul Keating ( and educated the Senate )

His triade before the Senate inquiry was classic. Tied them in knots, and that was with one hand tied behind his back. Can still see him giving the inquiry mob a basic lesson . Was great to watch.

 

[divs4ever]

Hmm I'm just wondering if it was brought up and actually was passed would the peasants have an uprising and boot out one mob of duds only to replace them with another lot of duds.

the only real fix would be to elect a mob willing to unleash a razor gang ( onto the public service )

OR someone willing to rebuild the whole system again but avoiding the flaws in the current system ( stuff like ministers 13 levels away from the general public with the problem, departments that become family dynasties , etc etc

 

[farmerge]

the only real fix would be to elect a mob willing to unleash a razor gang ( onto the public service )

OR someone willing to rebuild the whole system again but avoiding the flaws in the current system ( stuff like ministers 13 levels away from the general public with the problem, departments that become family dynasties , etc etc

Unfortunately will never happen. The gold trail is set in concrete for the next lot to follow

 

[Smurf1976]

unleash a razor gang ( onto the public service )

Even that has a serious flaw in the way it would actually be implemented.

In the PS as in most places there's a mix of people.

Those who competently but unremarkably go about their jobs.

Those who actually are experts on something and know it inside and out in great detail.

Dead wood.

Having worked in the PS I'll give you a guarantee of how any razor gang will operate. It'll cut a fixed % of the workforce and will do so first by wiping out the technical experts completely and after that will seek expressions of interest for a "voluntary" redundancy from those who competently but unremarkably go about their jobs.

If not enough applicants are received for redundancy, managers will be given the task of making the workplace as unpleasant as possible until enough people quit.

The dead wood will remain 100% employed throughout indeed to the extent lower level managers take redundancies, the dead wood will be promoted into those roles as a reward.

A third of the former PS technical experts will retire as such, a third will leave that line of work completely and do something unrelated whilst the other third will start their own businesses as consultants. They'll quote some ridiculous price for their services and this will be accepted since there's nobody else with the required knowledge. End result is a third as many people and the total cost of them has doubled.

That's exactly how it works.

 

[Value Collector]

And Mr Value Collector therein lies the problem. The tax burden is not spread evenly. multi nationals with their off-shore tax havens, extra smart accountancy keeping the super wealthy from paying a fair and equiable share, while the poor peasants shoulder the burden and are always pushing that bogged wagon out of a bog trying to earn a quid.
Unfortunately in this very lucky country we are over governed and over taxed.

Yep, you are justifying my point there, there is a lot of ways the super rich get out of paying the taxes the rest of us face.

That’s why I said I am not against capitalism, hell I make my living as a capitalist, but we can be capitalists while still trying to make the tax system fairer.

As I explained above I believe an inheritance/death tax is a good way to catch some of these huge amounts of wealth that built up and escaped taxation during their owners lives, and it’s not double taxation, because it’s a tax on the new owner, not the previous owner.

But as I said it will never get in, because people will resist it on irrational arguments, and mean while allow these huge dynasties to get away without paying their fair share.

 

[qldfrog]

And that tax elephant is never slimming 328 billions from memory just committed last weeks to have leaking Chernobyl tin cans bought abroad to ensure we get into the next big world war.
328b on a scrawly 20m taxpayer country, that will be a lot of working class turned into "rich bastards to be taxed."..and i forgot the olympic games

 

[divs4ever]

Even that has a serious flaw in the way it would actually be implemented.

In the PS as in most places there's a mix of people.

Those who competently but unremarkably go about their jobs.

Those who actually are experts on something and know it inside and out in great detail.

Dead wood.

Having worked in the PS I'll give you a guarantee of how any razor gang will operate. It'll cut a fixed % of the workforce and will do so first by wiping out the technical experts completely and after that will seek expressions of interest for a "voluntary" redundancy from those who competently but unremarkably go about their jobs.

If not enough applicants are received for redundancy, managers will be given the task of making the workplace as unpleasant as possible until enough people quit.

The dead wood will remain 100% employed throughout indeed to the extent lower level managers take redundancies, the dead wood will be promoted into those roles as a reward.

A third of the former PS technical experts will retire as such, a third will leave that line of work completely and do something unrelated whilst the other third will start their own businesses as consultants. They'll quote some ridiculous price for their services and this will be accepted since there's nobody else with the required knowledge. End result is a third as many people and the total cost of them has doubled.

That's exactly how it works.

unless you trim the laws and regulations in the process ( had a few relatives work in the Federal Public service , even privatizing them couldn't help )

but public servants are like LIC managers i don't mind paying the extra if they produce the outcomes , but often all you find are private fiefdoms

i gave TLS a chance but never again , i will never hold CBA , or MPL , i await with amusement for the next ALP privatization .. will it be the NBN or a fully privatized Australia Post ( or something else like the ABC )

and another thing how many departments ( ministers ) do we really need ??

 

[divs4ever]

Yep, you are justifying my point there, there is a lot of ways the super rich get out of paying the taxes the rest of us face.

That’s why I said I am not against capitalism, hell I make my living as a capitalist, but we can be capitalists while still trying to make the tax system fairer.

As I explained above I believe an inheritance/death tax is a good way to catch some of these huge amounts of wealth that built up and escaped taxation during their owners lives, and it’s not double taxation, because it’s a tax on the new owner, not the previous owner.

But as I said it will never get in, because people will resist it on irrational arguments, and mean while allow these huge dynasties to get away without paying their fair share.

free-market capitalism , NOT crony-capitalism for me , thanks

treat the capital nicely and it will be invested ( re-invested ) there , start getting greedy and profits run away

 

[qldfrog]

And that tax elephant is never slimming 328 billions from memory just committed last weeks to have leaking Chernobyl tin cans bought abroad to ensure we get into the next big world war.
328b on a scrawly 20m taxpayer country, that will be a lot of working class turned into "rich bastards to be taxed."..and i forgot the olympic games

My mistake only 15m taxpayers in oz... and the cost is 368 billions..remember the scandal of Morrison 50 billions submarine buy from France
So 368000millions split in 15m taxpayers.
Each of us got an extra $24500 aud of extra debt on our shoulder added in the last fortnight that's $75k for my family of 3..in less than a month
Seriously,why do we bother investing and saving

 

[divs4ever]

My mistake only 15m taxpayers in oz... and the cost is 368 billions..remember the scandal of Morrison 50 billions submarine buy from France
So 368000millions split in 15m taxpayers.
Each of us got an extra $24500 aud of extra debt on our shoulder added in the last fortnight that's $75k for my family of 3..in less than a month
Seriously,why do we bother investing and saving

and the Collins class before that , not to mention being tricked into scrapping the F-111s ( about the only lucky break we had since the Spitfires arrived too late for WW2 )

am certainly not investing/saving for the Government's sake