Which is your least favourite tax?

[Bushman]

With the findings of the Henry Review to be published soon, taxation reform is becoming a hot topic. So which is your least favourite tax? You know the one that irks you every time you read about it.

For me it has to be land tax and stamp duty. These ridiculous throw back to a by-gone era that unfairly penalises a whole investment class (i.e. commercial property) and adds to the illiquidity of a whole sector. Then if you do manage to make a quid on your investment, you are slugged with a CGT as well. Get rid off it!

 

[TOBAB]

Re: Which is yout least favourite tax?

Where do I start, simply can not limit to one:

1. Payroll tax: I make a point of trying to explain this one to my staff at review time. This usually results in a confused look and the incorrect assumption that it is the withholding of their PAYG. NO IT IS THE TAXING OF EMPLOYMENT PLAIN AND SIMPLE.

2. The fire levy: You do he right thing and insure your property and pay the fire levy. Your neighbour does not insure. The fire fighters will still turn up and douse the flames at your neighbours and not be charged for it. Huh? A good reason to self insure.

3. Land tax and stamp duty: I classify as the same due to the effect. Why tax property differently to everything else? Answer because they can.

4. CGT: Why do we discount this tax?????

5. GST: completely regressive, plain and simply unfair to the less fortunate.

I am a simple man. Why can't we tax Capital Gain and income at the same level AND remove all other taxes, levies etc EXCEPT those which have an alternative defineable benefit eg Alcohol and cigarettes due to their health effects. At least this way we would know what we are paying. If it means 60% top marginal then ok.

 

[freddy2]

Re: Which is yout least favourite tax?

4. CGT: Why do we discount this tax?????

Inflation. Previously it was indexed but I believe the discount rules were brought in to be simpler.

Also remember if you are going to remove stamp duty or the GST where are you going to get the tax dollars from instead?

 

[Tatts]

What about the petrol excise that is taxed as a % of price. So as price goes up so does the excise. We are then also expected to pay tolls for using new roads?

 

[Bushman]

Re: Which is yout least favourite tax?

Inflation. Previously it was indexed but I believe the discount rules were brought in to be simpler.

Also remember if you are going to remove stamp duty or the GST where are you going to get the tax dollars from instead?

Why is stamp duty only excised against property though? Why not incur it at a federal level and add a lower duty across all asset classes (shares, bonds, property etc). The issue is that state governments can charge the property taxes and no-one has had the political will to take this revenue stream from them.

We could always remove the state governments if we want to save some tax dollars?

The other one that irritates me is the pokies taxes. Talk about a conflict of interest for the state government.

Personally I am with Tobab. Scrap the reems of taxation rules and simply have three taxes for individuals - income tax, a consumption tax and CGT.

In terms of companies, have a company tax and federalise mining royalties and spread these across all the States. Non-resource states have to put up with the high Australian dollar so it is only right that we share in some of the mineral riches.

 

[Mofra]

Re: Which is yout least favourite tax?

1. Payroll tax: I make a point of trying to explain this one to my staff at review time. This usually results in a confused look and the incorrect assumption that it is the withholding of their PAYG. NO IT IS THE TAXING OF EMPLOYMENT PLAIN AND SIMPLE.

I'm very glad a tax professional put this one at number 1. It is the most counter-intuitive tax that I know of and I would prefer that companies receive an incentive for employing someone, not a disincentive.

Fuel excise & land tax are the other two I have an issue with - I could live with them if there was sufficent clarity on where the funds go; for all I know they could go into consolidated revenue and nobody would be the wiser. I'd prefer if the fuel excise was spent on (wait for it) roads and public transport, with stamp duty/land tax contributing to maintenance and infrastructure.

Stamp duty on ETOs is a weird one - why is this even charged if most other asset classes are immune?

 

[freddy2]

Re: Which is yout least favourite tax?

I am a simple man. Why can't we tax Capital Gain and income at the same level AND remove all other taxes, levies etc EXCEPT those which have an alternative defineable benefit eg Alcohol and cigarettes due to their health effects. At least this way we would know what we are paying. If it means 60% top marginal then ok.

Governments increase tax on cigarettes, alcohol and petrol because of the inelascticity of demand for these items. Sure they might call it a "sin tax" or whatever but this is just politics. You have to understand that increasing tax by 10% on an item does not lead to an increase of 10% of tax revenue but is variable depending on what the tax is. What do you think the increase in tax revenue would be if the top marginal rate was 100%?

 

[trainspotter]

Stamp Duty and GST on Insurance policies is my least favourite of taxes. I was of the understanding that Stamp Duties would be wiped out and we jsut pay a broad based consumption tax. Then it got polluted along the way so that Howard could get the GSZT through the senate. BINGO ... 2 lots of taxes on the same thing. Grrrrrrrrrrrrrrrrrrr !

 

[subasurf]

Stamp duty.

 

[doogie_goes_off]

Stamp duty sucks the most, although capital gains runs a close second with medicare surcharge third.

No one likes tax, but these are bordering on stealing from success.

 

[zzaaxxss3401]

Payroll / Income tax for me. Capital Gains Tax is still just another form of income tax anyway. Why should we be taxed on our savings and investments??? There's no incentive to save, and even though Super has it's tax advantages, you can't touch it for 40+ years!

Bring on the Henry Tax Review - apparently the Government is going to offer tax relief on savings with banks... it's a start at least.

 

[TOBAB]

Re: Which is yout least favourite tax?

Inflation. Previously it was indexed but I believe the discount rules were brought in to be simpler.

Also remember if you are going to remove stamp duty or the GST where are you going to get the tax dollars from instead?

Income tax. Keep it simple and try not to be regressive.

Also do we index PAYG? No, so why do it on CG?

 

[TOBAB]

Re: Which is yout least favourite tax?

Governments increase tax on cigarettes, alcohol and petrol because of the inelascticity of demand for these items. Sure they might call it a "sin tax" or whatever but this is just politics. You have to understand that increasing tax by 10% on an item does not lead to an increase of 10% of tax revenue but is variable depending on what the tax is. What do you think the increase in tax revenue would be if the top marginal rate was 100%?

NOT REAL FLASH IF THE TOP MARGINAL WAS 100%; but that is being silly.

 

[Frank D]

Every year our tax code gets bigger and more complicated, and god helps
us if an ETS is introduced. Biggest scam in history if it is.

There should be a flat tax on everything. I’d be happy for 13%
(Income & GST).

That means first dollar earned is taxed @ 13%, and no other taxes
other than GST. 13%.

That should get rid of half the government bureaucrats (Cut Govt spending)

A low tax rate doesn't mean less money for government. In fact tax
revenue should increase because people are willing to produce more and
pay their taxes when the system is fair and tax rates are low.

Less reason to evade tax or move offshore, as high personal & business
income tax rates are responsible for high levels of tax evasion.

Hong Kong has had a flat tax for a long time, and it's been one of the
fastest-growing economies for nearly 50 years. Most previous
soviet countries have been running flat taxes for the past 10 years and
their economies are expanding by 10% per year.

First year of a flat tax in Russia and real revenue increased by 26%.
Income tax revenue by 46% (less evasion).

History tells us that by lowering taxes Government 'real' revenues & income 'tax' revenues increase often by double digits.

Anyone willing to be provided with a service by being taxed at a higher rate
are kidding themselves.

 

[drsmith]

There should be a flat tax on everything. I’d be happy for 13%
(Income & GST).

That means first dollar earned is taxed @ 13%, and no other taxes
other than GST. 13%.

Ideally there should just be a flat rate of tax on consumption and corporate profitability (say, 20% for example) and not on personal income or personal capital gains. That would be the simplest of all.

 

[Frank D]

Ideally there should just be a flat rate of tax on consumption and corporate profitability (say, 20% for example) and not on personal income or personal capital gains. That would be the simplest of all.

It’s not about the 'simplest'; it’s about simplifying the ‘tax’ whilst
at the same time increasing ‘revenue’.

Without increasing revenue there’s no way the government is going
to change anything, other than introduce more taxes (robbery)

A flat tax is a flat tax on everything. You can’t remove income tax as
it decreases revenue for the government.

And I'm certainly not in favour of keeping income tax rates as they are, or as someone mentioned 'willing to pay 60% income tax'.

 

[TOBAB]

It’s not about the 'simplest'; it’s about simplifying the ‘tax’ whilst
at the same time increasing ‘revenue’.

Without increasing revenue there’s no way the government is going
to change anything, other than introduce more taxes (robbery)

A flat tax is a flat tax on everything. You can’t remove income tax as
it decreases revenue for the government.

And I'm certainly not in favour of keeping income tax rates as they are, or as someone mentioned 'willing to pay 60% income tax'.

That 60% call was an exasperated suggestion. You are right stating that a consistent tax is best. I disagree with your consumption tax though. I think it is unfair to those on smaller incomes. Do not have and make the rate higher.

 

[drsmith]

A flat tax is a flat tax on everything. You can’t remove income tax as it decreases revenue for the government.

Probably true. Governments have grown fat by collecting too much tax overall from too many taxes.

A regressive tax statem is the simplest and hence the most transperant but difficult to implement given income support at lower an middle income brackets. This could potentially take decades to unwind in order to satisfy the ideal above.

The initial step would be to fix loopholes in existing taxes and use the proceeds to eleiminate some taxes and reduce the rates of taxation on others. This is hopefully what Henry will address and the government implement.

My most hated taxes are the medicare assiciated ones and inparticular the surcharge. The medicare levy itself should be integrated into marginal tax rates. As for the surchage it almost makes me ill to think I have to contribute to private health insurance for effectively nothing in return.

 

[Julia]

Ideally there should just be a flat rate of tax on consumption and corporate profitability (say, 20% for example) and not on personal income or personal capital gains. That would be the simplest of all.

That would be immensely unfair to people on low incomes.
Our society already comprises the "Haves" and the "Have Nots". This would exacerbate the divisions.

 

[Bintang]

I don't have ANY favourite taxes.
They are all detestable.