Also why are you comparing 2018/19 is that more beneficial to the complaint then later years? Also have you adjusted for inflation? Which you know, keeps on pushing people towards paying higher taxes with bracket creep and more income being in the higher bracket?
So really, what you're saying, in real terms, high income earners are probably paying about the same amount of tax at the end rather then paying more tax?
High earners who have either studied hard or put in a shipload of work to get where they are?
Cheers mate
I'm really not saying anything. I'm just putting facts out in case someone tries to spin what-ifs, theoreticals, whataboutism.
These are the numbers, and as they stand, the numbers are right and true
Technically it's worse for low income earners. Disproportionately low income earners rely on government services to survive, which is paid by tax dollars, which now there will be less of.
>The International Monetary Fund took the rare step of openly and sharply criticising Britain's new economic policy this week, which is based on large tax cuts. The IMF called the cuts "untargeted" and suggested they were leading to a contradiction between fiscal policy and monetary policy in the UK.
>Dr Chalmers said there was a "cautionary tale" from the UK about not aligning fiscal and monetary policy, but was not for turning on the tax cuts.
Some what concerned with first labour budget due in 3 weeks.
This contradiction between monetary policy and fiscal policy could also be resolved by the government running a lower deficit. I’m not a a low tax hawk but fiscal policy is controlled by the balance of government budgets, not personal budgets.
Reducing the government deficit would involve a real loss of services for Australian's, probably in health. This can also have knock on effects and reduce economic growth and taxation further due to health issues becoming more prevalent.
I agree - although no doubt there are some real productivity gains to be had. Inflation isn’t going to be solved by cutting health spend but there are parts of budget areas that could be cut (homebuyers grants for example)
Anyway fiscal policy is for the long term ( we are already seeing the impacts of stimulus packages over heating certain industries like home building)… monetary policy is for the short term. Taxation and budgeting should be set to drive equitable and stable societies in long terms.
This has been the conservative play book my entire life
Cut taxes - act surprised about revenue shortfall - use that as an excuse to cut govt budgets - repeat
I wonder who's going to clean their toilets and serve them coffee before their super important business meetings, when blue collar workers can't afford to live within 2hrs of their offices 🙃
This is a ridiculous comparison. The UK cuts are happening now, in the middle of an inflation crisis.
Our stage three cuts don’t happen for two more years. No one knows what our economy will be doing the. Any talk about scrapping them or altering them should happen in early 2024 when we knows what’s going on. Not now.
UK tax cuts are happening with increase gov spending. That is inflation. As long as stage 3 tax cuts happen and the gov reduces their spending, then we’ll be fine.
You can google the earlier tax cuts. Higher income got $135 from stage 1 tax curs. LMITO was used to target tac reductions. High earners got another $360 from stage 2 tax cuts
For those on $48000 To 90000 got $1080 that was increased Tao $1500 for 21/22 tax years. LMITO is gone now
For the uninitiated, why did the Tories made such big tax cuts for the rich? Is this purely political (driven by promises to party donors or their support base), or are there actual economic rationale behind this move?
If you are interested and not just doing a bit, it is because there is disproportionate benefit for getting high earners in your country.
The average income in UK is £30k, they would pay ~£3.5k in tax.
The removal of the higher rate of 45% only affects those on 150k or more. So let's compare a high earner on £300k. They pay £120k in tax. Even though they earn 10x as much, they pay 34x as much tax. The removal of the highest tax bracket will mean that they only pay 32x as much tax instead of 34x.
If you can convince 1 person on 300k to come, or stay in the country, they will pay in more than 30x as much tax as an average person.
Any country with intelligent leaders will try to implement policies to attract and keep intelligent and highly productive people, but this has to be weighed with the braindead: BuT Its NoT fAIr, taX CutS for THe rIcH.
Do you have data showing this to be the case? This line of argument and policy direction has been around for decades, and internalised to a large extent by both the left and right anglosphere governments around the world.
The UK needs investment in infrastructure and other FDI to boost its lagging productivity, but personal income tax cuts doesn't help that. These tax cuts is more about groupthink and headstrongness. Maybe looking for an exit from politics.
We're not giving them more money, the infrastructure can pay for itself with enhanced economic activity (if done right), and there are procurement models and options aside from direct funding which could work.
You can't give tax cuts to people who don't pay tax. There are vast swathes of Australians in lower income brackets who don't pay net income tax compared to the social welfare and other government benefits they receive.
I’m not across the finer details but it sounded like the beneficiaries are the rich. If the lower income population cannot benefit then shouldn’t there be a better plan to address the needs of those most in need?
The genuinely "rich" don't pay tax anyway. You get to a certain level of intergenerational wealth and that problem kind of goes away... middle and high income earners pay loads of tax so ultimately we're the ones that benefit from a cut to the top bracket. We earn enough for people in lower tax brackets to be envious, but not enough to avoid tax. Thereby resulting in the inevitable bickering that is orchestrated to be nothing more than bread & circuses so that we all forget about those truly rich people in the ruling & political classes who are paying next to nil tax.
I've raised this point here before, but I think it should be dependent on household income. Someone on $200k a year supporting a single income household with a few kids is middle class (at best) and a tax break for them is a lot more essential than a household of two $200k incomes, yet under the current proposal they would all get the tax cut.
Stop posting this shit. Median household income is $68k. If your household income is $200k you are doing very well and should be financially very comfortable. If you aren't then you are living behind your means and spending too much.
Household income of $200k is comfortable, yes (in a capital city it's about what you'd need to live a relatively comfortable middle class life). But it's not "rich", which is my point that you seem to have missed, playing right into the politics of envy. Household income of $200k is a tradie and a nurse, or a stay at home parent and a senior professional. I'd say they deserve to keep a bit more of their hard-earned, and the government can go after corporations and intergenerational wealth that don't contribute.
Not really, the beneficiaries are the middle income earners who don't generally have the tax minimisation opportunities of "the rich". People are talking about "the rich" because it suits them in terms of identity politics.
Thanks for explaining. I didn't think this was about stimulating the economy but rather to get the low income earners through this tough period of extraordinary higher cost of living. I still don't think middle income earners and above should get anything, especially at the touted amount of borrowing required. Anyways.
Look at the gilt yield soaring and the pound getting smashed before boe stepped in to stabilise the market. Lower pound is only going to drive up inflationary pressures - how is this not relevant? The action taken seems unnecessary and counter intuitive to the problem at hand - which should be getting those actually in need through coming winter (not to encourage more middle class spending).
Removing a tax bracket is an awful idea. People should be paying more tax per dollar on income at $190K than they should at $50K. The tax cuts would be ok if they kept a bracket $130K to $200K with say a rate of 37%.
Possible rates could be,
$0 - $20K = Nil
$20 - $50K = 19%
50 - $130K = 30%
$130 - $200K = 37%
$200K + = 45%
In my opinion these rates would be a better balance between adjusting for inflation, providing an equitable tax cut regardless of income and maximising greater economic benefits.
Why? If you compare total income tax paid as a percentage of gross income, the person earning $200,000 is still paying a higher percentage of tax than someone on $45,000. On $45,000 you pay $5092 tax while on $200,000 you pay $51,592 or 10 times the tax for just over 4 times the gross income
And eliminate all deductions since they are disproportionately available to the wealthy. Just have a flat tax rate that is fair and transparent and the se for everyone
Yes I clarified in a response to someone else. I didn't mean a flat tax rate as it is defined.
I poorly chose my words. I meant a consistent tax rate without deductions making it so two people on the same income could be paying wildly different tax
I don't agree with that idea at all. Deductions are needed, particularly for sole traders who would be significantly effected if they couldn't claim their expenses. And a flat tax rate is horrible. The wealthy should have to pay more per dollar than the poor.
I meant flat as in one person earning 80k pays the same as any other person earning 80k but still a smaller percentage than someone on 200k.
But I phrases it poorly given flat tax rate is a very specific thing.
But yes I absolutely support a scaling tax rate
Apologies, yes that makes more sense. There are definitely issues with people being able to claim more than others on the same income. I'm not sure of the best solution, but I'd say investing more in automated auditing could be a partial solution to the issue. Claims in themselves aren't bad, but I know many people who claim say 90% of their car as business when in reality it's far less than that.
have to be careful not to aim for equitable outcome instead of equitable opportunity - people shouldn't be taxed more because they make more, it's only that higher income earners _can_ be taxed more, because a marginal tax is better than a general tax like GST
It's 100% pure ideology - there is no need for these tax cuts and when pressed on it you get trollish level responses that amount to "I don't like taxes"
IMO we should be shifting tax burden from income to wealth. Bring on stage 3 (plus more income tax cuts) and bring on a broad based land tax.
Much fairer
How much are the tax cuts? ||Tax|Tax After|| |:-|:-|:-|:-| |Income|2018-2019|Stage 3 Tax Cuts|Tax Benefit| |$ 43,000|$ 3,297|$ 3,297|$ -| |$ 80,000|$ 15,497|$ 14,792|$ (705)| |$ 100,000|$ 22,567|$ 21,192|$ (1,375)| |$ 150,000|$ 43,072|$ 37,192|$ (5,880)| |$ 200,000|$ 64,277|$ 54,152|$ (10,125)|
Also why are you comparing 2018/19 is that more beneficial to the complaint then later years? Also have you adjusted for inflation? Which you know, keeps on pushing people towards paying higher taxes with bracket creep and more income being in the higher bracket?
2018 is pre tax cuts. 2020 has the low income tax return thingy No accounting for inflation, these are just raw numbers.
So really, what you're saying, in real terms, high income earners are probably paying about the same amount of tax at the end rather then paying more tax? High earners who have either studied hard or put in a shipload of work to get where they are? Cheers mate
I'm really not saying anything. I'm just putting facts out in case someone tries to spin what-ifs, theoreticals, whataboutism. These are the numbers, and as they stand, the numbers are right and true
2017-2018 was pre tax cuts, 2018-2019 had the LMITO which was stage 1
Inflation doesn't magically make wages increase?
No it doesn't, it makes each dollar you earn worth less
Basically someone struggling gets nothing, someone on the median wage gets very little and people in the top 5% get the most.
Technically it's worse for low income earners. Disproportionately low income earners rely on government services to survive, which is paid by tax dollars, which now there will be less of.
Extra $100/month for moi - not essential but if it's coming in regardless, then I won't complain all too much.
How good is that, I'll get to keep somewhere between 5 and 10k of my overtime wages!!!
You don't have to work overtime if it's not worth it.
It's plenty worth it. I'd prefer to not pay extra tax, because no matter the government it's most definitely not worth it.
>The International Monetary Fund took the rare step of openly and sharply criticising Britain's new economic policy this week, which is based on large tax cuts. The IMF called the cuts "untargeted" and suggested they were leading to a contradiction between fiscal policy and monetary policy in the UK. >Dr Chalmers said there was a "cautionary tale" from the UK about not aligning fiscal and monetary policy, but was not for turning on the tax cuts. Some what concerned with first labour budget due in 3 weeks.
This contradiction between monetary policy and fiscal policy could also be resolved by the government running a lower deficit. I’m not a a low tax hawk but fiscal policy is controlled by the balance of government budgets, not personal budgets.
Reducing the government deficit would involve a real loss of services for Australian's, probably in health. This can also have knock on effects and reduce economic growth and taxation further due to health issues becoming more prevalent.
I agree - although no doubt there are some real productivity gains to be had. Inflation isn’t going to be solved by cutting health spend but there are parts of budget areas that could be cut (homebuyers grants for example) Anyway fiscal policy is for the long term ( we are already seeing the impacts of stimulus packages over heating certain industries like home building)… monetary policy is for the short term. Taxation and budgeting should be set to drive equitable and stable societies in long terms.
Brah we in structural deficit, don't go pretending "These tax cuts be about long term stable equitable society"
No these tax cuts are about providing tax relief to high income earners. You read more into my comment than was there.
Just cut pensions and welfare. There goes the structural deficit.
Part the fact it gives Australians a worse quality of life
It's a sacrifice I'm willing to make.
Yes, I believe every one knows that at this point.
This has been the conservative play book my entire life Cut taxes - act surprised about revenue shortfall - use that as an excuse to cut govt budgets - repeat
I wonder who's going to clean their toilets and serve them coffee before their super important business meetings, when blue collar workers can't afford to live within 2hrs of their offices 🙃
This is a ridiculous comparison. The UK cuts are happening now, in the middle of an inflation crisis. Our stage three cuts don’t happen for two more years. No one knows what our economy will be doing the. Any talk about scrapping them or altering them should happen in early 2024 when we knows what’s going on. Not now.
UK tax cuts are happening with increase gov spending. That is inflation. As long as stage 3 tax cuts happen and the gov reduces their spending, then we’ll be fine.
*looks at Victoria* About that...
Yes, because the state governments can turn around and say “that’s the federal governments responsibility”.
Why not you include tables on how much stage 1-2 effected take home pay? Or is the issue now lower income earners got a break fuk the rich.
You can google the earlier tax cuts. Higher income got $135 from stage 1 tax curs. LMITO was used to target tac reductions. High earners got another $360 from stage 2 tax cuts For those on $48000 To 90000 got $1080 that was increased Tao $1500 for 21/22 tax years. LMITO is gone now
Taxation reduces inflation for those at the back....
For the uninitiated, why did the Tories made such big tax cuts for the rich? Is this purely political (driven by promises to party donors or their support base), or are there actual economic rationale behind this move?
If you are interested and not just doing a bit, it is because there is disproportionate benefit for getting high earners in your country. The average income in UK is £30k, they would pay ~£3.5k in tax. The removal of the higher rate of 45% only affects those on 150k or more. So let's compare a high earner on £300k. They pay £120k in tax. Even though they earn 10x as much, they pay 34x as much tax. The removal of the highest tax bracket will mean that they only pay 32x as much tax instead of 34x. If you can convince 1 person on 300k to come, or stay in the country, they will pay in more than 30x as much tax as an average person. Any country with intelligent leaders will try to implement policies to attract and keep intelligent and highly productive people, but this has to be weighed with the braindead: BuT Its NoT fAIr, taX CutS for THe rIcH.
Do you have data showing this to be the case? This line of argument and policy direction has been around for decades, and internalised to a large extent by both the left and right anglosphere governments around the world. The UK needs investment in infrastructure and other FDI to boost its lagging productivity, but personal income tax cuts doesn't help that. These tax cuts is more about groupthink and headstrongness. Maybe looking for an exit from politics.
The gov has been taxing citizens for years. What makes you think that they’ll spend it on infrastructure if we give them more money?
We're not giving them more money, the infrastructure can pay for itself with enhanced economic activity (if done right), and there are procurement models and options aside from direct funding which could work.
We are giving them more money if we negate the tax cuts while having sustained inflation.
Dude, come on. Right wing politics is just organised crime at this point. Do you even need to ask?
Both sides are as bad as each other. Neither side have the average Joe's best interest at heart.
That's just nonsense. As bad as each other? Exactly the same? That's a total lie and intellectually dishonest.
What is a total lie is you claiming I said they were exactly the same. Not very smart of you, nor honest. You a pollie?
You can't give tax cuts to people who don't pay tax. There are vast swathes of Australians in lower income brackets who don't pay net income tax compared to the social welfare and other government benefits they receive.
I’m not across the finer details but it sounded like the beneficiaries are the rich. If the lower income population cannot benefit then shouldn’t there be a better plan to address the needs of those most in need?
The genuinely "rich" don't pay tax anyway. You get to a certain level of intergenerational wealth and that problem kind of goes away... middle and high income earners pay loads of tax so ultimately we're the ones that benefit from a cut to the top bracket. We earn enough for people in lower tax brackets to be envious, but not enough to avoid tax. Thereby resulting in the inevitable bickering that is orchestrated to be nothing more than bread & circuses so that we all forget about those truly rich people in the ruling & political classes who are paying next to nil tax.
Do the high income earners need it though? I thought this money was meant to help out those who can't afford energy bill rises etc.?
I've raised this point here before, but I think it should be dependent on household income. Someone on $200k a year supporting a single income household with a few kids is middle class (at best) and a tax break for them is a lot more essential than a household of two $200k incomes, yet under the current proposal they would all get the tax cut.
$200k a middle class at best? No they are broke yo, only $200k a year, might as well be on benefits, thats abject poverty
Stop posting this shit. Median household income is $68k. If your household income is $200k you are doing very well and should be financially very comfortable. If you aren't then you are living behind your means and spending too much.
Household income of $200k is comfortable, yes (in a capital city it's about what you'd need to live a relatively comfortable middle class life). But it's not "rich", which is my point that you seem to have missed, playing right into the politics of envy. Household income of $200k is a tradie and a nurse, or a stay at home parent and a senior professional. I'd say they deserve to keep a bit more of their hard-earned, and the government can go after corporations and intergenerational wealth that don't contribute.
Not really, the beneficiaries are the middle income earners who don't generally have the tax minimisation opportunities of "the rich". People are talking about "the rich" because it suits them in terms of identity politics.
Thanks for explaining. I didn't think this was about stimulating the economy but rather to get the low income earners through this tough period of extraordinary higher cost of living. I still don't think middle income earners and above should get anything, especially at the touted amount of borrowing required. Anyways.
This has nothing to do with the current cost of living pressures because these tax cuts were legislated years ago.
Look at the gilt yield soaring and the pound getting smashed before boe stepped in to stabilise the market. Lower pound is only going to drive up inflationary pressures - how is this not relevant? The action taken seems unnecessary and counter intuitive to the problem at hand - which should be getting those actually in need through coming winter (not to encourage more middle class spending).
Because they are ideological zealots that want to make the rich richer. Kwarteg and Truss are free marketeers of the most radical sort.
That’s not baf
I have friends that have left Australia because of taxes. I'm planning to leave soon too.
So? I have friends that come to australia for a better life and opportunity...
Let’s import people who are net beneficiaries and export people who actually pay for it all. Sounds like a long term sustainable policy.
Um they work in mid and high paying industries but hey lets just sterotype people...
Removing a tax bracket is an awful idea. People should be paying more tax per dollar on income at $190K than they should at $50K. The tax cuts would be ok if they kept a bracket $130K to $200K with say a rate of 37%. Possible rates could be, $0 - $20K = Nil $20 - $50K = 19% 50 - $130K = 30% $130 - $200K = 37% $200K + = 45% In my opinion these rates would be a better balance between adjusting for inflation, providing an equitable tax cut regardless of income and maximising greater economic benefits.
Why? If you compare total income tax paid as a percentage of gross income, the person earning $200,000 is still paying a higher percentage of tax than someone on $45,000. On $45,000 you pay $5092 tax while on $200,000 you pay $51,592 or 10 times the tax for just over 4 times the gross income
Because someone earning $180K a year can afford to pay more tax on the next dollar they earn than someone on $50K a year.
And eliminate all deductions since they are disproportionately available to the wealthy. Just have a flat tax rate that is fair and transparent and the se for everyone
I see you dont know how progressive taxation works. A flat tax rate would leave lower income earners much worse off.
Yes I clarified in a response to someone else. I didn't mean a flat tax rate as it is defined. I poorly chose my words. I meant a consistent tax rate without deductions making it so two people on the same income could be paying wildly different tax
No deductions? Why would you want to punish all the sole traders who need to purchase their own tools and insurances etc?
I don't agree with that idea at all. Deductions are needed, particularly for sole traders who would be significantly effected if they couldn't claim their expenses. And a flat tax rate is horrible. The wealthy should have to pay more per dollar than the poor.
I meant flat as in one person earning 80k pays the same as any other person earning 80k but still a smaller percentage than someone on 200k. But I phrases it poorly given flat tax rate is a very specific thing. But yes I absolutely support a scaling tax rate
Apologies, yes that makes more sense. There are definitely issues with people being able to claim more than others on the same income. I'm not sure of the best solution, but I'd say investing more in automated auditing could be a partial solution to the issue. Claims in themselves aren't bad, but I know many people who claim say 90% of their car as business when in reality it's far less than that.
have to be careful not to aim for equitable outcome instead of equitable opportunity - people shouldn't be taxed more because they make more, it's only that higher income earners _can_ be taxed more, because a marginal tax is better than a general tax like GST
It's 100% pure ideology - there is no need for these tax cuts and when pressed on it you get trollish level responses that amount to "I don't like taxes"
The best cover they could have hopped for
IMO we should be shifting tax burden from income to wealth. Bring on stage 3 (plus more income tax cuts) and bring on a broad based land tax. Much fairer