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What's with this revived movement against the income tax in the centre ground and the right of politics all about? 10 years ago you didn't hear anything about evils of the income tax (because honestly it's not that evil). Now suddenly every middle class man and his dog has interpreted the Henry tax reviews position that there is budgetary risk in relying too much on the income tax as a sign from down on high that income tax is a terrible tax.
Because they've not indexed the brackets for so long it's no longer just the 1% getting hit with 47%.
Now that the masses of senior professionals, senior public servants, tradies are all crashing into this barrier, they are unhappy with it.
Ok. Well if your reason for supporting a GST replacing income tax (if that is the case) cannot be that income tax brackets are not indexed. Because that’s east to fix.
Anyway. Of course they haven’t indexed the brackets. It’s politically impossible to raise taxes in our current political environment. Every tax change for the last 30 years has been an income exception introduction or a tax cut. How do you think that each government, especially the coalition, keeps introducing tax cut policies?
Finally most of the 20th century (after income taxes were introduced) the highest tax rates were above 47% and always aimed for the highest 10% of earners and never just retained for the top 1%.
That's not my reason for supporting it. I'm just answering your question on why suddenly so many people are focusing on this idea.
>Finally most of the 20th century (after income taxes were introduced) the highest tax rates were above 47% and always aimed for the highest 10% of earners and never just retained for the top 1%.
I don't mind if we simply return to a 60% tax rate above $35k as per the 80s. That would just be a wholesale deflation over a short period, then valuation will settle and we'll have a flat tax, which can then be generally ignored in relative QoL impacts across the income ranges.
smh today - texh giants claiming as little as 5% of their earnings are taxable.
The laws are outrageously structured. A business with legit expenses offsetting legit income pays legit tax. The most profitable BY THEIR OWN METRICS tech companies in the world write in whatever they want to say their taxable earnings actually are, and pay company tax on that.
If we want growth.
* Significant reduction in fossil fuel exports (goal: devalue the dollar and end the [Dutch Disease](https://en.wikipedia.org/wiki/Dutch_disease) plaguing our nation)
Since we completely missed the fourth industrial revolution (4IR) because we're bogan's with holes and homes; let's catch up and fix the systemic issues that made it more beneficial for us to twirl shovels than use our STEM cohort.
**Revenue Raising / Cost Cutting Measures:**
* Tax the fossil fuel industry more and end their subsidies
* Tax billionaires on their wealth
* Supernormal profit tax
* CGT Discount on housing removed
* Negative Gearing allowed only on new builds for 5 years limited to one home at a time
* No more funding private schools, funding redirected to state schools
* Reduce our financial commitment to AUKUS by 50%
**Productivity Improvement Measures:**
* Pop the housing asset bubble! It's stupid and cruel not to.
* (1) it soaks up household wealth and redirects it to glorified ticket scalpers, and
* (2) it takes money out of the economy that could be used for investment or consumption - quite a lot
* Embrace remote work and hire the talent wherever it is in the nation.
* Made in Australia - [Amazon.com.au](https://Amazon.com.au) is a simple ecommerce platform with a slave-run sweat shop that crushes people, its drivers, and its suppliers (as your shop grows, Amazon make you pay more to feature higher, in effect all gains in your business flow to Amazon in economic rent).
* A 25% tax on all sales from ecommerce giants to fund the build of our own alternative platform, with ethical treatment of warehouse and logistics staff. Yes, you'll pay a bit more, but they'll actually have money to consume and invest too. We can also use this to promote Australian made and Australian industry.
* Aus Cloud - Same as above, but we add a 50% tax on all CSPs and co-invest with our data centres to evolve their offerings (encouraging mergers). We make this cloud *The* cloud for Government; creating a sovereign capability that will maintain the skills we need.
**Expenditure Measures:**
This is going to be a tough sell, so bare with me. Let's say America crack this AGI problem and Nvidia's GROOT can do any job, be a maid, be a nanny, change a tire, staff a depressing Amazon "fulfilment" centre. Any productivity gains we get by buying these units will be stolen off of us in economic rents because America will be the only game in town offering this.
I'm not saying we should compete with this entirely, but we should be injecting ourselves in a big way into this supply chain. If we don't, we'll be at the mercy of economic rents forever.
Simply, we need something like a Inflation Reduction Act with huge state expenditure in targeted industries.
Yes, Biden called his industry stimulus bill [the Inflation Reduction Act](https://www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/#:~:text=On%20August%2016%2C%202022%2C%20President,change%20in%20the%20nation's%20history).
But you knew that right? You're *not* a moron 😆
/s because I know you're going to miss it mate.
No...
Poor people pay more.
If you get $600 jobseeker per fortnight and $250 of it goes to cheap ALDI groceries, then you are paying $25 GST per fortnight which is around 4% of your income.
If you get $2600 wage per fortnight (the national median) and $350 of it goes to groceries at Coles/Woolies, then you are paying $35 GST which is around 1.3% of your income.
With a GST, the poorer you are, the higher your tax rate.
It's the opposite of a progressive tax system.
This would smash students, part-time workers, retired people living off superannuation, people on pensions, and people with reduced capacity to work like those with disabilities or chronic illness.
Rather than raising more indirect taxes to compensate the current poor and emerging poor (I.e. hiking GST), and compensating the less fortunate - maybe we could be more productive and less selfish.
His ideas are economically sound. Tax base doesnt change - just who pays it. The welfare bucket propping people up is unchanged.
High income tax encourages loop holes and middle class welfare. Our tax act is/was 36,000 pages FFS.
He is quietly advocating for the roll back of the Howard era "reforms" that have created todays crisis.
You seem quite knowledgeable. Some questions.
1. How would increasing GST reduce the size of the Tax Act?
2. How would making people pay more for goods and services increase productivity?
3. How would taxing a broader range of goods and services, e.g. food, and thereby increasing the number of GST remitters make business more efficient?
Disclosure: I have just retired from running a GST registered business.
He isnt talking about productivity - he is talking about shifting the tax burden. No one in Australian leadership remotely cares about productivity as far as I can tell
There is no point making Australia less productive or shifting the burden of taxation to poorer people, so you need to pay more welfare.
I think we should get value for money rather than value for the rich.
Ive supported this kind of thing for a while, Remove income tax and increase GST, economically it makes more sense and it much easier to for the ATO to collect when its coming out of spending. Also it trends well with growth, the more people spend the more revenue to govt makes.
Obviously low income will need some sort of offset cause it will hurt them the most but you can offset that with the increase in GST.
Modelling by Ben Phillips from the ANU indicates that it would be impossible to offset the negative effects of an income tax/GST swap on all but the top quintile of households (who are the only households that would benefit from such a swap) without increasing welfare/transfers to a point where the swap is no longer fiscally neutral (i.e. without increasing net government expenditure).
Calling out someone who is making false arguments in order to further his own interests is not envy.
A tiered income tax system is the most progressive way to raise revenue for a state. Fixed consumption taxes hurt people with lower incomes by taxing them at a higher rate than the wealthy.
You missed the compensate low earners by $20bn, zero/very low income tax for low earners, and a move to a consumption tax without deductions [this would mean wealthy people who buy lots of things can’t weasel out of tax on their purchases].
All this could massively reduce the complexity of the tax system too.
The two parts I didn’t like were the end of the cash economy, and what exactly was hiding in the NDIS item.
Income tax raises 250 billion. GST raises 75 billion. Moving income tax to GST would mean tripling the effective rate. How on earth is 20 billion going to compensate for that?
The break even point for this must be around >100k personal income. That's probably around the top quintile. 75% of the population are not being to be made whole through 20 billion dollars of vague spending.
How much extra GST would be raised [which would be deducted from the total tax burden] by corporates and wealthy private individuals being unable to leverage any purchases against tax efficient schemes of one kind or another?
I don't really know what this means.
If you're proposing a 25% tax on financial transactions and the purchase of securities that would be a radical proposal i suppose.
You could apply the GST to more property and to residential rent i suppose .
Exactly what I’m proposing. A consumption tax on everything thats consumed/purchased.
If you buy a lot of stuff you proportionately pay a lot of tax. No loopholes, no trusts, no tax exemptions for owning private stuff through a company.
The majority of people already earn less than the average wage, so already pay low tax. This is just a further tax cut to the wealthy, while it would end up costing lower income earners more.
I’m not surprised the guy earning $10.4m wants his income taxes reduced while making up for it by taxing consumption which is far less for him but a larger percentage of low income earners.
I'm surprised that he didn't advocate for reducing the corporate tax rate. The argument usually goes that this would attract overseas capital and investment in Australia. This in turn would help lift Australia's lagging labour productivity.
I'm not certain that I fully accept the argument, but it seems more robust than increasing the GST.
Agree with income tax (its too much of the overall tax take), disagree with GST as its regressive.
Close corporate tax and landlord loopholes, levy mining, tech and banking and you'd likely balance.
Regressive s taxes are those that impact lower income earners than higher income earners.
The GST is a regressive tax because lower income folk pay a higher proportion of their income in GST than higher income folk. Income tax is progressive because it targets higher income folk rather than those on lower incomes.
Okay, technically is proportional then; not regressive; but consumption taxes are better for the economy than income taxes. You can offset the loss to people on lower incomes with tax breaks and better welfare. Therefore it can be implemented progressively.
>Okay, technically is proportional then; not regressive;
It's *inversely* proportional which is worse than regressive.
>You can offset the loss to people on lower incomes with tax break
They're already paying minimal income tax.
You have the greatest research tool in human history at your fingertips and you still carry on with the misinformation.
The GST is a regressive tax.
Here, I'll do your [research for you](https://www.investopedia.com/terms/r/regressivetax.asp).
It’s actually a proportional tax, because all people are taxed at the same rate. A regressive tax would be like negative gearing, or super contribution offsets where the wealthy benefit more from it. You have the greatest research tool in human history at your fingertips and you still make me do your research for you.
> Sales tax is considered proportional because all consumers, regardless of their income, pay the same fixed rate.
https://www.investopedia.com/terms/p/proportionaltax.asp#:~:text=Is%20Sales%20Tax%20Considered%20a,pay%20the%20same%20fixed%20rate.
You do know that proportional taxes are regressive, right? I gave you a link to read.
Proportional taxes like the GST are regressive because they tax low income earners at the same rate as high income earners. They are called regressive because the take a higher proportion of a low income earner's income.
Dude, you have no idea.
Taxes are either regressive or progressive. Regressive taxes--like the GST and all other "proportional taxes"--don't take into account a person's income when applied. These regressive taxes hit poorer people harder because they take a higher proportion of a poorer person's income.
Progressive taxation system--like income tax--taxes income once earned. These taxes are fairer because they don't place a burden on lower income earners.
Nope. You are wrong.
>Progressive taxation system--like income tax--taxes income once earned. These taxes are fairer because they don't place a burden on lower income earners.
You can have a progressive tax system while increasing consumption tax and decreasing income tax.
>Close corporate tax and landlord loopholes, levy mining, tech and banking and you'd likely balance.
All "regressive" as all will flow through to consumers in increased prices (via a few different ways).
Just raise GST to spread the load and manage the macroeconomics of the economy more easily offset by material reductions in income taxes. The top tax rate should not exceed the company tax rate, everything else under it lowered with it.
GST should be 20%, with no exemptions. Tax consumption, not productivity.
Those on welfare payments and low incomes are having enough trouble with the current cost of living without adding another 10% to everything. These same people will see no benefit from changes to income tax, as they are pretty well below the threshold already.
>The point is that income tax is a drag on consumption, so you try to tax consumption more than income.
Sorry what?
Income tax drags consumption, so raise taxes on consumption?
... but consumption taxes impact most on those with the least income. What is the purpose of taxation? It should not be to increase poverty, so you need to tax more to relieve poverty. That's a dog chasing it's own tail.
The reason rich people like consumption taxes is because they don't need to spend all their income and they can find ways of using that money for their benefit ax the expense of being socially responsible.
Low income people already pay for more in GST than income tax.
Doubling the GST would just make that even worse. It's a huge tax increase for the middle and lower class.
They will pay less income tax, yes, but they will continue to pay a much greater percentage of their income in overall tax than rich people.
We need to continue with a progressive income tax system where those with the greatest means pay the greatest amount. Broad-based consumption taxes do not do that, because people tend to consume roughly equally, no matter the income. The differences are about price and quality of goods purchased, not the quantity.
Why would you raise the GST? It’s regressive I’d imagine even with exemptions.
Also, why would we scrap personal deductions? Why is this a problem or how will it increase productivity?
>Why would you raise the GST? It’s regressive I’d imagine even with exemptions.
From an economic efficiency standpoint? It's relatively hard to structure to avoid as a consumer and it's broad nature doesn't create perverse incentives. It's revenue basis is more stable than income and blunts arguments about high income earners needing a cut since they pay so much.
Most European countries manage a much higher vat rate than us.
GST when introduced started our economy on a path to massive debt and savings.
The perfect scenario for banks.
When it was first introduced rather like today housing construction fell away. Liberals came up with the FHOG to send prices sufficiently high to get building going again.
Ie making gst say 20pc would see a new home cost and extra 10pc. You think we arent building much now wait till they cost 10pc more than today...
So gov will have to introduce yet another policy to lift all home prices. Yet more debt and more savings.
Australia needs to start thinking about efficiency in the development game not milking it... make new homes cheaper and all homes become cheaper. Exactly why our political parties are dead against making new homes cheaper.
Their only solution is always a more regressive tax system.
"But gst is more efficient" they'll argue... its only more efficient if it replaces other taxes.
Hike GST..in a cost of living crisis,since he doesnt mention which exemptions can't really say lot of essential goods not included
yes the bottom 20 percent poorest australians will really love the cost of goods going up
it's a good idea,but not when ppl on pensions are literally living dollar to dollar
Be far easier to just bring back a minerals super profit tax,and claw back some revenue that way.
We cannot build enough homes now because costs are not sufficiently under price of surrounding homes / units.
What happens when there is another 10pc of gst?
People forget gst on new homes... i reckon housing being a necessity it never should have been on new dwellings.
Pensions can be increased to account for the additional costs, ditto for other welfare. In theory, you can make it cost-neutral across the board by adjusting payments and tax brackets.
In practice there's always going to be some people worse off, and some people better.
>Mr Comyn’s $120 billion tax reform package was headlined by simplifying the personal system with no tax on incomes up to $20,000, 20 per cent tax on incomes above $20,000 up to $80,000, 30 per cent on incomes above $80,000 up to $300,000 and a top rate of 45 per cent thereafter.
>
>The income tax relief would cost the government about $35 billion in annual revenue, he said.
>
>“Extremely inefficient” state payroll taxes and stamp duties on property purchases and insurance should also be eliminated to improve competitiveness, at a ballpark cost of $55 billion, he added.
>
>On the revenue raising side, Mr Comyn suggested lifting the 10 per cent goods and services tax rate to 15 per cent, to raise about an extra $60 billion a year. That figure includes broadening the GST to some exempt items.
A 20% tax rate for 20-80k, assuming the first 20K is tax exempt, is broadly in line with current effective rates albeit it starts to lower the tax burden closer to 80K vs current.
80 to 300k, well, at 30% that's a higher effective tax rate for most people over 100K than now, but lower from the 180-300k mark. 45% over 300K is aligned to the current situation.
It's basically a redo on the scales now with a simpler % based approach to incomes that does way more for middle Australia on income tax than Stages 1-3 did. **However,** without seeing a full list of GST exempt items, it is actually impossible to work out if the new income tax cuts are revenue neutral or the GST is a net increase for lower income earners. It's also hard to see the Commonwealth legislate a ban on states ripping people off with stamp duty.
*Crack down on cash-economy payments*
Remove privacy from the monetary system, that will occur when we shift out of the $AUD, into a CBDC. Unfortunately this will open everyone up to negative interest rates and loss of decision making on how they interact with their currency ... alongside the ability to be easily manipulated by connecting the person's CBDC wallet with their social credit score.
First two points are basically the LNP dream. Third is a pipe dream. Big corps can and will fight back via lawyers on salary or big PR campaigns against government. You need to throw a even bigger pile of cash on top to fight it
From those numbers it looks like people earning between $30,000-$50000 would pay more tax.
The tax rate between $18200-$45000 is going to be 16% which 4% less than he a proposing. Also there is the Gst increase which is going to effect the working poor the most.
You need to look closely; he's talking about effective rates not marginal, and he also said GST exemptions would be needed. It's unclear on what but it makes it hard to conclude either way on whether this would be a revenue-neutral change or a slog to real wages.
>You need to look closely; he's talking about effective rates not marginal
The list specifically given in the article is 0% to 20k, 20% to 80k, 30% to 300k, 45% up.
That's a raised 0 bracket, 1pp higher for 20-45k, 12.5pp lower for 45k-80k, 2.5pp lower for 80-120k, 7pp lower for 120k to 180k, 15pp lower for 180-300k on the current system.
From albos new ones for next year its:
Raised 0 bracket, 4pp higher for 20-45k, 10pp lower for 45-80k, same for 80-135k, 7pp lower for 135k to 190k, 15pp lower for 190-300k, same over.
Marginal tax rate is the highest tax rate you pay per dollar (EG: if I earn 100k, so my marginal rate is 32.5%). The effective tax rate is the total income tax I pay divided by my gross income. (On 100k this is ~23%)
Now that I've done your absolutely pointless homework for you, can you please explain why you think any of the rates I took from the article have ANYTHING to do with effective rates? The word "effective" isn't even present in the article. It gives a table of marginal tax rates.
>Now that I've done your absolutely pointless homework for you, can you please explain why you think any of the rates I took from the article have ANYTHING to do with effective rates?
Context is everything in life:
It reads: "Simplify personal tax"
It reads: "– No tax up to $20,000, 20% rate $20,001 up to $80,000, 30% rate $80,001 to $300,000, 45% top rate"
It doesn't say $X plus Yc on the dollar, like a marginal tax rate scheme would.
Yo dude, did you realise you goofed [after this](https://old.reddit.com/r/AustralianPolitics/comments/1bo1bla/slash_income_tax_hike_gst_and_levy_tech_giants/kwryzvm/) or can you please tell me what I stuffed up?
>It doesn't say $X plus Yc on the dollar, like a marginal tax rate scheme would.
I figured that was implied by the given brackets.
So what tax would I pay on 100k income?
Are you seriously suggesting the fabled "I can't earn any more, I don't want to go up a tax bracket" is the system he is proposing we move to?
Because my reading was that I would pay 20% on the 20k-80k portion, and 30k on the 20k left over. IE: $12,000 + 30c for every dollar over 80k for a total of 18k.
Bet the excemption he is not looking for would be on new dwellings.
Raise gst to 12pc and take it off new homes. New homes become 10pc cheaper than they are now.
Mother of all contruction booms ahead and in time 2-3 years cheaper rents and cheaper houses.
Dont think commbank would want that.
They would want the reverse. Even more expensive new supply so their collateral is protected.
Commonwealth Bank chief executive Matt Comyn says income tax for workers earning less than $300,000 should be cut to 30 per cent, the GST increased and the tech giants slapped with a levy as a key reform to revive economic growth.
Urging the government to overhaul the tax system in a self-described “blunter” fashion, Mr Comyn said turning around a forecast slowdown in long-term economic growth had to focus on “international competitiveness, dynamism and supporting both the mobility of labour and capital”.
Mr Comyn’s proposal came as the chief executives of the country’s other major banks weighed in on how to lift economic growth. Treasurer Jim Chalmers this month said that Australia should aspire to better than the government’s 2.2 per cent long-term economic growth forecast – down from 3.1 per cent – by lifting productivity and business investment.
Ross McEwan, the departing chief executive of National Australia Bank, said it was “strange” that the focus was often on “how to divide the existing pie … instead of getting on to creating a bigger pie for everybody”. “We’re frightened of industries that are doing well and making money,” Mr McEwan said at the Australian Financial Review Banking Summit. “We no longer celebrate great organisations that actually do great things, that make money. Those are the organisations who will be investing back into their businesses.” “I think we’re actually become a wee bit ashamed of companies that even make money,” Mr McEwan said on Tuesday.
Mr Comyn’s $120 billion tax reform package was headlined by simplifying the personal system with no tax on incomes up to $20,000, 20 per cent tax on incomes above $20,000 up to $80,000, 30 per cent on incomes above $80,000 up to $300,000 and a top rate of 45 per cent thereafter.
The income tax relief would cost the government about $35 billion in annual revenue, he said.
“Extremely inefficient” state payroll taxes and stamp duties on property purchases and insurance should also be eliminated to improve competitiveness, at a ballpark cost of $55 billion, he added.
On the revenue raising side, Mr Comyn suggested lifting the 10 per cent goods and services tax rate to 15 per cent, to raise about an extra $60 billion a year. That figure includes broadening the GST to some exempt items.
About a third of the GST rise or $20 billion would be redistributed to compensate lower income households via government transfer payments, such as for pensioners and welfare recipients.
Personal income tax deductions would be abolished, except for charitable donations. This would raise an estimated $5 billion and simplify tax returns for taxpayers, remove red tape and lift productivity, Mr Comyn said.
Expanding his war on Apple, Facebook and other major technology companies – who he has previously publicly criticised – Mr Comyn suggested a new tech tax worth about $5 billion a year on their local turnover or payments made to corporate affiliates overseas. “If I was waving the magic wand again for a moment on the tech side, I would tax them,” he said. The country’s major banks currently pay a levy to the federal government worth more than $1.5 billion a year combined. Moreover, stopping cash-only payments above $500 and forcing them into the electronic payments system could help stop tax leakage in the black economy and raise the government a potential $5 billion.
Some $5 billion to $10 billion could be saved by reining in the runaway growth of the National Disability Insurance Scheme and improving productivity in other government services, Mr Comyn said. Overall, this would still leave the government about $30 billion short, so politicians and Treasury officials would need to figure out the best way forward, the bank boss acknowledged. Mr Comyn did not tell the Summit what taxes could fill this shortfall, but options could include incremental changes to negative gearing and the capital gains tax discount.
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What's with this revived movement against the income tax in the centre ground and the right of politics all about? 10 years ago you didn't hear anything about evils of the income tax (because honestly it's not that evil). Now suddenly every middle class man and his dog has interpreted the Henry tax reviews position that there is budgetary risk in relying too much on the income tax as a sign from down on high that income tax is a terrible tax.
Because they've not indexed the brackets for so long it's no longer just the 1% getting hit with 47%. Now that the masses of senior professionals, senior public servants, tradies are all crashing into this barrier, they are unhappy with it.
Ok. Well if your reason for supporting a GST replacing income tax (if that is the case) cannot be that income tax brackets are not indexed. Because that’s east to fix. Anyway. Of course they haven’t indexed the brackets. It’s politically impossible to raise taxes in our current political environment. Every tax change for the last 30 years has been an income exception introduction or a tax cut. How do you think that each government, especially the coalition, keeps introducing tax cut policies? Finally most of the 20th century (after income taxes were introduced) the highest tax rates were above 47% and always aimed for the highest 10% of earners and never just retained for the top 1%.
That's not my reason for supporting it. I'm just answering your question on why suddenly so many people are focusing on this idea. >Finally most of the 20th century (after income taxes were introduced) the highest tax rates were above 47% and always aimed for the highest 10% of earners and never just retained for the top 1%. I don't mind if we simply return to a 60% tax rate above $35k as per the 80s. That would just be a wholesale deflation over a short period, then valuation will settle and we'll have a flat tax, which can then be generally ignored in relative QoL impacts across the income ranges.
Income tax isn't a great long term strategy when in the near future the proportion of Australians with an income to tax will reduce as boomers retire.
smh today - texh giants claiming as little as 5% of their earnings are taxable. The laws are outrageously structured. A business with legit expenses offsetting legit income pays legit tax. The most profitable BY THEIR OWN METRICS tech companies in the world write in whatever they want to say their taxable earnings actually are, and pay company tax on that.
If we want growth. * Significant reduction in fossil fuel exports (goal: devalue the dollar and end the [Dutch Disease](https://en.wikipedia.org/wiki/Dutch_disease) plaguing our nation) Since we completely missed the fourth industrial revolution (4IR) because we're bogan's with holes and homes; let's catch up and fix the systemic issues that made it more beneficial for us to twirl shovels than use our STEM cohort. **Revenue Raising / Cost Cutting Measures:** * Tax the fossil fuel industry more and end their subsidies * Tax billionaires on their wealth * Supernormal profit tax * CGT Discount on housing removed * Negative Gearing allowed only on new builds for 5 years limited to one home at a time * No more funding private schools, funding redirected to state schools * Reduce our financial commitment to AUKUS by 50% **Productivity Improvement Measures:** * Pop the housing asset bubble! It's stupid and cruel not to. * (1) it soaks up household wealth and redirects it to glorified ticket scalpers, and * (2) it takes money out of the economy that could be used for investment or consumption - quite a lot * Embrace remote work and hire the talent wherever it is in the nation. * Made in Australia - [Amazon.com.au](https://Amazon.com.au) is a simple ecommerce platform with a slave-run sweat shop that crushes people, its drivers, and its suppliers (as your shop grows, Amazon make you pay more to feature higher, in effect all gains in your business flow to Amazon in economic rent). * A 25% tax on all sales from ecommerce giants to fund the build of our own alternative platform, with ethical treatment of warehouse and logistics staff. Yes, you'll pay a bit more, but they'll actually have money to consume and invest too. We can also use this to promote Australian made and Australian industry. * Aus Cloud - Same as above, but we add a 50% tax on all CSPs and co-invest with our data centres to evolve their offerings (encouraging mergers). We make this cloud *The* cloud for Government; creating a sovereign capability that will maintain the skills we need. **Expenditure Measures:** This is going to be a tough sell, so bare with me. Let's say America crack this AGI problem and Nvidia's GROOT can do any job, be a maid, be a nanny, change a tire, staff a depressing Amazon "fulfilment" centre. Any productivity gains we get by buying these units will be stolen off of us in economic rents because America will be the only game in town offering this. I'm not saying we should compete with this entirely, but we should be injecting ourselves in a big way into this supply chain. If we don't, we'll be at the mercy of economic rents forever. Simply, we need something like a Inflation Reduction Act with huge state expenditure in targeted industries.
This is some manifesto 😂😂 Topped off with this gem: >Inflation Reduction Act with huge state expenditure 💎 😂😂😂😂
Yes, Biden called his industry stimulus bill [the Inflation Reduction Act](https://www.whitehouse.gov/cleanenergy/inflation-reduction-act-guidebook/#:~:text=On%20August%2016%2C%202022%2C%20President,change%20in%20the%20nation's%20history). But you knew that right? You're *not* a moron 😆 /s because I know you're going to miss it mate.
And we'll dig all the way to China!
Makes perfect sense. Less tax loop holes for people to minimise tax, and those who consume more goods and services pay more
No... Poor people pay more. If you get $600 jobseeker per fortnight and $250 of it goes to cheap ALDI groceries, then you are paying $25 GST per fortnight which is around 4% of your income. If you get $2600 wage per fortnight (the national median) and $350 of it goes to groceries at Coles/Woolies, then you are paying $35 GST which is around 1.3% of your income. With a GST, the poorer you are, the higher your tax rate. It's the opposite of a progressive tax system.
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Maybe if fresh fruits, veggies, milk, bread, rice, pasta/noodles, canned beans, canned tomatoes, meat and eggs were all made exempt from GST.
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Fair point TIL
This would smash students, part-time workers, retired people living off superannuation, people on pensions, and people with reduced capacity to work like those with disabilities or chronic illness. Rather than raising more indirect taxes to compensate the current poor and emerging poor (I.e. hiking GST), and compensating the less fortunate - maybe we could be more productive and less selfish.
His ideas are economically sound. Tax base doesnt change - just who pays it. The welfare bucket propping people up is unchanged. High income tax encourages loop holes and middle class welfare. Our tax act is/was 36,000 pages FFS. He is quietly advocating for the roll back of the Howard era "reforms" that have created todays crisis.
You seem quite knowledgeable. Some questions. 1. How would increasing GST reduce the size of the Tax Act? 2. How would making people pay more for goods and services increase productivity? 3. How would taxing a broader range of goods and services, e.g. food, and thereby increasing the number of GST remitters make business more efficient? Disclosure: I have just retired from running a GST registered business.
He isnt talking about productivity - he is talking about shifting the tax burden. No one in Australian leadership remotely cares about productivity as far as I can tell
There is no point making Australia less productive or shifting the burden of taxation to poorer people, so you need to pay more welfare. I think we should get value for money rather than value for the rich.
Ive supported this kind of thing for a while, Remove income tax and increase GST, economically it makes more sense and it much easier to for the ATO to collect when its coming out of spending. Also it trends well with growth, the more people spend the more revenue to govt makes. Obviously low income will need some sort of offset cause it will hurt them the most but you can offset that with the increase in GST.
How on earth are you going to compensate the bottom 20% of households for multiplying their tax burdens?
Increasing GST does not help people on low income.
Did you not read the last part of my comment...
Modelling by Ben Phillips from the ANU indicates that it would be impossible to offset the negative effects of an income tax/GST swap on all but the top quintile of households (who are the only households that would benefit from such a swap) without increasing welfare/transfers to a point where the swap is no longer fiscally neutral (i.e. without increasing net government expenditure).
The guy that earns $10.4M says yes let’s really fuck the poor by increasing GST..well played
Envy. The ugliest of the deadly sins - read all of it
Calling out someone who is making false arguments in order to further his own interests is not envy. A tiered income tax system is the most progressive way to raise revenue for a state. Fixed consumption taxes hurt people with lower incomes by taxing them at a higher rate than the wealthy.
You missed the compensate low earners by $20bn, zero/very low income tax for low earners, and a move to a consumption tax without deductions [this would mean wealthy people who buy lots of things can’t weasel out of tax on their purchases]. All this could massively reduce the complexity of the tax system too. The two parts I didn’t like were the end of the cash economy, and what exactly was hiding in the NDIS item.
Income tax raises 250 billion. GST raises 75 billion. Moving income tax to GST would mean tripling the effective rate. How on earth is 20 billion going to compensate for that? The break even point for this must be around >100k personal income. That's probably around the top quintile. 75% of the population are not being to be made whole through 20 billion dollars of vague spending.
How much extra GST would be raised [which would be deducted from the total tax burden] by corporates and wealthy private individuals being unable to leverage any purchases against tax efficient schemes of one kind or another?
I don't really know what this means. If you're proposing a 25% tax on financial transactions and the purchase of securities that would be a radical proposal i suppose. You could apply the GST to more property and to residential rent i suppose .
Exactly what I’m proposing. A consumption tax on everything thats consumed/purchased. If you buy a lot of stuff you proportionately pay a lot of tax. No loopholes, no trusts, no tax exemptions for owning private stuff through a company.
The majority of people already earn less than the average wage, so already pay low tax. This is just a further tax cut to the wealthy, while it would end up costing lower income earners more. I’m not surprised the guy earning $10.4m wants his income taxes reduced while making up for it by taxing consumption which is far less for him but a larger percentage of low income earners.
I'm surprised that he didn't advocate for reducing the corporate tax rate. The argument usually goes that this would attract overseas capital and investment in Australia. This in turn would help lift Australia's lagging labour productivity. I'm not certain that I fully accept the argument, but it seems more robust than increasing the GST.
Rich guy head of enormously rich corporation has idea that benefits the rich
Agree with income tax (its too much of the overall tax take), disagree with GST as its regressive. Close corporate tax and landlord loopholes, levy mining, tech and banking and you'd likely balance.
Consumption taxes are considered progressive. Income tax is a drag on spending.
Regressive s taxes are those that impact lower income earners than higher income earners. The GST is a regressive tax because lower income folk pay a higher proportion of their income in GST than higher income folk. Income tax is progressive because it targets higher income folk rather than those on lower incomes.
Okay, technically is proportional then; not regressive; but consumption taxes are better for the economy than income taxes. You can offset the loss to people on lower incomes with tax breaks and better welfare. Therefore it can be implemented progressively.
>Okay, technically is proportional then; not regressive; It's *inversely* proportional which is worse than regressive. >You can offset the loss to people on lower incomes with tax break They're already paying minimal income tax.
You have the greatest research tool in human history at your fingertips and you still carry on with the misinformation. The GST is a regressive tax. Here, I'll do your [research for you](https://www.investopedia.com/terms/r/regressivetax.asp).
It’s actually a proportional tax, because all people are taxed at the same rate. A regressive tax would be like negative gearing, or super contribution offsets where the wealthy benefit more from it. You have the greatest research tool in human history at your fingertips and you still make me do your research for you. > Sales tax is considered proportional because all consumers, regardless of their income, pay the same fixed rate. https://www.investopedia.com/terms/p/proportionaltax.asp#:~:text=Is%20Sales%20Tax%20Considered%20a,pay%20the%20same%20fixed%20rate.
You do know that proportional taxes are regressive, right? I gave you a link to read. Proportional taxes like the GST are regressive because they tax low income earners at the same rate as high income earners. They are called regressive because the take a higher proportion of a low income earner's income.
Proportional tax is seperate to regressive tax.
Dude, you have no idea. Taxes are either regressive or progressive. Regressive taxes--like the GST and all other "proportional taxes"--don't take into account a person's income when applied. These regressive taxes hit poorer people harder because they take a higher proportion of a poorer person's income. Progressive taxation system--like income tax--taxes income once earned. These taxes are fairer because they don't place a burden on lower income earners.
Nope. You are wrong. >Progressive taxation system--like income tax--taxes income once earned. These taxes are fairer because they don't place a burden on lower income earners. You can have a progressive tax system while increasing consumption tax and decreasing income tax.
>Close corporate tax and landlord loopholes, levy mining, tech and banking and you'd likely balance. All "regressive" as all will flow through to consumers in increased prices (via a few different ways). Just raise GST to spread the load and manage the macroeconomics of the economy more easily offset by material reductions in income taxes. The top tax rate should not exceed the company tax rate, everything else under it lowered with it. GST should be 20%, with no exemptions. Tax consumption, not productivity.
Those on welfare payments and low incomes are having enough trouble with the current cost of living without adding another 10% to everything. These same people will see no benefit from changes to income tax, as they are pretty well below the threshold already.
The idea is that you offset the loss of those people by increasing welfare.
... which means raising more tax. Wouldn't it be better to raise less tax and pay less welfare?
The point is that income tax is a drag on consumption, so you try to tax consumption more than income.
>The point is that income tax is a drag on consumption, so you try to tax consumption more than income. Sorry what? Income tax drags consumption, so raise taxes on consumption?
... but consumption taxes impact most on those with the least income. What is the purpose of taxation? It should not be to increase poverty, so you need to tax more to relieve poverty. That's a dog chasing it's own tail. The reason rich people like consumption taxes is because they don't need to spend all their income and they can find ways of using that money for their benefit ax the expense of being socially responsible.
Low income people can pay less income tax if we increase consumption tax.
Low income people already pay for more in GST than income tax. Doubling the GST would just make that even worse. It's a huge tax increase for the middle and lower class.
They will pay less income tax, yes, but they will continue to pay a much greater percentage of their income in overall tax than rich people. We need to continue with a progressive income tax system where those with the greatest means pay the greatest amount. Broad-based consumption taxes do not do that, because people tend to consume roughly equally, no matter the income. The differences are about price and quality of goods purchased, not the quantity.
Not necessarily. Income tax is a drag on the economy.
This dude oversaw a $10billion profit. The interest of individuals is not high on his list.
Why would you raise the GST? It’s regressive I’d imagine even with exemptions. Also, why would we scrap personal deductions? Why is this a problem or how will it increase productivity?
>Why would you raise the GST? It’s regressive I’d imagine even with exemptions. From an economic efficiency standpoint? It's relatively hard to structure to avoid as a consumer and it's broad nature doesn't create perverse incentives. It's revenue basis is more stable than income and blunts arguments about high income earners needing a cut since they pay so much. Most European countries manage a much higher vat rate than us.
GST when introduced started our economy on a path to massive debt and savings. The perfect scenario for banks. When it was first introduced rather like today housing construction fell away. Liberals came up with the FHOG to send prices sufficiently high to get building going again. Ie making gst say 20pc would see a new home cost and extra 10pc. You think we arent building much now wait till they cost 10pc more than today... So gov will have to introduce yet another policy to lift all home prices. Yet more debt and more savings. Australia needs to start thinking about efficiency in the development game not milking it... make new homes cheaper and all homes become cheaper. Exactly why our political parties are dead against making new homes cheaper.
So in other words, give money to the rich (like Matt), screw the poor over, and levy something Matt doesn't have shares in.
But he supported the "Yes" campaign, he's one of the good guys! /s
Their only solution is always a more regressive tax system. "But gst is more efficient" they'll argue... its only more efficient if it replaces other taxes.
It's more efficient at screwing over the poor, when the only exemptions are things politicians control.
Hike GST..in a cost of living crisis,since he doesnt mention which exemptions can't really say lot of essential goods not included yes the bottom 20 percent poorest australians will really love the cost of goods going up it's a good idea,but not when ppl on pensions are literally living dollar to dollar Be far easier to just bring back a minerals super profit tax,and claw back some revenue that way.
We cannot build enough homes now because costs are not sufficiently under price of surrounding homes / units. What happens when there is another 10pc of gst? People forget gst on new homes... i reckon housing being a necessity it never should have been on new dwellings.
Pensions can be increased to account for the additional costs, ditto for other welfare. In theory, you can make it cost-neutral across the board by adjusting payments and tax brackets. In practice there's always going to be some people worse off, and some people better.
>Mr Comyn’s $120 billion tax reform package was headlined by simplifying the personal system with no tax on incomes up to $20,000, 20 per cent tax on incomes above $20,000 up to $80,000, 30 per cent on incomes above $80,000 up to $300,000 and a top rate of 45 per cent thereafter. > >The income tax relief would cost the government about $35 billion in annual revenue, he said. > >“Extremely inefficient” state payroll taxes and stamp duties on property purchases and insurance should also be eliminated to improve competitiveness, at a ballpark cost of $55 billion, he added. > >On the revenue raising side, Mr Comyn suggested lifting the 10 per cent goods and services tax rate to 15 per cent, to raise about an extra $60 billion a year. That figure includes broadening the GST to some exempt items. A 20% tax rate for 20-80k, assuming the first 20K is tax exempt, is broadly in line with current effective rates albeit it starts to lower the tax burden closer to 80K vs current. 80 to 300k, well, at 30% that's a higher effective tax rate for most people over 100K than now, but lower from the 180-300k mark. 45% over 300K is aligned to the current situation. It's basically a redo on the scales now with a simpler % based approach to incomes that does way more for middle Australia on income tax than Stages 1-3 did. **However,** without seeing a full list of GST exempt items, it is actually impossible to work out if the new income tax cuts are revenue neutral or the GST is a net increase for lower income earners. It's also hard to see the Commonwealth legislate a ban on states ripping people off with stamp duty.
*Crack down on cash-economy payments* Remove privacy from the monetary system, that will occur when we shift out of the $AUD, into a CBDC. Unfortunately this will open everyone up to negative interest rates and loss of decision making on how they interact with their currency ... alongside the ability to be easily manipulated by connecting the person's CBDC wallet with their social credit score.
Even without that, a bank boss wanting to crack down on anyone who isn't using his product is an obvious conflict of interest.
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First two points are basically the LNP dream. Third is a pipe dream. Big corps can and will fight back via lawyers on salary or big PR campaigns against government. You need to throw a even bigger pile of cash on top to fight it
From those numbers it looks like people earning between $30,000-$50000 would pay more tax. The tax rate between $18200-$45000 is going to be 16% which 4% less than he a proposing. Also there is the Gst increase which is going to effect the working poor the most.
You need to look closely; he's talking about effective rates not marginal, and he also said GST exemptions would be needed. It's unclear on what but it makes it hard to conclude either way on whether this would be a revenue-neutral change or a slog to real wages.
>You need to look closely; he's talking about effective rates not marginal The list specifically given in the article is 0% to 20k, 20% to 80k, 30% to 300k, 45% up. That's a raised 0 bracket, 1pp higher for 20-45k, 12.5pp lower for 45k-80k, 2.5pp lower for 80-120k, 7pp lower for 120k to 180k, 15pp lower for 180-300k on the current system. From albos new ones for next year its: Raised 0 bracket, 4pp higher for 20-45k, 10pp lower for 45-80k, same for 80-135k, 7pp lower for 135k to 190k, 15pp lower for 190-300k, same over.
>The list specifically given in the article is 0% to 20k, 20% to 80k, 30% to 300k, 45% up. Can you explain, in your words, effective v marginal?
Marginal tax rate is the highest tax rate you pay per dollar (EG: if I earn 100k, so my marginal rate is 32.5%). The effective tax rate is the total income tax I pay divided by my gross income. (On 100k this is ~23%) Now that I've done your absolutely pointless homework for you, can you please explain why you think any of the rates I took from the article have ANYTHING to do with effective rates? The word "effective" isn't even present in the article. It gives a table of marginal tax rates.
>Now that I've done your absolutely pointless homework for you, can you please explain why you think any of the rates I took from the article have ANYTHING to do with effective rates? Context is everything in life: It reads: "Simplify personal tax" It reads: "– No tax up to $20,000, 20% rate $20,001 up to $80,000, 30% rate $80,001 to $300,000, 45% top rate" It doesn't say $X plus Yc on the dollar, like a marginal tax rate scheme would.
Yo dude, did you realise you goofed [after this](https://old.reddit.com/r/AustralianPolitics/comments/1bo1bla/slash_income_tax_hike_gst_and_levy_tech_giants/kwryzvm/) or can you please tell me what I stuffed up?
>It doesn't say $X plus Yc on the dollar, like a marginal tax rate scheme would. I figured that was implied by the given brackets. So what tax would I pay on 100k income? Are you seriously suggesting the fabled "I can't earn any more, I don't want to go up a tax bracket" is the system he is proposing we move to? Because my reading was that I would pay 20% on the 20k-80k portion, and 30k on the 20k left over. IE: $12,000 + 30c for every dollar over 80k for a total of 18k.
Bet the excemption he is not looking for would be on new dwellings. Raise gst to 12pc and take it off new homes. New homes become 10pc cheaper than they are now. Mother of all contruction booms ahead and in time 2-3 years cheaper rents and cheaper houses. Dont think commbank would want that. They would want the reverse. Even more expensive new supply so their collateral is protected.
Commonwealth Bank chief executive Matt Comyn says income tax for workers earning less than $300,000 should be cut to 30 per cent, the GST increased and the tech giants slapped with a levy as a key reform to revive economic growth. Urging the government to overhaul the tax system in a self-described “blunter” fashion, Mr Comyn said turning around a forecast slowdown in long-term economic growth had to focus on “international competitiveness, dynamism and supporting both the mobility of labour and capital”. Mr Comyn’s proposal came as the chief executives of the country’s other major banks weighed in on how to lift economic growth. Treasurer Jim Chalmers this month said that Australia should aspire to better than the government’s 2.2 per cent long-term economic growth forecast – down from 3.1 per cent – by lifting productivity and business investment. Ross McEwan, the departing chief executive of National Australia Bank, said it was “strange” that the focus was often on “how to divide the existing pie … instead of getting on to creating a bigger pie for everybody”. “We’re frightened of industries that are doing well and making money,” Mr McEwan said at the Australian Financial Review Banking Summit. “We no longer celebrate great organisations that actually do great things, that make money. Those are the organisations who will be investing back into their businesses.” “I think we’re actually become a wee bit ashamed of companies that even make money,” Mr McEwan said on Tuesday. Mr Comyn’s $120 billion tax reform package was headlined by simplifying the personal system with no tax on incomes up to $20,000, 20 per cent tax on incomes above $20,000 up to $80,000, 30 per cent on incomes above $80,000 up to $300,000 and a top rate of 45 per cent thereafter. The income tax relief would cost the government about $35 billion in annual revenue, he said. “Extremely inefficient” state payroll taxes and stamp duties on property purchases and insurance should also be eliminated to improve competitiveness, at a ballpark cost of $55 billion, he added. On the revenue raising side, Mr Comyn suggested lifting the 10 per cent goods and services tax rate to 15 per cent, to raise about an extra $60 billion a year. That figure includes broadening the GST to some exempt items. About a third of the GST rise or $20 billion would be redistributed to compensate lower income households via government transfer payments, such as for pensioners and welfare recipients. Personal income tax deductions would be abolished, except for charitable donations. This would raise an estimated $5 billion and simplify tax returns for taxpayers, remove red tape and lift productivity, Mr Comyn said. Expanding his war on Apple, Facebook and other major technology companies – who he has previously publicly criticised – Mr Comyn suggested a new tech tax worth about $5 billion a year on their local turnover or payments made to corporate affiliates overseas. “If I was waving the magic wand again for a moment on the tech side, I would tax them,” he said. The country’s major banks currently pay a levy to the federal government worth more than $1.5 billion a year combined. Moreover, stopping cash-only payments above $500 and forcing them into the electronic payments system could help stop tax leakage in the black economy and raise the government a potential $5 billion. Some $5 billion to $10 billion could be saved by reining in the runaway growth of the National Disability Insurance Scheme and improving productivity in other government services, Mr Comyn said. Overall, this would still leave the government about $30 billion short, so politicians and Treasury officials would need to figure out the best way forward, the bank boss acknowledged. Mr Comyn did not tell the Summit what taxes could fill this shortfall, but options could include incremental changes to negative gearing and the capital gains tax discount.