Since 2003, income tax has been rising at 4% per year, roughly the same as AWE, corporate tax has been rising at 6% per year, and GST has been rising at 4% per year, slightly faster than inflation. Total revenues have increased around 5% per year.
The proportion of our incomes that we pay in tax is now dependent on age. If you are a Baby Boomer, you pay less tax as a proportion of your income than a GenX or GenY, because you earn more (and income tax has gone down) but you consume less (empty nest, independent children) and consumption taxes have increased. The one off increase in tax revenues of roughly 8% has never been reclaimed by the tax payer. We continue to pay 8% more than before the GST, but it is unevenly distributed among tax payers, with the younger generations paying roughly 12% more relative to incomes, and the Baby Boomers paying around 4% less.
Noted. So raise the GST to 15% and raise the tax free threshold for workers to say $50k and a Land a tax of 1% for all land owners, abolish stamps etc.... increase welfare to compensate. By raising the GST we tax the aged as well and possibly one of the ways to keep our conboat going is to slowly extract the wealth in housing from pensioners who can afford it, through reverse mortgages etc...
And how does the single 80 year old woman living in a 3 bedroom house drawing a pension pay the extra 1%?
Or do we park this issue, given we had the same discussion recently anyway?
Er ... if she is drawing a pension, the pension will go up 1% in compensation. That way the tax payer can subsidise her children's inheritance of the house.
There really is no end to the socialist whining in this country is there.
------------------------------ " ... which is that all-too-familiar dynamic in Irish life where people tell lies, cover them up and create all sorts of collateral damage, sometimes spread out over decades, and never take responsibility." - Alan Glynn
Er ... if she is drawing a pension, the pension will go up 1% in compensation. That way the tax payer can subsidise her children's inheritance of the house.
There really is no end to the socialist whining in this country is there.
Huh? So if her house is worth $500,000, and she pays an additional $5,000 per year in tax you'll increase her pension by 1%, which is what - $250 a year?
Doesn't sound real viable from her perspective. I guess reverse mortgage will be the only way.
Record youth unemployment sounds like it goes hand in hand with massive immigration as the ' new ' Australian takes all the jobs from the kids of 'old' Australians.
Government policies set to ruin Australia all in the name of the gravy train.
Saves on training. The companies love it.
But not good for the host country.
... and then the press start calling the kids lazy.
Huh? So if her house is worth $500,000, and she pays an additional $5,000 per year in tax you'll increase her pension by 1%, which is what - $250 a year?
Doesn't sound real viable from her perspective. I guess reverse mortgage will be the only way.
Ah, I thought you were referring to the rise in GST. 1% land tax on a house valued at $500,000 is $5000? I don't think so .... but let's say the property is valued at 1.2M, and the land value is $500K, making a 1% land tax $5000 per year. If she lives to 100, then in today's dollars she will pay $100K in tax, and her children will inherit $1.2M in property, and she will have collected $360K in pension payments. Harsh.
Are you suggesting that because all of her savings are tied up in the property, that she should be exempt from paying for her own retirement?
------------------------------ " ... which is that all-too-familiar dynamic in Irish life where people tell lies, cover them up and create all sorts of collateral damage, sometimes spread out over decades, and never take responsibility." - Alan Glynn
Ah, I thought you were referring to the rise in GST. 1% land tax on a house valued at $500,000 is $5000? I don't think so .... but let's say the property is valued at 1.2M, and the land value is $500K, making a 1% land tax $5000 per year. If she lives to 100, then in today's dollars she will pay $100K in tax, and her children will inherit $1.2M in property, and she will have collected $360K in pension payments. Harsh.
Are you suggesting that because all of her savings are tied up in the property, that she should be exempt from paying for her own retirement?
No, I'm not suggesting that. I made an error in assuming that the value of the property would be the base amount used to calculate the additional tax liability. Thanks for pointing it out, and not being a knob about it.
I guess there is a balance to be struck, between accepting that people will want to stay in their homes, and enabling them to do that.
Preserving inheritence by providing welfare is not something I would support at all.
Preserving inheritence by providing welfare is not something I would support at all.
Now would I.
And if there has to be an assets test for pensions, I do not support excluding any asset based on its asset class. (i.e. if you get docked for cash, you should get docked for the home you live in.)
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
The low light is a 6.4 per cent unemployment rate – a 12 year high for that measure. Add to that a 9 year low for the employment to population ratio and almost no net increase in employment for the last four months and you have a picture where the jobs market is telling the world (including the RBA), that the rate of economic growth remains below trend.
Curiously, at its meeting just two days ago, the RBA Board noted "There has been some improvement in indicators for the labour market this year" and to be sure, there was. But with this update on the jobs market, it seems that 'improvement' was short lived.
In simple terms, there is a growing degree of slack in the labour market and this clearly accounts for the fact that real wages are falling. There are signs that inflation is also cooling with the monthly TD-MI Inflation Gauge tilting lower in July while the fall in commodity prices and the terms of trade continues unchecked.
While consumer confidence and business expectations have firmed since the shock of the budget, they remain fickle.
Retail sales fell in the June quarter, building approvals are trending down and net exports look like subtracting from GDP. The Australian dollar is ridiculously over-valued and the RBA needs to cut interest rates if it is to stop the unemployment rate exceed 6.5 per cent or even hitting 7 per cent especially with fiscal policy caught between ineptitude and a cranky Senate.
There was a bit of a fuss about whether the new ABS methodology artificially inflated the unemployment rate, but the ABS categorically noted:
"There is no evidence that the introduction of the new active job search steps and the changing of two active steps to passive has had a significant impact on the estimates for unemployment."
Which means the numbers are shocking and a policy easing is needed - maybe next month.
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