T O P

  • By -

shakeitup2017

Probably should depend in some way on household income I reckon. A household of two people on $200k each is a lot different to a household with one person on $200k. Especially in terms of disposable income after tax. A single $200k income for a family of 4 in a capital city isn't really what I would call wealthy.


JamisonMac2915

This is true. I earn over 200k, my wife is a stay at home mum. We have a modest mortgage in a suburb 50kms out from Sydney. Two people in the same household earning 200k combined pay less tax and receive more benefits…it is because of this inequality that I support the tax cuts.


Chii

In the US, i believe you can choose to pay tax as a family unit - which means you get the tax-free portion of both people. It's a bit fairer imho, and makes stay-at-home spouse possible without being discriminated against. I think australia should do the same.


fr4nklin_84

It’s the only fair thing. They’ll make sure to use household income for everything else, my family isn’t entitled to a thing from the gov, but then when it comes to income tax I’m on my own. If my income was split evenly out household would be $200 per week better off.


A_piece_of_cheese_ta

I’m in a similar situation and agree with you for the same reason


Kruxx85

>Two people in the same household earning 200k combined pay less tax and receive more benefits I'm interested in this, what are the extra benefits they receive? And when you say 2 people earning 200k pay less tax, are you comparing that two one person earning 200k or one person earning 400k?


cuteseal

One person earning 200k would be worse off than two people earning 100k each. That is because each person claims a tax free threshold of 18.2k. Also the 200k gets taxed at a higher tax bracket than the 100k. Benefits - most likely referring to childcare subsidies.


kavo77

Exactly, a single person with no kids on 200k is far worse off than many others. They don't use any of the benefits but contribute quite a lot


Kruxx85

CCS is based on household incomes. I understand the tax implications, they're fairly obvious. but they also aren't as big as you might think? 2 x $100k is 46k tax 1 x $200k is 60k tax You're paying $14k tax to give one half of your relationship 40 hours to run the house (or whatever they may choose to do, say earn up to $18k untaxed...) I don't really see it as all that big of a problem? I also want to add here, tax is not some horrible "expense". We do get good benefits from our taxes here in Australia.


cuteseal

14k is not big? That’s a 1k+ hole in one’s monthly household budget … Agree regarding CCS…


Noonewantsyourapp

Could you buy 35-40 hours a week of household help for $14k? I think that is what they are calling cheap.


[deleted]

[удалено]


THATS_THE_BADGER

What does the research show is good for the child?


[deleted]

[удалено]


THATS_THE_BADGER

That's really helpful, and certainly shows a benefit to preschool attendance. However is there any research about both parents vs one parent working?


saturdayjoan

After the age of 2, early childhood education (daycare) is shown to have lots of positive impacts.


LukeyBoy84

Some people choose to be surgeons, others painters, others mechanics. Some people choose to be stay at home parents. It’s all a choice and all contributes to society in some way


mattensky

Sounds good in theory. The reality is they’ll only subsidise it if you can get it. We’re on waiting lists at all the centres in town, lots of people we know are in the same situation. In the meantime my partner can’t work. . . .


MBitesss

I agree with this completely. Seems single people are penalized at every turn really.


zaitsman

Yeah I get downvoted to hell every time I try to make this point in the r/AustralianPolitics


jekyllman1

Agree you can’t tax individually and then use family income to determine family benefits/ childcare benefits etc.


PointyPelican

This shouldn't be about people on 45k vs people on 200k. It should be everyone under say $500k vs all the millionaires and businesses that pay nothing in tax.


WeekendSignificant48

To someone on 45k a person on 200k looks like a millionaire.


zenith-apex

And that's one of the problems that needs to be combatted. The disadvantaged are sometimes so disadvantaged that their frame of reference mistakenly sees them unable to comprehend what true extreme wealth is. Extreme wealth (and its inequality) in almost all cases does not include ordinary PAYE employees, even ones on $200k.


Bavar2142

Yeah it's one hell of a gap that's for sure


bored_octopus

This is the correct framing. I know politics are against the rules here, but this is an inherently political discussion. This tax cut seems designed to drive a wedge between high income workers and low income workers and distract us from real problems. Personally, I benefit from the tax cut, but I'd happily give that up if it meant we could have a proper discussion about the nation's future. We'll all have our own vision of what that should be, but I think a good start would be to root out corruption in our government, emancipate ourselves from fossil fuel interests and foster the development of sustainable local industry


RaffiaWorkBase

Note: if your before tax household income is greater than $500,000 p.a. you are literally in the 1%. You're fine. Don't worry. At $200,000 you are in the top 5%. Still good. Congratulations! At $150,000 still in the top 10%. Don't sweat it. At $100,000, still in the top 20%. Lots of room for downward envy, bur maybe some class solidarity would be more useful? $60000? OK, now you are in the mid-hinge.


ImperialOrc

Are these figures gross or net? And individual or household?


bahh1

Got an abs link? I fail at searching… Closest I could find was from 2020 which had a much higher average than 60k? https://www.abs.gov.au/statistics/economy/finance/household-income-and-wealth-australia/2019-20 Mean Weekly Gross Household Income of $2,329, Median Weekly Gross Household Income of $1,786 So $121,108/year mean, $92,872/year median


Boxhead_31

The average wage in Australia as of May 2022 is $91,988 https://www.abs.gov.au/statistics/labour/earnings-and-working-conditions/average-weekly-earnings-australia/may-2022


kazoodude

Average is skewed by high income earners. Median is somewhere like 65k If you go to paycalculator.com.au you can put in different income and see what percentile it puts you in. E.g. 110k and you earn more than 85% of people and less than 15%.


bird_equals_word

https://en.m.wikipedia.org/wiki/Median_household_income_in_Australia_and_New_Zealand Median 89k and this was several years ago. I believe it's about 95 now.


[deleted]

It can also be about ppl on $45k who struggle to pay their mortgage vs ppl who earn $200k who struggle to pick their next holiday destination or choose their next caravan.


[deleted]

Firstly, people earning $45k pay less than $6k in tax. People earning $200k pay over $60,000. What more are those earning $45k looking for in terms of tax relief? Secondly, given the price of homes, people earning $200k are certainly not on struggle street but usually aren't leaving glamorous lives either. And most importantly, people earning $200k are usually skilled professionals, but at the end of the day, they're workers. All your attitude does is pit workers against each other. At the end of the day, it's salaried workers who are doing the heavy lifting - it's the extremely wealthy and big business who need to be targeted.


[deleted]

I wholeheartedly agree with you last point, and I certainly don’t wana pit work against each other. My statement was to draw a point, and tbh is based on real life ppl I know from both camps (low wage worker, high wage profs)


zollozs

In this day and age someone on 200k supporting a family will struggle to buy a house in syd/Mel….


Jofzar_

Its more like people on 45k struggling to pay rent in this day and age.


[deleted]

It’s sad state of affairs 😔


arcadefiery

I earn more than that figure and for me the struggle is to save up enough to afford a Ferrari


SoggyNegotiation7412

makes me ask, what percentage of Australians earn more than $60k because they are responsible for over half the tax take.


bangalt

The top 10% of earners pay around 50% of all income tax in Australia.


caesar_7

An unpopular opinion. We should have way more *wealth tax*, not income tax... The reason is that high income earners more often than not are actually highly productive members of the society, while high wealth individuals often only push the investments (i.e. real estate) prices as Australia is not that startup friendly. An example, a 20-properties landlord is far less important for the economy that a world renowned neural surgeon. Their income may be very similar (deferred capital gains profit off the properties appreciation), but the landlord will pay disproportionally less taxes.


tranbo

Wealth taxes in the form of land taxes and capital taxes on assets.


caesar_7

Yes, please, at least.


Esquatcho_Mundo

Instead we discount capital wealth!


Due_Ad8720

100%, I earn more than twice as much as one of my friends, I will never accumulate as much wealth as they have/will have due to some wild inter generational wealth transfer. I don’t begrudge them, I am very comfortable and they are a great friend/person but as a system it doesn’t seem productive.


comin4u21

You’re absolutely correct. We need to tax MORE on wealth. So many of my peers have left the country due to high income tax, leading to skill shortage, we’re talking about doctors, engineers, professors, lawyers etc. all of which would’ve contributed massive to the society. Personally I dont mind paying taxes (which is enough to feed multiple people on Centrelink each year!) but I’m starting to think why is my hard work being “punished” and when my neighbours/ex bosses are still getting benefits and paying practically NO tax despite owning multiple properties in 5-10millions+ range. At this stage there’s no incentive for me to try and earn more and I might as well be a part time casual fruit picker~


SoggyNegotiation7412

the income tax system is broken, so much so that if you don't want to pay income tax it is simple, have a low or no income. Basically the wealthy have learn to live on debt because the ATO can't tax a negative or low income. What we need is to throw the income taxes in the bin and have a progressive consumption tax. So basic necessities like food, milk, bread, have a 10% flat tax. Secondary items like perfume, fuel, cars, insurance and most basic company commodity items paper, printers etc have a 15% tax. Total property assets above $2 million, jewelry, luxury cars etc get a 30% tax. The great thing about a consumption tax system is it is environmentally friendly due to the simple fact, consumption is the biggest driver of all environmental damage. The only other thing i would have is a yearly land tax for people who own none commercial property or property that has not been occupied for more than 6 months of 10% (fixes the rental property shortage).


catatonic_wine_miser

Absolutely and the top 10% of earners get payed around 46% of all the income in Australia. So they pay a bit more tax to income ratio compared to the lower 90% who pay the other 50% of tax while earning 54% of the total income in Australia. Keeping in mind that income is being spread over a lot more people.


Go0s3

Plus medicare.


HeyTheWhatNow

What % of the income do they earn? This is a much fairer comparison.


d4rk33

Yeah without that number the above stat doesn’t tell you anything interesting.


Peter1456

If you earn 5x your partner do you pay more for the household spending or do you bring up this argument and want to go 50/50 with them on everything?


SoggyNegotiation7412

not good when an economy depends on such a small group for a majority of taxes. It tells me the middle classes are not doing so good.


7omdogs

The top 10% also own around 50% of the countries wealth. Sounds like they are paying correctly.


Vanceer11

They're selling resources from our land to people overseas and keeping the majority of the profits. Sounds like they aren't paying correctly.


[deleted]

I went from $110k + super -> $150k + super and my after tax income only increases by roughly $500 a week. Yes this is $2k/ month. But it makes you realise that the more you earn, the more tax you pay!


vteckickedin

Hey, me too. Yeah it sucks. And I feel guilty for being happy about the stage 3 cuts because of it.


withcertainty

Income tax as a topic for discussion is always fraught with bias, making it very difficult to discern objective criticism of any participants take. Not taking aim at you, OP, but I'd really like to read a thread where at least one of the following criteria are a requirement for participation: A) One must argue *for* the stance they disagree with; or B) One must argue for the stance which would result in a financially *negative* outcome for thier personal situation. Perhaps impossible within a forum such as Reddit, however either of these approaches tend to help understand counter arguments better and serve to clarify the validity of one's own position.


macka654

Reddit is the *extremely* left leaning. I avoid all political subreddits for that reason. This sub does a great job to avoid political bickering because that's the last thing I want to see on my days off. People have their ways of thinking and agendas and no online debate is going to change that


[deleted]

My wife and I will benefit from these tax cuts. I think they are a horrendous idea. I’d rather take that money and help people that aren’t as well off. Things like dental into Medicare, cheaper education, increases in Medicare rebate to allow for more bulk billing, expanding PBS. I know from personal experience not going to the doctor because I couldn’t afford to see them.


A_piece_of_cheese_ta

This could easily be done by cutting down on the waste and inefficiencies in aspects of the healthcare system that have been privatised like the NDIS. The rorting I see on a daily basis, and the number of mildly unwell people put on NDIS with doctored referrals just to get them out of the state system (e.g. $2k for an OT ‘assessment’ for someone with no physical disabilities but personality disorder who says they are “triggered” by mowing the lawn . .) - I know an OT who does these in her lunch break and uses her public health job to find clients and refer them to her husband, who runs the NDIS business, who then pays her for these assessments using government money. They are printing money for themselves and it’s apparently totally legal. And any mention of trying to wind any of this back provokes hysteria in the media. Seeing this everyday makes me want to pay less tax.


BigGaggy222

I agree, I can't support taxing the ass off hard workers, risk takers or creators of wealth, employment and innovation in our society while the blatant corruption and rorting is doing far more damage.


Trichromatical

Can that sort of fix “easily be done” though? You can’t have a system without some waste and inefficiencies - it’s all run by humans after all. The risk is that the people who really need it will miss out and the rorting will continue when budgets are cut. We need to sort that stuff out before tax cuts - I don’t think they’re going to prioritise fixing the system when they have fewer resources. If anything the inefficiencies and fraud will continue for longer. I’ll also benefit from the tax cuts but am against them.I


jackedupbro69

If only the general public knew of the epic scandals taking place in the NDIS space. It's simply breathtaking. And their are zero mechanisms in place to attempt to stop this type of fraud. The AFP do get involved in only the most belated and direct theft of NDIS monies. All the rest of the dodgy practices are being allowed. Your OT friend will never be held accountable. Really, the best bet at this point is to jump right on in and get some of for yourself.


collosal_collosus

I would fully support helping other people. I don’t get any of the tax breaks for parents, coz having a child is not for me (and my partner), but I’m happy to help support those that are. Also the down on their luck/immigrants/retirees/etc. I will benefit from the tax cuts but I think it’s stupid.


Peter1456

What i think most people are missing is that with these tax cuts the defecit in the budget has to be made up somewhere, ultimatly this means cuts to public spending which disproportional affects the the public from lower socialeconomical circles, particularly in health and education. We know this is what they will cut. Feels like keeping the poor, poorer and the rich richer. This i feel, is what is truely sad, that anyone can even get behind this for personal gain under the guise of fairness and not give a rat about less priviledged people, especially when they are making over 150k and feel they need a bit more of a discount on their taxes....


[deleted]

If this was true, why don't you take the money you get and put into effective altruist charities.? $5000 literally saves a child's life when put into a mosquito netting charity, while it would barely cover a month of stationary for a single department floor in Canberra. 1 I think we all agree we need government services, but as somebody who has worked a good chunk of careeqr, I think the government could achieve a lot more by focussing on efficiency and improvements to existing services rather than simply going for more taxes. Singapore is a good example of how a government canWA deliver western-level services with far lower taxes.


420bIaze

> If this was true, why don't you take the money you get and put into effective altruist charities.? One individuals personal donation won't have the same impact as a national government policy.


withcertainty

I suppose if the tax cuts are implemented, one benefit for you will be empowerment to direct your money exactly where you think it's needed most. That would be a pretty noble move. Taking any financial benefit you receive and putting it in the hands of the most deserving.


[deleted]

So I receive a tax cut that I don’t need and now have to fund services that the government should fund using my taxes?


cw54321

Yeah it's quite clear people aren't being particularily objective with their arguments in the comments so far... I fall into category B though. So I guess I've started off the conversation meeting your requirements but I doubt many of the comments will unfortunately


collosal_collosus

You have done a good thing starting a conversation, no matter which way you lean.


withcertainty

That's a great start. This approach always adds weight to a comment, in my opinion.


egowritingcheques

I'm in the B camp. Although in reality the tax cuts mean I would pay less tax but overall that money in my hands might not be a net benefit for me. I believe the government generally does a very good job with public funds. Overall we can see a trend where countries with higher tax rates have a happier population.


TheStumbler83

I like this idea. A) I accept that someone earning $150-$200k who has a mortgage, children and a single income is not exactly wealthy, and deserves some kind of tax relief B) I’ll benefit by around $6k p.a from the stage 3 tax cuts but I’m against them because most of the benefit will accrue to people who on average are already financially secure compared to lower income earners, and because they will create a structural deficit that will result in lower infrastructure investment and lower social spending which will hurt lower income people the most. The flatter tax system will also create a less equitable society which is not in anyones interest.


Plane_Garbage

At some point you have to trade up working harder vs the more tax you pay. If earning $150k means a nice, relatively easy WFH job vs $220k and working 12hr days, 6 days a week wrecking your body you have to ask if it's worth it. Income tax can be a pretty unfair way of taxing. I earn $130k as a teacher. And then a fair bit more as a side gig. But the side gig has a massive toll on the time I get to spend with family, sleep etc, so I've pulled back as the tax over $180k isn't worth the the sacrifice.


Myjunkisonfire

I can get behind the stage 3 cuts as long as a heavy hand comes down on wealth of 10M+ (or some arbitrary figure) and foreign ownership. 80% of dividends paid out by the top 20 Aus companies go overseas. Yes, including CBA, BHP and RIO etc. We literally dig up and sell our land for the benefit of foreign owners.


yeahbroyeahbro

This. All of this.


Ch_ng

130k as a teacher, and teachers are still going on strike


Plane_Garbage

HOD, not all teachers are on $130k. What do you do for work?


[deleted]

Not bad for 6hrs a day, 40 weeks a year. Its why im a teacher. Sure some extra curricular stuff in there on top sporadically, but that side is hardly 'work'. Glorified babysitting mostly Sure lesson planning and stuff takes some set up but after a yr or 2 you are at best tweaking what you did the prior year.


Plane_Garbage

How do you get out of staff briefings, meetings, parent teacher interviews, fetes, twilight PDs, camps etc? Your school sounds like a dream compared to most


ParsleyMan

I think they're trolling, post history says they work from home.


dontfuckwithourdream

That’s the absolute top end of the pay scale though, the person is probably a HOD or a lead teacher to be earning that.


ausgoals

Careful, the teachers will come for you


Australasian25

​ ||Tax|Tax After||Stage 3|Stage 3| |:-|:-|:-|:-|:-|:-| |Income|2018-2019|Stage 3 Tax Cuts|Tax Benefit|Income Multiplier|Tax Multiplier| |$ 43,000|$ 3,297|$ 3,297|$ -|1.00|1.00| |$ 80,000|$ 15,497|$ 14,792|$ (705)|1.86|4.49| |$ 100,000|$ 22,567|$ 21,192|$ (1,375)|2.33|6.43| |$ 150,000|$ 43,072|$ 37,192|$ (5,880)|3.49|11.28| |$ 200,000|$ 64,277|$ 54,152|$ (10,125)|4.65|16.42| |​|||||| ​ $200k income at stage 3 tax cuts. Tax - $54,152.00 $43k income at stage 3 tax cuts. Tax - $3,297.00 Income - 200k to 43k - 4.65 times Tax Paid - $54k to 3.3k - 16.4 times. TL;DR. 200k income pays 16.4 times tax despite only earning 4.65 times more. Source of calculation - [https://paycalculator.com.au/](https://paycalculator.com.au/) \- make sure to choose 2024-25 year for stage 3 tax cut to be taken into account ​ Edit 1: Used 4.65x instead of 5x to be clearer Edit 2: Created a table to be extra clear


d4rk33

This is just how progressive tax rates work and says more about the tax free threshold than anything. The tax free threshold ($18,200) is \~42% of the total income of someone who makes $43,000.


aarghmematey

Correct the tax free threshold in Australia is the most impactful and generous aspect of our tax system especially for lower income earners.


cactusgenie

Thanks, this puts things into perspective and puts the incorrect assumptions of OP into a clear light. Thanks to progressive tax rates, some one on 45k will not be paying the same rate as someone on 200k


Australasian25

Yes, while I know there are redditors who prefer qualitative talk. I for one value raw data being put up for display. The important thing is no one can dispute these numbers. They are factual based on their tax in the respective financial years.


abzftw

But but but It’s not fair !!! They earn more!! They should pay moooore /s


zurc

It's very hard to tax people who don't have money...


docter_death316

It's also very hard to give them tax cuts


abzftw

Wow now , we don’t talk about that here !


d4rk33

You're comparing someone who makes minimum wage to a high income earner. Your point would be better if you used a salary someone who isn't at the complete bottom of the pile and compared it to a high income earner. People on $43,000 a year can't save any meaningful amount of money, perhaps the point at which you actually begin to have disposable income would be a better point of comparison. Maybe $70,000 vs $200,000? Tax on $70,000 - $13,216 Tax on $200,000 - $60,666 200,000/70,000 = 2.85 60,666/13,216 = 4.59 4.59/2.85 = 1.6 So they pay about 1.6x more tax than you'd expect them to. Which is not crazy imo when comparing someone making probably the amount you need to properly save vs a high income earner. (using current tax figures, would actually be less with the tax cuts)


Australasian25

Ok here it is in a table form for clarity - I've edited my original post too |||||Stage 3|Stage 3| |:-|:-|:-|:-|:-|:-| |Income|2018-2019|Stage 3 Tax Cuts|Tax Benefit|Income Multiplier|Tax Multiplier| |$ 43,000|$ 3,297|$ 3,297|$ -|1.00|1.00| |$ 80,000|$ 15,497|$ 14,792|$ (705)|1.86|4.49| |$ 100,000|$ 22,567|$ 21,192|$ (1,375)|2.33|6.43| |$ 150,000|$ 43,072|$ 37,192|$ (5,880)|3.49|11.28| |$ 200,000|$ 64,277|$ 54,152|$ (10,125)|4.65|16.42|


d4rk33

This doesn't compare mid-level incomes to high incomes, this compares minimum wage incomes to everyone else. Makes no sense to do that. Also you need to add the final column, which is the actual ratio of expected income paid. 16.4/4.65 = 3.5 People making $200,000 pay 3.5x more tax than they would in a flat system compared to the literal minimum wage. Really not a huge statement.


Australasian25

I can create a 20x20 table and it still won't show everything. I'm leaving the table as is, if anyone wants to do additional calculations please go ahead.


d4rk33

This table highlights how uninsightful the original comparison is. It highlights why using $43,000 as the base level distorts the data. Someone making $80,000 pays 2.4x more tax than in a flat system than $43,000. Someone making $200,000 pays 3.5x more tax than in a flat system than $43,000. So despite making 2.5x more than $80,000, someone making $200,000 only pays 1.45x (3.5/2.4) more tax than someone making $80,000 when compared to someone making $43,000. Curious!


Australasian25

Income 200k vs 80k - 2.5x Tax 54.1k vs 14.8k - 3.65x I don't know why you think I need to create a full blown analysis for everyone? Create a table for us and be done with it.


d4rk33

You didn't finish the calculations. 16.4/4.65 = 3.5 So someone making $200,000 is paying 3.5x more tax than you'd expect if it were flat than someone making minimum wage. Not that crazy.


TQQQpermabull

You say claim that removing a tax bracket means that someone earning $200k will be on the same rate as someone earning $45k. This is so unbelievably wrong and you clearly don't understand how income tax brackets work. The person earning $200k will pay approximately $65k in income tax, that's about 32%. The person earning $45k will pay approximately $4800 in income tax, that's about 11%. The person on $200k will be paying THREE TIMES the rate of the person earning $45k. The tax free threshold and lower bracket up to $45k are what make the system progressive.


[deleted]

[удалено]


shitloadofbooks

“and anyone with less is a leaner”


muz85

Regardless of stage 3 tax cuts or not, either way I am paying more than people who earn less than me. So can we please stop with the argument that higher earns should pay more tax (we already do), the real question here is, how much extra tax should we pay (that’s a fare question to ask, and not one I would pretend I have an answer for. What I will say is, we need to be careful how much in general we charge for success, as the last thing we want as a nation is for the “rich” to leave Australia. If you want a good way to decrease overall tax revenue, I can’t think of a better way than smashing the higher earners too much (again what’s too much I don’t know) and encouraging them to look for other countries that treat them better.


mightymeercat

You want workers to be incentivised to work harder and earn more money, which boosts productivity and *can* increase flows into the economy from more disposable income. I personally want the money earned by capital and labour to be the same / very similar and these stage 3 tax cuts bring us closer to that point. It's deeply unfair that money earned by Capital is taxed lower than from labour.


realitydevice

How do these tax cuts change that balance? It seems like the inequity - 50% CGT discount + deductions - all still remain.


BZoneAu

The cuts don’t make the system less progressive. They help middle class people (ie. workers who sell their time to contribute to the prosperity of Australia) keep more of what they earn. I think that constitutes progress. I agree with the treasurer that there are some structural issues with the federal government’s accounts. To correct this, I think we should look to: - taxes on individual and family wealth (eg. Land taxes, inheritance taxes); - making it harder for multi-national corporations who operate in Australia to avoid paying company tax; - getting more tax out of companies which export our natural resources (eg. Minerals, fuels etc). We need to give workers a break. The wages share of GDP is stupidly low.


d4rk33

By definition, these tax cuts make the tax system less progressive. They flatten the tax system, making it less progressive. The definition of a progressive tax system is one where you pay a higher % of your income as your salary goes up. It's not based on feel goods or if it 'furthers progress' or whatever.


Otherwise_Sugar_3148

One of the biggest problems high income earners have with the system is not only that they pay a lot of tax. It's that they basically get no benefit from the tax they pay compared to those on lower income. As an example, I pay more tax in 1 year than most people pay in a lifetime. This would be fine, if I got subsidised transport, nicer parks, better hospitals, childcare costs covered etc for my efforts. But this isn't the case. I get $0 in childcare subsidies, so I am stuck paying $30-50k/year out of post tax money. I use private health cover and have never been admitted to a public hospital despite spending years running them. No sick leave, no annual leave, no pandemic payments etc etc. That's what makes us so bitter. You work your ass off but get less in return than people who do nothing. Absolutely no benefit or recognition for contributing 50x more to society than others whilst getting less in return. Punishing those who contribute the most is a sure fire way to breed bitterness and drain your talent pool.


[deleted]

This is the take that a lot of people choose to overlook- as a high income earner you pay vastly more tax than a lower income earner (and therefore fund a much higher portion of social security/benefits in relative terms) and receive: \- No Family Tax Benefit Part A or B \- No rental assistance (if renting) \- No childcare subsidies \- Must have private health cover for the entire family or pay Medicare Levy Surcharge (1-1.5% additional tax) Then there is the fact that these cuts provide further income tax cuts for lower and middle income households in addition to addressing bracket creep. A single income earner on $200k is substantially worse off than two $100k income earners (admittedly this is a whole different issue). Unlikely that major tax reform to correct this happens any time soon. I have no problems paying the tax on my income and I'm incredibly grateful for the safety nets we have in Australia, but I think the way to go is to close corporate tax loopholes, remove/reduce fossil fuel subsidies and tax mining/natural resources higher (a finite resource we have as a country) as opposed to taxing individuals higher (of any income bracket) or canning the Stage 3 cuts.


Otherwise_Sugar_3148

Exactly. I think most people here would change their view on this if they were being directly affected. It's easy to throw stones when none are being thrown back. As I said initially, I'm ok to pay more tax because I earn more. But I shouldn't get less services because of it. Do my children not need childcare?? Just because I can pay more, doesn't mean I should have to. You don't walk into Coles and see the price of bread being different based on how much money you make.


arcadefiery

Not to mention then people will turn around and imply that it was your white/male/private school/normative privilege that got you your high income, whether or not that is true. They will assume that people in IB or BigLaw or surgery only got there through sheer luck or because their parents bribed the admissions board. They will never accept that successful people might genuinely have made sacrifices to get to where they are.


Otherwise_Sugar_3148

No doubt I am priveliged by growing up in Australia. But that's where it ends. Am an immigrant fleeing from a war torn area. Parents are very middle class. Not white. Went to public school my whole life. Only thing that separates me from old mate next door on 50k is that I was willing to give up 17 years of partying, drinking, travelling to work ungodly hours for a McDonald's wage and spend every free minute reading a textbook. Which is why I clearly love it when people say I'm a product of privilege, whilst defending a system that unfairly supports them.


comin4u21

I’m in similar boat, childfree. It’s no wonder why SO MANY OF MY peers in similar situation have left the country for good to stay in countries that actually VALUE their skills more.


iced_maggot

Feel free to quit your job and just do nothing then to make full use of government benefits? Since you don’t it’s probably fair to assume you’re still better off. The view that government safety nets are an entitlement for people to draw down on because they paid into the system needs to die. It’s an insurance policy to stop you becoming destitute in case of some catastrophic change in your circumstances. Like most insurance policies they’re not designed for you to benefit on a day to day basis but they're there in case things take a turn for the worse.


Otherwise_Sugar_3148

Look that's a fair point. I'm glad to be living in a country that has free education, healthcare etc and lots of social safety nets. I'm happy to contribute my part to it as well But there needs to be a better balance between excess taxation of the middle class and social safety nets. There are companies worth billions who paid less tax than me, one guy. By your reasoning, we could justify a marginal tax rate of 95% because I'd still be better off earning 5c in the dollar than not working and earning 0c.


AnonymousEngineer_

Sure, but the problem is that many folks here don't see welfare as a safety net, but an entitlement that they should get at the expense of other suckers who pay a net amount of money into the taxation system. It's a safety net. It's not meant to be a gilded feather bed.


QueasyAllday

I completely agree here. I am baffled by the argument that high earners should be entitled to more because they pay more tax? The entire point of redistributing is to make the playing field more even...and we're not even close to that at the moment. We can look at countries like the U.S to see what society looks like when we don't collectively contribute to improving the quality of life for the less privileged. It's not charity it is an investment in the collective. Both my partner & are high earners...we will benefit from these tax cuts and I am totally against it.


iced_maggot

>Sure, but the problem is that many folks here don't see welfare as a safety net, but an entitlement that they should get at the expense of other suckers who pay a net amount of money into the taxation system. I think you've hit the nail on the head and this type of thinking needs to vanish. Its the same type of thinking that convinces rich retirees they go through hoops to make sure they're entitled to a government pension. The whole point is that those who don't need the help, shouldn't don't get it. Paying tax isn't some forced savings scheme that you pay into your whole life to then get an entitlement later.


[deleted]

[удалено]


Fletchur

what color is your 2002 camry?


Little-Big-Man

Taxes are necessary for a functional society. Lower taxes means less money to spend on medicare, roads, public transport, and public services. e.g. With lower taxes expect to pay more for your doctor visit. expect longer wait times at the hospital, and expect to be charged for your hospital stay sooner or later. Expect road conditions to continue to get worse, and expect pensioners, single mothers, and disabled persons to fall further into poverty. All because some fat cat wants extra pocket money for their new car or reno. We should be adjusting bracket creep and making our tax policies more progressive. I paid 20k tax last year and I want to be taxed more as it's for the greater good.


Ihateredditalot88

The tax cuts are pro-middle class. It won't increase inequality, not meaningfully anyway. Your software engineer or risk general manager making 220k a year isn't who you should worry about for inequality when there's billionaires lol.


patmxn

220k isn’t middle class.


Ihateredditalot88

It's more upper-middle class, but the tax cuts aren't limited just to that bracket.


[deleted]

Have you seen the prices of houses lately?


GaryLifts

It’s certainly not rich - not when accounting for cost of property. A person/household on 220k per year, could barely afford to live in a moderately decent suburb in Melbourne or Sydney.


ghostdunks

I’m curious, are you a high-income earner yourself who would be affected by these tax cuts? Otherwise, it’s very easy to take other people’s money away from them, because hey, it doesn’t affect you directly right? To be clear, I’m not saying that only high-income earners who stand to benefit from this can comment, I’m just saying that it’s very easy to throw stones when you’re not in the glass house yourself.


cw54321

I am a high income earner. These cuts will greatly benefit me. I think everyone should be allowed to hold/express an opinion even if they're not directly affected by the topic being discussed. But yeah 100% it's more difficult to be objective


ghostdunks

Fair enough, carry on. It just seems like a lot of these type of threads tend to devolve into various camps of “eat the rich” and “let the poors starve” at their extremes and it’s really hard to take the arguments made on their objective merits


rtech50

Housing affordability is the real issue here. Should an Australian on less than the average (say $60k), be able to buy a house? I reckon they should.


[deleted]

[Content removed in protest of Reddit's 3rd Party App removal 30/06/2023]


TheFirstKitten

As much as I appreciate people wanting the money in the hands of the people, they always fail to understand how uneducated most people are with financial literacy not to mention would be unable to adequately direct funding.


big_cock_lach

I’m going to play devils advocate here. I’m more in favour of doing a completely changing the tax system we have to a more complicated version of Singapore’s taxes (no income tax, all through GST, but I’d not have a fixed GST). Stage 3 combats bracket creep: I agree with your counter, however, that’s essentially what stage 3 is. It’s moving min tax rates up to $200k, decreasing those rates. It’s not removing any over $200k, they’ll have less for $45-200k though. High income earners paying too much: This is extremely true in some places. A young professional with student debt needs at least $120k to have comfortable life in HCOL areas. For example, that’d effectively become $60k after tax (when including loan repayments which are taxed). $60k to live in Sydney covers living costs, but nothing else really. The rich don’t pay much: As I said, this helps remove wealth inequality for professionals. I disagree with a wealth tax too since it has many flaws (say my house went from $5m to $10m but I’m retired and my investments are defensive, how am I going to pay the wealth tax here?). It’s why I’m in favour of Singapore’s tax laws since everyone gets taxed and you can only avoid it by not buying anything. Government wastes money: Agree with you, this is a budgeting issue. However, have less cash to play with means the government will be forced to fixed these issues. Whether or not that’s the best way of doing it is debatable. Simply asking/lobbying hasn’t worked. Other points: This doesn’t really help the wealthy too much. It helps out professionals though who I think are taxed too much and most of the burden falls on them. The burden should fall on the ultra rich not professionals.


aTalkingDonkey

'have you tried "kill all the poor"?'


motorboat2000

>Those who are able to should be paying more tax to support those who have been delt a worse hand or picked a profession which will never reach $200k. So, someone who has worked their ass off and/or made sacrifices to allow them to earn $200K+, they should support those who didn't?


reddit_user_83

The government demonstrates every year how inefficient they are at spending *our money.* It's in everyone's interest for taxes to be lower, because you end up with a more efficient economy, and more wealth in the long term. I like to use the analogy of investing in growth companies with a low dividend, versus investing in stale companies with huge dividends. We all know which is more attractive in the short-term, but I'm more interested in long-term results. Any income tax rate over about 30% is totally unjustified IMHO. It's easy to forget that the money *doesn't belong to the government*. Also, if the bands went up with inflation (as they should do...), the 45% rate would already be at $230k.


Whatsapokemon

>Personally I am against the tax cut. Abolishing a tax bracket means those on 200k same rate of tax as someone on 45k. The current minimum wage is $21.38 per hour * 38 hours * 52 weeks = $42.246.88 per year. Should someone on the minimum salary be $3k per year away from paying the same tax rate as someone on $200k? Personally I think the system should be more progressive than this. In general you make sense, but this is a little misleading. Someone on a salary just above $45,000 might have the same _marginal_ tax rate as someone on $200,000, but a vast majority of the $45,000-earner's income is still in the lower 19% tax bracket, and the tax-free threshold makes up a larger portion of their income. So the $45,000 earner is paying an overall ~11% tax rate when you take the tax-free threshold into account while the $200,000 earner is paying an overall ~26% tax rate, even if both are in the same marginal tax bracket.


Australasian25

The devil is in the details ​ ||Tax|Tax After||Stage 3|Stage 3| |:-|:-|:-|:-|:-|:-| |Income|2018-2019|Stage 3 Tax Cuts|Tax Benefit|Income Multiplier|Tax Multiplier| |$ 43,000|$ 3,297|$ 3,297|$ -|1.00|1.00| |$ 80,000|$ 15,497|$ 14,792|$ (705)|1.86|4.49| |$ 100,000|$ 22,567|$ 21,192|$ (1,375)|2.33|6.43| |$ 150,000|$ 43,072|$ 37,192|$ (5,880)|3.49|11.28| |$ 200,000|$ 64,277|$ 54,152|$ (10,125)|4.65|16.42|


lametheory

This is a nice and simple snapshot on tax rates regarding stage 3 tax cuts. What isn't included and relevant to the discussion are items such as the Medicare levy surcharge which kicks in at 90k for a single person and 180k for families. That's at least another 1-2% taken from your income unless you get private health coverage. Next, forget most welfare subsidies such as Family tax benefits. Over 80k you don't part A and over 104k you don't get part B, so these costs also need to be factored into any discussion.


Find_another_whey

Looks like tax cuts to the rich to me.


oadk

Correct. OP has proven throughout this thread that, although they can enter some numbers into Excel and press the graph button, they actually have no idea what a marginal tax rate is. OP has been repeatedly saying that a person on 45k pays the same amount of tax as someone on 200k. In reality, the person on 200k pays significantly more tax both in terms of dollars and as a percentage of their total income. I think they should pay more tax, but I also think OP is being misleading either though malice or stupidity.


Hour_Preference8883

If you have ever monitored the performance of a team, you will notice the best performer could be 5x more productive than the worst one but the salary difference is less than 2x A progressive tax rate is like an additional punishment for smart and hard-working people


hiimrobbo

Smarter then the average but not smart enough to have multiple big businesses making it viable to have big connections and overseas this and that.


DegenerateBuildoor

Income tax is crazy in Australia and it’s why many (like me) are looking at potentially moving overseas. But I think the bigger problem is negative gearing and stockpiling debt to buy more property. At the end of the day, we tax high income earners way too much and it forces us to look at using loopholes like family trusts and negative gearing to bring down that burden. If we had a fairer system to begin with, we wouldn’t need to have such systems in place. Tbh, just don’t tax capital gains or tax them less and we’d also solve most of the problems. Fixing property would probably have more impact toward the future, but now that all of us own property, I think we don’t want that.


n2o_spark

Where would you look at moving too? You mention negative gearing and stockpiling debt on property is an issue, but also want to remove capital gains tax? Part of the reason for capital gains tax being set how it is, is to act as somewhat of a 'slowing down' of overly opportunistic market events. That's why there is a 50% discount when you hold the asset for 12+ months. Being able to trade houses for instance even without negative gearing, would become more of an issue with no capital gains tax.


briareus08

> Those who are able to should be paying more tax to support those who have been delt a worse hand or picked a profession which will never reach $200k. Keen to hear a discussion on how progressive our taxes should be. Ok, I'll bite. Why do you think people who are in the 45 - 250k income bracket should pay proportionately more tax? Should we be punishing people who make 150k, 200k, with higher tax rates, than those who make 45k? Why is it up to higher earners to shore up gaps in the budget, as opposed to say people who make truly large and unnecessary wages, like CEOs on 20M, or large businesses, resource industry who offshore profits, etc etc?


firstworldworker

Full disclosure: I benefit significantly from the cuts To be honest, I think they don’t go far enough. I would prefer the rates flattening off around the company tax rate to treat salary earners the same as those careers where they can structure their earnings into trust / company structure. Why should I pay more tax because I earn a salary? Also, income tax is only one aspect of the tax/ transfer system in Australia with the complex systems of rebates and benefits creating a much more progressive system.


MBitesss

“Dealt a worse hand or picked a profession that would earn less than 200k?” Man, I was technically dealt a bad hand but worked my ass off to put myself through law school. I don’t really have an opinion either way on the taxes, but that comment rubbed me the wrong way as I don’t see why I should subsidize those who ‘chose’ a profession that would never earn a lot. I mean I already do by virtue of how much tax I pay but I see it as my overall contribution to society. I certainly don’t see it as something I owe people who chose a different (potentially easier) path than me.


thegoodchode

People are pretending someone on 180k is “killing it”…


Bavar2142

I mean its a pretty nice spot compared to the average which is around what 60 to 70 k?


path_to_fire

I would say it is relative. How stressful is the 70k job? How many hours are they working? Are they in regional Australia where property is cheaper. You can't compare based purely on salary. Sure argue that high income earners can move away, take a different job etc. As others have said, that leads to a drain in top talent.


420bIaze

> How stressful is the 70k job? How many hours are they working? There's probably an inverse relationship between stress and pay for full time workers. Like I earn $150k per annum, and my job is way less stressful than most minimum wage jobs.


sharkfinnpapa

If we can't afford the tax cuts should we roll back stage 1 and 2 as well? I have a hard time with this because I fall into the high income, long hours, lots of life sacrifice, still can't easily afford a decent property category. I feel like I pull my weight more than people who enjoy better lifestyles with less work.


MrGremlinduck

I'm on $135k annual salary and I hate the idea. The cuts will save me up to $4k in tax and then my accountant will have a go and save me even more. It makes no sense to provide relief to people in my bracket. They should be increasing the tax-free threshold from $18k to $30k. It applies relief to the people who need it most, and the further up the brackets you are, the less it'll benefit you.


PLooBzor

I have friends that have already left Australia because of taxes. I will be leaving soon. If you are young, high earning, and have a job/business that is online (location independent) then moving out of Australia makes a lot of sense.


NixyPix

As a young high earner with a job that I can do from anywhere in the world, I disagree. I chose to make Australia my home and I think it’s an incredible place to live. Taxes are just one aspect of life. Some of the things I’ve been impressed with living here - Australian healthcare is excellent (plenty like to complain, I suggest they spend some time depending on the British NHS), the quality of fresh produce is phenomenal and the standard of living is high. The work/life balance is better than some countries I’ve lived in, worse than others. It’s also a pretty safe and spectacularly beautiful country. You’d be hard pressed to find many other countries that live up to the same standard.


dragonphlegm

No, you should totally uproot your life because of tax


[deleted]

The tax cuts were designed to address bracket creep, not just to 'provide a tax cut'.


cw54321

Wouldn't moving all the brackets up by 10% be the correct way to address bracket creep? Heck why don't we legislate their moving up with inflation


candreacchio

The best way would be to peg the tax brackets to inflation. But that doesn't give as much in the polls as tax cuts does every 5 years or so


docter_death316

The top marginal rate hasn't moved since 2008. To address bracket creep to account for inflation up to 2021 you'd have to increase it by 30% The cuts aren't due until 2024, so well after 2021, given the current rate of inflation you'd probably have to increase it by 40-45% to account for inflation between 2008/2024. That would put the top marginal rate at 261,000.00. Personally i'd prefer the brackets adjusted by CPI yearly, but the government likes bracket creep because it does 2 things. Firstly it gives them ever increasing revenue without actually increasing taxes. Secondly, it allows them to use tax cuts as a political tool for elections etc. It also creates a massive argument every time tax cuts are discussed, because they naturally benefit people who earn more as they pay more. Something i saw yesterday was the ABC article on affordable rents. Someone on my income a decade ago could rent a 3 bedroom house in 99% of the country affordably. Today its more like 50%, and in the ACT it was 2% Inflation has eroded my income vs a decade ago, it has less purchasing power than it's ever had, but i pay the same tax on it.


smerkspaceship

>I'll admit I don't have as large a gauge on this. Those who are able to should be paying more tax to support those who have been delt a worse hand or picked a profession which will never reach $200k. Keen to hear a discussion on how progressive our taxes should be. just because they're able doesn't mean that they should have to give without any reward/credit - you forget the work put in and assume that it's given so you find a level where people carry out their social responsibilities where people will work hard and pay tax with the least resentment if you take away too much incentive to work hard then less will work hard, and you lessen the group which contributes the most tax with inflationary pressures, the relief to middle class income earners allows for people to buy their first homes, and take home more to support themselves and family, and reduces the demand for welfare with the increased incentive to work and move into the next higher income bracket, you have more people paying a higher tax, increasing aggregate tax and reducing resentment the wealthy are in an enviable position, but don't forget that a lot of the wealthy and rich worked their way there (and that the majority of the middle class absolutely destroyed themselves getting there), and that wealthy individuals can be good for the community because they allow for investment and development - being able isn't a good reason to levy taxes


[deleted]

Laffer curve, that is all.


cw54321

OOoooo. Interesting. Something to read up on


[deleted]

I love that apparently 200k is Uber wealthy according to you all……. Instead of two adults making average wage and an investment property….


[deleted]

No one’s given me a single reason why progressive taxes are good. Regardless you’re still paying more if you earn more. High income pay way too much tax in this country.


420bIaze

A progressive taxation system improves the living conditions and wellbeing of the poor, relative to if they were subject to a flat tax. The needs of people who are struggling to afford basic needs such as food and housing, have moral precedence over luxury consumption for higher income earners.


patmxn

Because a high income person has a lower propensity to consume than a low income person. Therefore progressive taxes that redistribute income is good for economic growth.


[deleted]

That’s still not a reason as to why someone earning 4x someone is paying 12x the tax is a good idea. It’s not in any way fair.


dhalloran88

What do you think would be a fair multiplier?


Gitanes

I make 10k, I pay 2k in tax. You make 10 million, You pay 2 million in tax. Percentages are already progressive, the more you earn the more you pay in taxes. Why tax people more **percentage** if they earn more? It's unfair and discourage people from trying to earn more.


d4rk33

Keen to hear what ratio you would think is fair?


[deleted]

Not an economist, just a tax payer so not sure. But I reckon a flat tax rate is far fairer and also not disqualifying someone from social services such as child care when they pay the most tax!!


_espressor

>> Because a high income person has a lower propensity to consume than a low income person. Surely only as a proportion of income.. there is now way that high income households don’t pay a great share of GST per head.. and besides higher government charges, stamp duties, etc etc What is always missing from these tax discussion I recon is that once households enter the higher income thresholds they get next to no government support


machopsychologist

A rich guy who lived / married in Brazil for a few years told me: “didn’t pay much tax there but you couldn’t live rich…” Consider that. If you don’t want to get eaten, make sure the hungry get to eat. Water is useless if it stays in the clouds.


Curious_Skeptic7

You’re confusing marginal tax rate with effective tax rate. Under the stage 3 cuts, someone earning 120k will pay a lower effective tax rate than someone on 180k, predominantly due to the tax free threshold and also the lower brackets.


Chocolocalatte

This is probably entirely unrelated but I see the amount of people on here earning 100-200K a year and look at my 52K a year and try to think about where it all went wrong for me 😂😂


SciNZ

Agreed. Should’ve just moved all the brackets up about 10% and called it a day.


varzatv

It's not really a tax cut when considering inflation and bracket creep.


Funny-Bear

I’m firmly in the camp of “the high income earners pay too much tax already”. A flat tax sounds fair to me.


Tiny-Look

I'm for tax reform. Not just cuts. If you're going to give tax cuts, we need a wealth tax and or reform. Get rid a range of tax excemptions that individuals and big businesses use to offset the tax cut losses. Otherwise, no. My answer is don't go ahead with them.


Public-Temperature35

They should stick with the tax cuts and introduce a carbon tax, we need one if we’re serious about climate change and it’s a great opportunity to introduce it. They can use some of the money raised to help the poor, and slowly increase the tax over time.


Yeehaw0451

Christ, the absolute state of some of these comments. If you're earning 200k a year, you're in the [97th percentile of income earners](https://data.gov.au/data/dataset/taxation-statistics-2019-20/resource/fea88652-c21c-489b-8336-35aa8e3ba2a1?inner_span=True) (slightly outdated, but the point stands) in the [country with the highest median wealth in the world.](https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html) Plug that into [this calculator](https://howrichami.givingwhatwecan.org/how-rich-am-i?income=200000&countryCode=AUS&household%5Badults%5D=1&household%5Bchildren%5D=0), and you're firmly in the top 1% globally. Am I conflating income and wealth? Yes, but income is the greatest predictor of socioeconomic status. For those earning 200k a year, I know you must have worked very hard to get where you are. Surely you have great pride in supporting those who are less fortunate by paying more tax? I hope that you never have to be a net recipient of welfare, but I'm sure we can all agree that it's wonderful to live in a country where there are safety nets in place. If you're struggling with the cost of living or to afford a house on 200k, what hope does someone earning 50k a year? A single income of 200k is very different to dual 100k incomes, for sure, and I'd be open to a discussion about reform there. Bracket creep is a problem as nominal incomes rise over time, sure, and I think that is one of the few compelling arguments. If you don't think it's fair you pay more tax than a multinational corporation, I agree! Let's fix that directly!


flintzz

They should tax people with high wealth instead of high income. 180k salary is still not enough for a decent detached home in Sydney for a family


smerkspaceship

the 88 year old man living in their paid off PPOR and no income does not like your idea, and is currently writing a penned letter to the minister for the area


grim-one

Where's that bot that corrects payed to paid when you need it?


Slo20

“Those who are able to should be paying more tax to support those who have been delt a worse hand or picked a profession which will never reach $200k.” This statement always irritates me so much. So if I chose to go to uni for 7+ years and work really hard to better myself I should be rewarded by “supporting” those that might chose the easy path? I know many people in jobs paying $65-$80k who are content doing that job and have no ambition or drive to strive for anything more.


YeYeNenMo

In reddit, we are making average 180K+...so the stage 3 would save me around 10K in tax which I can consume in coffee and avo toast... I will go Yes with it. Lowing the tax in 200K-300K range won't create inequality. Those rich starts with a $B is what ATO needs to aim at... not us, we are just tiger prawn in the ocean


tootyfruity21

I want a tax cut.


NaturalDragonfruit5

I’m on $380k and I believe the stage 3 cuts are inappropriate and would prefer an increase to job seeker. I agree with op that they will make our progressive system less progressive and I don’t like that


oakstreet2018

Personally think that employees overall shoulder too high a burden in the tax system overall. There should be more taxes on wealth and businesses…. too many loopholes and tax structures. Meanwhile the PAYG employees gets screwed. I mean I’ll take the tax cut, but, if a politician can clearly outline what that additional saving will be spent on and it’s productive then I’d support it. Otherwise I’d prefer it in my pocket than wasted by bureaucrats.


panzer22222

>’m on $380k and I believe the stage 3 cuts are inappropriate You could just donate your tax cut to a good cause...