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Taxes and who payes 'em

Discussion in 'Politics' started by wilful, Oct 25, 2012.

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  1. wilful Larry Dwyer (12)

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    Thought that this would be an interesting addition to thoughts about taxes:

    http://www.rossgittins.com/2012/10/budget-redistributes-income-over-life.html
  2. Braveheart81 Rocky Elsom (76)

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    I like Gittins. He writes in a very straight forward and direct way. I think he offers something of value for everyone from the very financially literate to those with little or no financial knowledge.

    He often gets criticised for being too much of a leftie however I think that is a bit unfair. Many commentors seem to take the stance that any economics writer who doesn't bemoan taxes as a socialist income redistribution tool must be a massive leftie.
  3. fatprop David Wilson (68)

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    I get taxed too much and little to nothing back. I even get taxed on money I haven't received yet at the moment.
    Inside Shoulder likes this.
  4. mark_s Chilla Wilson (44)

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    So do I, whats worse - I may never receive it but still have to pay the tax now just in case I do.
    Scotty likes this.
  5. Braveheart81 Rocky Elsom (76)

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    ... and if you don't receive it, you can claim the tax back.
  6. mark_s Chilla Wilson (44)

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    No, you can't offset capital losses against income tax. I would need capital gains to offset the losses.
  7. fatprop David Wilson (68)

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    actually no, business cash flow, unit trusts to family trusts & stuff = accountancy hell
  8. Braveheart81 Rocky Elsom (76)

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    [USER=1554]mark_s[/USER] Are you talking about employee share scheme shares/options?

    If they never crystallize into shares you can go back and amend the tax return where you originally included the discount received as assessable income and remove it.

    Unless they crystallize into marketable shares and then become worthless, they should never give rise to a capital loss.

    [USER=1520]fatprop[/USER] I was talking about employee share scheme options which I assumed mark_s was talking about.

    Unless you control the family trust, I'd be asking for the cash from your taxable distributions :)

    If you do control the unit trust/family trust, you're probably doing well enough that you can pay a bit of tax on money you haven't received :D
  9. Gagger Nick Farr-Jones (63)

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    Try paying higher rate tax and then double GST - that's living in pomlandia for you
  10. cyclopath Phil Waugh (73)

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    But think of the climate.
    Wait, I see your problem.
    yourmatesam likes this.
  11. Gagger Nick Farr-Jones (63)

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    Ah, but you forget Pomgolia's big positive - it's nearer to other places! :confused:
  12. Inside Shoulder Nathan Sharpe (72)

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    Given the amount retired people take out why are the soon to be retired so severely limited in what they can deduct by way of superannuation contributions?
    This will only add to the future burden: very short sighted of this government.
  13. Braveheart81 Rocky Elsom (76)

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    I agree. Most people maximize their super contributions when 50+ because they're closer to paying off their mortgage etc. Limiting deductible contributions for everyone to $25k makes it harder for people to boost their super balances to the necessary levels.

    Whilst I accept that the tax concessions for wealthy people through superannuation are very substantial (certainly SMSF are the tax minimisation vehicle of choice now ahead of the family trust), perhaps some middle ground could have been found. If the second $25k was taxed at a rate of 30% then the taxpayer would still pay a decent rate of tax for that money but there would still be the incentive and benefit to make the full $50k deductible contribution.
  14. mark_s Chilla Wilson (44)

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    Wow, you really seem to know your stuff braveheart. I will explore you suggestions further.
  15. Inside Shoulder Nathan Sharpe (72)

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    I agree with [USER=1554]mark_s[/USER] so I will confirm my ignorance and invite your comment: didn't the reasonable benefit limit (I hope that's what it was) try to keep a lid on loading up your super contributions in order to achieve present day deductions?
    My understanding was that it was equally arbitrary but at least it reflected a partial solution to the problem.
    Speaking only for me, if I retired at 65, I would, given my present super situation, be able to get on the government teat, with all the perks. I would like to avoid that but I pay enough tax that I'm not going to make contributions for which I get no benefit just to save them money in the future.
    Im sure I'm not alone.


    Sent from my iPad using Tapatalk
  16. overthehill Allen Oxlade (6)

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    Gittens is plain wrong. Money has not worked that way since 1971.

    Australia has a sovereign fiat nonconvertible currency. The Federal government creates money by spending it into the private sector and cancels it by taxation.

    The government does not operate like a household or private business that can't create its own money.
  17. Scarfman Knitter of the Scarf

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    I have a credit card. Isn't that creating money? I don't think your point is terribly relevant, though. Gittens is reflecting on tax and welfare at the household level. The guys in this thread point only the only negative in Gittens's description - if you are rich, and especially if you are rich without kids, you're going to pay more than you get back.

    The rich to poor transfer is a fairly obvious one, and the basis of our society. The no-kids to kids transfer is less obvious. I think perhaps Howard and Costello went too far in this direction (and I say that as a father of 2).
  18. overthehill Allen Oxlade (6)

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    Your credit card is bank credit i.e. fake money created out of thin air (at interest) by a bank.

    On the contrary. Our society works on the transfer of wealth from poor to rich via the financial system.

    While money creation may not seem relevant to the minutiae of the tax system, when you understand the way money creation works it puts all the minutiae and argument into an entirely different light e.g. the rich to poor argument.

    Taxes, in a fiat money system, don't actually "pay" for anything. The deficit, and all the hooha surrounding it, is just a number.
  19. overthehill Allen Oxlade (6)

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    Listening to all the argy-bargy over the budget update makes you think - what strange things budgets are. The government spends all this money - hundreds of billions a year - but where does it come from? From us, of course.

    This is Gittens' starting point. And it's wrong, so the premise is wrong and the rest of the article compounds the error.
  20. Braveheart81 Rocky Elsom (76)

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    RBLs were abolished in 2007. This was when taxpayers were offered the one off chance to put $1m into super (as a non-concessional contribution).

    Under RBLs you were allowed to put larger concessional (deductible) contributions into your super each year and claim a deduction for the first $5,000 and then 75% of the remainder. This is for substantially self-employed people. Wage earners need to salary sacrifice and get their employers to make deductible contributions on their behalf.

    The greatest concession available in superannuation is that once you are on a pension, income in your super fund is tax free. For wealthy people who manage to put a lot of money into their fund (you can put $150k non-concessional per year) it is a lot of money they are no longer paying tax on. A couple could put $3m into their SMSF over a period of 10 years and then once they are on a pension the income from those funds would be tax free. Prior to being on a pension these funds are only taxed at 15%.

    Obviously it is a good thing for as much of the population to be self-funded in retirement as possible however the tax concessions which are effectively paid for by the rest of the tax base are massive.

    This will definitely be the area of taxation targetted to improve government revenue in the next few years.
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