Author Topic: #Auspol - Australia Votes 2019!  (Read 43622 times)

middo

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Re: #Auspol - Australia Votes 2019!
« Reply #350 on: August 26, 2019, 02:17:46 AM »
The GST was probably the last bit of real reform that I can think of.  And the GST needs reforming now.

It really is a shame that we don't seem to get that type of reform brought forward at an election.  Oh wait!  Labor went with a reform agenda and the scare campaign worked.  I don't think we will see any real reform agendas brought out for a least another 10 years or so.

Bloop Bloop

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Re: #Auspol - Australia Votes 2019!
« Reply #351 on: August 26, 2019, 02:28:03 AM »
We could solve all our economic problems simply by treating the PPOR as we would any other asset, for pension eligibility, and instituting a progressive estate tax.

Strangely, neither party supports this. You could understand why the Liberals are against it, since they (sadly) are all for the intergenerational transmission of unearned wealth - but I can't see why Labor wouldn't agitate it, other than that they must think it's a vote loser.

Which then raises the question, why does everyone rail against inequality (fair enough I guess) but then want to entrench it by allowing parents to pass wealth onto children? Wouldn't you rather have your children earn their own keep?

mjr

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Re: #Auspol - Australia Votes 2019!
« Reply #352 on: August 26, 2019, 03:33:17 AM »
Strangely, neither party supports this. You could understand why the Liberals are against it, since they (sadly) are all for the intergenerational transmission of unearned wealth

This so-called unearned wealth was earned and TAXED by older generations.  It's theirs to do with as they please.  They can give it to children or charities or whomever when they're alive, but die and suddenly the state thinks it can help itself to some more tax ?  How's that fair ?

As far as 15% tax on super pensions go, sure I agree that's how it should be have been set up.  Tax-free contributions and maybe earnings, but Keating didn't set it up that way,  presumably because he wanted money sooner.  By all means have new people coming in to the system have such rules, but don't go moving the goal posts on those well into the game.

Bloop Bloop

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Re: #Auspol - Australia Votes 2019!
« Reply #353 on: August 26, 2019, 03:55:13 AM »
It's theirs to do with as they please - to the same extent that income is ours to do as we please. That is, it's subject to the tax framework.

We accept double taxation in many other areas of life (e.g. the GST is a double tax. Stamp duty is a double tax. Luxury car tax is a triple tax.)

So if the alternative is a sky-high marginal rate on first-generation income earned by talented people doing their best to make a decent living, versus a modestly high estate tax on second-generation wealthy, doing their best to sponge off their parents, I know which I'd vote for. To clarify, I'd only accept an estate tax if there was some allied benefit, i.e., lower income tax or some other lowering of personal tax.

No form of taxation is entirely fair - it's all about trade-offs.

LonerMatt

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Re: #Auspol - Australia Votes 2019!
« Reply #354 on: August 26, 2019, 02:27:27 PM »
Generally any time money changes hands there's a tax at play, inheritance shouldn't be any different and I think the taxes should be high on it (20-25%).

The majority of estates are benefiting people well into middle age (Grattan report last week covered this) IIRC around 40-50 year olds, people who are often doing well and at the peak of their earnings, so the taxes are more justified given that demographics.

As to Bloop's question re: inheritance. I think that fair taxation, closing appropriate loops holes, funding social welfare properly (esp. the types that affect younger people which are under attack much more often than middle class welfare) and bringing down house prices would do a lot more for equality than doing away with inheritance completely. Those last two are key drivers of inequality in Australia.

LonerMatt

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Re: #Auspol - Australia Votes 2019!
« Reply #355 on: August 26, 2019, 06:45:45 PM »
https://www.abc.net.au/news/2019-08-27/interest-rates-predicted-to-stay-low-economists/11450918?section=business

Interest Rates predicted to stay low until 2025 - while it's always a bit of a mug's game to try and predict the future too closely this is an interesting paradigm.

Personally I think that we (globally) should be trying to pursue lower rates of economic growth so that we can reduce our impact on the environment, but that doesn't necessarily mean stagnation is good right now.

mjr

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Re: #Auspol - Australia Votes 2019!
« Reply #356 on: August 28, 2019, 12:52:01 AM »
We accept double taxation in many other areas of life (e.g. the GST is a double tax. Stamp duty is a double tax. Luxury car tax is a triple tax.)

They exist and we "accept" them, but that doesn't mean they are fair.  The states reneged on the "deal" that the GST should replace many of their taxes, like stamp duty.  It's certainly not an argument for the introduction of another one.

Generally any time money changes hands there's a tax at play, inheritance shouldn't be any different and I think the taxes should be high on it (20-25%).

The majority of estates are benefiting people well into middle age (Grattan report last week covered this) IIRC around 40-50 year olds, people who are often doing well and at the peak of their earnings, so the taxes are more justified given that demographics.

As to Bloop's question re: inheritance. I think that fair taxation, closing appropriate loops holes, funding social welfare properly (esp. the types that affect younger people which are under attack much more often than middle class welfare) and bringing down house prices would do a lot more for equality than doing away with inheritance completely. Those last two are key drivers of inequality in Australia.

So, if I was 20 when my parents died, it's ok, but if I'm better off because I'm older when they die then the state can take some ?

Spoken from a position that the government owns everything and will choose how much people can keep instead of the other way around.

Inequality is a fact of life and is not much of a problem in Australia.  We have pretty good equality of opportunity.

I'm all for welfare for people in drama and for the record I'm quite against middle-class welfare as well.  Imagine how much tax the government could not take if we didn't have such generous middle-class welfare programmes.

Bloop Bloop

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Re: #Auspol - Australia Votes 2019!
« Reply #357 on: August 28, 2019, 01:11:43 AM »
The thing is, inter-generational transmission of wealth hurts equality of opportunity.

Wouldn't you rather have much lower income tax rates - thus more of a meritocracy - and much higher estate tax rates?

I mean, if I'm a high earner, I'd rather keep more of my own income, and amass a lot of wealth during my lifetime, and then have to give up some of that to the government when I die. It's much better than keeping a lot less of my own income and amassing a lot less wealth (which then goes untouched). At least in the former scenario, I get to use the money in my own lifetime.

Yes, you might say it'd be better to get rid of middle class welfare and then we don't even need an estate tax at all. What I am saying is that the political reality is that people are clamouring for more and more welfare and redistribution, unfortunately. So to the extent that we have to pay that lip service, it is better to introduce inter-generational taxes than to penalise hard workers by taking their own present income.

Kyle Schuant

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Re: #Auspol - Australia Votes 2019!
« Reply #358 on: August 28, 2019, 01:49:05 AM »
Generally any time money changes hands there's a tax at play, inheritance shouldn't be any different and I think the taxes should be high on it (20-25%).
It's unclear to me why inheritance can't be taxed like any other income. Whether you got $500k in the form of inherited super, a house, a chest full of dubloons, your law firm partnership, sales of grain grown in your fields or whatever, it's income.

It's also unclear why businesses pay tax on profits while individuals pay tax on their income; an individual doesn't get to say, "oh yeah but I spent all my money this year so I should pay zero tax, yeah?"

It's all rather muddled by the history of various parties fiddling with things to favour whoever they wanted to vote for them. A while back Simon Crean was our local member, I met him once and asked, "Look, rather than taxing us at say 20% and then giving us 5% back in various rebates, why not just tax us at 15% and save us the paperwork?" He looked confused and said, "But then what would the tax accountants and lawyers do?" and went on to talk to someone else.

And thus I learned that our complex taxation system is a Keynesian employment scheme for accountants and lawyers.

Fresh Bread

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Re: #Auspol - Australia Votes 2019!
« Reply #359 on: August 28, 2019, 03:34:56 AM »
Have you read the book "Bullshit Jobs"? It specifically mentions tax accountants :)

deborah

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Re: #Auspol - Australia Votes 2019!
« Reply #360 on: August 28, 2019, 04:30:58 AM »
We used to have inheritance tax, and it was dropped by the liberal government a month after my grandfather died. As I recall, it wasnít much use because many people avoided it. We have a form of inheritance tax, in the tax on super when someone dies and itís not given to a dependant, and capital gains tax also works as an inheritance tax. However, family trusts avoid inheritance taxes, and they are the real problem area IMO.

middo

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Re: #Auspol - Australia Votes 2019!
« Reply #361 on: August 28, 2019, 04:57:25 PM »
I think an inheritance tax would be a great idea.  And that is the problem.  Going from an idea to implementation.

Any inheritance tax would only be a tax on those that cannot or do not arrange their affairs in such a way as to avoid it.  The very wealthy would avoid most of it, the middle class would pay, and the poor wouldn't qualify.  That is why it was removed.

Family trusts were one way of getting around inheritance taxes.  Now they are being used to reduce taxation by spreading the earnings.  Again, the average salary earner cannot use these type of arrangements to reduce their tax, but the wealthy can.

Labor had a policy on family trusts, but obviously they did not win the election. 

LonerMatt

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Re: #Auspol - Australia Votes 2019!
« Reply #362 on: August 28, 2019, 05:43:03 PM »

So, if I was 20 when my parents died, it's ok, but if I'm better off because I'm older when they die then the state can take some ?

Spoken from a position that the government owns everything and will choose how much people can keep instead of the other way around.

Inequality is a fact of life and is not much of a problem in Australia.  We have pretty good equality of opportunity.

I'm all for welfare for people in drama and for the record I'm quite against middle-class welfare as well.  Imagine how much tax the government could not take if we didn't have such generous middle-class welfare programmes.

This is an interesting thing to read.

What I wrote was that given that inheritance enriches already rich people it's even more important to tax it. I think this is so because, well, systems that tax progressively are more equal in outcome.

Australia, though, is quite inequal on almost any metric you can name. Life expectancy, for example, is a metric where Indigenous Australians have 30 years less alive than non-IA. Similarly with education we see deeply entrenched results (the postcode your born into is the more accurate predictor of your ATAR result). While we have the appearance of a more egalitarian society, I just don't think it's really true to the extent you're suggesting (which sucks because institutional inequality is bullshit).

Quote
The thing is, inter-generational transmission of wealth hurts equality of opportunity.

This is the first time I've agreed with Bloop, I think

Quote
Wouldn't you rather have much lower income tax rates - thus more of a meritocracy - and much higher estate tax rates?

Lower income tax rates do not promote meritocracy in outcomes even if it's meritocratic in design.

Bloop Bloop

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Re: #Auspol - Australia Votes 2019!
« Reply #363 on: August 28, 2019, 06:00:53 PM »
I think an inheritance tax would be a great idea.  And that is the problem.  Going from an idea to implementation.

Any inheritance tax would only be a tax on those that cannot or do not arrange their affairs in such a way as to avoid it.  The very wealthy would avoid most of it, the middle class would pay, and the poor wouldn't qualify.  That is why it was removed.

Family trusts were one way of getting around inheritance taxes.  Now they are being used to reduce taxation by spreading the earnings.  Again, the average salary earner cannot use these type of arrangements to reduce their tax, but the wealthy can.

Labor had a policy on family trusts, but obviously they did not win the election.

I think discretionary trusts ought to be canned. They are, obviously, just a tax rort.

Get rid of discretionary trusts (or grandfather them if you must), and then institute a "gift tax" (to prevent pre-death transfers of assets), and suddenly the inheritance tax has teeth.

If there's anything I hate more than paying a high marginal rate of income tax, it's seeing other rich people not pay very much tax, because instead of having to earn (and be taxed on) it, they were gifted it by profligate parents. It would be lovely to see people have to earn their way through life instead of being given it on a silver platter.

That said, ironically, the same reason why the average punter votes for (slightly) lower income taxes under the Libs is also the same reason why he or she votes for no inheritance tax: everyone wants to crack it big, become a millionaire, and then pass it onto their kids.

Bloop Bloop

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Re: #Auspol - Australia Votes 2019!
« Reply #364 on: August 28, 2019, 06:04:16 PM »
Lower income tax rates do not promote meritocracy in outcomes even if it's meritocratic in design.

They would if we could reduce the transmission of wealth across generations. If each kid starts with not too much in assets (but a decent and free public education, funded by the increased proceeds from the estate tax), then our society would be much closer to a meritocracy.

On a tangential note, another great idea I have, in terms of a cheap way to meritocracy, is that ATARs should be school-specific. That is, your ATAR rank should be based on where you finish in your particular school's cohort. This would have the effect of, very very quickly, smoothing out overall school performance. It would also promote going to your local school instead of wasting 30 grand a year to go to a so-called elite school.

LonerMatt

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Re: #Auspol - Australia Votes 2019!
« Reply #365 on: August 28, 2019, 06:22:58 PM »
Interesting thoughts on ATAR!

Education results tend to be higher in collaborative environments, so there's always that to balance, still some reform is definitely needed to promote better education for students in Australia across the board.

middo

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Re: #Auspol - Australia Votes 2019!
« Reply #366 on: August 28, 2019, 07:54:00 PM »
Bloop - I agree with Matt, the ATAR idea is interesting.  As a maths teacher and being interested in all things mathematical (hence ATAR), I can see many problems with the idea - BUT - it is intriguing.

<I was going to rant about education, but deleted it.>

I would love to see less extremity of wealth and opportunity in Australia.  Education can help with this disparity, and social mobility had been shown to help societies get along better.

Bloop Bloop

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Re: #Auspol - Australia Votes 2019!
« Reply #367 on: August 30, 2019, 05:19:11 PM »
https://www.smh.com.au/politics/federal/labor-calls-for-early-budget-update-fast-tracked-tax-cuts-20190830-p52mab.html

Labor trying to govern from opposition.

I'd rather see less spending, more of a surplus, because at some stage when Labor gets into power, if there's not a healthy surplus, we all know what's going to happen to achieve it: tax hikes.

LonerMatt

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Re: #Auspol - Australia Votes 2019!
« Reply #368 on: August 31, 2019, 02:32:57 AM »
Tax hikes on corporate tax, high nw individuals and estates would be a good start.

Also super @15% and stopping negative gearing would be great to help balance that budget!

marty998

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Re: #Auspol - Australia Votes 2019!
« Reply #369 on: August 31, 2019, 05:42:53 AM »
https://www.aofm.gov.au/securities/treasury-bonds

You guys can see I'm having a wild Saturday night.

In April 2020, Treasury bonds issued in October 2009 worth $19.3 billion paying an interest rate of 4.5% come up for maturity. The annual interest bill on those securities is $870 million.

If Mr Frydenberg decides to refinance those bonds, he'll likely be able to do it at an interest rate of 1.5% or less. This results in an annual saving to the budget of at least $580 million.

Here I am cheering about a $4500 interest bill sing when my fixed loan ends in September. Half a billion dollars really is something to get excited about.

mjr

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Re: #Auspol - Australia Votes 2019!
« Reply #370 on: August 31, 2019, 06:19:42 PM »
Tax hikes on corporate tax, high nw individuals and estates would be a good start.

Also super @15% and stopping negative gearing would be great to help balance that budget!

I just laugh.  Socialists everywhere use the same old script.  Take money from someone else, because they have more and clearly didn't earn it and/or don't deserve it.

If you have a society where success is encouraged, there WILL be inequality but everyone will be better off too.

Kyle Schuant

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Re: #Auspol - Australia Votes 2019!
« Reply #371 on: August 31, 2019, 06:42:15 PM »
This was interesting.

https://www.weforum.org/agenda/2019/08/which-countries-have-the-most-wealth-per-capita/

By the measure of median wealth, Australia is the wealthiest country in the world, per person; and by the measure of mean vs median, the wealth is also spread fairly equitably (there's a difference between a household with one person on $100k and another on $10k, and a household with $70k and $40k). Of course, we're also a very indebted country, and a lot of the wealth is in super which we can't touch until whatever age, rising. Nonetheless, you wouldn't guess it from all the whinging.

If you have a permanent full-time job in Australia, you are doing very well. If you have a stable family in your home, you're doing very very well.

LonerMatt

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Re: #Auspol - Australia Votes 2019!
« Reply #372 on: August 31, 2019, 08:31:14 PM »
Tax hikes on corporate tax, high nw individuals and estates would be a good start.

Also super @15% and stopping negative gearing would be great to help balance that budget!

I just laugh.  Socialists everywhere use the same old script.  Take money from someone else, because they have more and clearly didn't earn it and/or don't deserve it.

If you have a society where success is encouraged, there WILL be inequality but everyone will be better off too.

I'd go further: if you have enough money to solve pressing issues and don't spend it to fix said issues - you're evil.

Inequality makes everyone worse off, we can't have perfect equality and no one wants to aim for that, however we don't have equality in opportunity and we need to prioritise that.

Literally every meaningful achievement comes from the basis of a society that's functional and collectively prosperous. There's a reason we see both a rise in equality and a rise in innovation, prosperity, etc in the 20th century!

Bloop Bloop

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Re: #Auspol - Australia Votes 2019!
« Reply #373 on: August 31, 2019, 08:44:42 PM »
I think you're conflating two issues, Matt, one being inequality and one being equality of opportunity.

Things like greatly increased funding to all schools, stripping private schools of any benefits/advantages, and a punitive estate tax would definitely help equality of opportunity. They would also lessen wealth inequality, insofar as wealth inequality is in part inherited across generations.

However, I doubt they would result in much difference to income inequality in the present. Because people have different skills and abilities.

LonerMatt

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Re: #Auspol - Australia Votes 2019!
« Reply #374 on: August 31, 2019, 09:18:15 PM »
I don't think I'm conflating, I just don't think we've gotten to the point in the conversation where I need to clarify.

Be that as it may I'm generally for equal opportunity policy and generally anti policy that aids corporations and ultra wealthy (1% plus) increase their priviledge and power.

You're right that we don't aim for, nor expect, a totally flat playing field or a totally equal game score, which is fine. I do, however, feel that we should at least aim to provide a social package that enables people with drive and vision to achieve things. Currently, I do not feel we are there yet, too much is determined by who your folks are and how much $$ they have. It wasn't as set in stone as it is now 50-60 years ago, I hope it's not as set in stone in 15-20, but we'll see. Certainly bold policy reform is not a priority in Australian elections.