Universal basic income: forced early retirement

[JLee]

45% rate is not all inclusive. There is a 2% medicare levy - which is compulsory - thus it is really 47%. New Labor government will raise that to 49%. In addition, you are required to pay approx $1,000 pp per year for private health insurance, otherwise you pay a 1.5% penalty and so your marginal rate goes up to 50.5%.

Note that only those on incomes of about $30,000+ pay the 2% medicare levy, only those on $90,000+ pay the 1.0-1.5% penalty for not having private insurance, and our other marginal rates are much lower.

From a US perspective, that is astonishingly inexpensive -- if I combine what my employer pays and what I pay for my health insurance, that's 9.42% of my gross salary.

You may pay a lot more in health insurance but we pay a lot more in income tax and other personal taxes. Our income tax:GDP ratio is the highest in the OECD.

I would gladly swap tax rates between Australia and the US even if I had to pay 9.4% for healthcare rather than the 3.5% that I do now.

If you made the typical ~$40k/yr that someone with an associates degree makes here in the US, you'd probably feel differently paying $10k/yr for health insurance. ;)

According to wikipedia, total tax revenue vs GDP for Australia is 27.8% vs the USA at 26%. It may be skewed across various forms of taxes but it's not a significant difference overall.

[Prairie Stash]

45% rate is not all inclusive. There is a 2% medicare levy - which is compulsory - thus it is really 47%. New Labor government will raise that to 49%. In addition, you are required to pay approx $1,000 pp per year for private health insurance, otherwise you pay a 1.5% penalty and so your marginal rate goes up to 50.5%.

Note that only those on incomes of about $30,000+ pay the 2% medicare levy, only those on $90,000+ pay the 1.0-1.5% penalty for not having private insurance, and our other marginal rates are much lower.

From a US perspective, that is astonishingly inexpensive -- if I combine what my employer pays and what I pay for my health insurance, that's 9.42% of my gross salary.

You may pay a lot more in health insurance but we pay a lot more in income tax and other personal taxes. Our income tax:GDP ratio is the highest in the OECD.

I would gladly swap tax rates between Australia and the US even if I had to pay 9.4% for healthcare rather than the 3.5% that I do now.

https://www.oecd.org/ctp/tax-policy/revenue-statistics-australia.pdf
http://www.oecd.org/tax/tax-policy/taxing-wages-australia.pdf

According to OECD you rank 30 of 36 for tax:GDP ratio; you are below the average for OECD.

http://www.tai.org.au/sites/default/files/P521%20Australia%20a%20low%20tax%20country_0.pdf
This is the Australian institute. Its claiming the opposite of what you say, the title says it all:
"Australia – the low tax country
OECD data shows Australia raises less tax revenue than
almost all developed countries"

It pulls data from the OECD. I can't find any source that says you are the highest in the OECD or even above average. Care to share where your data is from? I enjoy learning about other countries, I found it surprising that Australia was taxed heavily like you claim.

[Bloop Bloop]

45% rate is not all inclusive. There is a 2% medicare levy - which is compulsory - thus it is really 47%. New Labor government will raise that to 49%. In addition, you are required to pay approx $1,000 pp per year for private health insurance, otherwise you pay a 1.5% penalty and so your marginal rate goes up to 50.5%.

Note that only those on incomes of about $30,000+ pay the 2% medicare levy, only those on $90,000+ pay the 1.0-1.5% penalty for not having private insurance, and our other marginal rates are much lower.

From a US perspective, that is astonishingly inexpensive -- if I combine what my employer pays and what I pay for my health insurance, that's 9.42% of my gross salary.

You may pay a lot more in health insurance but we pay a lot more in income tax and other personal taxes. Our income tax:GDP ratio is the highest in the OECD.

I would gladly swap tax rates between Australia and the US even if I had to pay 9.4% for healthcare rather than the 3.5% that I do now.

If you made the typical ~$40k/yr that someone with an associates degree makes here in the US, you'd probably feel differently paying $10k/yr for health insurance. ;)

According to wikipedia, total tax revenue vs GDP for Australia is 27.8% vs the USA at 26%. It may be skewed across various forms of taxes but it's not a significant difference overall.

It's not our total tax to GDP, but specifically income tax. Our income tax is 41% of the tax base compared to OECD average 24%. Even then, our average income tax burden is not particularly high; the income tax falls spectacularly on moderately high and high earners, due to the nature of our tax rates.

https://www.oecd.org/ctp/tax-policy/revenue-statistics-australia.pdf

[Prairie Stash]

45% rate is not all inclusive. There is a 2% medicare levy - which is compulsory - thus it is really 47%. New Labor government will raise that to 49%. In addition, you are required to pay approx $1,000 pp per year for private health insurance, otherwise you pay a 1.5% penalty and so your marginal rate goes up to 50.5%.

Note that only those on incomes of about $30,000+ pay the 2% medicare levy, only those on $90,000+ pay the 1.0-1.5% penalty for not having private insurance, and our other marginal rates are much lower.

From a US perspective, that is astonishingly inexpensive -- if I combine what my employer pays and what I pay for my health insurance, that's 9.42% of my gross salary.

You may pay a lot more in health insurance but we pay a lot more in income tax and other personal taxes. Our income tax:GDP ratio is the highest in the OECD.

I would gladly swap tax rates between Australia and the US even if I had to pay 9.4% for healthcare rather than the 3.5% that I do now.

If you made the typical ~$40k/yr that someone with an associates degree makes here in the US, you'd probably feel differently paying $10k/yr for health insurance. ;)

According to wikipedia, total tax revenue vs GDP for Australia is 27.8% vs the USA at 26%. It may be skewed across various forms of taxes but it's not a significant difference overall.

It's not our total tax to GDP, but specifically income tax. Our income tax is 41% of the tax base compared to OECD average 24%. Even then, our average income tax burden is not particularly high; the income tax falls spectacularly on moderately high and high earners, due to the nature of our tax rates.

https://www.oecd.org/ctp/tax-policy/revenue-statistics-australia.pdf

Australia is 40.8% compared to USA at 40.3%...all you're saying is thatyou match the USA for % breakdown which has nothing to do with total taxes paid. Don't confuse a pie chart with the size of the pie.

you linked the tax:GDP ratio link, which has you at 30 of 36 for tax:GDP. It shows the opposite of what you're saying.

[Bloop Bloop]

No, I don't think you've seen the clear distinction that I've always been making. I said nothing about tax generally, only about income tax as a proportion of all tax and of GDP. Not all tax, only income tax. With all tax, we are a low taxing country. That is because we tax proportionally high income earners much more on their high income. (We don't tax consumption very much, and strangely we don't tax wealth very much.)

[MaaS]

I think the scare around automation eliminating jobs is very overblown.

Let's take trucking, an industry I know well. Level 5 autonomous trucking won't be here at any significant scale for a minimum of 10 years. At that point, only long haul trucking will be affected. Local (the majority) jobs are multi-decades away from being affected. During this aforementioned 10 year period, the amount of local jobs is projected to increase dramatically. Nearly as much as the long haul jobs that could be feasibly automated.

A long winded way of saying: In the near to intermediate term, the jobs are just changing, not disappearing. In the long term? Probably, but I really doubt it's going to be a switch flipped where tens of millions of jobs suddenly disappear. It's going to be gradual.
 

[Bloop Bloop]

The other thing is that even if certain jobs are lost, who's to say they won't be replaced by other jobs?  Think about a full-time Airtasker kind of gig, or someone who performs civic services like cleaning up parks or dealing with pollution. Once the utility of an old role is gone, new things arise that fill the gap.

I'm not saying that the new jobs will be just as well-paying or as stable as the old - but they will still be jobs.

[Prairie Stash]

No, I don't think you've seen the clear distinction that I've always been making. I said nothing about tax generally, only about income tax as a proportion of all tax and of GDP. Not all tax, only income tax. With all tax, we are a low taxing country. That is because we tax proportionally high income earners much more on their high income. (We don't tax consumption very much, and strangely we don't tax wealth very much.)

I see the distinction. Your links say you are incorrect though. you are not #1 in OECD, according to your links, you are #2. In comparison to USA you tax income at 40.8 instead of their 40.3, hardly a huge discrepancy. That would place them at #3, and your complaining about a 0.5% difference while ignoring the biig picture.

Overall your tax structure has you as a lower tax country (OECD) with a more progressive tax rate on high income; the reason you rank so high on income tax is because all your other tax rates are low. If you increase your tax rates on other categories, it drops your proportion of income tax....basic math. That's why other countries rank lower than Australia, because they tax other categories higher and collect more taxes in totality.

The % is just how the pie is divided, the important part is the size of the pie. You want it sliced differently but 29 other countries accomplished what you're arguing for by INCREASING the size of the pie. Be careful what you wish for.

[MaaS]

Another consideration is that technology has proven to be very deflationary.  As long as monopolies (not dominant companies, monopolies) are avoided it's very possible that the cost of just about everything will drop in the future.

Ex: If/when autonomous vehicles arrive, a Lyft or Uber will be a fraction of what it is today.  If we can 3d print homes, they'll be a fraction of the cost. If we don't have to aggregate in the areas of job concentration, land costs will drop.

Yet another consideration is that we could easily reduce the hours and scope of most jobs.  40 hours of work can be done by two people each working 2.5 days.  Pretty feasible if the cost of living is reduced.

[Prairie Stash]

Another consideration is that technology has proven to be very deflationary.  As long as monopolies (not dominant companies, monopolies) are avoided it's very possible that the cost of just about everything will drop in the future.

Ex: If/when autonomous vehicles arrive, a Lyft or Uber will be a fraction of what it is today.  If we can 3d print homes, they'll be a fraction of the cost. If we don't have to aggregate in the areas of job concentration, land costs will drop.

Yet another consideration is that we could easily reduce the hours and scope of most jobs.  40 hours of work can be done by two people each working 2.5 days.  Pretty feasible if the cost of living is reduced.

https://eh.net/encyclopedia/hours-of-work-in-u-s-history/

If history is a guide, we can absolutely reduce hours. At one point a typical work week was 60 hous (5 days and 12 hours/day). I bet they had the exact same thougths wen they reduced the work week, that it would kill the economy, but there is the USA still humming along.

Overall I expect to work around 40,000 hours over my lifetime; far less than a person working from 20-65.

[Bloop Bloop]

No, I don't think you've seen the clear distinction that I've always been making. I said nothing about tax generally, only about income tax as a proportion of all tax and of GDP. Not all tax, only income tax. With all tax, we are a low taxing country. That is because we tax proportionally high income earners much more on their high income. (We don't tax consumption very much, and strangely we don't tax wealth very much.)

I see the distinction. Your links say you are incorrect though. you are not #1 in OECD, according to your links, you are #2. In comparison to USA you tax income at 40.8 instead of their 40.3, hardly a huge discrepancy. That would place them at #3, and your complaining about a 0.5% difference while ignoring the biig picture.

Overall your tax structure has you as a lower tax country (OECD) with a more progressive tax rate on high income; the reason you rank so high on income tax is because all your other tax rates are low. If you increase your tax rates on other categories, it drops your proportion of income tax....basic math. That's why other countries rank lower than Australia, because they tax other categories higher and collect more taxes in totality.

The % is just how the pie is divided, the important part is the size of the pie. You want it sliced differently but 29 other countries accomplished what you're arguing for by INCREASING the size of the pie. Be careful what you wish for.

I would be happy to increase the size of the pie, because then we would have more revenue, which could go towards dropping our ridiculously high income taxes at the upper end. So that our marginal rate of 45 + 2 + 1.5% (soon to be another +2.0%) could drop towards the OECD average. Keep in mind our marginal rate kicks in at just 2.2x average full-time income, making it very hard for anyone to meaningfully get ahead.

It does no good to live in a "low tax" environment when that low tax is accomplished only by drilling high earners on their income and requiring no one else to pay any meaningful tax. If I'm going to have to pay 70k or 80k a year in tax I'd at least like the burden to be shared.

[Bloop Bloop]

Another consideration is that technology has proven to be very deflationary.  As long as monopolies (not dominant companies, monopolies) are avoided it's very possible that the cost of just about everything will drop in the future.

Ex: If/when autonomous vehicles arrive, a Lyft or Uber will be a fraction of what it is today.  If we can 3d print homes, they'll be a fraction of the cost. If we don't have to aggregate in the areas of job concentration, land costs will drop.

Yet another consideration is that we could easily reduce the hours and scope of most jobs.  40 hours of work can be done by two people each working 2.5 days.  Pretty feasible if the cost of living is reduced.

I'm already finding that recent advances in technology/gig economy have led to deflationary pressures.

For example:
- Uber is so much cheaper than taking a taxi.
- Ubereats/Menulog, while no longer good value (due to the whole contractor/employee shenanigans), has put a lot of pressure on restaurants to drop their delivery pricing.
- Airtasker has dropped the prices of getting someone to do basic things for you.

[JLee]

No, I don't think you've seen the clear distinction that I've always been making. I said nothing about tax generally, only about income tax as a proportion of all tax and of GDP. Not all tax, only income tax. With all tax, we are a low taxing country. That is because we tax proportionally high income earners much more on their high income. (We don't tax consumption very much, and strangely we don't tax wealth very much.)

I see the distinction. Your links say you are incorrect though. you are not #1 in OECD, according to your links, you are #2. In comparison to USA you tax income at 40.8 instead of their 40.3, hardly a huge discrepancy. That would place them at #3, and your complaining about a 0.5% difference while ignoring the biig picture.

Overall your tax structure has you as a lower tax country (OECD) with a more progressive tax rate on high income; the reason you rank so high on income tax is because all your other tax rates are low. If you increase your tax rates on other categories, it drops your proportion of income tax....basic math. That's why other countries rank lower than Australia, because they tax other categories higher and collect more taxes in totality.

The % is just how the pie is divided, the important part is the size of the pie. You want it sliced differently but 29 other countries accomplished what you're arguing for by INCREASING the size of the pie. Be careful what you wish for.

I would be happy to increase the size of the pie, because then we would have more revenue, which could go towards dropping our ridiculously high income taxes at the upper end. So that our marginal rate of 45 + 2 + 1.5% (soon to be another +2.0%) could drop towards the OECD average. Keep in mind our marginal rate kicks in at just 2.2x average full-time income, making it very hard for anyone to meaningfully get ahead.

It does no good to live in a "low tax" environment when that low tax is accomplished only by drilling high earners on their income and requiring no one else to pay any meaningful tax. If I'm going to have to pay 70k or 80k a year in tax I'd at least like the burden to be shared.

Well, you could always make $50k/yr and pay a lower rate. :P

[Kyle Schuant]

As the income goes up, so too does the whingeing.

[Bloop Bloop]

Everyone whinges, true; but I feel semantically it is appropriate to differentiate between whinging that you don't get to keep more of your own money versus whinging that you are not getting more of other people's money.

[Prairie Stash]

Everyone whinges, true; but I feel semantically it is appropriate to differentiate between whinging that you don't get to keep more of your own money versus whinging that you are not getting more of other people's money.

You're the only one who assumes that it's coming out of your income tax. You are 100% complaining that someone else might get money from an increased corporate tax instead of it going towards a tax break for yourself. You are whinging that any new tax might not lower your taxes and go towards UBI.

I also like tax breaks for myself, I understand the desire. But as you have already pointed out, income tax rates are high in Australia (I'll take your word) so the most llikely source of funds would be a new tax. Coincidentally, it would increase the size of the tax pie and DECREASE your proportional amount of income tax paid, dropping your OECD rank for income tax:GDP. You would get exactly what you want, you would get closer to the OECD average...see the problem?

[Bloop Bloop]

I have absolutely no issues if it was a new tax that was not a personal income tax. I'd even be fine if it was a tax that affected me, like a consumption tax, as long as it was broad enough to affect everyone, or nearly everyone. You will just have to trust me that in Australia, any time we need money, we turn to income tax.

So I'm in 100% agreement with you. But, I can't see UBI coming in without an increase in income tax.

And, for context, the person I was replying to was stating that 'as the income goes up, so does the whinging' which I feel is a very unfair remark since higher earners are paying the tax which pays the welfare of lower earners, and therefore to call their largesse 'whinging' is rather unnecessarily emotive, in my view.

[JLee]

I have absolutely no issues if it was a new tax that was not a personal income tax. I'd even be fine if it was a tax that affected me, like a consumption tax, as long as it was broad enough to affect everyone, or nearly everyone. You will just have to trust me that in Australia, any time we need money, we turn to income tax.

So I'm in 100% agreement with you. But, I can't see UBI coming in without an increase in income tax.

And, for context, the person I was replying to was stating that 'as the income goes up, so does the whinging' which I feel is a very unfair remark since higher earners are paying the tax which pays the welfare of lower earners, and therefore to call their largesse 'whinging' is rather unnecessarily emotive, in my view.

Largesse? Lol, you specifically said you wanted to pay less, therefore your contributions are certainly not rooted in generosity.

[Bloop Bloop]

A buck's a buck. I'd say that people shouldn't look a gift horse in the mouth.

[JLee]

A buck's a buck. I'd say that people shouldn't look a gift horse in the mouth.

That doesn't absolve you from misrepresenting your mandatory taxes as personal generosity.

[Bloop Bloop]

As I've said previously, I find it sad that there is little sympathy for those who do all the heavy lifting in society. Whether largesse is mandated or voluntary, people who cannot or do not earn an adequate income, and whose shelter and provisions are paid for by taxes peeled from the sweat of others, ought to be grateful.

[Kyle Schuant]

"He that gives should never remember, he that receives should never forget." - says the Talmud.

"Whoever gives tzedakah [charity] to the poor with a sour expression and in a surly manner, even if he gives a thousand gold pieces, loses his merit. One should instead give cheerfully and joyfully, and emphasize with him in his sorrow." - Maimonedes

"From everyone who has been given much, much will be demanded; and from the one who has been entrusted with much, much more will be asked” says the Christian bible.

"Philanthropy is commendable," said Martin Luther King, "but it must not cause the philanthropist to overlook the circumstances of economic injustice, which make philanthropy necessary."

"How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it." - Adam Smith, who is in many senses the father of modern capitalism.

There are some who understand these things. There are some who do not.

[Threshkin]

Another set of quotes worth thinking about.

Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others.

Creation comes before distribution - or there will be nothing to distribute. The need of the creator comes before the need of any possible beneficiary. Yet we are taught to admire the second-hander who dispenses gifts he has not produced above the man who made the gifts possible. We praise an act of charity. We shrug at an act of achievement.

Whoever claims the right to redistribute the wealth produced by others is claiming the right to treat human beings as chattel.

Economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman's tool is values; the bureaucrat's tool is fear.

The majority of those who are loosely identified by the term 'liberals' are afraid to let themselves discover that what they advocate is statism. They want to keep all the advantages and effects of capitalism, while destroying the cause, and they want to establish statism without its necessary effects. They do not want to know or to admit that they are the champions of dictatorship and slavery.

The man who produces while others dispose of his product is a slave.

Ayn Rand

[JLee]

"The businessman's tool is values"

lmao. If nothing else, the last few years should have made it abundantly clear that is not the case. Facebook data exploitation, Amazon worker exploitation...and who are the richest people in the world?

[Threshkin]

"The businessman's tool is values"

lmao. If nothing else, the last few years should have made it abundantly clear that is not the case. Facebook data exploitation, Amazon worker exploitation...and who are the richest people in the world?

Yes, liberal capitalist exploitation.

[Kyle Schuant]

Ayn Rand is about as credible as Marx. Just another hateful ideologue who in the end spent their time idly mooching off others while railing about what society should be like.

https://www.snopes.com/fact-check/ayn-rand-social-security/