Should Wealthy People Be on a Version of The "Cashless Welfare Card"

The GST is not proportional to income. Very poor people pay the same amount as very wealthy.

If multi-millionaires and even wealthier were forced to use a cashless card they could be charged a higher more proportionate amount of GST.

I also feel that many businesses would relish charging a millionaire $20 for a carton of milk.

I also feel that the super-rich would call in their corporate army to burn the place down if somebody tried to implement it(but that's just the cynic in me).

Just on the merit of whether GST should be proportionate to income, should the uber rich be on a higher rate of gst with a special shopping card?
(ps don't say this is just one of their fancy exclusive credit cards)

Poll Options

  • 4
    Proportionate GST no card
  • 19
    Proportionate GST card
  • 614
    Same GST

closed Comments

  • +102

    No, they should pay the same amount as everyone else.

    If you think the rich should contribute to society more, then raise the income tax(which would apply to everyone equally).

      • +119

        I see equality in every person paying the same price for the same thing.

        • -93

          Do you see an inequality in a poor person paying the exact same income tax as a very wealthy person?

          for instance if one person earned $100 a year, and paid $20 in income tax, and another person earned 200,000 and paid $20 in income tax, would that be fair?

          As that is the state of gst

          • +34

            @sarahlump: I think the current income tax rate brackets are pretty good.

            • -16

              @ozhunter: I apologise, I was using a comparison to explain gst, not income tax.

              • +5

                @sarahlump: I still think everyone pays the same price.

              • +25

                @sarahlump: You're trying to apply our progressive income system to GST. Wealthy already pay more tax on income, you essentially want to increase their tax. Why increase it on GST, why not just increase their income tax?

                • +3

                  @arkie0: Looking at my wealthy friends and the middle income to low income friends, my wealthy friends pay less in tax than my middle income friends but probably more than my low income friends due to having a lot more options and better accountants / financial advisors.

                  • +3

                    @lonewolf: Yeah we probably need tax reform to fix some of that, but progressive GST isn't the way.

                    • @arkie0: yeah I dont think progressive GST is right, it wont even look right. but I would really like to see some Tax Reform as there is a massive gap from my wealthy friends to my middle income friends and another gap although not as nearly as large from my middle income to my low income friends.

              • +2

                @sarahlump: so they should pay more GST AND income tax?
                are we supporting equality or inequality here?

          • +68

            @sarahlump:

            one person earned $100 a year, and paid $20 in income tax,

            This person pays no income tax.

            200,000 and paid $20 in income tax,

            While this one pays $63097.

          • @sarahlump: I think you have income tax and GST mixed up.. you don't pay GST on an income

          • +13

            @sarahlump: Poor people buy less things than rich people, therefore rich people pay more get total. There are also lots of staples that are get exempt.

            • +9

              @brendanm: winning comment.

              Essential things (i.e. non-luxiuries) are GST exempt…meaning rich people who buy rich people things pay rich people gst tax

              Discolosure: I'm poor.

            • +4

              @brendanm: 100% this.

              Income tax is too open to creative accounting. This is why very wealthy often pay less tax than those who aren’t,

              GST however is a fixed tax on purchases. Simply put, rich people buy lots of stuff! For example you pay $20k GST on a big merc, but only $2k GST on a Corolla. Don’t even get me started on the amount they spend on furniture etc to fill a big house compared to a 2br apartment.

              GST is the fairest tax, on my opinion.

              • +2

                @geoffs87: And let’s not forget luxury car tax… add another $15k to that Merc

                • +3

                  @MementoMori: Wasn’t going to complicate matters for the financially mis-informed like the OP… but very good point :)

              • @geoffs87: You don't think that same creative accounting would be used to lower the GST rate!!??

                • @MrFrugalSpend: Not an accountant, but i can't see how. You pay GST at the time of purchase, certain things you can claim back, sure, but not really…

          • @sarahlump: Are we talking GST or income tax???????

            • @burningrage: Not relevant. We're talking about taking from the rich. Pick your poison.

          • @sarahlump: suggest you go back to school and learn what % is

          • +2

            @sarahlump: In general, I'd have thought wealthy people probably pay more on GST anyway.. firstly, 'essential items' are generally GST free. And when it comes to everything else, wealthy folks probably buy more stuff and buy more expensive stuff, in effect contributing more to GST

          • +1

            @sarahlump: Not sure what you are saying.

            A person earing 200,000, gets 135k after tax, pays 65k tax, and spends roughly 80,000 and pays 8,000 as GST. Total tax of 73k.

            A person who earns AUD 100 per year is hypothetical.

            I think get rid of income tax altogether, and increase the GST for all.

            Tax the spend, but make more money available to everyone to spend.
            Some of the richest earn millions, yet hardly pay anything as tax.
            ( A famous story was a Gold coin as tax for someone who earned over a million).

            If you have 200,000 and can spend 150,000- it is better for the economy, and say 45k goes to the govt as tax.
            No more ATO chasing people for money, no more the largest Dept.
            It is deducted at the time of purchase.

            • @darkmattersunB6c0MV:

              I think get rid of income tax altogether, and increase the GST for all.

              One day, they all will get to that. For now I just can agree.

      • +83

        You don't want equality.

        You don't want equal opportunities.

        You want equal outcomes. Equity.

        Why would anyone work any harder, be better, play wiser when everyone is going to end up equal anyway?

        • +26

          It's really annoying when people get equity and equality mixed up. I'm glad someone gets it.

          Also to OP, the rich person buys more and more expensive things, hence pays more GST.

        • +6

          wanting equal outcomes is the recipe for absolute catastrophe.

          what people should worry about is ensuring there's dignity at the bottom. only a greenfields implementation of human kind would allow this fact to change, and only if the human biology also changes.

        • +1

          thank you. The comment i was looking for.

    • Wealth and capital taxes are much more 'equal' than income tax. Income is (at least kinda sorta ideally) related to effort and investment in skill - it exists as a reward to motivate productivity in a capitalist economy.

      Wealth on the other hand represents past effort, not current. Which for the most part represents the efforts of the parents and so on, not the person - and it doesn't motivate future work nearly as much as income does.

      Progressive wealth tax would see the inheritance pigs start contributing to their country for once - but unfortunately they also wield wildly disproportionate political power, so it'll never happen.

    • The statement that rich people pay the same amount of GST than the poor is completely wrong.
      Rich people spend more, and therefore pay more GST.

  • +93

    Stop trying to come up with ways that other people can pick up your slack. If you want to be able to spend more, you get out there and work your arse harder. The people who earn more money didn't just get there overnight.

    The so-called wealthy already pay much more income tax based on the existing tax scales. You're obviously one of the people who whinge and cry about the "rich" benefiting more every time there's a tax cut, without really understanding how the tax system actually works!

    • -18

      “So called wealthy”. So you think that some people are wealthy is an illusion? I think you are going to have trouble arguing that point with Trump, he thinks he is very wealthy. Some “so called wealthy” do pay more tax but they also squirrel money away in offshore tax havens, undertake dodgy loans between companies and have family trusts to severely minimise the tax they pay.

      Personally, I would raise the tax free threshold as this ensures that the low end earners get a better tax break, based on proportion of earnings whilst applying to everyone. We would also need to improve the welfare net to improve services to our vulnerable citizens.

      Warren Buffer, another “so called” wealthy individual criticised the American tax system because it meant he paid a lower tax rate than his secretary. Another “so called” wealthy person, Bill Gates, agreed with him.

      Maybe it is me but when people can install gold plated toilets in their bathroom, whilst bankrupting companies to avoid paying their bills, there seems to be something wrong with the system. When the remedy to get paid is prohibitive costs going through the courts, there is something wrong with the system.

      If you have more than your proportion of the wealth you should pay more than your proportion of the tax.

      • +13

        You’re describing a tiny minority of the ultra wealthy.

        Is someone making $180k salary wealthy?
        Is someone that owns a $2M property but living off the pension wealthy?

        • +7

          The OP was talking about multimillionaires and you are setting a rate at $180k? However, at 180k per year they should be able to afford their tax bill and keep a roof over their heads and feed their families.

          The second gets trickier because people can be asset rich and income poor based on how housing prices have shot through the roof. Although someone living in a place that expensive is likely to have other assets and income sources as well. It was this sort of scenario that death taxes were introduced for, and didn’t the LNP play that up in the last election. Me, I wouldn’t force people out of their homes but if their property is worth that much they should get extra scrutiny before they get the pension.

          • +9

            @try2bhelpful: I picked $180k because that’s where the top tax bracket kicks in. If a new tax wasn’t being applied to existing brackets, how else would it be determined?

            The second is a common situation for elderly in places like Sydney where they bought an average house 50 years ago, on a low to average wage. The house appreciated over a long period but that doesn’t mean the owners were on high incomes and have become “wealthy”.

            • +3

              @nse: So maybe we need a bracket above $180k.

              I think I’ve covered both of your scenarios.

          • @try2bhelpful: I believe that If someone was born with a healthy body and mind then they are born wealthy.

            If people can't find a way to maintain a happy lifestyle because they cannot afford to feed their family, perhaps they should have chosen a better partner or invested in condoms.

          • @try2bhelpful: I think a Government backed reverse mortgage is worth considering. I don't think people with million dollar homes should get the pension. But I don't think they should be forced to reverse mortgage under commercial terms. Perhaps indexed to CPI like the HECS system.

        • Don't let the retirement trick out of the bag . Sell everything off put it into whatever you can afford house and they can't do anything about it . Yes they are defined by assets that do it well way above average assets , many multi millionaire's and if have played no super well are entitled to a pension and other entitlements lol .

          • @popsiee: Kind of curious , do you have access to everyone's superannuation information ?

    • @bobbified

      Get out there and work your arse harder.

      I dont think realise how good your comment was! LOL!

      • +1

        😂😂😂😂 LOL!!

  • +39

    GST on caviar is more than on rice pudding.
    Wealthy people are likely to contribute more total GST due to more discretionary spending.
    Define "wealthy"
    .

    • +4

      This.

      The GST is proportionate to the item price, and the wealthy person is more likely to buy raw cold pressed milk as opposed to Woolworths UHT.

      • +3

        No probably not, that’s how they became wealthy by not spending on junk. The only spenders on these things are those who acquire wealth from record sales, movies, the grandfathers estate, or drug sales (or other illegal activities)

    • -1

      plus they will pay luxury tax on cars for example, pay more stamp duty on property, etc. They will also not have hand outs from centrelink, or age pension.

  • +3

    Abolish income tax and only have GST (the same GST% for everyone).

    • +1

      Na

    • One or the other yep. Both GST and income tax means that the parasite class hit the workers both ways. They parasitise us when we earn and they parasitise us again if we spend.

    • That would be true equality

  • +8

    The true "wealthy" do not buy goods and services in their own name. So this idea is pointless.

    • +1

      Don’t disagree with you. They will find a bunch of tax dodges to hide behind.

      • +7

        And those who want others to "share" with them will find a bunch of socialist ideals to hide behind.

        • +3

          Socialist ideas like people not starving to death in their homes or dying of treatable diseases. How dare people demand access to health care, they should just die quietly in the corner. You don’t have to go far back into out history to see when that was the case.

          • +3

            @try2bhelpful:

            Socialist ideas like people starving to death in their homes or dying of treatable diseases.

            Yes. Those are socialist ideas and socialist outcomes.

            You're finally getting it.

            (Oh. You edited to include the "not". Still citing fantasy.)

            • +8

              @tshow: No, I mistyped so I corrected myself. Really, you think I’m talking about fantasy. May I suggest you back and look at the history of places like Collingwood in Melbourne and the slums around here. Go look at the conditions in Dickensian England and the death toll with children in their slums. Not fantasy, Just what it was actually like. There is a reason why we have improved our safety nets. Me, I’m willing to accept I was lucky and conditions meant I could do “better” in life. If not for Gough’s free education I wouldn’t have got where I did, and my taxes have paid back that debt many times over. I talk about fences at the top of cliffs rather than ambulances at the bottom. Some people just prefer to leave the broken to suffer. Not everyone who is “poor” deserves it and not all of them can get themselves out. I take the “there but for the grace of God go I” because I didn’t grow up in a household where Mummy and Daddy could give me everything. Yes, I worked my arse off to get where I am and I would like to see others given that chance.

              • +6

                @try2bhelpful: Lol.

                You cite cases that are so rare they are news.

                How bout the socialist regimes that literally starved the masses (not the mom and dad too iced out to care for their children), yeah literally starved down to the ribs in their own home.

                Let's not reference the millions who died under Pol Pot, Lenin, Stalin, Hitler, Mao… Socialist Party. People's Party. Lol. Nah, can't remember those.

                "Briiing briing. Hey dead great granpa. Turns out when the soldiers kicked you out of the house and you literally starved to death in working camps, it wasn't socialism! The socialist do not starve people, they feed them."

                Do you hear that? That's the dead rolling in their grave. Yeah, grave (singular) cause they got buried in the same mass one.

                Goodness. I'm not offended. I'm plainly disgusted.

                • +10

                  @tshow: Kinda like the tens of thousands dead from Covid-19 under the capitalist regime of the US right? Same regime that forced people to pay to be tested and spruiked drugs to hedge the sharemarket while people died?

                  It sounds silly because equating ideology with mass murder is. Mass murder happens when a single ideology is allowed to run with total authority. Countries that do well adopt a balance of policy that supports the people selectively (i.e. health and education), while at the same time allowing them to pursue their goals and speak their minds without being thrown in prison for it. Medicare is incredibly socialist policy, that doesn't make us socialists (and btw, Pol Pot and Mao were communists) and it's been a lifeline during this pandemic. Allowing farmers to buy water rights is capitalist policy and has been their lifeline in many ways. Both have their drawbacks.

                  This silly hysterical pointing to 'socialists' decades gone and using the criminals who murdered all those people as being somehow kind of representative of what will go wrong when we support people is a little strange. It's like you've forgotten about the 70 years after WWII.

                  • -1

                    @MissG:

                    This silly hysterical pointing to 'socialists' decades gone and using the criminals who murdered all those people

                    These criminals are built on the back of socialism. Repetitively.

                    If we just condone socialism as if we will get a different result, we are going to be surprised when history repeats itself.

                    Btw, a certain Kim is also a socialist. The pattern of socialism > tyrant isn't obsolete.

                    Medicare is incredibly socialist policy, that doesn't make us socialists

                    I am not under any delusion that it isn't.

                    Like you said, it is a check and balance. If capitalist go unchecked, people who make their living will end up keeping their income. Of course there will be some detriment in that outcome.

                    If socialist go unchecked, people will be slaughtered. A much worse outcome.

                    So if I had to choose which side of the tug of war to be on, I know which end I'd be pulling for.

                    There is nothing immoral about wanting to keep ones income. There is nothing moral about wanting to keep someone else's.

                  • @MissG: Yes this so much. In my view a healthy balance is what we need, the world is complex and strictly applying one ideology to everything isn't going to lead to optimal outcomes.

              • +1

                @try2bhelpful: Instead of looking locally why don't you apply the same logic to the entire world. I guarantee there are people starving in the world who can't afford a computer, who don't have electricity or internet and want wealthy people like you to provide for them too.

      • I would as well if I were paying near 50% of what I was earning to the government for nothing.

        • +1

          If you are paying 50% then the odds are you have more than enough money to live on anyway.

          • +3

            @try2bhelpful: Good of you to decide how much he needs to live on.

          • +9

            @try2bhelpful: The amount "needed to live on" is not the point. I could live on the dole. I could live on a million a week.

            The point is that someone who is working with the qualifications, skills and hours required to be earning over $180k, shouldn't be penalised for doing so.

            Someone making that sort of coin and having to actually report it, isn't some businessman doing "creative accounting". It's a surgeon or an anaesthetist, who have done 8+ years of school, spent likely a hundred grand plus on uni fees. Or an engineer working in the mines or oil and gas, away from their family for weeks at a time, working massive hours.

            What's their reward for this? To have half of their money taken off them once they have worked "too hard".

      • -1

        If they are following the law then there is no problem the strategy of purchasing via a trust. People who complain about the mechanism fail to realize that this is something they themselves could utilize if they had made better life choices.

  • +3

    GST is universally recognised as a more fair system of tax. It is a tax on consumption. Few people have already illustrated above how that happens. If you really want to make it even more fair, we could have variable GST rates, with lower rates on essentials, and higher rates on discretionary spends. There are a few countries that do have this. An example in Australia could be similar to the luxury car tax.

    • +2

      with lower rates on essentials, and higher rates on discretionary spends.

      We had that before the GST. It didn't work.

    • +2

      Define "fair".

      GST has benefits in that it's very hard to avoid and it can be levied on tourists (food, hotels, etc.) , but the main downside is that it's very regressive. Poorer people are taxed, as a percentage of their income, more than wealthier people.

      The difficulty in luxury goods taxes is that classifying goods certain ways creates tax loop holes (GST is applied on jewellery but not gold bullion for example) or problems with thresholds (what price exactly is a luxury car?)

      • +1

        I read elsewhere that this can compensated by strengthening the distribution system to poorer people.

        GST is arguably fairer in the sense that those who spend more (richer) will end up paying more overall and is extremely hard to "avoid". Income tax, while progressive, allows many minimisation and/or evasion methods that clouds the revenue brought in.

        The tax brought in should allow an appropriate welfare level to ensure poor people arent worse off.

        • +1

          As a proportion of income it isn't more though, it's in fact the opposite. You don't suddenly consume twice as much because you make twice as much.

          • @Zephyrus:

            You don't suddenly consume twice as much because you make twice as much

            This seems very Australian to me.

          • +1

            @Zephyrus: Implying that if you make twice as much, you should let the govt take twice as much in taxes? This just disincentivize productivity.

            Taxing consumption isn't such a bad idea, but i dont think consumption make up enough to pay for common goods. So tax on income is always going to be needed to supplement. Unless you're a small country like Monaco.

            • @sangohan: I mean that's what happens now, doesn't seem to be working too badly. Ever heard anyone saying they're not going to pick up some extra hours because the extra tax isn't worth it?

              • +4

                @Zephyrus: Yes. Im in that boat, and so are a lot of my doctor friends. Im just about to hit that 180k bracket, where I'm taxed 45%, plus 2% medicare levy, plus 10% HECS, and up until recently, have to pay more for childcare.

                So when they say to me, do you want to work Saturday for extra money: I say no thanks, it just isnt worth my while, after I see around 43c in the dollar.

                And I'm tired of everyone making out that no top income earners pay tax and they all "hire accountants and hoard offshore". No they dont. Maybe the uber wealthy, but theres a massive chunk of people around the 150-300 bracket that are professionals and subject to PSI, where they pay massive amounts of tax.

                I'd prefer closing all the tax loopholes and making everyone pay tax, so that the base rates can be lower for everyone. At least GST is hard to evade.

              • @Zephyrus:

                some extra hours because the extra tax isn't worth it?

                people who earn the big bucks are people who start new companies and businesses, not people who pick up extra hours in a wage earning capacity.

                How many businesses that didn't start in australia because of the high tax rates here?

    • +1

      People like OP will complain that higher tax on discretionary spends means that poor people can't afford a nice holiday, designer clothes or new console games.

      The current system is fair. If poor people want to piss away their money buying wants instead of needs, then it's their own fault for being poor.

    • Citation of “universally recognised as a more fair system of tax” please. I often see GST and VAT referred to as a regressive tax on low income earners.

      • "fair" means equally, not morally.

        A regressive tax is a fair (read, equal) tax, and a progressive tax is, by definition, unfair (or unequal) - you're taxing richer people more.

        Whether you stand on one side or the other depends on whether you benefit or not from it.

  • +2

    How would you actually measure someone’s wealth year in year out.
    Most rich people have sfa in their name.

    • +1

      Sshhhh, stop pointing out how pointless the original question was, no-one else even read it. We're just trying to have an even more pointless, noisy, "left vs right" debate with other obedient lower
      and middle class people. Like we're supposed to.

  • +5

    This a basic video explaining progressive income tax, I think it would be of benefit to you. It explains why richer people find it unfair, this video is American, AU has an even more progressive system (the in AU rich pay even more tax, 45% over 180k).

    https://www.youtube.com/watch?v=S6HEH23W_bM

    Applying the same concept to GST. If we get paid the at the same rate, but I work twice as hard (twice the number of hours). Is it fair that if we buy the same food for my family, but I need to pay twice as much GST?

    Take it further, if you blow all your money on booze, drugs & hookers and thus poorer, while I save up my money by only spending a little on booze, drugs & hookers, I should have to pay more 3 times as much GST as you?

      • +8

        No, I grew up in gov housing. Dad worked 2 shit paying hard labor factory jobs throughout the week and did farm work on the weekend. Mum worked sewing machines 8AM-12mightnight, sometimes until the AM whilst juggling kids. I admit my parents did a lot of the hard work to provide me with the opportunities I have today, but the same can be said for everyone.

        2 friends I grew up with OD'd, 3 still on methadone but doing better. That's the environment we grew up in.

        You look on struggle street and some of them have booze, drugs, smokes, take out and soft drinks. We couldn't afford soft drinks growing up, we drank water.

        So you work 7 days a week and long hours and can't make it ahead? Least do it for you kids, they will get better jobs they will buy a house, they will buy you a house in retirement,

        • +1

          Australia is a rich country with plenty of opportunities. It’s not reason for anyone to work as hard as your parents did not being able to make ends meet.

          • +1

            @whooah1979: Agreed, it is a rich country with plenty of opportunities. But because it is rich, there is a sense of entitlement.

        • +2

          Commies always know better. The poverty which you overcame by effort couldn't possibly have been real poverty. Just like the communism which killed 300,000,000 in the 20th century couldn't have been real communism.

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