If they pare back the promised stage 3 tax cuts would you:
Stage 3 Tax Cuts - Who Will You Vote for Now?
minijumbuk on 24/01/2024 - 07:31
Last edited 26/01/2024 - 07:18 by 2 other users
Last edited 26/01/2024 - 07:18 by 2 other users
Poll Options
- 1144Voted labor, will continue to vote labour. It's the right thing to do.
- 209Voted labor but won't anymore, breaking election promises is the wrong thing to do.
- 116Didn't vote labor but will now, he's doing the right thing.
- 445Don't vote labor and won't next time, breaking election promises is the wrong thing to do.
Comments
@Gnostikos: If you make the claim, you've gotta have the evidence. That's just how you discuss or debate a subject..
It is the third part of a suite of changes to the tax system - it is not a stand alone change.
You got stages 1 and 2, and now Labor want to back out of the third stage. They aren't getting rid of the earlier stages - are they?Stage 1 was temporary. It is already gone!
Removed last year LMITO - saving of anywhere between 1080 to 1500 gone this year.
Not adjusting Tax Bracket for decade
Okay, let me explain to you why people are pissed about this….
Taxing income at the rate that we do for the given salary bands actively punishes anyone trying to get ahead who isn’t already ahead through asset value growth.
This is because wage growth does not increase in real terms anywhere near the pace of big ticket wealth drivers like property. I’m sure I don’t need to remind you all how much more difficult it is to buy a property today compared to a decade or two ago. Yes, taxation of assets does happen (CGT) and the percentage tax rates for those assets are very high, but through bank loan leverage, your asset can appreciate in value very quickly regardless. You can gain wealth in multiples of $10,000’s each year via asset accumulation. On a year by year basis, almost none of us gain multiples of $10,000 each year in salary increases.
This is the issue. Folks in their 20s or 30s who didn’t buy assets when they were children but are willing to do jobs that earn high salaries cannot compete with prior generations who have made their money through asset acquisition. Even high earning folks will never have the same quality of life as the previous generation, let alone anyone earning less.
You can’t roll back the disproportionate wealth generated by asset acquisition now that it’s already happened (aside from taxing wealth rather than income), and you can’t devalue property assets en mass because we can’t afford to pay pensions for retirement savings that would be shattered in the process. Entire super funds and SMSFs have been built on asset-based wealth.
Income tax bands have not been indexed to CPI and they need to have been for the past two decades. This stage 3 tax cut was a step in the right direction prior to it being cut back.
Salary earners above $180000 make up less than 5% of salary earners. We are not the bulk of the population driving inflation. Those who drive inflation are those with wealth - folks who have paid off mortgages or equity out the wazoo who don’t even work anymore. The criticism that Stage 3 tax cuts would increase inflation and make everything worse for everyone else is an absolute fallacy
This needs to get more vote! Thanks for summarising
Very well put.
The asset rich will claim they worked hard for it, paying off their mortgage with a single income.
When the top 10% of income earners struggle to afford the median house price, hard work these days just doesn't cut it.Fix tax brackets to CPI and backdate it to before the disproportionate tax bracket creep started post covid.
Everyone will magically be able to pay off their ridiculous mortgages.
Severely reducing the tax on the highest ~10% income earners in Australia isn't addressing the pressures you're suggesting it would be.
Generational inequality and wealth hoarding would be better handled by policy that directly addresses those issues. Reducing tax burden - which is still happening for the vast majority of working Australians - wont help younger people to buy houses when property continues to sky-rocket faster than salaries rise
I don't earn over 180k and that's why I don't support it. Did those rich people speak against the removal of tax offset(LMITO)? Why should I help you keep more of your money? If government slashes tax from one area they will have to increase it from somewhere else so I'll end up paying more tax and just like you I don't want to pay more tax and I have less disposable income than you.
People on higher income are paying more tax so cuts are just relative to that. Plus it's stage 3 so it's only fair to keep it as is or wind back stage 1 and 2.
Clearly tall poppy syndrome in actionThe reason to review it is inflation. Cutting taxes will risk raising inflation. Winding back stage 1 and 2 would cause economic damage when cost of living is already a problem despite low unemployment. Same reason they handed out that tax rebate when inflation and economic growth was low, it’s just about managing the economy.
Don’t take economic management personally, it should be about what’s best for the economy. Tax cuts to deal with bracket creep are inevitable but the timing needs to be right.
you can't stop inflation, regardless cutting tax or not.
?? You obviously can.
Pumping more money into the economy is one of the basic inflationary forces. Otherwise they could just print trillions of dollars and make us all rich.
People use economic excuses to suit them. There was strong argument against Stage 3 saying people on high income won't spend the money. Make up your minds people! And giving more to middle income will curb inflation because they won't spend it? Poor argument there.
Also it's a fact that tax income to our GDP is disproportionately higher so that's a problem we need to fix. And guess who pays the most tax?Very true. I strongly disagree with the changes Albo has announced, taking it from the wealthy to give to those on lower incomes - it will do absolutely nothing to benefit those it's claiming to benefit as all they'll see is prices rise a bit more to eat it up. As you say, higher income people are less likely to spend it. I was against reversing stage 1-2 cuts because of the economic damage but increasing cuts is just playing politics.
Our tax income to our GDP isn't disproportionately high though, we're sitting around that 30% point. It's lower than it was a couple of decades ago. Considering the low unemployment, high inflation and issues particularly around booming construction costs we should be banking the excess against debt and not throwing it on tax cuts for everyone.
I don't see how these cuts risk causing inflation to spike.
If you are on like 100k you are gonna pay something like 2k less tax, it's not like they are handing out a 2k bonus no? That would be like $40 a week or there abouts. Hardly going to cause spending.
inflation is measured in single digit percentages, it doesn't take much. Put $40 into everyone's pocket and we'll see the same competition to squeeze that little bit of money out of people, competition on rents going that little bit higher because can go an extra $10-20 a week, supermarkets continuing to test the waters on how high they can push prices to get that money out of people, streaming services feeling like they can bump up a couple of bucks a month and not lose customers.
In the current environment it's not likely that people will wind up with an extra $40 in their pocket.
Agree with this comment. I think the whinging middle class have forgotten that they've already benefitted from stage 1 and stage 2.
By repealing stage 3 (or modifying as some have suggested), all we're doing as a country is encouraging people to just plod along and not work harder to climb up the ladder in life.
This was the topic of conversation I had with my dad a few months ago who questioned my ambition in life. I pointed out to him that there's no point aiming for a $200k+ salary if all I'm going to do is work harder to only see almost HALF of any future pay increases and bonuses go into the government coffers. Instead, I'd rather stay in my current job on the 2nd highest income tax bracket and have a side hustle that operates via an ABN that provides me with enough extra $$$ to travel the world and take 6 weeks of annual leave every year. Yes, the side hustle is taxed at my marginal tax rate but due to it giving me the ability to also claim business expenses (that I probably would've incurred anyway such as travel), I end up with MUCH more back in my pocket and society benefits as I give back a lot of my side hustle income back to various charities.
Meanwhile, I have a friend who works at Deloitte as a director on $250k+ and he's gunning for partner. I laugh at him because he works so hard (60+ hours per week) and is quite simply a corporate slave looking for the next promotion. He is pretty money hungry and ambitious (which is a good quality to have) but what's the point of having $1m+ in your bank account if you're not going to put it to good use such as giving to various causes or travel as I've pointed out above. Furthermore, I'm pretty sure I earn much more than him on a hourly basis after-tax.
If the government repeal or modify stage 3, all that's going to happen now is people like me will just find more ways to avoid the highest tax bracket. e.g. buying a Tesla 3 Performance on a novated lease, donating more $$$ to charity, buying new laptops/mobile phones/iPads for my business etc…
Yes, the side hustle is taxed at my marginal tax rate but due to it giving me the ability to also claim business expenses (that I probably would've incurred anyway such as travel)
So tax fraud?
Incorrect. To be clear, travelling for the purposes of investment due diligence but if I have time whilst there, will also do a bit of sightseeing and work remotely.
By repealing stage 3 (or modifying as some have suggested), all we're doing as a country is encouraging people to just plod along and not work harder to climb up the ladder in life.
Has anyone ever turned down a promotion because "It's not worth getting more pay if I only take home 63% of it instead of 70% of it"?
The concept is always thrown around a lot, but it didn't happen when people were taxed 80%+, it's not going to start happening when it's still less than 40%.
Damn right I'd turn it down, like hasher above, I'm much better off working my 32 hour week and doing some side hustle stuff. I'm sure you'll still get people wanting to do it, but it's a hard pass for me.
@brendanm: How are you "better off" exactly? Your side hustle gives you some sense of fulfillment in life rather than money?
Working less hours to earn less money is a tradeoff everyone will make regardless of tax. I'm on the couch pissing around on the internet rather than working at maccas right now because I'm happy with my income. But generally I work at improving my career because it earns me more money. If my boss came to me and said if I did a training course they'd pay me $10k more a year, I'm not saying no because I'd pay tax on that $10k.
Usually career progression doesn't involve working a linear number of more hours. Otherwise CEOs would be cloning themselves just to justify their income.
How are you "better off" exactly? Your side hustle gives you some sense of fulfillment in life rather than money?
I made an extra $100k last year from my side hustle. More than my main job after tax. I could do it at times when I was only doing naff all anyway.
So I'm better off in that I made way more money, didn't have to work a heap more hours, worked when I wanted on what I wanted, and didn't pay a heap of extra tax.
I'm on the couch pissing around on the internet rather than working at maccas right now because I'm happy with my income.
Where did I mention Macca's or working for minimum wage?
If my boss came to me and said if I did a training course they'd pay me $10k more a year, I'm not saying no because I'd pay tax on that $10k.
Generally more pay comes with more responsibility and/or more hours.
I made an extra $100k last year from my side hustle. More than my main job after tax
Sounds like your main job is actually the side hustle :)
I'm actually at a loss trying to think as to what kind of random hours side job could earn that kind of $ but well done.
@SBOB: It was last year, can't really be bothered doing as much this year, and it does require the right thing coming up, and an outlay of cash. My wife also doesn't have the same risk appetite as me which makes it harder.
@brendanm: Well let's bring this back to the point
By repealing stage 3 (or modifying as some have suggested), all we're doing as a country is encouraging people to just plod along and not work harder to climb up the ladder in life.
How exactly is the tax rate stopping you from working harder? It sounds like you have two jobs that are paying quite well and using your spare time to work instead of naff around. It sounds very much like you're maximising your earning potential and, as such, paying the most tax you reasonably could.
@brendanm: I love how the advice in this thread has turned from "taxes will stop people working harder" to "I'm just a tax dodger".
Next ozbargain top tip - you can make tonnes of money being a drug dealer!
@freefall101: Tax dodging was not mentioned.
I think I know what the side hustle is. Have a think - what are the sources of income that are tax free and legal?
@skid: Capital gains that they’re borrowing against so never triggering the tax?
Gifts from mum and dad?
Honestly have no idea.
I think the answer to your question is yes, remember that "Make it idiot-proof, and someone will make a better idiot". Never underestimate the number of dumb people our there.
Furthermore, I'm pretty sure I earn much more than him on a hourly basis after-tax.
This. The calculation of tax done annually is unfair in this regards as someone who works 100 hour at $30 per hour is taxed the same as someone who works 10 hour at $300 per hour.
The point of progressive tax system is to make the more fortunate helps the less fortunate, but it's not exactly doing that.what?
Actually found the absolute whinger right here.
Where's the option:
Didn't vote ALP, wont next time and accept that taxation and budgets should be produced for best outcomes.
???
Can you define "best outcomes"?
Taxation and budgets should always be produced for the best possible foreseeable economic and fiscal outcomes. Not political gain or favour.
Tax cuts are a typical shout out to the masses for votes that do little in addressing the overall way in which tax is collected in the country. If that were the case, we would have paid closer attention to the Henry Review and subsequent criticism of reliance on income/individual tax.
Instead, we're still slugging HECS, stamp duties, ridiculous income brackets, complex taxes on property and assets and seem allergic to rent taxes and significant corporate taxes.
Yet, we are hearing whispers of reintroduction of inheritance and death taxes as well as double dipping on Super.
We really aren't progressing at all, despite having an oversized tax office who never seem to earn their monies worth….
Sorry, but there's no definition of best outcomes in this.
I am curious to see what your definition is. Based on the statement of HECS, is it free education?
The best outcomes here are for the Government. It's actually quite clever in what they are doing with lowering the tax bracket.
Clever being that if they give money to the lower tax bracket, they are more likely to get most of it back through the purchase of high taxed industries, ie: Smoking, Alcohol and Gambling. Im not saying that rich people don't do any of those, but lower income earners are the highest rate of funding to those three industries.
The Government knows that if they give relief to the middle income $150k+, most own homes which will probably go on their mortgages instead of those highly taxed items, hence seeing little to none back. So in fact, they are giving you money to rob you in taxers back.
I remember this through an interview with John Hewsen way way back in the day
The poll options are dumb. I didn't vote Labor, and won't next time - but not because of Stage 3.
Those criticising the PM for a broken promise are obviously rich. The redistribution of tax cuts to give more to those earning up to $150,000 is a good thing for most of the population and for a more equal society.
Those criticising the PM for a broken promise are obviously rich.
Do you want to incentivise smart and skilled high earning people to work more?
High earning people are not stupid and they will do the math as to whether working more is worth it, after the high tax, or whether staying in this country is worth it.
The redistribution of tax cuts to give more to those earning up to $150,000 is a good thing for most of the population and for a more equal society.
A more equal society? So the high earners already pay for a huge amount of the tax revenue. So you want it to be even higher; how does that make anything more equal?
Or we tax everyone at $150k and over at 100% tax and then we give homeless people a $100k salary. Then we can all be equal.
Ironically, high skilled earning people work less for each $ earned.
Or we tax everyone at $150k and over at 100% tax and then we give homeless people a $100k salary. Then we can all be equal.
The don't give the greens more ideas.
Good point and seems lots of people on lower income seem to think those on higher income have just simply found ways to dodge tax.
or whether staying in this country is worth it.
Well (profanity) leave then! We have some of the most livable cities and best way of life in the world. We have an extremely stable society with good freedoms and benefits - all things that are PAID for. That’s what you selfish pricks all seem to forget. Go live in Qatar or another income tax free hole and keep every single cent to yourself then, see if it’s worth it.
All you selfish “citizens” can’t look past an additional dollar in your bank account for what is better for the country. Look at income tax at some of the wealthiest countries in the world - they are all high.
Do you want to incentivise smart and skilled high earning people to work more?
I have genuinely never understood this argument.
I'm in the top tax bracket, so I'd be getting like a $5K tax break instead of a $9K tax break (rough figures, but about right), i.e. a difference of $4,000 per year. I can't imagine myself or anyone I know changing our work habits over this.
You really think "smart and skilled high earning people" will all of a sudden work harder or less hard over $5K per year? You really think that someone who earns that much money will choose to leave the country over $5K per year?
Come on, you can't be that silly.
Rich? No. The rich don't actually have $250K+ taxable incomes. Their finances are structured completely differently to a sucker PAYG employee.
Equal? Why not have a flat 30% tax rate and not punish the people who have worked damn hard to get to the $250K+ salary bracket. It doesn't incentivize people to work hard, innovate or achieve more. Drives the wrong behaviour. Why not make $20K a year and get $20K of handouts from the government instead and have all the free time, no stress. People on 250K+ a year get zero tax breaks, zero handouts from the government etc etc. Disappointing to say the least.
Why not make $20K a year and get $20K of handouts from the government instead and have all the free time, no stress.
said no person on $250k a year ever….
Yeah the amount of these stupid arguments I’ve read on here are absolutely moronic.
Because 30% taxed on someone earning $60k (i.e. which means living on 40k) hits a lot harder than someone on $250k. Flat tax is not good.
The only way way a flat tax would be in any way remotly sane would be with a generous negative income tax or similar support payments. Say, ~25k as the minimum income, and then the same effective marginal tax rate from $0 onwards. The precise tax rate might need to be higher or lower depending on how much we can shift taxation from personal (labour) income to something more tied to wealth and ownership.
The 'rich' already pay almost ALL of the net income tax in this country.
When transfers are taken into account, only the top two tiers pay almost all net tax.
https://treasury.gov.au/sites/default/files/2019-03/twp-char…
Who knows what will come out in the end? It’s not finalised. But given incomes have risen in recent years with massive inflation, tax brackets should reflect that. 180k salary now is no where near as high as it was 10 years ago in real terms.
The top marginal tax bracket of $180k started in 2008-09. Back in 08-09, $180k was prob considered a high salary… today, in 2024, $180k is not that high (yes, its a decent wage and a lot higher than the average but by no means a high flyer).
Anyone who thinks $180k is not a high salary needs a reality check. Maybe go on one of those reality shows where you swap lives with someone on $90k a year.
It is "high" but is it so high that it should be taxed at 47%?
Or someone in 90k can swap lives with 180k not just for a few weeks but a lifetime to see the effort, life decisions that someone on 180k makes?
jv upvoted the original comment so he must be earning $180k+ yet he still has time to post over 111,000 comments on OzBargain.
also depends if you live in a HCOL location
Anyone who thinks $180k is not a high salary needs a reality check. Maybe go on one of those reality shows where you swap lives with someone on $90k a year.
Just a little over a year ago, I was on a salary of ~$100K, then I got a new job and am now on a salary of ~$180K, so I literally did that whole "swap lives" thing.
I live in the exact same house, drive the exact same car, kids go to the exact same school, eat the exact same food, buy the exact same things, have the exact same hobbies.
The only difference is that I'm paying off the mortgage a little faster. I think it was something like paying it off in 12 years vs. 17 years last time I checked. Other than that, literally no difference in my day-to-day life, no difference in spending, no difference in happiness.
Anyone earning over 180k is wealthy. The Average income is 90,800, but the median income is 54,890. So half of the nation earns less than 54k.
Sure the top bracket was the same, but let's be real here, back in 2008 you also paid 15% tax at $6k, 30% at $34k, and most significantly 40% on every dollar over $80k, meaning your effective tax rate was higher than it is today (as it should be), with or without cuts.
A $180,000 salary equates to effective tax rates of:
- $58,000 (32.2%) way back in 2008
- $55,267 (30.7%) today
- $51,538 (28.6%) in July under Albanese's proposals.
- $49,192 (27.3%) in July under the original stage 3
(Although yes they should have kept the bracket at 200k+ IMO.)
The whole tax system needs a rework but none of the parties have the balls to do it. Labor & Liberal are the same party nowadays
none of these have balls. Sadly, AUS is just a US lapdog.
What does our alliance with the USA have to do with tax policies in Australia?
We've got to pay for AUKUS somehow.
maybe abolish income tax and raise GST to 35% (to be revise every 10 years)
But that benefits the higher income person a lot compared to the lower income. Everyone gotta eat
Perhaps look at what the GST doesn't apply to. https://www.ato.gov.au/businesses-and-organisations/gst-exci…
Minimise spend and maximise investments. Interest rates would go down. Public spending would go down too?
Labor & Liberal are the same party nowadays
Please explain how the below Labor initiatives are even one iota similar to the LNPs? Show us your working.
Created more jobs in the first 12 months than any other government
Better Medicare, so much work required here.
Cheaper PBS Scripts.
Added new Medicines to PBS for Breast cancer, Cervical cancer, Diabetes.
50+ Bulk Billing clinics.
Ban on single use vapes.
National Gun register.
Far Cheaper childcare.
Gender Pay equity included in the Fair Work act.
Closing the loopholes bill.
Same Job, Same Pay bill.
Criminalised Wage theft.
Ban Engineered stone (world first, I believe).
Updated the Car Emissions standard - Australia was just a dumping ground for shitty cars before this.
3,000 more Centerlink staff.
Increased rent assistance.
Price Caps on Gas and Power.
Expand Parental Payment leave.
10 days Family/Domestic Violence leave.
Ensure there are protections for women who persue sexual harrassment claims, shielding them from adverse cost orders.
Women's workforce participation is now at Australia's highest it's ever been, 62%.
Implement Kate Jenkins Sex discrimination commissioner report recommendations.
Legislate that larger companies have to publish and report on their gender pay gap.
Apology to all thalidomide victims on behalf of the Aust government.
Confirm a heap of Aussie sports are locked into Free to air TV.
300,000 additional FEE-FREE TAFE courses, jfc what a win.
Have finally curbed inflation.
Nurses in aged care 24/7.
Aged Care nurses are getting better pay, resulting in a 66% increase in applications.
Robodebt Royal commission, forgot about that one?.
Addressing the multitude of issues with NDIS, saving $6B straight out the gate.
NACC.
Lower the tax on Electric cars.
National Reconstruction fund.
Freed the Biloela family.
Addressing ID theft.
2% deposit gauruntee to purchase home.
HAFF (major win).
Fixing the NBN, upgrades.
Secured funding for ABC/SBS for Five years.
Made unfair contract terms between small and large businesses illegal.
Wholesale power prices down 50%.
Mended plenty of our relationships with international community.
China's trade relationship fixed.
Security agreement with PNG.
Liberals are meant to stand for free enterprise but are always intervening in the free market
Labor are meant for the working class but yet want to protect businesses like Qantas and now bailing out the mining industry with some subsidies.
There are no major policies that split the two as there was with Hawke/Keating & Howard era
Labor are meant for the working class but yet want to protect businesses like Qantas and now bailing out the mining industry with some subsidies
I beg your effing pardon? They want to protect businesses like QANTAS? You need to turn off the Mainstream media, dude.
The Federal Government, under the ALP, have taken QANTAS to the Federal High Court of Australia.
Remember how QANTAS received billions in JobKeeper thanks to the Morrison government, then sacked 1700 workers unfairly?
Guess who came to the workers side in this case? https://www.theguardian.com/australia-news/2023/jan/24/feder…
Have you heard of the Same Job, Same Pay bill that they passed? It was specifically implemented because of the fact that QANTAS had something like up to 17 different pay contracts for their workers performing the exact same work. That is now illegal.
Where, exactly, is the ALP protecting QANTAS? Cos it sure as sh!t isn't in court, nor in legislation that directly hurts QANTAS's hip pocket.
Well, when you give examples of nonsense it is easy to make a long list.
Let's pick one - the Robodebt Royal Commission.
Tell me, what exactly came out of that? How is Australia better because of it?lol do you seriously not care about Australia's largest-ever record payout, to the tune of multiple billions?
The results of that are before the NACC, FYI.
@ThithLord: The payout was approved yonks before the Royal Commission and had nothing to do with it.
We are talking about the list of 'Labor Initiatives' that are supposed to be so wonderful for the country.
So again, what has the Robodebt Royal Commission done for the country?@Almost Banned: Your lack of empathy is noted. You obviously have a huge, unrequited disdain for the less-fortunate than yourself, so I have nothing to say to you.
@ThithLord: Let me make this simple for you:
1. Has the Robodebt Royal Commission given a single person anything they didn't already have?
2. Has the Robodebt Royal Commission resulted in a single person responsible - other than Catherine Campbell who was suspended but then chose to resign, and was not sacked - losing their job?
3. Has the Robodebt Royal Commission resulted in a single prosecution?
4. Has the Robodebt Royal Commission improved anyone's lives?
5. Has the Robodebt Royal Commission ensured that government will not stuff up again in the future?
The robodebt made 56 recommendations. The government accepted all of them. Many of those implement checks and balances that will go a long way to ensuring a future robodebt can't happen again… People are so bloody cynical these days they ignore the basic facts in front of them.
@bobswinkle: Right - so name one thing that has changed as a result of 'accepting' all those recommendations.
One thing.
Flat income tax rate 10%, no deduction possible at all. Tax free threshold $20K. Tax lands, properties, resources etc
If progressive income tax is a must, then make it progressive based on the pay per hour, instead of per annum.
We need some young blood in politics.
Like when Abraham was told to sacrifice Isaac ?
Younger :)
need some young blood in politics
Yeah! Just like they have in the USA
Voted labour
Do you mean Labor ?
Could mean being a labourer or going into labour?
Doing Dan's work.
No HARD Labor!
How do you tell a politician is lying??
His mouth is open
Greens like the color of the money tree.
Where's the "these poll options" suck option
Lol, every single one of the 4 options is 'Labor doing the right thing'
@ThithLord: Right, the guy who needs sources for the self-evident truth that all politicians lie is calling me ignorant and uninformed while simultaneously regurgitating talking points ad verbatim from establishment media outlets who also lie for a living? Get a load of this "free thinker" here and his original hot takes, he can pat his tummy and rub his head while playing Albo sez with the TV…
The average Australian simpleton ladies and gentlemen: chasing that carrot on a stick while running full speed into the brick wall that is their cognitive dissonance. Because 40 years of voting for the same retards and watching your nation go down the toilet is proof positive that the system is working.