The article is not adequately specific. What are the percentages based on, total population, working age people, or taxpayers or what?

The top 1% of the adults includes CEOs, medical specialists and probably even accountants who think that they are worth $280+ per hour for fiddling the tax returns of the wealthy.

The bottom 20% of the population includes those who form the 14% (plus) of the working age population who are either without a job or have low paying or part time jobs. For an ancient senior I do very well but the tax system works very much in my favour and this year I paid tax for the first time for years.

To protect the young form the pariahs, each investment property should be treated as a separate entity and only allowed deductions up to the level of the rent income received.

Those on the right love capital value inflation and income form such sources is taxed after on year at 50% of the rate applicable to "hard earned" income.

Great start to Richard Holden's essay. All options on the table. But the introduction of 'obsolete dogmas and outworn slogans' into his article failed to deliver the promise of a new dawn. The spin doctors use the term 'progressive' tax for something which is anything but progressive. To tax employment at increasingly higher rates as income levels increase ignores a powerful human drive called 'motivation'. What about our tax reviewers/reformers examine a 'what-if' situation. What if the government was deprived of the tool with which it has manipulated voters over the years in order to buy power. Our 'progressive' tax system has become so complex, few voters can comprehend anything but the siren call of Vote 1 for me and I will tax those dreaded rich people and give you your share of the loot. The financial year constraints on buying and selling would disappear. There could be an ASX agency beside every TAB in every pub in the country. People could back a company as easily as backing a horse. The horse race is over when rhe horses pass the Finish Post. The company race is over when you sell your shares.
A 2% Spending tax is the only way to ensure economic activity is fairly taxed. Multinationals would pay the same rate of tax as locals. It eliminates the futile exercise of measuring and taxing the elusive profit.
With acknowledgement to Baroness Emma Orczy
The Taxman's Lament
We seek it here we seek it there, that damned elusive profit
But profit can be anywhere, both on-shore and off it.

A simple, fair, consistent method of funding government has been exhaustively modeled. A 2% Spending tax, where the buyer pays the seller 2% extra for each exchange of ownership of goods, services, property and labour could replace the 9 major taxes on profit and employment. The proposal was submitted to the Hawke 1985 Tax Summit and ignored. A new analysis of the 2014 Federal and State budgets shows that a 2% Spending tax would still more than adequately fund government and stimulate the motivation to produce and exchange wealth.

It seems that this article is mainly about how governments try to raise revenue.

The first system is through taxation and it is highly doubtful that anyone in the top tax bracket is actually paying 46% of their income in taxation.

Many high income earners have the ability to channel income into trusts and or companies, thereby minimising the amount of taxation that they pay.

The second system is through gambling, gambling gives the low income earner the seductive promise of being able to raise their standard of living through a lucky win. Whilst governments scoop a percentage of dollars gambled.

In the end gambling is another form of taxation on the poor.

I think a reality check is in order.
The simple unavoidable fact is, governments get elected by promising to lower taxes.
Governments get unelected by threatening to raise taxes.
And “wealth redistribution” is an ugly term.
Changing the tax system is nothing more than a bandaid solution. The problems are much deeper than that.
Instead of looking for ways to get money back from the obscenely rich, we should be looking at ways to stop them purloining an unfair share of OUR money in the first place. Industrial democracy, as practised by such institutions as the Mondragon co-operative in Spain are very effective in reducing the gulf between those at the top and those at the bottom.
We have allowed institutions (corporations, local governments, governments...) to get too big. The taller the pyramid the greater the abyss between those at the apex and those at the base, who then become little more than cannon fodder.
A serious ACCC with the ability to stop all anti competitive behaviour -such as mergers and takeovers, and companies buying other companies in general- would do a great deal to stop the egregious inequality.
And following the example of Singapore, for instance, will be inevitable if we wish governments to continue to supply services. If -realistically- taxes must continue to fall, governments must be permitted to become shareholders in profitable companies. Singapore has very low personal tax rates simply because the Singapore gov. has a finger in almost every corporate pie.
The idea that governments can't usefully invest in companies or even run companies is demonstrably rubbish. Our second largest Telco is 100% government owned, -just not by our government. This means everyone in Australia with an Optus account is subsidising the tax payers of Singapore.
Keating's idea of compulsory superannuation wasn't a bad one; insisting that it should be run by private companies was a terrible one. It is now mandatory for every taxpayer to give a percentage of their income to a bunch of suits, so they can play silly buggers with other people's money.
And tough luck if they screw up.

The Top 10% paying 46% Tax is a Paper Myth. In order to reduce their 46% because it's too high, these people channel their income into all sorts of Tax Reduction schemes & end up pay SBA. Those of us at the bottom end of the scale end up paying more than the Top 10% on average.

Therefore, I propose a 10% Tax on Gross Earnings for everyone. No deductions for anything for any reason.

Well, perhaps the header should read, how to raise more revenue, without destroying lucrative tax practices, or making the ATO redundant!?
Because that's what real tax reform would achieve; and requires, and save an average 7%, currently clawed from the averaged bottom line by TAX compliance costs!
Simply put, a stand alone unavoidable expenditure tax of around 18%, would end the need for any compliance costs, making the effective rate just 11% in real terms.
Arguably, he lowest real tax rate in the developed world.
And arguably the only way to end all of the current rorts; like having the same bundle of money chase its tail through several subsidiaries, in order to create the illusion of cash flow, or costs.
One to fool the bankers to lend more money, to a company that might be trading insolvent; or the ATO, into believing these same companies, are running at a significant loss!?
Depending whether the cost or profit ledgers (clever accounting) are tended or emphasized?
And only possible, given both the banking fraternity and the ATO, treat each company, as an entirely separate entity! (and part of the problem.)
Then we have the practice of creating an offshore entity, that then provides a "service" for which exorbitant rates are charged against the parent company profits!
Parent company lending is anther way to BURY profits!
Another is setting aside money for future capital expenditure, which then disappears as so called service costs/commercial interest on borrowings etc/etc!
And then we wonder, why as much as 40% of foreign based companies allegedly pay no or very little company tax to anyone.
When it comes to free enterprise, we live in a world without borders, except when it comes to very professional tax avoidance.
We can add complication after complication, (loophole after loophole) and lift the service business and robber baron brokers incomes quite massively, all while compounding the destiny of demography!
Or we can get real, grow a great big new set of cohones, and just jettison all the convoluted complexity in favor of a stand alone unavoidable expenditure tax.
Rhrosty. Continued.

The 18% tax rate could then be progressively lowered, until the only tax collected, was just around 5%!
Moreover, the tax rate could be microscopically adjusted, region by separate region, when and where necessary; to alone control all inflation or stagnation, (simultaneously) and far more rapidly, than the delayed reaction of interest rate adjustment!
Meaning the interest rate could be adjusted downward and left at historical lows.
Any problem then created in retirement incomes etc, could be offset by the long overdue, Government guaranteed, self terminating thirty year development bonds, which would only be available to finance income earning infrastructure, like say a rapid rail roll-out, along our heavily populated eastern seaboard.
This change, would seriously disable or render impossible, any actual tax avoidance; and yet, only tax profit earned right here; and regardless where in the world, the business actuator was located!
We could further enhance those profits and a queue wishing to relocate their operations here, by rolling out the lowest costing industrial energy provision in the world; namely, Thorium power connected to micro-grids!
And only possible if the old divide and rule dogmas and mantras are also entirely jettisoned, and replaced by long overdue pragmatism/bipartisan cooperation, in order to actually ring in the now essential reforms, plural!
Rhrosty.
Continued.

What a pile of waffle.

In an attempt to justify a rise in the GST rate Richard goes on with a lot of garbage, saying very little.

Effectively he says, dumb people gamble. Dumb people earn less, so low income earners pay more gambling tax.

OK, self evident, only dumb people would have to be told this. However he then wants to use these obvious simple facts as justification to raise the GST.

Come on Richard, just how would raising the rate of GST stop dumb people waiting their money gambling? You really do need to explain that one, if you want the theory to hold water.

What your pieces says to me Richard, is we should cut all government spending by 15% in all areas, & 30% in staffing particularly in sacred cows like education. No need for more tax then mate.

These proposed changes, would increase AUSTRALIAN BASED profitability, by as much as 37%!?
Given the inherent savings; also improve household disposals, by an estimated 25%. (averaged)
This would help to increase discretionary spending, the very life blood of the domestic economy, now around 80% of the whole economy!
The mandatory legislated removal of the (robber baron) profit demanding middleman, would further reduce the cost of living, by around half!
A 25% averaged, increase in household disposables, would make a noncontributory super, of 15% also immediately doable!
As for the states, their role could (must) be progressively diminished, to the point, where enlarged councils, would be far more efficient, as local service providers.
And done by the simple expediency of massively reduced federal funding, and direct service funding, that simply circumvents, the fee demanding, double handling, middleman state government!
Thereby saving the tax pay, or consolidated revenue, a further 70 billions per!
So you can see, it's just not tax reform we need, (the tip of the essential reform iceberg) but rather a complete and very pragmatic makeover!
Least we fulfill Lee Kwan Yu's prediction, "we will eventually become the poor white trash of Asia."
And patently incomprehensible, in any fair comparison, in a country with our natural advantages/resources!
Unless systematically and incompetently managed, like an asylum run by the inmates, who might even look like "progressives," in any fair comparison!
Rhrosty.

Yes Hasbeen old mate.
Increases in the GST, would allow the entire current convoluted complexity to be kept, along with highly lucrative tax practices, and public service jobs in the ATO, around 5,000!
Surely there are better ways to employ these super mathematicians, needed like never before in our high school maths and science classrooms for example, or inside a now essential, Government owned, new, low cost, capital venture bank.
And where better to place the huge new surpluses, we could create, with long overdue, real reform!
So we can finally claw back our purloined economic sovereignty, and start to finally invest in our own people and their better ideas!
I mean and as Witlim noted, we can't all be door openers!
And a rapidly falling AUD, might even give a couple of car companies cause for pause and a reconsidered local future?
A scenario, helped quite massively, by genuine tax reform, coupled to, the supply of the world's lowest costing energy!
But only if the real goal is to actually assist local business, as opposed to leaving it with no other choice but to offshore operations.
And a recipe for future disaster, when we traverse through the minerals peak; if we haven't already!
Cheers, Rhrosty.

How much taxes do people pay if they combine all the taxes together?

I saw some figures the other day Armchair, that said all the PAYE tax collected was not quite enough to pay the welfare bill.

Everything else has to come from some other tax source. No wonder they are chasing everything.

Instead of opinions lets look at facts.
On 1 October 2010 the NZ goverment led by John Key raised the GST level to 15% and dropped the maximum marginal rate to 33% for salaries greater than $70,000.
GST in Australia remains at 10% since 2000 and the marginal rate in Australia is 49% for salaries greater than $180,000.
NZ was hit much worse by the GFC than Australia and has suffered the Christchurch earthquakes.

Yet in 2014 NZ exports are surging, Australia's are declining.

NZ growth for 2015 is predicted to exceed 4.2% while Australia's is predicted to be 0.85%.

The taxation system adopted by a country is a key determinant of its economic success. Richard Holden is right in his thinking and all you have to do is look to NZ to see how easy it is for Australia's system to be fixed.

First and foremost, I'm all for a true financial transaction tax, one that taxes money, not money earners as such and, no matter how little or how much one earns, we all pay the same very small amount.

This would see many benefits, such as hugely increased disposable incomes and would stop many who at present slip through the gaps, as there would be no escaping this tax, even if they move their money off shore.

The problem with tax is that most figures reported, are distorted by the media, like saying a company only pays 1% in tax.

Sure, while that might be true, it's doesn't count for the legal deductions that are made.

The other thing that people have to decide, is whether they want large corporations to pay more tax, or, would they prefer to have jobs, because let's face it, most jobs are created by big business, albeit, indirectly, so, given so many large corps are on the brink of leaving, if they have not already decided to do so, clamping down on their taxes may just be the straw that breaks the camels back so as to say, because outr government revenues rely on dollars, not percentages. So if a Corp pays one billion in tax, who cares what percentage of their sales that is.

rehcub: So if a Corp pays one billion in tax, who cares what percentage of their sales that is.

I do if that's only 1% of their Gross profit less deductions & loopholes, Trusts, etc. The low paid wage earner is paying 33% of his gross earnings less a few paltry dollars that he is allowed to claim in deductions.

An ex-brother-in-Law used to pay the bill when we went out & collect every ones share of the Bill. When away he would get a receipt for a $35 breakfast & only have the $5 special. He was only one of the little fish. These CEO's have Thousand Dollar lunches & claim it as a deduction.

Jayb, you're a bit out of touch on how things work these days.

Business lunches are something that the ATO has come down hard on and, in order to claim a lunch meeting, full documentation must be provided and alcohol is not deductible.

As for the low paid, they are actually paid more by way of welfare than they pay in taxes so I struggle to accept your assertion that they pay 33% of their wages in tax. Not only that, but for low paid, say $50K per year, the tax does not kick in until they have earned some $18,000 then they pay approx 20% of the balance, $8000 which is in fact 16% of their wage, before they draw welfare.

As for big business, you have to understand that we have the most costly business operating country and, if we pesue them on their taxes, I suggest they will leave because like most things, the majority of people only look at the percentage of tax they pay, and disregard the amount they actually generate for our economy through the likes of employees and contractor, with their employees.

Be careful what you wish for I say because if we manage to push these miners and other large companies off shore we will loose in the end.

Of cause if we introduced a transaction tax no one could escape their fair share.

Of course if we introduced a transaction tax, nobody could escape their fair share.
Well, that's probably right, but as yet another tax add on, further complication, cost and most of the current status quo! And therefore, regressive.
Perhaps, and given the lead NZ always seems to provide for us, when it comes to commonsense reform and what have you, we could outsource government itself, to that near neighbor.
And in so doing save the country squillions.
Imagine how much we'd save, just by mothballing all our parliaments, with all their pompous pontification/political posers; when what is really needed, is quite massive government downsizing or "outsourcing".
And just get it off of the bent or broken backs of entrepreneurs, and Australian free enterprise.
Trouble is, the current Conservative Kiwis would likely privatize everything, including private medicine. [What's it cost to see a doctor there now?] HOLY HORSE MANURE AND OUCH! PENSIONERS? OUCH! OUCH!
And while I'm on that subject.
Those medicare policy holders, who are deemed to be just customers, and are therefore not to be compensated, when Medicare private is privatized?
Should just claim all that they can now, then change their provider as quick as they can, to reduce Medicare private's cash flow to nothing; and give an extremely arrogant government, something they can't sell to anybody, with the brains they were born with!
Unless it's the current owners!
Regulate that! Yawol?
Rebel Rhrosty.

Beer for shearers is still tax deductible, and rightly so - you try getting 'em to come if you won't supply beer at the end of the day. It's a business expense par excellence.

JKJ: It's a business expense par excellence.

It's a rip off scam available to the likes of Lawyers, CEO"S, etc. It's a scam for the big end of town & you know it.

As a rough guide, I pay around 25% of my income as a PAYE. Then add on around 10% GST on my left over income.

Then there are the sales taxes, petrol duty, and a host of other government fees and charges.

I guess that the effective tax rate to be around 45% of my income.