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The Forum > Article Comments > Only rich people want to lower the top tax rate > Comments

Only rich people want to lower the top tax rate : Comments

By Andrew Leigh, published 8/3/2006

Instead of focusing on cutting tax rates we should be making the tax system simpler.

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Patty Jr.
I agree with most of your opinion, however poverty is a major issue in Australia at this time. I am one of the fortunate poor, who was able to work for 40 years hence my computer. Thankfully My family have no debt, but also live on a pension, so no chance of advancement.

wre, Arjay,
I find it interesting that those who recieve large amouts of remuneration, are the people argueing against the wealthy paying the top rate, the reason for the imposition of same, is that the median Australian wage is $26,000 p.a. which is a fairly low reward for services rendered. Those on $100,000 or more are obviously able to pay more, in in fairness should.

Every man woman and child now pays G.S.T. which obvioulsy hits low paid families much harder than it does wealthy families. If the tax on personal income is to be restructured, it should involve a lessening of business deductions, to pay for it.

I know people who are living on rice with fish pieces, merely to survive, any further lowering of their living standards would see them perish, should they perish so a wealthy person can have a tax cut? I think not.
Posted by SHONGA, Thursday, 9 March 2006 5:13:37 AM
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Bootstrapper,
You are spot on the money, the wealthy can well afford to pay, companies have so many deductions that the poor indirectly subsidise, it is criminal.

I am not anti-business, I merely feel that business should stand alone, in their endevour to make a profit, it should not be subsidised by those who earn $26,000 p.a. if a business cannot survive on a stand alone basis, it should not be in business.

In reality this situation is such that an employee, subsidise the company they work for, without the benefits enjoyed by their employer. I understand I will face some hostile comments, however I invite fellow posters to show me where me where I am wrong, with sensible arguement.
Posted by SHONGA, Thursday, 9 March 2006 5:24:13 AM
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Shonga

As far as I am concerned if a business cannot afford to pay a reasonable wage to its employees commensurate with the cost of living index, it has no right being in business. Once upon a time the costs of a service or product included all expenses involved in production ie wages & salaries. Now it appears that employees wages are considered some kind of an impediment to production rather than being a part of the process. It is a weird kind of double think that defies logic.

I mean why do company shares frequently sky-rocket when staff are sacked? Often a company which does this then has to out-source for staff to do the work which was originally in-house. I have done a lot of temp work for organisations who had to hire large groups of temps to cope with the grunt work when they had sacked too many staff. In fact, one such company I worked for ended up rehiring many people they let go because they had lost so many people with specific skills that temps couldn't replace.

I am aware that much out-sourcing is to countries where wages are lower. But for how long? Surely as countries like China and India become more and more 'westernised' they will demand more of the 'western' style of living. For how long do companies think they can really exploit low income workers?

And back in the land of AUS how long do the low and middle income groups have to support the wealthy via the GST?
Posted by Scout, Thursday, 9 March 2006 9:42:33 AM
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Scout

It is a complete fallacy that 'the poor support the wealthy via the GST'. Firstly, next time you go shopping take a look at the 'GST items' on your receipt and you'll notice that no luxury items such as bread, milk, vegetables etc don't attract the GST. Secondly, it is an economic fact that BOTH middle and high income earners are taxed to such an extent that welfare in this country is in effect replacing a substantive tax free threshold.

It is also inaccurate that Australia has to lower wages to compete with places such as india for 'outsourcing contracts'. Firstly the shares in large companies rise on the back of redundancies because of increased efficiency. Secondly the reason many workers made redundant find it hard to reenter the work force is because small to medium enterprises have had little incentive to take risks. Thirdly once a redundant worker is on the welfare cycle there is little incentive (because of tax) to find work.

The upshot of all of that really is a simple economic sollution: broad based tax cuts, a higher tax free threshold, gradual reductions in welfare and extreme reductions in tax deductibles. An efficient, incentive based taxation system equals an efficient, incentive based economy. Those on the 'rich' v 'poor' train tend to be anti any proposal that benefits all income brackets- we hear all about the 'wealthy agenda' but I wonder whether it is really the 'tall poppy agenda' that is stifling this reform.
Posted by wre, Thursday, 9 March 2006 10:03:19 AM
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Shonga,
You solicit arguments to show where you may be wrong.
Well if you are implying by your post that companies should not be allowed special concessions, deductions and other forms of grants and in return all workers should be subject to the same flat rate in tax, then I fully agree.
However if you claim companies should stand alone, but …err.. poor people should still be given special concessions, deductions etc, then hey! where’s the justice there?
Aren’t we supposed to be living in an egalitarian society where all people are treated equally. The Rule of Law and all that.
Andrew Leigh’s main argument was that the majority of Australians don’t want to give tax breaks to the rich so that therefore should be the end of it. Really? It’s not like the decision is whether to go to war or not.
Codes of conduct should be about being colour blind, gender blind, class blind, whatever blind, whenever government interacts with its subjects. Treating people equally should be one of the most fundamental tenets of our system.
I always fascinated how some people can view rich people as nothing more than objects to be pilloried and plundered. They are rich, so then it is “only fair” that we should take some of that wealth, as much as we will democratically decide to take.
Posted by Edward Carson, Thursday, 9 March 2006 11:19:31 AM
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WRE

You need to take another look at GST.

Interesting take you have on luxury. So gas, electricity, water, etc,tradesman to repair aforementioned services and not to mention TAMPONS are luxuries are they? I could cite more examples but I hope you get my drift. They all charge GST. Take a look at your last utilities account, my friend.

Now another thing that defies logic is in order to compete with third world countries Australia must become a third world country. Is that what you are saying? Australian workers should live on a dollar a day so that we can continue to be a part of the booming world economy. Can't wait to see how that pans out.

Oh BTW at the same time Australia is retreating into feudal conditions, third world countries are aspiring to first world standards. We are in for intereesting times.

Edward Carson

- I don't think that Shonga has that POV at all - it is the scale of inequity between the wealthy and the rest he objects to. There is nothing equitable between a CEO earning 60 times the income of a bottom line worker. There is nothing wrong with executive staff being highly paid for their skills, but when they move in, sack 100's of staff and complain about paying a reasonable living wage to lower level staff, well, you don't have to be Einstein to know that the system is top heavy and the most vulnerable are being exploited.

:0)
Posted by Scout, Thursday, 9 March 2006 11:59:16 AM
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