Indi, we have beaten your flat tax theory to death.

It is simp,y not fair, as low income earners require 100% of their income to provide necessities, while high income earners require less.

As for neg gearing, be careful what you wish for, for if this tax is removed, good luck finding a rental property.

As for tax, a real 'transaction tax' is what is needed in my view.

Unlike the GST, which is a tax on goods, this is a tax that taxes 'money' each and every time it is used.

It has been suggested that a very small TT of less than 2% would generate more tax than all others combined.

The consumer will only ever pay the 2% 'flat tax' as you can only spend money once.

Now if you earn $60,000 per year, your total tax for the year would be $1200. That's it!

However, your $1200 dollars is used time and time again and that is where the tax is generated.

Why else do you think the banks are opposed.

So indi, a TT is a real flat tax that you ask for, difference being, it taxes money, not people.

BTW, there would be no such thing as personal tax deductions and it would also result in a decline of accountants.

As for business deductions, they must be allowed as they business expenses.

Many people think that if your BE are say $100,000 per year, you get that back.

What actually happens is that the $100,000 is deducted from your gross sales (not income) then you pay tax on your gross income, just like any PAYG earner, only without the threshold.

Confusion is often caused a many accountancy packages refer to gross sale as 'income', whereas it should be referee to as revenue.

It is simp,y not fair, as low income earners require 100% of their income to provide necessities, while high income earners require less.
rehctub,
Hang on a second, low income earners require 100% ? But they don't get 100%. They pay income tax, then Gst, then fuel tax, in fact tax on anything. So, they're getting to keep a hell of a lot less than what they earn. Income tax is the killer here. Let's get rid of it & just have your transaction tax or a across the board GST. The seller pays & the buyer pays, no-one slips through the screen.
Tax deduction is what ruins our economy. It makes a lot of money only for some . A TT come GST makes money for the country to be used for infrastructure & essential services. Our top bureaucrats can very easily do with less.

Indi, all PAYG earners, low earners included, don't pay tax on about the first $12,000 or so, then, their tax is a portion of the remainder and the rate increases as income increases.

A lot of people have the miss conception that they pay 48c in the dollar tax.

But they only pay this on the lVast portion of their income, not across the board.

TT V GST
GST is a consumption tax and can only be collected once. So it is little different to income tax, however, it is a tax, on top of a tax (income tax) and it hurts low income earners the most, as they are the ones with less, if any, disposable income.

Whereas a TT is a tax on money.

Now while nobody can spend money more than once, it's impossible, the money it's self can be spent time and time again.

An example.
I spend $100 and pay $10 in GST. Remember, I have already paid income tax on that $100 as well. So my total tax on that $100 is approx $35.

My $100 with a TT cost me say $2, thats it, nothing more as income tax is gone.

So if I earn $1200 per week, about the average, I will only ever pay a total of $24 tax, that's it, so I would be better of to the tune of about $400 per week, or, $20,000 per year.

However, my $66,000 annual income may change hands Thousands of times throughout the financial year, collecting 2% every time it does. Some suggest 0.2% is enough.

Back to the $100
It would be different if my $100 were re printed each time it was paid to me, but it's not, as it is actually a portion of the over all dollars that are continuously reused, throughout our financial system, day in day out and it collects $2 every time it gets used.

The big losers with a TT would be the banks.

But, when you think about it, they make their money from our money anyway.

GST is a consumption tax and can only be collected once.
rehctub,
I'm exposing my ignorance here but there goes. If I buy a $100,- worth I add 10% =$110.-
Then, after I've used it for awhile I sell it again for $90.-. The buyer then pays Gst $9.-. The next buyer pays Gst again & so on. I might have been under the wrong impression that the Gst is actually a TT. Well, if it isn't it should be one. That's why I'm an advocate for flat Tax. You make a Dollar & you pay tax. No-one gets away & we all win. All this negative gearing bizo is what drains the coffers. Rich or poor we pay the same rate, I can't think of anything fairer than that. If we did then we won't have any poor. The reason we poor is because of the greed by the middle class which happens to be the Public Service. They contribute the least of all towards their Superannuation & other benefits.

With the GST it is now in the governments best interest we have inflation, and additional taxes on top of that. The carbon tax will inflate prices and we will then be required to pay GST on that as well (continual inflation).

Our leaders talk of growth and this is mistaken by voters as progress, but progress in production (with more efficient practices) should mean we actually have deflation, true it would reduce revenue
but if our government was truely progressive their costs would come down also. They are absorbing any gains we create, and then some.

The same thing applies to income tax. For example 50 years ago a person earning $20,000 a year was very well off, and was taxed accordingly. A person earning that now lives in poverty and should not be taxed at all. Over time the poor will pay more income tax due to inflation. This is known as bracket or fiscal creep.

The GST and carbon tax are a flat tax everyone has to pay equally regardless of their means (unless they live or invest offshore). This is not fair on the poor. Its amazing they sold it to us by saying it will force the rich to pay their share, when really the opposite is the case.

I floated this suggestion back in the 60's - how bout we tax everyone on NOT what they make, but how FAST they make it. This opened years of debate and every arguement against it was counteracted but it went for a hundred pages so I hope I havent opened a pandora box here.