Tax Reform

[SB076]

The government has performed a review and are looking at modifing the current tax system. Initially they were looking at simplifing the process (for example there are over 100 different taxes that may be imposed on businesses - some are applicable some are not) However my belief is that they are looking for additional revenue sources.

The proposed new system has the mining industry concerned as there is a new tax (Resource Super Profits Tax) Basically the miners will be forced to pay extra tax on any profit when it is realised.

This got me thinking currently we all pay different amounts of income tax (based on what we earn)
$0 – $6,000 Nil
$6,001 – $35,000 15c for each $1 over $6,000
$35,001 – $80,000 $4,350 plus 30c for each $1 over $35,000
$80,001 – $180,000 $17,850 plus 38c for each $1 over $80,000
Over $180,000 $55,850 plus 45c for each $1 over $180,000

Now this system isnt perfect but it has been used for years

Is it in the governments best interst to scrap all taxes on business and implement a single tax based on the profitability of a business?

I have not put any thought into these figures below however this is just to give you and idea. Profit figure between $0 and $500 K would attract a tax figure of $0.20 for every dollar of profit. $500K to 1,000K would attract a tax figure of $0.23 to every dolalr profit and so on until you get to the larger corporations who earn 1 billion plus and they would pay $0.45 for every dollar of profit.

Obviously the tax would need to be structured in such a way to ensure it didnt restrict foreigh investment.

Thoughts and ideas - I havent had a chance to really think through this idea, but its just something that crossed my mind when reading the about the super resource income tax. Would be interested to hear what business owners think, would this reduce red tape and the burden of running a business?

[ebxr8240]

Well ?? Interest rates cannot keep going up to slow things down while money from other sections is not affected too much by interest rates..
Seeing that up to 80% of these companies are owned by overseas people then fair enough..
Its seems a tax on there PROFFITS..

[zetec]

I'd like to see the opportunity for first home buyers to use their superannuation as a bond to secure part of the value of their first home and offset the need for a high mortgage.

This offer would not be available to anyone buying a subsequent home or investment property, but would only be available once to first home owners. I'd also permit double-incomes to joint-invest.

Would take a lot of working out, but a simple idea that could liberate $40-$50k additional for people in the job market less than 10 years on top of their own bank savings. Help first home owners get into the market with not a cent extra needed by governments, but only available ot first home owners without just pumping cash into them to inflate market prices.

The equivalent portion of capital gain on the property upon sale of the first home would be payable back to the superannuation fund limited at a minimum to the value of the original principal investment - i.e. if the property loses value, the original sum would still be payable to encourage wiser investment and not over-investment and just using the money to buy a bigger, more expensive house that the investor can't genuinely afford.

The government could then offer greater first home owner's grants of say $15k to low income earners to assist them, but stop payment to anyone earning over say $20-30k p/a to encourage a strong belief in Super for almost all taxpayers and reward them for starting early.

It'd ultimately really only be available to people who've genuinely worked for it, who aren't just going cap-in-hand to a bank and borrowing way above their head and pocketing free government cash and it would keep the onus on the buyers that if they made a bad decision, it would still cost them their original investment as a minimum. Importantly, it'd still benefit renters who have had a hard time saving but have worked for years by giving them access to their super, but still not disadvantage those who have saved on top of their Super.

[gtfpv]

when i started work in 1986 more people were in the highest tax bracket compared to today . but no one really cared about that because things were affordable a big chunk of things means a roof over your head . a tradesmans pay including overtime back then was about 32k gross . a 3bd house in the western suburbs of sydney . $75k
now that is enough said .
in the mid 80s tradesman in the mines were on around 55k .
a little later down the track when i bought a 3 bd house in sydneys west in 1992 . me being a tradesman then was on 65k inc ot. house price $170k
note well the obove only includes a single income . no spouses income included .
fastforward 18 years and here we are. average tradesman 100k . me i little more than that . but will take average and say around 100k ( av trade ) 3 bedroom house in sydneys west . $440k
before 2000 there was no GST. MORE PEOPLE WERE CLOSE TO TRADESMANS PAY . and long service was the norm .
nowadays we have minimum staffing ,less aussie industry, we own less of our resources, high job turnover labour, casual 2nd class employment , many many many people on less than $100k , education costs a fortune , and we pay for technology which has become the norm . like the internet . + + + + + + +.
DOES IT REALLY MATTER WHAT THE GOVT DOES WITH OUR TAX OR SUPER ANYMORE?
WHEN HAS EARNINGS BEEN THE MAIN ISSUE IN THE LAST 20 YEARS . ????
I'M STARTING TO GET ANGRY . TIME TO STOP TYPING .

[ebxr8240]

Quote.
The government could then offer greater first home owner's grants of say $15k to low income earners to assist them, but stop payment to anyone earning over say $20-30k p/a to encourage a strong belief in Super for almost all taxpayers and reward them for starting early.



Any one earning this should NEVER consider buying a house !!
This is what started the financial crises in the first place..

[zetec]

Originally Posted by ebxr8240

Quote.
The government could then offer greater first home owner's grants of say $15k to low income earners to assist them, but stop payment to anyone earning over say $20-30k p/a to encourage a strong belief in Super for almost all taxpayers and reward them for starting early.



Any one earning this should NEVER consider buying a house !!
This is what started the financial crises in the first place..

Completely agree, but it unfortuantely always comes with a balance in the public's eyes and no government would ever have the balls to deny those that shouldn't buy a house the means to do so... even if it makes finanical sense. They'd be seen ot be denying them the Great Australian Dream, which itself is already out of reach of many.

[ebxr8240]

Originally Posted by zetec

Completely agree, but it unfortuantely always comes with a balance in the public's eyes and no government would ever have the balls to deny those that shouldn't buy a house the means to do so... even if it makes finanical sense. They'd be seen ot be denying them the Great Australian Dream, which itself is already out of reach of many.

Yea the banks won't give them credit anyway...
Even with 20% deposit...

[snappy]

Originally Posted by ebxr8240

Yea the banks won't give them credit anyway...
Even with 20% deposit...

I had trouble with 45%

[xtremerus]

Originally Posted by zetec

Completely agree, but it unfortuantely always comes with a balance in the public's eyes and no government would ever have the balls to deny those that shouldn't buy a house the means to do so... even if it makes finanical sense. They'd be seen ot be denying them the Great Australian Dream, which itself is already out of reach of many.

Thats why we have this " affordable housing" Govt. BS spin. It keeps the "battlers" hopes up that they might just get that house one day.
Govt. know they won't, but roll out the BS for votes.

[Iggypoppin']

If I could invest my super into a home as propositioned by zetec, that would be nearly 20,000 I could theoretically put towards a home, more every day as I salary sacrifice and personally contribute.

[Romulus]

Tax reform? How can adding a tax be beneficial for the businesses it's taxing? Cape Lambert has announced it will pull out of exploration in Australia. This is exactly the type of business the government says will benefit from it's tax changes. You can bet RTIO and BHP won't hesitate to pull the pin on further upgrades earmarked to start next year and 2012.

My super fund has copped a flogging and interest rates are going up. If this government keeps up it's genius plans it will be on a sure fire one term track record!

There's been no tax reform or simplification, just more taxes and levies imposed.

[xy500]

Am I the only one ticked off that ruddy wants to fill Canberra's coffers with the money made in WA? its a rort, where do you come up with such a policy? Trying to get the economy moving? why not just tax the booming industry until no one wants to invest in it any more.

[ltd]

Originally Posted by xy500

Am I the only one ticked off that ruddy wants to fill Canberra's coffers with the money made in WA? its a rort, where do you come up with such a policy? Trying to get the economy moving? why not just tax the booming industry until no one wants to invest in it any more.

Best quote I have heard on this was;

"The government estimates cutting down on smoking by increasing taxes, what do they think will happen as a result of increasing taxes on mining?"

Billions already wiped off the big miners, which is where most peoples super funds lay. This truly is one epic fail of a policy.

[gtfpv]

yeah its a bad day . billions in mining shares have been wiped off over night .
i thought though that all australians own australia , and since its ours the profits should go to australian revenue , not overseas mining tycoons in the form of high profits. imagine going into your neighbours yard and fining gold and selling it .

once again this has proved way over my head in understanding .
anyways one thing is sure . i think RUDD has sent us backwards . i wish to emphasise this on evidence , not political bias . as i'd have a shot at any party on that basis .

[Scott]

Here's my super-simple-underthought tax reforms:

Abolish every tax that currently exists - create two.

As there will be no Income Tax, pick a GST % (perhaps 50%) that is plied to every dollar spent that is not used for essentials such as food/water/toiletries/electricity/gas/medical/education/credit payments etc.

Nominate a tax free threshold for business at perhaps $50k-$100k then ply a sliding scale from there. Business still use similar deductions and still operate as the GST collectors. Business would include personal investors.

No tax returns or tax refunds for individuals;

Massive dis-incentives for cash deals.

[Scott]

Originally Posted by xy500

Am I the only one ticked off that ruddy wants to fill Canberra's coffers with the money made in WA?

WA and QLD. If I ever hear another Sydney-sider complain about "their GST money" I will spew.

[DJR-351]

Rudd and his incompetent cronies need to go now!! this is just the start, if this 40% levy gets through you can say goodbye to the resources boom and the jobs they create....

http://bigpondnews.com/articles/Nati...ve_458369.html

Tuesday, May 04, 2010 » 09:07pm

Perth-based miner makes big move

An iron ore miner has blamed the federal government's new tax for its withdrawal from Australia.

An iron ore miner has blamed the federal government's new super profits tax for its decision to cancel planned exploration projects in Australia and move to Africa.

The announcement comes as Treasurer Wayne Swan engages in a spat with Australia's fifth richest man, Clive Palmer, over a plan to adopt a key recommendation of the Henry tax review.

West Australian Premier Colin Barnett fears more mining companies will leave Australia if the flagged tax on super profits in the resources sector is enacted.

Perth-based iron ore miner Cape Lambert on Tuesday announced it would cancel planned exploration works in Western Australia.

'I've made the decision now: I'm ceasing all drilling work in Western Australia that we were planning to do later this year in one of my mines up in the Pilbara,' the company's executive chairman Tony Sage told ABC Radio.

'What is the point if you're going to get slugged an extra tax?'

Mr Sage said the resources company would instead shift its investment dollars, earmarked for Australia, to four projects in Africa.

The federal opposition's deputy leader Julie Bishop told Sky News the Cape Lambert decision would be the first of many such announcements to come.

Mining magnate Clive Palmer labelled Mr Swan a fool for wanting to levy a 40 per cent tax on profits made from non-renewable resources from July 2012.

Mr Palmer said he would consider taking projects like coal developments offshore to places like Indonesia where he would be taxed at only 20 per cent.

'When I was taxed at 30 per cent I might have done it in Queensland, but now I'm going to be taxed at 70 per cent I'll go ahead and do it in Indonesia,' he told reporters on the Gold Coast.

'So, the treasurer is just a fool. That money he thinks he's getting, he's not going to get more money - he's going to get less money.'

Mr Swan hit back, questioning Mr Palmer's motives as he began

talks with the mining industry.

'Clive Palmer acts in the interests of his own fat pockets. He doesn't act in the interest of the Australian people, and it's my job to act in the interests of the Australian people and make sure they get a fair share,' Mr Swan told reporters.

Mr Barnett called on the federal government to abandon its plan for the Resource Super Profits Tax, telling parliament the 40 per cent levy was 'too high'.

Earlier, he said the tax plan, announced on Sunday, would jeopardise future projects in Australia.

'I have been struck over the last 24 hours by the numbers of both larger and smaller companies that are clearly reviewing investment decisions,' he told ABC Radio.

Commonwealth Securities chief economist Craig James said uncertainty about whether the Senate would pass the government's proposed tax had created uncertainty for investors.

How anyone can aggree with this madness is beyond me....

[Scott]

Without being political about it..... Rudd MUST go.

[DABOSS]

Originally Posted by GTP006

Without being political about it..... Rudd MUST go.

I agree , " By any means necessary "

[zetec]

Agreed.

But I never voted for the arseclown in the first place. So I take delight in knowing and saying "I told you so".

[gtfpv]

we must remember that we own australia , not the mining companies . surely if miners run from our resources others will step in and print money.
STORIES ARE ONLY STORIES . it remains to be seen who is bluffing the most !!

[DJR-351]

Originally Posted by gtfpv

we must remember that we own australia , not the mining companies . surely if miners run from our resources others will step in and print money.
STORIES ARE ONLY STORIES . it remains to be seen who is bluffing the most !!

No they won't, the miner owns the lease, if they choose not to mine due to Rudd's proposed levy they just shut down and close the gates and wait until it becomes profitable again, they just pay the lease which this proposed 40% c**p can't touch, same with the Offshore Oil & Gas.....

[Smoke Pursuit]

Originally Posted by zetec

Agreed.

But I never voted for the arseclown in the first place. So I take delight in knowing and saying "I told you so".

You and me both...

[Romulus]

Originally Posted by gtfpv

we must remember that we own australia , not the mining companies . surely if miners run from our resources others will step in and print money.
STORIES ARE ONLY STORIES . it remains to be seen who is bluffing the most !!

Really? These companies pay for mining leases, just like you pay for the land you own. Mind if I come in and take some of your stuff because you're doing well for yourself? No I don't think so.

The news stories doing the rounds in WA is KRudd has given up on WA and acknowledges he will probably lose 2 or 3 seats. He's hoping to pickup seats from the opposition in the east coast, but he'll fall over his own commitment made regarding the RSPT. He has said that the bulk of the $700 million for infrastructure spending will be spend in the resources rich states i.e. WA and Qld. It is interesting to note the opposition leader Eric Ripper has come to the support of his Federal leader.

How many members of our current government have actually run a business and payed taxes? Out of 140 odd members of the ALP they have combined less than 2 years experience running a business. Their track record speaks volumes of their abilities, hence the rediculous RSPT.

Westpac posted a record half year profit, why not impose a BSPT on them?

ALP - bunch of assclown sending this country down the gurgler.

[gtfpv]

Originally Posted by GT Falcon

Really? These companies pay for mining leases, just like you pay for the land you own. Mind if I come in and take some of your stuff because you're doing well for yourself? No I don't think so.

The news stories doing the rounds in WA is KRudd has given up on WA and acknowledges he will probably lose 2 or 3 seats. He's hoping to pickup seats from the opposition in the east coast, but he'll fall over his own commitment made regarding the RSPT. He has said that the bulk of the $700 million for infrastructure spending will be spend in the resources rich states i.e. WA and Qld. It is interesting to note the opposition leader Eric Ripper has come to the support of his Federal leader.

How many members of our current government have actually run a business and payed taxes? Out of 140 odd members of the ALP they have combined less than 2 years experience running a business. Their track record speaks volumes of their abilities, hence the rediculous RSPT.

Westpac posted a record half year profit, why not impose a BSPT on them?

ALP - bunch of assclown sending this country down the gurgler.

thanks for the lesson . good post.

[HLC]

Originally Posted by bfiipursuit

You and me both...

and me as well.

[Romulus]

I should correct my comment regarding the opposition leader here in WA. He has not endorsed federal Labor's RSPT policy.