How My Taxes were distributed

[Roverlord off road spares]

I received my assessment notice from the ATO. it has a break down of where my taxes I paid were spent. Most of it was spent on welfare, This covers Aged, Famlies, Diability and unemployed in that order. The Health and followed by Defence, and so on.
Very far down the list near the bottom was public order and safety.

[incisor]

that is what taxes are for :p

[frantic]

Because of the massive fine revenue, law and order, mainly don't cost much, if anything these days. Ditto public housing, who where break even or better for a long time(for decades the successive state govt's collected without planning for the future), its just recently that a LOT of their houses have reached a used by date that they are starting to cost more to repair than they get in rent, or require a cash injection to redevelop the 3 bed 1/4 acre homes into 3, 3 bed townhouses.
My issue is the inequity in the tax system. If I was a small business/ sole trader, my tax would be half to one third what im now paying on my income. that disparity gets greater, the more you go up the income scale.

[Roverlord off road spares]

My issue is the inequity in the tax system. If I was a small business/ sole trader, my tax would be half to one third what im now paying on my income. that disparity gets greater, the more you go up the income scale.
LOL, I don't know what your point is here?
A sole trader pays the same rate of tax as you. Every one gets the tax free threshold of $18 k odd.then so many cents in the dollars for each income stage
A sole trader can claim the cost of services and associated costs of purchasing goods, he must however pay 10% GST on every sale, this comes out of the bottom line which is his income ( wage you could call it)
Income is from profit derived, so you only earn if you are profitable.
No holiday pay, no sick pay, no superannuation. No hourly rate or penalty rate. The more profit the sole trader makes = more income a sole trader makes which is taxable, and it's the same bracket creep as some one on wages, so how is a sole trader better off?
He pays the same tax as you do but has to work longer hours and days.
We work 7 days a week, start in the morning and the last response is at around 11.30pm to midnight ( Perth is hours behind so there are enquiries), Sat Evening, Sunday morning phone calls from customers in trouble.
The hours put in if paid as an hourly rate, would equate to slave labour rates, but we do it as we are are own boss, answer to no one except ourselves and enjoy the business)

[incisor]

My issue is the inequity in the tax system. If I was a small business/ sole trader, my tax would be half to one third what im now paying on my income. that disparity gets greater, the more you go up the income scale.

sorry frantic but for me that first and second sentence is utter drivel in the majority of circumstances.

the third sentence is closer to reality, but the bar starts a lot higher than the vast majority of mum and dad small business / sole traders.

the stats show many are just getting by.

the stats also show that the majority would drop everything and go with paid employment if they could only get that decent job with super and all the perks many workers take for granted.

[Ferret]

...If I was a small business/ sole trader, my tax would be half to one third what im now paying on my income. that disparity gets greater, the more you go up the income scale.

What complete rot.

I'm a sole trader, I pay the same tax as you. My Income is treated no differently than you (pay as you go) except maybe you have income tax deducted at each pay cycle and get to claim deductions annually whereas I have to pay income tax at each BAS statement (quarterly) and get to claim deductions at the same time also.

[Homestar]

What I don't get is the amount of people that expect Roll Royce service from the Government while paying Datsun taxes. Contrary to popular belief our taxes are not high compared with other 1st world countries, but we continually expect to get services on a par with them.

I pay a **** load of tax - not as much as some, but certainly enough to pay someone a decent full time wage, but it needs to be paid.

Maybe the super rich could be hit up a bit more as they're really good at minimising their tax, but if we want the services the Government provide, then they have to be paid for - simples.:)

[DiscoMick]

Taxes are the price of having a civilized society. Go to a low tax society and observe the chaos around you. Then come back here and be thankful.


The problem we have with taxes at the moment has more to do with who's paying and who's scamming the system. At the moment the system is biased towards giving tax cuts to the rich paid for by cutting help for the poor. Look at the overnight changes to super for example. Nine million people have their retirement incomes cut, but 16,000 people whose super funds earn more than $100,000 a year because their balances are so high get a tax shelter. Where's the fairness in that?


http://www.abc.net.au/news/2014-09-02/cooney-super-sting-in-the-tail-of-mining-tax-win/5714066

[Lotz-A-Landies]

...
Nine million people have their retirement incomes cut, but 16,000 people whose super funds earn more than $100,000 a year because their balances are so high get a tax shelter. Where's the fairness in that?


Super sting in the tail of mining tax win - The Drum (Australian Broadcasting Corporation) (http://www.abc.net.au/news/2014-09-02/cooney-super-sting-in-the-tail-of-mining-tax-win/5714066)We can blame Clive for that, he's one of the 16,000 and its his negotiation that got it there.

Its Mathias Corman's Win# Win* Win% comment but only for Mr Palmer.

# No mining Tax
* No increase in super payments to his employees for 11 years
% Tax shelter for his super income.

[gusthedog]

Taxes are like rates. I work for local government and people always whinge about rates and how a council spends $. Quite often a new councillor will come on board using rates and Council spending reduction as their election platform. They then see how close to the bone every local government runs, realise they can't improve it anywhere as they have no expertise and it is already running fairly efficiently. Little do people know that local government is also the most cost effective form of governance. You want to see $ wasted, try working for state or federal governments. Then you see real $ wastage.

As Baciat says, our taxes are relatively low for a 1st world country.

And to answer part of your implied question Roverlord, every 1st world country spends the most tax $ on welfare.

[Roverlord off road spares]

And to answer part of your implied question Roverlord, every 1st world country spends the most tax $ on welfare.
Hey don't shoot the messenger, I am not implying anything!
I shared what I received from the ATO on how my taxes are spent, and shared the breakdown as lot lot of people whinge about paying taxes, so now they know where it goes.

[gusthedog]

Hey don't shoot the messenger, I am not implying anything!
I shared what I received from the ATO on how my taxes are spent, and shared the breakdown as lot lot of people whinge about paying taxes, so now they know where it goes.


No shooting implied Roverlord. :D

[DiscoMick]

Its all good.
I'm quite happy to pay reasonable taxes to ensure the kids get a decent education, sick people can afford treatment, disabled and pensioners get a reasonable pension, essential services are provided, the environment is protected, industry has a sensible level playing field of regulation to work on to create wealth, crooks are prosecuted, the country is defended etc.
What I object to, as someone who has worked and paid tax all his life, is people, particularly wealthy people, trying to sponge off the rest of the community by demanding special concessions for themselves at the expense of everyone else.

[frantic]

What complete rot.

I'm a sole trader, I pay the same tax as you. My Income is treated no differently than you (pay as you go) except maybe you have income tax deducted at each pay cycle and get to claim deductions annually whereas I have to pay income tax at each BAS statement (quarterly) and get to claim deductions at the same time also.



If you pay the same tax as me, as a sole trader on the same income , you should go and shoot your accountant!:twisted:
A very close relative of mine was on the same pre-tax income as me(weekend work 5days, 2 days off midweek), but as a sole trader, wrote off part of the house, all the car, all fuel, only paid himself a very basic wage and the rest went into his "business" fund that paid the bills and investment property. The end result at tax time he was paying a total, gst included, of 1/3 of my total tax bill.
He was screaming blue murder for about 5 years when he moved employer, SAME JOB, but was paid a normal wage(same , if not higher before tax) as that group would not employ him as a sub contractor. The only benefit he got was super and a few weeks extra paid holidays(his industry shuts from dec 15-20ish-mid January every year).Working there his actual take home pay shrunk as he was paying the same tax as me. so before he was paying say as a simple example $10 tax/pay averaged out over a year , now he was paying $30 tax each fortnight. Combine this with the tax taken each pay, not each quarter or year and it was a big drop.

[Ferret]

If you pay the same tax as me, as a sole trader on the same income, you should go and shoot your accountant!:twisted:

The fact remains a PAYE tax payer and a sole trader who fills in a BAS statement and pays tax quarterly are treated the same tax wise, both have the same opportunities to claim legal deductions.

If your feeling ripped because your relative pays less tax than you even though your on the same pre tax income then I suggest you ensure your relative pays the appropriate capital gains tax on his place of residence come sale time since he used it to offset income tax. That should even things up.

[Roverlord off road spares]

The fact remains a PAYE tax payer and a sole trader who fills in a BAS statement and pays tax quarterly are treated the same tax wise, both have the same opportunities to claim legal deductions.

If your feel ripped because your relative pays less tax than you even though your on the same pre tax income then I suggest you ensure your relative pays the appropriate capital gains tax on his place of residence come sale time since he used it to offset income tax. That should even things up.
You beat me to it, we don't claim our home as a business as come sell time capital gains tax is to be paid. Might be ok for some one that will die in the same spot and will never sell the house and move elsewhere.
The grass always looks greener on the other side until your actually there and can speak first hand.

[Ferret]

He was screaming blue murder for about 5 years when he moved employer, SAME JOB, but was paid a normal wage(same , if not higher before tax) as that group would not employ him as a sub contractor. The only benefit he got was super and a few weeks extra paid holidays(his industry shuts from dec 15-20ish-mid January every year).Working there his actual take home pay shrunk as he was paying the same tax as me. so before he was paying say as a simple example $10 tax/pay averaged out over a year , now he was paying $30 tax each fortnight. Combine this with the tax taken each pay, not each quarter or year and it was a big drop.

I might also add. If your description of your relative is correct, ie working for an employer and is therefore an employee, then I think your relative was probably involved in a bit of a tax scam. I don't believe you can be an employee and hide behind an ABN number calling yourself a contractor.

It is a scam that minimises the obligations an employer has to their employees (don't need to pay superannuation, don't need to pay sick leave, don't need to pay holidays etc.) as well as possibly having implications for the individual concerned making shonky declarations to the tax office - see the so called 'Work Test' declarations.

It was a scam that was cracked down on some years ago by the ATO. That's what is probably behind his new employer refusing to employ him as a contractor for doing the SAME JOB.

[pibby]

IIRC the definition of an employee for superannuation purposes is defined specifically by the act governing super. It is not based on the normal tests used to determine employee-employer relationship. Not all employers are aware of this.

Also, generally in these cases (as being pointed out regarding using principal residence to generate assess able income) there are two sides to a transaction. If you claim it you can/will be subject to profit/loss on sale ie the asset is no longer fully exempt.

[frantic]

You claim a room in your own home as business office, any k's on your car are claim able , your investment is owned by business. Now ferret, how many chip pies, brickies, plumbers, painters, plasterers, tillers,sparkles ,roofers, concreters etc are working for the same builder 5-6 days a week, for decades. Afaik a VAST majority are subbies :o:o:o what a shock! I know of dozens who worked for major builders for 10-15 years plus as subbies in every position. In the it industry there are subbies who come in on a contract for 12-18 months who are paid as a company. Numerous lawyers are paid through their firm as a subbie to reduce their tax, go and talk to their ex wives for a full description of how to avoid both tax and child payments;)

[ramblingboy42]

It sounds to me like most of you need some serious financial advice.

If you feel you are paying too much tax go and have a good chat to your bank manager or financial advisor.

You are allowed to put in place whatever legal strategies you want to, to reduce your taxes.

I will not give anyone any advice how to reduce tax effectively other than to seek it yourself professionally.

Do not pay anyone anything until you have a plan or advice that you can are satisfied with and can sleep with.

[rick130]

sorry frantic but for me that first and second sentence is utter drivel in the majority of circumstances.

the third sentence is closer to reality, but the bar starts a lot higher than the vast majority of mum and dad small business / sole traders.

the stats show many are just getting by.

the stats also show that the majority would drop everything and go with paid employment if they could only get that decent job with super and all the perks many workers take for granted.
This.

[Ferret]

Y... how many chip pies, brickies, plumbers, painters, plasterers, tillers,sparkles ,roofers, concreters etc are working for the same builder 5-6 days a week, for decades.

...

Numerous lawyers are paid through their firm as a subbie to reduce their tax, go and talk to their ex wives for a full description of how to avoid both tax and child payments


The building industry... With regard to whether your mates are really contractors or employees - you can read about it here (Making employment look like contracting (https://www.ato.gov.au/Business/Employee-or-contractor/In-detail/Building-and-construction-industry/Building-and-construction-industry---how-to-determine-if-workers-are-employees-or-contractors/?page=7#Making_employment_look_like_contracting)), on the other ATO links on that page and make your own judgements.

The question of whether the tax system is fair to different categories of tax payers and the question of whether tax avoidance (and avoidance of other obligations) by any category of tax payer is fair are different questions.

[mns488]

when he moved employer, SAME JOB, but was paid a normal wage(same , if not higher before tax) as that group would not employ him as a sub contractor. The only benefit he got was super and a few weeks extra paid holidays(his industry shuts from dec 15-20ish-mid January every year).Working there his actual take home pay shrunk as he was paying the same tax as me. so before he was paying say as a simple example $10 tax/pay averaged out over a year , now he was paying $30 tax each fortnight. Combine this with the tax taken each pay, not each quarter or year and it was a big drop.

Mate your friend would be caught by the PSI rules. Personal Services Income. He would only be entitled to the same deductions to those that any ordinary employee would.

Anything else, he (and his Accountant) are lodging an incorrect return and at risk of an Audit. The back tax, interest and fines would destroy him.

Sounds like rubbish tax advice bordering tax fraud given his intent.

[pibby]

was going to mention PSI. but this tax stuff is so complex and a car forum comprised of car enthusiasts may not be the best place for an expert opinion based on the facts.

then again i dont know much about cars and i happily post on this forum so what do i know. :)

[frantic]

Mate your friend would be caught by the PSI rules. Personal Services Income. He would only be entitled to the same deductions to those that any ordinary employee would.

Anything else, he (and his Accountant) are lodging an incorrect return and at risk of an Audit. The back tax, interest and fines would destroy him.

Sounds like rubbish tax advice bordering tax fraud given his intent.

Been audited ok :D
He just retired, except for that 5 year period 6-11 years ago he was a contractor. The companies he worked for have names that start with M, B,A, H. Each one of these home builders would do 2-500 homes a year in Sydney and the first 2 have regularly done 200+ on the south coast/Illawarra. How many of the builders on here could do 20-30 a year, as when he was working for the local H franchise the 3 chippie owners had problems keeping up with sales of 20 each, along with obtaining adequate insurance to cover the jobs at various stages.

One of his good friends has just left B as the wood bitches never raised his pay per job for a decade as a plasterer. The way they get around it depending upon current laws is pretty simple. One common method was to have 3 managing companies, and the subbies got paid one job from each, that changed after the laws changed.

The one he worked for who paid him as a PAYE sold around 200+ from one office with a advertised average build time of 17 weeks. They have 3-4 sales centres in Sydney and one down here.