Thread: How My Taxes were distributed

Originally Posted by Roverlord off road spares

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.

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.

Originally Posted by Ferret

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!
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.

Originally Posted by frantic

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

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.

Originally Posted by Ferret

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.

Originally Posted by frantic

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.

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.

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 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