tax cuts- what will you spend yours on?

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Originally Posted by Tombie

In relative terms it’s nearly double the benefit ( % ) for the lowest income earner in your example vs the highest.

As the Person on $150k already pays nearly $50k tax and will only receive a smaller percentage of their earning back I’d suggest they won’t notice it much.


The solution to the problem - change career paths - never too late.

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I do understand that. What I'm getting at is the higher wage earners shouldn't be getting it at all. Its a similar vein to giving a minimum wage earner a 5% payrise is bugger all..... but will make a huge difference to there ability to put food on the table. The actual amount is about $37 a week before tax for the minimum wage earner.

For someone on 200k .... about $192 a week with a 5% payrise...... percentages make a big difference as you work your way up the pay scales.

Giving hand out and tax cuts to higher wage earners doesn't drive the ecomony. If they are given to lower income earners .... they will spend every cent. Just like giving big business tax cuts. There is absolutely no "flow on effect" to wages.

Given the current world economy any sort of tax cuts for any company/person that is well of is insanity.

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Originally Posted by DoubleChevron

The actual amount is about $37 a week before tax for the minimum wage earner.

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'
min wage earner only get 37$ per week? that doesnt sounhd right

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Originally Posted by DoubleChevron

Giving hand out and tax cuts to higher wage earners doesn't drive the ecomony.

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have a beer.


"Suppose that once a week, ten men go out for beer and the bill for all ten comes to £100. If they paid their bill the way we pay our taxes, it would go something like this...


The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
And the tenth man (the richest) would pay £59.


So, that's what they decided to do.


The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly beer by £20." Drinks for the ten men would now cost just £80.


The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free but what about the other six men? The paying customers? How could they divide the £20 windfall so that everyone would get his fair share? They realized that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer.


So, the bar owner suggested that it would be fairer to reduce each man's bill by a higher percentage. They decided to follow the principle of the tax system they had been using and he proceeded to work out the amounts he suggested that each should now pay.


And so, the fifth man, like the first four, now paid nothing (a 100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving).


Each of the last six was better off than before with the first four continuing to drink for free.


But, once outside the bar, the men began to compare their savings. "I only got £1 out of the £20 saving," declared the sixth man. He pointed to the tenth man, "but he got £10!"


"Yeah, that's right," exclaimed the fifth man. "I only saved a £1 too. It's unfair that he got ten times more benefit than me!"


"That's true!" shouted the seventh man. "Why should he get £10 back, when I only got £2? The wealthy get all the breaks!"


"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up.


The next week the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important - they didn't have enough money between all of them to pay for even half of the bill!


And that is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy and they just might not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier."

That example doesn't allow for the fact that under our tax system EVERYONE pays nil tax on about the first $20k they earn, so everyone benefits.

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Originally Posted by DiscoMick

That example doesn't allow for the fact that under our tax system EVERYONE pays nil tax on about the first $20k they earn, so everyone benefits.

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that would be true if income tax was the only tax. and its not.

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Originally Posted by scarry

Yes even younger than 65/66 a large lump sum,I think it is one off,can be put in super.
The accountant sorted ours,but I can’t remember the actual ruling.
Although there could be a cieling on it at our age.

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Sorry I should have said applies to those already retired and no longer allowed to contibute to superannuation. This allowance is a one off because of Covid.

Giving big business tax cuts has an enormous flow on effect to economy - companies offered the correct cuts hire more people, more people spend and pay more tax.

Without the big players many won’t have work.

No one can argue with the last sentence but tax cuts only work to a certain degree and that point was reached a while ago.

When the cuts get to the point that it imbalances the economy, there is no positive response.

And for all the talk about how poorly jobs in Qld have been talked about by one side of the news and politics, Qld created more than 10 times the jobs that NSW did in the last quarter...

Wonder why?

The main problem in Qld is the lack of international tourists because our national borders are closed. Apart from that, things seem to be going well, from what people tell me.
Giving tax cuts to people who have jobs and good incomes does nothing to help people who have lost their jobs. Workers in closed hotels won't get their jobs back because a tradie buys a new ute.

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Originally Posted by DiscoMick

The main problem in Qld is the lack of international tourists because our national borders are closed. Apart from that, things seem to be going well, from what people tell me.
Giving tax cuts to people who have jobs and good incomes does nothing to help people who have lost their jobs. Workers in closed hotels won't get their jobs back because a tradie buys a new ute.

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giving an income tax cut to someone who has no income isnt going to work very well. lol