Australias tax system takes from the young to give to the old

[peetoo]

“Criminally” undertaxed is an exaggeration.

We don’t pay the same Stamp Duty rates and VAT/GST rates as somewhere like the UK. But that’s not exactly a bastion of housing affordability is it? They are going through almost a complete collapse of housing affordability, even worse than ours.

We pay far more tax than US states though on a typical property development or investment property transfer through.

You are completely ignoring our other tax classes, where we are among the highest in the world.

It’s sobering to think we ‘followed’ the UK in the eighties. The Kennett govt even getting UK mandarins to show us how to privatise etc?
UK is now re nationalising it’s rail. Maybe we should not wait and do some re nationalising ourselves.

Dutton with public funded nuclear power seems to be ahead of the curve?`

 

[Sphynx]

It’s sobering to think we ‘followed’ the UK in the eighties. The Kennett govt even getting UK mandarins to show us how to privatise etc?
UK is now re nationalising it’s rail. Maybe we should not wait and do some re nationalising ourselves.

Dutton with public funded nuclear power seems to be ahead of the curve?`

The UK rail network is probably their most critical transport mode and it was made up of a large number of different providers.

Think of all the different Australian metro city train operators, but then overlap them in interconnecting services and stations throughout towns, villages, cities etc.

Most of the nationilsation in this aspect is due to poor performance and constant delays/cancellations, not just managing the massive price rises going on over there.

Do we have a comparative industry with the same level of dissatisfaction of both performance and rising costs outstripping inflation?

 

[peetoo]

The UK rail network is probably their most critical transport mode and it was made up of a large number of different providers.

Think of all the different Australian metro city train operators, but then overlap them in interconnecting services and stations throughout towns, villages, cities etc.

Most of the nationilsation in this aspect is due to poor performance and constant delays/cancellations, not just managing the massive price rises going on over there.

Do we have a comparative industry with the same level of dissatisfaction of both performance and rising costs outstripping inflation?

The cost of uk rail travel compared to europe is stark. Uk policy somehow always ends up with worst possible outcomes

 

[Seeds]

It’s sobering to think we ‘followed’ the UK in the eighties. The Kennett govt even getting UK mandarins to show us how to privatise etc?
UK is now re nationalising it’s rail. Maybe we should not wait and do some re nationalising ourselves.

Dutton with public funded nuclear power seems to be ahead of the curve?`

Publically funded expensive nuclear plants is exactly why nationalising sectors is often a bad idea. It forces costs through the roof and leads to lagging tech development.

all the tech developments in telecommunications have come from the private sector.
All the tech developments in the transport services industry have come from the private sector.

If we still had both those sectors fully public we would be twenty to thirty years behind where we are today in terms of services and costs. Uber would not exist and you would still be reliant on using a phone to call a taxi. Certainly would not have the internet on your phones.

 

[Chief]

all the tech developments in telecommunications have come from the private sector.

Then WiFi and the internet came along and can pretty much replace them.

Who even has a landline any more?

 

[peetoo]

Publically funded expensive nuclear plants is exactly why nationalising sectors is often a bad idea. It forces costs through the roof and leads to lagging tech development.

all the tech developments in telecommunications have come from the private sector.
All the tech developments in the transport services industry have come from the private sector.

If we still had both those sectors fully public we would be twenty to thirty years behind where we are today in terms of services and costs. Uber would not exist and you would still be reliant on using a phone to call a taxi. Certainly would not have the internet on your phones.

And yet optus has been here 30 years and is quite frankly, pathertic

 

[Seeds]

Then WiFi and the internet came along and can pretty much replace them.

Who even has a landline any more?

So we would be reliant on private sector led tech deployment in other countries to maintain tech advancement in our publically owned sectors.

 

[Chief]

So we would be reliant on private sector led tech deployment in other countries to maintain tech advancement in our publically owned sectors.

CSIRO invented WiFi.

US gov got us the internet.

 

[Sphynx]

Publically funded expensive nuclear plants is exactly why nationalising sectors is often a bad idea. It forces costs through the roof and leads to lagging tech development.

all the tech developments in telecommunications have come from the private sector.
All the tech developments in the transport services industry have come from the private sector.

If we still had both those sectors fully public we would be twenty to thirty years behind where we are today in terms of services and costs. Uber would not exist and you would still be reliant on using a phone to call a taxi. Certainly would not have the internet on your phones.

Relevant.

However, the energy sector is one of the main outliers.

See Armaco and QatarEnergy.


They priorities investment in local industry, processes and further development of downstream operations to maximize profits and efficiency for their country (lol, families I should say).

They have global investment funds to further advance technology etc in the fields.

Nationalization is precisely the reason they have the lowest energy costs in the world. They build their energy support services around this industry and their natural resources


Compare that to here. Global corporations which take profits with the least point of resistance, locked in long term contracts which mean the country can't benefit from global market conditions, these private companies do, sell our resources for well under market value, don't invest in downstream services as they can maximise profits elsewhere, then dodge all the tax on the backend.


If we nationalise anything, it should be the gas industry.

The cost would be enormous, but the payoff would be fairly quick given how poorly we are benefiting from it in comparison to other companies who do have nationalised industries of similar or even far less volume.

 

[Seeds]

CSIRO invented WiFi.

US gov got us the internet.

I used the word deployed.

Its one thing to have scientists in a lab create something. But its usually the private sector/individuals that find ways to integrate the tech into new ways to do things. Often combining it with other new techs.

Bureacrats just neither have a broad enough knowledge base (compared to the mass of people that exist in the private system) nor are sufficiently incentivised to change things. And thats even when they are paid differential wages and bonuses. In a socialist system the incentives are even lower.

Do you ever wonder why the tech is always decades outdated in socialist countries?

 

[peetoo]

I used the word deployed.

Its one thing to have scientists in a lab create something. But its usually the private sector/individuals that find ways to integrate the tech into new ways to do things. Often combining it with other new techs.

Bureacrats just neither have a broad enough knowledge base (compared to the mass of people that exist in the private system) nor are sufficiently incentivised to change things. And thats even when they are paid differential wages and bonuses. In a socialist system the incentives are even lower.

Do you ever wonder why the tech is always decades outdated in socialist countries?

Real over simplification there

Are universities private? Not many

 

[Chief]

Its one thing to have scientists in a lab create something. But its usually the private sector/individuals that find ways to integrate the tech into new ways to do things. Often combining it with other new techs.

The internet was first deployed among universities.

Private enterprise deployed janky public access to the existing system.

And also stole a lot of pensioners moolah claiming this access would become the infinite money glitch.

 

[rank and file]

The internet was first deployed among universities.

Private enterprise deployed janky public access to the existing system.

And also stole a lot of pensioners moolah claiming this access would become the infinite money glitch.

Deployed by universities,explains a bit.

Don't know what janky means.

Stolen pensioners moolah and the infinite money glitch sounds like it belongs on the conspiracy board.

 

[peetoo]

How much worse was the pandemic due to privatised and casual workers in the Heath and aged care sector?

We have mixed economy so let’s not venerate one ‘ideologue’ over another

 

[Chief]

Deployed by universities,explains a bit.

It worked well for us at the time.

Don't know what janky means.

Then you weren't there, man.

Stolen pensioners moolah and the infinite money glitch sounds like it belongs on the conspiracy board.

The Dotcom Bubble ring a bell?

 

[Seeds]

So i have been running the numbers on my finances and come to a realisation.

Ive been underbaking how easy it is to make wealth once you have wealth with our current tax system.

The whole system is full on rort against young people from non rich families.

Once you have enough money to live off you can just put all your excess money into super or family trusts (if you trust your kids) and basically pay no tax on any of your savings which go through the roof due to compounding returns. This makes you super rich once you retire. And even if you retire early the tax you pay on capital gains is tiny due to the offsets.

And if you get a inheritance this is also completely tax free and can be put into excess savings for super and family trusts. So not only does the inheritance pay no tax but so do the compounding returns.

Yet young people with no wealth have to pay full tax rates on their income which is all wage based. This is ridiculous.

Rich people dont have to work and therefore pay little to no tax on capital income while non rich people have to work and pay the highest tax rates of all despite having little wealth.

 

[peetoo]

So i have been running the numbers on my finances and come to a realisation.

Ive been underbaking how easy it is to make wealth once you have wealth with our current tax system.

The whole system is full on rort against young people from non rich families.

Once you have enough money to live off you can just put all your excess money into super or family trusts (if you trust your kids) and basically pay no tax on any of your savings which go through the roof due to compounding returns. This makes you super rich once you retire. And even if you retire early the tax you pay on capital gains is tiny due to the offsets.

And if you get a inheritance this is also completely tax free and can be put into excess savings for super and family trusts. So not only does the inheritance pay no tax but so do the compounding returns.

Yet young people with no wealth have to pay full tax rates on their income which is all wage based. This is ridiculous.

Rich people dont have to work and therefore pay little to no tax on capital income while non rich people have to work and pay the highest tax rates of all despite having little wealth.

What is rich though in a high inflation era? The argument against is why pay tax multiple times on the same dollar?

Not to mention financial fees

 

[Chief]

Ive been underbaking how easy it is to make wealth once you have wealth with our current tax system.

Yes. This is what lots and lots of people have been talking about. Wealthy people are under-taxed.

Accusing the poor of moral failings based on their level of wealth is, therefore, shit.

 

[Captivating]

So i have been running the numbers on my finances and come to a realisation.

Ive been underbaking how easy it is to make wealth once you have wealth with our current tax system.

The whole system is full on rort against young people from non rich families.

Once you have enough money to live off you can just put all your excess money into super or family trusts (if you trust your kids) and basically pay no tax on any of your savings which go through the roof due to compounding returns. This makes you super rich once you retire. And even if you retire early the tax you pay on capital gains is tiny due to the offsets.

And if you get a inheritance this is also completely tax free and can be put into excess savings for super and family trusts. So not only does the inheritance pay no tax but so do the compounding returns.

Yet young people with no wealth have to pay full tax rates on their income which is all wage based. This is ridiculous.

Rich people dont have to work and therefore pay little to no tax on capital income while non rich people have to work and pay the highest tax rates of all despite having little wealth.

Trusts distribute income which is taxed at the beneficiary marginal tax rate. So not sure how you "pay no tax" by operating a trust.

 

[Chief]

Trusts distribute income which is taxed at the beneficiary marginal tax rate. So not sure how you "pay no tax" by operating a trust.

There was a great video/articles about the scams the rich pull off to avoid tax.

Money into "assets" that are inflated by the fact super wealthy people buy them to hoard wealth. They use those assets to back lines of credit at a tiny interest rate, and live off that. The growth in the investments covers the interest, which you may never pay regularly. The lender is fine with this as they get benefits of their own - I believe they can borrow money based on your debt to them. You never sell the asset backing your borrowing, until you die when it pays off your debts and you pass on the remaining wealth at a low or no tax rate.

If you're paying 1% interest to avoid, say, 30% tax, that's what you do.

Unless your assets devalue, then the debt is called in. Then you can be screwed on that deal as everyone tries to cash out at once to pay off the debt, prices crash...

Etc etc. Of course it is more complicated than that - I am no financial guy.

 

[peetoo]

I once read Un Uk system only 3% of loan value was tangible. All others were derivatives.

It’s just a house of cards all round. But when it collapses, it’s those on the breadline who suffer.

 

[Captivating]

There was a great video/articles about the scams the rich pull off to avoid tax.

Money into "assets" that are inflated by the fact super wealthy people buy them to hoard wealth. They use those assets to back lines of credit at a tiny interest rate, and live off that. The growth in the investments covers the interest, which you may never pay regularly. The lender is fine with this as they get benefits of their own - I believe they can borrow money based on your debt to them. You never sell the asset backing your borrowing, until you die when it pays off your debts and you pass on the remaining wealth at a low or no tax rate.

If you're paying 1% interest to avoid, say, 30% tax, that's what you do.

Unless your assets devalue, then the debt is called in. Then you can be screwed on that deal as everyone tries to cash out at once to pay off the debt, prices crash...

Etc etc. Of course it is more complicated than that - I am no financial guy.

Buy borrow die.

That doesn’t explain Seeds trust explanation.

 

[Seeds]

Trusts distribute income which is taxed at the beneficiary marginal tax rate. So not sure how you "pay no tax" by operating a trust.

They give to beneficiaries who have little to no marginal tax. Then on top of that capital gains gets a 50 percent discount. So someone on the 45 percent marginal tax rate can pass capital gains money onto someone on the 30 percent tax rate and then that gets lowered to 15 per cent.

 

[Sphynx]

So i have been running the numbers on my finances and come to a realisation.

Ive been underbaking how easy it is to make wealth once you have wealth with our current tax system.

The whole system is full on rort against young people from non rich families.

Once you have enough money to live off you can just put all your excess money into super or family trusts (if you trust your kids) and basically pay no tax on any of your savings which go through the roof due to compounding returns. This makes you super rich once you retire. And even if you retire early the tax you pay on capital gains is tiny due to the offsets.

And if you get a inheritance this is also completely tax free and can be put into excess savings for super and family trusts. So not only does the inheritance pay no tax but so do the compounding returns.

Yet young people with no wealth have to pay full tax rates on their income which is all wage based. This is ridiculous.

Rich people dont have to work and therefore pay little to no tax on capital income while non rich people have to work and pay the highest tax rates of all despite having little wealth.

This is slightly alarmist, bordering on blatantly incorrect.

You don't pay "no tax" on any of your savings in either scenario. Particularly to the scale you are alluding to.

A family trust is a discretionary trust.

You can't distribute more than $417 to any family member below the age of 18. Unless you want to pay 45% on that released income. So only ultra efficient for a period in time where your kids might be over 18 and not working a lot. As, as soon as they earn $18,200, they flick into the 19% tax bracket.

Further, all income for the year has to be distributed, if any income is retained in the trust, it's taxed at the highest marginal tax rate (45%).

If you automatically reinvest it and compound it like you have suggested it and not distribute it onto one of the trustee's personal income tax returns, it gets taxed at the 45% marginal tax rate.

Capital gains tax aren't tiny in either scenario. You don't get the 50% CGT discount for assets in your super, you get 33.3%. For a trust, the main benefit is being able to distribute any capital gain between the trustee's, you also get the 50% CGT discount if owning it for longer than 12 months. It's one of the strongest features of it.

You also bypassed the fee's and costs associated with starting and maintaining one.

 

[Sphynx]

They give to beneficiaries who have little to no marginal tax. Then on top of that capital gains gets a 50 percent discount. So someone on the 45 percent marginal tax rate can pass capital gains money onto someone on the 30 percent tax rate and then that gets lowered to 15 per cent.

Who are these beneficiaries? It only works in your scenario for trustee's who are 18+ and who don't work.