Do you agree with this proposed change to taxation? 117



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As the 2015 budget looms and we’re still not close to returning a surplus, we’re all wondering where the next government money grab will come from. Last year the every day person, the pensioner and the student were hit hardest but luckily a large portion of the harmful legislation wasn’t passed. This year however, the government could take an alternate route and could regain an additional $2 billion by changing one thing.

According to the Sydney Morning Herald, research commissioned in the lead up to the 2015 budget showed that 1 per cent of Australian wage earners earn more than $300,000 a year, but between them they claim over $2 billion in tax deductions.

What this rule would do is put a limit on tax deductions available for these high income earners. The SMH also reports that according to the Australia Institute, in 2011-12 75 Australian tax payers recorded income of over $1 million however used deductions to cut their income rate to below the $18,200 tax free threshold.

In the report prepared for GetUp! the institute suggests a so-called Buffett Rule. A similar rule was proposed by Barack Obama and is named after US billionaire Warren Buffet. It would create a tax rate floor which would only allow legitimate deduction but would prevent them from cutting high income earners’ tax rate below a specified minimum.

While $2 billion might not seem like the biggest sum of money in terms of government funds, it’s but enough to make a difference. This difference could stop us from paying more for healthcare, could provide us with more from the pension and could make our lives easier.

Tell us, is this a budget saving measure you’d actually like to see in Australia? Considering that every pensioner is guaranteed to be untouched by this rule, will you give it your support? 

Starts at 60 Writers

The Starts at 60 writers team seek out interesting topics and write them especially for you.

  1. It’s a great thought but it involves very complex changes to tax legislation and neither the ATO nor Treasury have the capability to implement it!

    1 REPLY
    • Spot on it’s all too hard

  2. Sound plausible, but could you really see the government actually giving it back?

  3. This wouldn’t hurt them that hard. Then government can leave pensions alone

    2 REPLY
    • Pensions are a privilege received from the Government its not your money not all who receive a pension deserve a free hand out from the government. Why should thoes who have worked hard continue to be taxed and taxed because they have worked hard to achieve where they are today. Robin Hood is a TV show stop robbing the rich to give the poor when the poor have done absolutely nothing to better themselves because they know they can get a free ride and then complain they are not received enough money free from the government

    • Susan I agree I am not a financial expert. But my husband and I have both worked hard long hours to achieve a comfortable income . We weren’t born with silver spoons in our mouths just good work ethics.

  4. Good on the Government I sincerely hope they succeed, but the high incomers will find some way of wheedling their way out of it as usual

  5. How does anyone who earns $1 mill wangle their way to not paying any tax? How can they possibly have so many deductions to end up only earning the tax free amount of $18,200 They and/or their accountants should be put in jail for frauding the gov! About time something was done about it!

    6 REPLY
    • The word is Defrauding the government and you are right why should they get away with it.

    • Agree it should not be legal, and tax accountants should be the first to be taken to task for they would charge an arm and a leg to Manipulate the system to allow such possible losses to below the threshold. It doesn’t matter what the excuse is it is Fraud by both the client and tax accountant. Time to plug the loopholes and make them pay. Then next should be the corporations. Why should they pay less tax than the ordinary wage earner?

  6. The low flat rate tax in Singapore brings in more tax than the high variable tax rate they used to have

  7. Have said it for years .. tax the high earners and stop the companies from paying only 1% tax. Hit them where it hurts.

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