Talking Politics

[The_General]

The LNP show they still really want a flat earth tax by continuing to support getting rid of the 37c tax bracket. The income tax system is progressive, it makes the system fairer, those who can afford to pay more end up paying more, they should make it more progressive, how about 55c tax above $300K.

DS

I don't think I could ever see someone being taxed more than half of what they earn. I think the issue I have is the upper end of the spectrum
are getting significantly higher and higher remuneration than their workforces. I haven't bothered to check data, but I'd imagine exec pay
is going up at a rate higher than CPI, whereas "workers" have had real wages go back.

Maybe to deal with that, we could tie remuneration packages for CEO/execs of companies so that they do not get paid more than a certain
ratio more than the average wage of their staff.
So the higher the wages of their workforce, the higher the remuneration package they'd be entitled to get. Maybe 5x what they earn
as an example. An exception to this may be when the person is the business owner - given they've invested capital at their own risk.

That would certainly incentivize people to try lift others up, rather than take a greater slice of the pie for themselves.

 

[tigersnake]

More than likely they realise they've been totally wedgied n that at least half a tax cut is better than nothing at all for the punter in the street.

The punter in the street are not in the tax bracket the LNP is concerned about.

 

[The_General]

More than likely they realise they've been totally wedgied n that at least half a tax cut is better than nothing at all for the punter in the street.

They're announcing/hinting today they'll introduce a Stage 4 if they get elected, which will be to implement stage 3 style changes as they don't want "disincentives for people to get promoted, work extra hours or take a new job"

I am not motivated by wages. I've never left a job just go get a higher wage (I've left due to other reasons, higher wages have happened as a side benefit of better working conditions)...I'd never in my wildest dreams consider not taking a job or promotion because of a tax rate. More is more, even if it's not proportionally the same amount. Maybe I'm an idiot, but if someone said "hey, we'll give you $50k (theoretical), but you'll only get $25k in your pocket" I wouldn't give a *smile*, I'd be over the moon.

These folks are not connected to reality methinks.

 

[Sintiger]

The LNP show they still really want a flat earth tax by continuing to support getting rid of the 37c tax bracket. The income tax system is progressive, it makes the system fairer, those who can afford to pay more end up paying more, they should make it more progressive, how about 55c tax above $300K.

DS

I don't like tax schemes that mean you pay more in income tax than you earn for extra income. The disincentive to take on high pressure and higher earning jobs would be enormous

I would prefer that we increase the level of GST but use that money to significantly reduce the tax bands for lower income earners. That would need to be accompanied with a review of welfare payments and pensions as well.

There is so much tax reform we could do and imo income tax is not the only place we should look

 

[Sintiger]

Episode 2 of nemesis was absorbing. What a *smile* show the liberal party was/is.
So much to unpack but one of the key takeaways for me was the mistakes Turnbull made in the 2016 election as well as the Mediscare campaign. I’m no liberal supporter but if they were to win the 2016 election it would have been better if they had a majority of 5-10 instead of 1. Any hope Malcolm had of doing anything sensible was gone because he only needed one defector.
Turnbull was popular when he became leader because he was a moderate who believed in some social programs and in climate change. The right wing stopped him from doing anything, he lost his popularity and then they got rid of him because he lost his popularity. I am sure it was more complicated than that but that was my read watching it

 

[Baloo]

Agree that Malcolm could have been one of our better PMs if he controlled the 2016 election better. That screw-up gave us Morrisson and Dutton the thug.

My other take away from that is the realisation that Abbott *really* believe climate change is *smile*. It's more than his benefactors and puppet masters telling him Climate Change measures are bad because they'll make less money. He honestly believes it's *smile*.

I find it strange that the one major player during these times that is rarely mentioned, and never has any critique of him, is Cigar Hockey. All the other players get some airtime, whether they are being interviewed or not, but Hockey gets mentioned in passing.

 

[The_General]

I don't like tax schemes that mean you pay more in income tax than you earn for extra income. The disincentive to take on high pressure and higher earning jobs would be enormous

I would prefer that we increase the level of GST but use that money to significantly reduce the tax bands for lower income earners. That would need to be accompanied with a review of welfare payments and pensions as well.

There is so much tax reform we could do and imo income tax is not the only place we should look

GST tends to hurt the lower end of the economy more than top end. Why? They have no/little disposable income, so everything is getting taxed.
I'm not sure you can give back to the lower end of the PAYG people without also further increasing the benefit to the top end.

I'd be aiming to tax wealth more heavily, not income - after the first home.

 

[Baloo]

GST tends to hurt the lower end of the economy more than top end. Why? They have no/little disposable income, so everything is getting taxed.
I'm not sure you can give back to the lower end of the PAYG people without also further increasing the benefit to the top end.

I'd be aiming to tax wealth more heavily, not income - after the first home.

Sin's point is that a reduction in direct taxes needs to happen hand in hand with a GST increase.

There so much wrong with our tax system that all we can do is tweek here and there. The Howard Costello Middle Class Welfare creation is something else that needs to be wound back, but can't because it will mean a loss at the next election.

 

[Sintiger]

GST tends to hurt the lower end of the economy more than top end. Why? They have no/little disposable income, so everything is getting taxed.
I'm not sure you can give back to the lower end of the PAYG people without also further increasing the benefit to the top end.

I'd be aiming to tax wealth more heavily, not income - after the first home.

By altering the tax scales for the lowest paid you give the same $ benefit to the highest paid as you give to the lowest paid, the philosophy being that the extra cost of the essentials from a GST increase is compensated for the same way for all.
Of course GST a levied on most things so by definition the more you spend the more GST you pay but if there is no compensation by changing the tax scales for higher income beyond that given to lower income taxpayers then the rich are less well compensated.
That’s the theory

 

[Baloo]

Dutton's Army copping a roasting during QT this week. They are just not getting any traction at all against Albo and he's making them pay big time.

 

[The_General]

Sin's point is that a reduction in direct taxes needs to happen hand in hand with a GST increase.

There so much wrong with our tax system that all we can do is tweek here and there. The Howard Costello Middle Class Welfare creation is something else that needs to be wound back, but can't because it will mean a loss at the next election.

Understood the point or objective. I don't know how that happens practically. I don't think there's been any country in the world which has implemented this (my ignorance will come back to bite me here I'm sure!) that has improved equity in society, not further separated the metaphorical "haves and have nots"

 

[Baloo]

Understood the point or objective. I don't know how that happens practically. I don't think there's been any country in the world which has implemented this (my ignorance will come back to bite me here I'm sure!) that has improved equity in society, not further separated the metaphorical "haves and have nots"

I don't know what the answer is. Scandinavian countries are taxed at ridiculous levels, but the governments provide social services and are top notch and the population for the most part accept that they give more if they earn more, but they see the results and they benefit from them. I'm not sure our government(s) can be trusted to do the same.

Really, a complete remake of the tax system needs to happen. Strip middle class welfare away. Provide support and assistance to those that need it but ensure it's not generous enough to discourage people from working there way to salary or tax brackets where they won't receive it. Preferential tax breaks for property investments needs to be scrapped. All investments should have the same tax breaks. Franking credits are a joke. There's a lot that can be fixed and needs to be fixed. But there's no chance it will happen with our current system of government and an election every 3 years (or less)

 

[The_General]

Got a mortgage? You’re losing in the war on the cost of living

The official inflation rate is 4.1 per cent. For people with a job and a home loan, the real inflation rate is much higher.

www.theage.com.au

Got a mortgage? You’re losing in the war on the cost of living​

ByShane Wright​

February 7, 2024 — 3.44pm
Save

​

Normal text sizeLarger text sizeVery large text size

People with a mortgage are suffering the most from spiralling inflation as self-funded retirees manage to avoid the worst of soaring prices and high interest rates.
A special breakdown of the price pressures facing different parts of the community shows the real inflation rate for working families paying off a home loan is almost 70 per cent higher than the official consumer price index.

And the inflation hit is being exacerbated by the Reserve Bank’s aggressive interest rate increases.
The consumer price index, which tracks hundreds of thousands of prices across the major capital cities, shows inflation edged down to 4.1 per cent in the 12 months to the end of December. A year earlier it was at 7.8 per cent.

But the Australian Bureau of Statistics knows groups within the community have vastly different spending patterns, which affects their own “inflation” rates.
Working families are much more likely than any other part of the community to have a mortgage. Mortgage rates aren’t included in the consumer price index (a practice that goes back to the 1990s).

The price of mortgage interest for working families has soared by 109 per cent since late 2020.CREDITETER RAE
Those spending patterns and the inclusion of mortgage interest mean there are considerable differences between the official measure of inflation and the actual inflation being felt by people.
Data from the bureau released on Wednesday showed the effective inflation rate for workers with a mortgage at 6.9 per cent. While down from 9 per cent in the September quarter, it is still well ahead of the inflation levels faced by any other part of the community.

One of the main reasons is the Reserve Bank. By lifting official interest rates to an 11-year high of 4.35 per cent in November in a bid to quell inflation, the bank has pushed it up for the third of the population with a mortgage.
Since December 2020, when the official cash rate was at 0.1 per cent, the price of mortgage interest on working families has climbed by 109 per cent.

By contrast, the inflation rate for self-funded retirees, few of whom have a mortgage, has slowed to 4 per cent – lower than the consumer price index.
Age pensioners and people on other forms of welfare, with inflation rates of 4.4 per cent and 5.2 per cent respectively, are better off than working families but still struggling with price rises above the official measure.

A key problem for all groups is the cost of insurance.
Loading
The bureau noted that increased insurance prices had translated into higher premiums across car, house and home contents insurances for all parts of the community, reflecting the spike in global reinsurance costs and natural disasters.
Inflation has also pushed up the cost of replacing insured goods such as new homes.
Across working families, age pensioners, self-funded retirees and other welfare recipients, insurance prices have climbed by about 30 per cent since the end of 2020, with much of that increase in the past 12 months.

In her press conference on Tuesday, Reserve Bank governor Michele Bullock noted that the higher interest rates the bank was using to bring down inflation struggled to affect certain goods and services. One of those was insurance.
“Insurance costs and the way insurance is moving in relation to climate change, in relation to the
effect on premiums and profit-margin rebuilding, reinsurance costs – these are things monetary policy can’t do anything about,” she said.

While most prices continue to climb, there are areas where parts of the community are getting some relief.
Prices for clothing and footwear have fallen by 1 per cent for working families over the past year. The fall has been more pronounced for age pensioners, who spend proportionately more on clothes and shoes, with prices down 1.5 per cent.

Higher interest rates have hit demand for furniture, carpets and household goods. That is affecting prices, which in the final three months of 2023 fell by 0.8 per cent for working families, the second consecutive drop.
Transport and education prices also fell in the December quarter.

 

[DavidSSS]

I don't think I could ever see someone being taxed more than half of what they earn. I think the issue I have is the upper end of the spectrum
are getting significantly higher and higher remuneration than their workforces. I haven't bothered to check data, but I'd imagine exec pay
is going up at a rate higher than CPI, whereas "workers" have had real wages go back.

Maybe to deal with that, we could tie remuneration packages for CEO/execs of companies so that they do not get paid more than a certain
ratio more than the average wage of their staff.
So the higher the wages of their workforce, the higher the remuneration package they'd be entitled to get. Maybe 5x what they earn
as an example. An exception to this may be when the person is the business owner - given they've invested capital at their own risk.

That would certainly incentivize people to try lift others up, rather than take a greater slice of the pie for themselves.

But back when we did tax high income earners at well over 50% (up to 91% in the USA under a Republican President) the disparity in wages was far lower. Coincidence?

But, more to the point, as Pikkety shows with actual data, income and even wealth inequality did reduce in the post war period of high taxes on the wealthy. It is about the only time that income and wealth inequality has reduced. Prior to WWII only those at the really pointy end of the income/wealth scale actually owned any substantial property, in other words had any wealth. This changed after WWII. While most of the middle class wealth was in housing, there was actually some level of middle class wealth. This is again disappearing as the middle class of the current generations cannot buy houses and there is little prospect of gaining any wealth. All this at the same time that tax rates on the very well paid have dropped massively. I think we used to have a tax rate around 60% back years ago and the Reagan tax cuts were reducing the top rate from 76% in the early 1980s. The higher taxes on the very well paid are clearly not the only reason we now have widening inequality of wages and wealth, but the reductions do contribute to the problem.

In terms of tax reform the idea of raising GST is a lazy option, and a bad option. GST is a regressive tax, we all know this. The better options would be to tax wealth apart from the main place of residence, stop giving tax breaks to those who can't make money out of their rental properties, higher tax rates for the very well paid (do people really have an issue with, for example, a 60% tax rate on income over $1million?), reducing tax avoidance, getting rid of concessions on capital gains tax (you work you pay full tax rate, you do nothing but buy equities and you get a concession, for basically collecting economic rent while you do nothing? Really?). But these reforms take guts and would take a change in media laws as the rabid right wing media would go apeshit.

DS

 

[DavidSSS]

Got a mortgage? You’re losing in the war on the cost of living

The official inflation rate is 4.1 per cent. For people with a job and a home loan, the real inflation rate is much higher.

www.theage.com.au

Got a mortgage? You’re losing in the war on the cost of living​

ByShane Wright​

February 7, 2024 — 3.44pm
Save

​

Normal text sizeLarger text sizeVery large text size

People with a mortgage are suffering the most from spiralling inflation as self-funded retirees manage to avoid the worst of soaring prices and high interest rates.
A special breakdown of the price pressures facing different parts of the community shows the real inflation rate for working families paying off a home loan is almost 70 per cent higher than the official consumer price index.

And the inflation hit is being exacerbated by the Reserve Bank’s aggressive interest rate increases.
The consumer price index, which tracks hundreds of thousands of prices across the major capital cities, shows inflation edged down to 4.1 per cent in the 12 months to the end of December. A year earlier it was at 7.8 per cent.

But the Australian Bureau of Statistics knows groups within the community have vastly different spending patterns, which affects their own “inflation” rates.
Working families are much more likely than any other part of the community to have a mortgage. Mortgage rates aren’t included in the consumer price index (a practice that goes back to the 1990s).

The price of mortgage interest for working families has soared by 109 per cent since late 2020.CREDITETER RAE
Those spending patterns and the inclusion of mortgage interest mean there are considerable differences between the official measure of inflation and the actual inflation being felt by people.
Data from the bureau released on Wednesday showed the effective inflation rate for workers with a mortgage at 6.9 per cent. While down from 9 per cent in the September quarter, it is still well ahead of the inflation levels faced by any other part of the community.

One of the main reasons is the Reserve Bank. By lifting official interest rates to an 11-year high of 4.35 per cent in November in a bid to quell inflation, the bank has pushed it up for the third of the population with a mortgage.
Since December 2020, when the official cash rate was at 0.1 per cent, the price of mortgage interest on working families has climbed by 109 per cent.

By contrast, the inflation rate for self-funded retirees, few of whom have a mortgage, has slowed to 4 per cent – lower than the consumer price index.
Age pensioners and people on other forms of welfare, with inflation rates of 4.4 per cent and 5.2 per cent respectively, are better off than working families but still struggling with price rises above the official measure.

A key problem for all groups is the cost of insurance.
Loading
The bureau noted that increased insurance prices had translated into higher premiums across car, house and home contents insurances for all parts of the community, reflecting the spike in global reinsurance costs and natural disasters.
Inflation has also pushed up the cost of replacing insured goods such as new homes.
Across working families, age pensioners, self-funded retirees and other welfare recipients, insurance prices have climbed by about 30 per cent since the end of 2020, with much of that increase in the past 12 months.

In her press conference on Tuesday, Reserve Bank governor Michele Bullock noted that the higher interest rates the bank was using to bring down inflation struggled to affect certain goods and services. One of those was insurance.
“Insurance costs and the way insurance is moving in relation to climate change, in relation to the
effect on premiums and profit-margin rebuilding, reinsurance costs – these are things monetary policy can’t do anything about,” she said.

While most prices continue to climb, there are areas where parts of the community are getting some relief.
Prices for clothing and footwear have fallen by 1 per cent for working families over the past year. The fall has been more pronounced for age pensioners, who spend proportionately more on clothes and shoes, with prices down 1.5 per cent.

Higher interest rates have hit demand for furniture, carpets and household goods. That is affecting prices, which in the final three months of 2023 fell by 0.8 per cent for working families, the second consecutive drop.
Transport and education prices also fell in the December quarter.

The trouble is that the Reserve Bank is stuck in the monetarist mindset that equates inflation with money supply, not even sure they consider the velocity of money. It is a simplistic model with little resemblance to reality. The inflation issue we faced after the pandemic was predominantly a supply side issue and the hammer the Reserve Bank brings to fix this? Yeah, let's go after demand. Idiotic. It is strange how supply side economists constantly talk about how we need to help suppliers when they want to see GDP rise, but when things go wrong, like when we get inflation, suddenly it is the demand side which is to blame.

The other aspect is that inflation is seen as the biggest baddest problem we can possibly have. Why is this? Is it because the finance sector loses out of inflation which has the beneficial effect of eroding debt in real terms? Eroding debt would be a good thing given the size of non-government debt we have along with most western countries, but no-one seems to want to deal with that problem.

DS

 

[Baloo]

If anyone still has doubts that the Dutton way is being carefully managed by the same RW Thinktanks in the US who are managing Trumps campaign, do yourself a favour and watch last night's 7:30 Dutton interview. Lies after lies after mistruth after ignoring the question and answering the question he wanted. Then when he didn't like a question, he turned it into an attack on the interviewer and the broadcaster, accusing them of bias and repeating Government lines. He couldn't have done himself any favours with anyone that isn't so far down the News Limited rabbit hole that they think Murdochs chemo'd prostrate is actually the sun.

It wasn't a good look for an opposition leader. So bad that if Dutton gets to be PM, he would do the impossible, which is be a worse PM than Morrisson, who did the impossible by being a worse PM than Abbott.

 

[tigerman]

If anyone still has doubts that the Dutton way is being carefully managed by the same RW Thinktanks in the US who are managing Trumps campaign, do yourself a favour and watch last night's 7:30 Dutton interview. Lies after lies after mistruth after ignoring the question and answering the question he wanted. Then when he didn't like a question, he turned it into an attack on the interviewer and the broadcaster, accusing them of bias and repeating Government lines. He couldn't have done himself any favours with anyone that isn't so far down the News Limited rabbit hole that they think Murdochs chemo'd prostrate is actually the sun.

It wasn't a good look for an opposition leader. So bad that if Dutton gets to be PM, he would do the impossible, which is be a worse PM than Morrisson, who did the impossible by being a worse PM than Abbott.

Yes, it was straight out of the Trump playbook, I was waiting for him come out with "fake News", I'm sure it won't be too long before he uses it.

 

[RoarEmotion]

If anyone still has doubts that the Dutton way is being carefully managed by the same RW Thinktanks in the US who are managing Trumps campaign, do yourself a favour and watch last night's 7:30 Dutton interview. Lies after lies after mistruth after ignoring the question and answering the question he wanted. Then when he didn't like a question, he turned it into an attack on the interviewer and the broadcaster, accusing them of bias and repeating Government lines. He couldn't have done himself any favours with anyone that isn't so far down the News Limited rabbit hole that they think Murdochs chemo'd prostrate is actually the sun.

It wasn't a good look for an opposition leader. So bad that if Dutton gets to be PM, he would do the impossible, which is be a worse PM than Morrisson, who did the impossible by being a worse PM than Abbott.

I think of politics in evolutionary terms.

To get elected and then not got killed off internally you need to be more of a narcissistic cutthroat lying deal making over principles *smile* than the previous one or your line is ended.

Eventually we got ScoMo as the top of the ‘evolutionary’ tree. Dutton is next.

 

[Baloo]

Dutton is next.

So we can expect Sussssssan Ley after Spud the Thug?

 

[Baloo]

Good piece on Crikey about the ALP Stage 3 changes and how the media are completely out of step with the electorate.

How the press corps got caught in the tax cuts wedge

Turns out voters like a government that adapts and adjusts. Someone needs to tell the press gallery.

www.crikey.com.au