The Issue of Taxes

Left or Right - its difficult.

Published on December 17, 2003 By Muggaz In Politics

I have noted a few articles on the site, one in particular from Calor - http://calor.joeuser.com/index.asp?aid=1869 and it sparked quite a debate on the issue... well - it wasn't really much of a debate, because there isn't much representation from Calors point of view - however, there are a lot of valid points, and it is very interesting to know what this community thinks of taxes.

In Australia we are a bit further toward the left of the political spectrum - the difference is negligable though. This country has one of the most questionable tax systems on the planet, and i beleive it to be totally unfair.

Basically - we have a passable welfare/education system, if you dont earn much money, or if you have a dissability, or if you are injured, the government will look after you so you dont fade away - granted, it isn't the best in the world, but it is something.

Of course we pay taxes to maintain this welfare/education system, and any other initiatives our government has, but the rates at which we pay these taxes are propostorous. The Middle class get screwed over rather visciously.

The best example i can use is that if you are a business - the taxation is roughly 30% of your GP... it doesn't matter what the GP is, whether it be $100mil or $100k - its still 30% and $30k is alot more damaging to the smaller company than $30mil would be to the larger corporation. I just think there has to be a middle ground in there somewhere, either the smaller company pays less, or the rich more...

While all this is going on - you have the lower middle class working for the business owners, paying their taxes for the welfare/education system... so those who need the assistance and are deserving of it, obtain the necessary help, but those without a job just getting free rides...

The Rich continue to get richer, the lower classes just plod along - while the middle class work so they can support the welfare system, The confidence to start your own business is there - but many go bust in the beginning because of outrageous taxing...

It creates a bad domino effect... i think education is the key, but our taxation is so whack, that private schools get more government funding than the public schools, hence they are much better institutions of learning, and this usually sets the trends for life...

I suppose its all a means to an end, but i would like to know your thoughts.

Comments

Abe cubbage

on Dec 17, 2003

"...that private schools get more government funding than the public schools, hence they are much better institutions of learning..."

Having more money does not mean the quality of instruction will be better or worse. People look at statistics and see that schools in poor neighborhoods don't perform as well academically as those in richer neighborhoods, then they conclude that the cause is lack of money. But the reason is lack of support from home as well as the negative mindset of teachers at the poorer schools. I remember seeing a report on a news show a long time ago that illustrated that having more money did not help. An inner-city school was given a huge amount of money. They completely remodeled the school, bought the best equipment, and paid the teachers more, etcetera. The result? A negligible improvement in test scores.

Muggaz

on Dec 17, 2003

Of course there are exceptions to every rule... it is a clinically proven fact though that private schools produce better academic scores... also there will always be a bias towards privately educated people - if two people went for the same white colar job, and were both equally qualified and one went to a private and one went to a public, as a general rule, the private student would get the job everytime.

It has nothing to do with the level of education - its societies perception.

Solitair

on Dec 18, 2003

Actually Maggaz I quite like the idea of a single percentage for tax. Company tax and income tax tend to be very differnt though. Single rate company tax is the norm worldwide, with the rate varying greatly from country to country. This means that 30K or 30M is directly related to your profits. It's fair. Most countries have incentives and lower regulation requirements on smaller companies anyway.

Income tax though is another matter. For some reason it's taken for granted that rich people should pay a higher percentage of their income in taxes and that poorer people should get a free ride. Why? Most countries play with the boundary points between poor, middle class and rich, and with the actual percentage, but does any country actually deal with the fundanemtal inequality problem?

I believe that any tax system that requires a definition of poor or rich is wrong. Such a definition and setting up or arbitary levels just asks for corruption, red tape and system abuse. No make everyone pay equal percentage taxes and give everyone equal government support.

Sounds very rich orientated but in reality is not. For example, imaging everyone pays 50% taxes and government spends 50% of it's budget on social welfare / pensions. Take 3 people. Person 1 earns 400k, person 2 earns 15k, person 3 earns nothing and is married to person 2. Tax paid is 200k, 7.5k and 0k. Social welfare budget is 103.25k = 33k paid to each. Money in pocket is 133k, 40.5k and 33k. Best of all every extra penny earnt adds to your income with NO loss of benefits or changes in tax levels, etc. Money saved by government in simple system would be enormous. As a tax payer I hate paying civil servants to complicate tax laws and keep their jobs.

Paul.

OccultPizza

on Dec 21, 2003

Yeah that is kind of a muddled progressive tax. It would be better if the progressive tax was based upon the amount of product you buy as opposed to output.

stevendedalus

on Dec 22, 2003

It seems strange that Australia--apparently concerned with a generous safety net for its citizens--would have a flat tax when it is clear to me that the country would ease the burden of the middle class with a progressive tax. You admit that the business paying 30K fares worse than the one shelling out 30M. That is because taxes are based on the amount left over after taxes and determines one's lifestyle. Making a $400 a week, the shopper who spends ten dollars is going to feel it more than the shopper making $1000 a week and spends $100.

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