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  #91  
Old 11th August 2017, 10:13 AM
wadaye wadaye is offline
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Default Re: Why income/wealth equality is getting worse

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Stub King said View Post
US centric but I would bet applies to Oz

Our Broken Economy, in One Simple Chart

https://www.nytimes.com/interactive/...nequality.html


Quote:
A well-known team of inequality researchers — Thomas Piketty, Emmanuel Saez and Gabriel Zucman — has been getting some attention recently for a chart it produced. It shows the change in income between 1980 and 2014 for every point on the distribution, and it neatly summarizes the recent soaring of inequality.
If income inequality is soaring, that is only the derivative of the main issue which is wealth inequality which is just atmospheric.

Imagine if one person or corporation came to own say, the whole of India (British East India Company, or in modern terms say a company came to own 99% of the earth's resources and finances. Then, would a wealth or asset tax be justified?

I know there are already small precedents for taxing assets, via the Land Tax in NSW for example. But this type of asset tax needs to be scaled up dramatically in both amount and scope of assets taxed if it is to really actually tax inequality.

I note that nobody here really disagrees with the principle of asset taxation, merely with the practicalities of it and the starting points of where it should be introduced.
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  #92  
Old 11th August 2017, 04:15 PM
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Stub King Stub King is offline
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Default Re: Why income/wealth equality is getting worse

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wadaye said View Post
If income inequality is soaring, that is only the derivative of the main issue which is wealth inequality which is just atmospheric.
I think this is a little bit of a chicken and egg situation.

Quote:
I know there are already small precedents for taxing assets, via the Land Tax in NSW for example. But this type of asset tax needs to be scaled up dramatically in both amount and scope of assets taxed if it is to really actually tax inequality.

I note that nobody here really disagrees with the principle of asset taxation, merely with the practicalities of it and the starting points of where it should be introduced.
there are plenty of precedents for taxing assets. council rates and car rego are two common taxes which almost everyone pays. then you have taxes on estates, inheritance, property and so on. naturally different jurisdictions tax different things, but asset based taxation is very common.

I do not know if nobody here disagrees. I can only speak for myself: I don't.

The problem with taxing assets is that it is quite susceptible to both evasion and collateral damage. an example of the latter is property tax. most taxation schemes aim to be progressive, so tax is proportional to asset value. taxing a retired couple who happened to have bought in the right suburb 40 years ago makes no sense. so how do you distinguish between such a case and some millionaire who has 10 homes? you start introducing all sorts of tests and conditions which become so convoluted people trip up all the time (unless of course you can afford top quality tax advice). then you have the flat taxes which are really regressive. a farmer needs a solid SUV. Mums in Toorak don't. but it's the same car so again you end up with a bazillion exceptions.

as far as evasion goes, assets can be owned by X and used by Y, where X is a different entity taxation wise. so now you end up in an arms race. you tax, people evade, your close loophole A, they find a new one, etc. This process is clearly weighs in more on those who do not have the means to keep up: i.e. the working and middle classes.

there are other taxes which can be more effective. tax on investment transactions, tax on luxury items, tax on executive bonuses.

but ultimately it will always be a game of cat and mouse.
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  #93  
Old 11th August 2017, 05:13 PM
wadaye wadaye is offline
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Default Re: Why income/wealth equality is getting worse

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Stub King said View Post
Quote:
wadaye said View Post
If income inequality is soaring, that is only the derivative of the main issue which is wealth inequality which is just atmospheric.
I think this is a little bit of a chicken and egg situation.

Quote:
I know there are already small precedents for taxing assets, via the Land Tax in NSW for example. But this type of asset tax needs to be scaled up dramatically in both amount and scope of assets taxed if it is to really actually tax inequality.

I note that nobody here really disagrees with the principle of asset taxation, merely with the practicalities of it and the starting points of where it should be introduced.
there are plenty of precedents for taxing assets. council rates and car rego are two common taxes which almost everyone pays. then you have taxes on estates, inheritance, property and so on. naturally different jurisdictions tax different things, but asset based taxation is very common.

I do not know if nobody here disagrees. I can only speak for myself: I don't.

The problem with taxing assets is that it is quite susceptible to both evasion and collateral damage. an example of the latter is property tax. most taxation schemes aim to be progressive, so tax is proportional to asset value. taxing a retired couple who happened to have bought in the right suburb 40 years ago makes no sense. so how do you distinguish between such a case and some millionaire who has 10 homes? you start introducing all sorts of tests and conditions which become so convoluted people trip up all the time (unless of course you can afford top quality tax advice). then you have the flat taxes which are really regressive. a farmer needs a solid SUV. Mums in Toorak don't. but it's the same car so again you end up with a bazillion exceptions.

as far as evasion goes, assets can be owned by X and used by Y, where X is a different entity taxation wise. so now you end up in an arms race. you tax, people evade, your close loophole A, they find a new one, etc. This process is clearly weighs in more on those who do not have the means to keep up: i.e. the working and middle classes.

there are other taxes which can be more effective. tax on investment transactions, tax on luxury items, tax on executive bonuses.

but ultimately it will always be a game of cat and mouse.
To take the example of an elderly couple in a home presently valued at say 1.6million, who get a pension. Taxing their assets at a rate of 1% per year would be a $16000 tax. Note that they don't pay any other tax except for if they have income from say shares or investments.
Then you have a single mum who might if she has a great job earn say $65K. With repayments of HECS, medicare levy and so on she is going to pay roughly $15K.

Out of the balance she has to pay the rent which is skyrocketing, as well as all the costs the pensioners have to pay, only more because there are kids as well, and then she has to pay the rego (can't walk to the shops, has to have the car for work) school costs, etcetera.

Her net assets are say negative $80k below zero.

So the tax these two people pay if this fairer wealth tax is introduced is the same. But even that would be unfair to the working mum. One is unemployed whether they can work or not. The other is going backwards constantly.

As a proportion of assets the first is paying about 1% per year which can easily be readily loaned by a bank at very fair interest rates.
If the working mum has to borrow money she may have to do so on a credit card at three to four times the interest rate that the first person would be able to borrow at.

The working mum pays tax as a proportion of net assets, well she doesn't have any net assets and yet she pays tax as if her wealth is higher than the pensioners (who doesn't presently pay

It really is time around the world that a wealth tax was introduced. The disparities of wealth in Australia from the humpies where some Aboriginal folk still live and die too young, to the mansions are a reflection of the present for large numbers of people around the world, and a reflection of the future for mainstream Australia too.

Edit - Inequality will never be dealt with unless it is addressed head-on, i.e. such as for instance by a very mild taxation on wealth. Someone after all has to shoulder a burden if inequality is to be addressed. Otherwise its not addressed of course, because while everyone is equal, some are more equal than others.

The scenario above is not really about lifestyle, its about what happens to wealth. Presently the tax system is only concerned with the derivative of wealth, namely annual income. That is a very blinkered view of capacity to pay tax.
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Last edited by wadaye; 11th August 2017 at 05:20 PM.
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  #94  
Old 11th August 2017, 06:23 PM
wadaye wadaye is offline
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Default Re: Why income/wealth equality is getting worse

Actually I think the lady would pay a bit more than that when HECS is taken into consideration but I am not looking at the exact figures.
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  #95  
Old 12th August 2017, 09:55 PM
wadaye wadaye is offline
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Default Re: Why income/wealth equality is getting worse

Talking about tackling inequality I am astounded by the quality of intellectual discourse from South Africa in a public forum criticising the ANC. It just played live on ABC news radio

Its not posted yet but should be soon
http://www.bbc.co.uk/programmes/p00y...pisodes/player
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  #96  
Old 21st August 2017, 07:40 AM
wadaye wadaye is offline
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Default Re: Why income/wealth equality is getting worse

The only way to tackle inequality is to tax it.
Taxes only tax the minor subset of wealth being income in a given year, and treats everyone as equal in that regard, whether they are a billionaire, have assets worth a million dollars (their home), or are struggling on a wage to pay their rent, debts, hecs, and childcare fees.
The person in the million dollar house pays no tax if they don't work. The person who owns nothing has to pay the tax, for the police to protect the assets of those who own them.

This is really very crazy. Negative gearing supercharges this insanity and is the cut in the achilles tendon of any future revenue.
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  #97  
Old 6th September 2017, 02:47 PM
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Default Re: Why income/wealth equality is getting worse

Ross Gittens, again , in Fairfax:

The most arrogant people in Australia are business people and we're sick of them

Quote:
How the worm – and the world – turns. When the Abbott government came to power just four years ago, it claimed its arrival signalled the "end of the age of entitlement". Don't laugh, it's happening – but in the opposite way to what treasurer Joe Hockey had in mind ...
Lots more at link.

May the worm turn more quickly
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