GST rise who will benefit 15% GST proposed

Discussion in 'Markets & Economies' started by switchtronics, Jul 22, 2015.

  1. smk762

    smk762 Active Member Silver Stacker

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    In the current system, they already print money and spend it on whatever they like, and we as citizens are left on the hook to pay the debt the RBA wills into existence through the flick of a pen (or mouseclick).

    If the politicians had a fixed budgetary allocation, they wouldn't be able to spend it on anything beyond simple governance unless voluntary donations were collected for specific initiatives. If the citizens had a BCF wage it would facilitate a universal ability of individual sovereignty.
    Ideally the proposed system would be adopted globally, but it can work even if not. For a start, foreign traders can be confident there will be no surprises in terms of how much money is printed per year, as this is predetermined. They can also be confident that the nation's liquidity is maintained and the velocity of money will not suffer volatility. As long as the nation continues to export enough good and services that are in demand internationally to import international items desired domestically, forex valuations can effectively be calculated on a trade weighted index basis (if floating). Alternatively, a fixed currency exchange system based on tangible commodities is an option (e.g. gold), though it would be wise to spread the risk by using a basket approach (i.e. inclusive of other national resource assets such as coal, iron, uranium etc.).

    The most likely reason this proposed system would fail would be due to foreign reserve bank intervention towards economic or military warfare in order to maintain it's global financial control. In a global universal floating fiat system as we have now, everything is based on perception, which is far easier to manipulate than anyone should be comfortable with. Fear and greed provide tacit consent to submission of individual sovereignty, as it always has. Are we really so unable to modify our perceptions toward confidence and generosity?

    I am aware that the likely response to that is no. And that is why the GST will go up, why income tax will not be abolished, and why the cost of the war effort will continue to burden us with debt while dividing us with violence and abuse, justifying further reductions of liberty and increases in state power.
     
  2. hawkeye

    hawkeye New Member Silver Stacker

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    Inflation benefits those with significant assets the most and those with large debts (ie. property investors). And those benefits are paid for mostly by those without such assets and debts.

    And it distorts economic calculations in the economy.
     
  3. hawkeye

    hawkeye New Member Silver Stacker

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    So what you are saying is that you think you can centrally plan the economy?
     
  4. smk762

    smk762 Active Member Silver Stacker

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    All forms of fiat have no current or future value, unless perceived to. At worst, inflation would be as a constant in proportion to the time period of BCF payments, and easily anticipated. Price controls are contrary to individual sovereignty, but free market dynamics should generate sufficient competition to maintain the price of necessities in line with available capital.

    Today, with record low interest rates, there is little incentive to save. Apparently this promotes investment in productive enterprise. The only destruction of capital would be due to inflation. Given a constant rate of payment, I'm not sure why the price of goods would shift so rapidly. I'm sure that initially there would be some wrinkles, but once the transition settles, it should be far less volatile than the current system.
     
  5. hawkeye

    hawkeye New Member Silver Stacker

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    You say all this like it's certainties, yet I see no reason to agree with it at all. I could pick away at little parts of it, but honestly, my suggestion is that if you have thought all this through, you should write it up in a paper and present it at an economic conference. Of course, you would have to have some actual calculations with real data to demonstrate your system. (Have you done this?)

    I'm trying to not be deliberately facetious here, because degreed economists have been working on this type of stuff for decades and not come up with anything that works. More and more economists all over the world have come to the acceptance that economic central planning doesn't work due to good theoretical and practical reasons. It's to do with human action and behaviour. There's a reason why most of us on this board who have done any reasonable reading into economics have largely come to the same conclusion. It's just a question of how to get from here to there which no-one seems to know at this point (which makes it an interesting question). But honestly the grand plans of central planners belong in the 20th century. That time has past.
     
  6. JulieW

    JulieW Well-Known Member Silver Stacker

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    I'm not being facetious, but I was paying close to that as an average wage slave.
     
  7. col0016

    col0016 Active Member

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    Will they give themselves 30% pay rises to cover the extra costs they have?
     
  8. switchtronics

    switchtronics Active Member

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    "
    Given that the government has all but acknowledged it has no plans or policies designed to make the economy and therefore tax revenues grow, there now appears to be a unanimous view that taxes need to rise. Joe Hockey has already revealed his hand, saying his white paper is intended to address "our over-reliance" on personal income tax and company tax. It's also no surprise that the highly paid economists argue for increases to the GST ("Super tax perks for the wealthy in the gun", 31/3).

    Economics 101 tells you that reducing income tax and increasing the GST massively shifts the tax burden from the high- to low-income earners. Someone, and you would think it would be Labor, needs to argue that the tax that should be increased to tackle the revenue shortfall and to stimulate the economy is personal income tax. This achieves a number of significant long-term benefits to the economy.

    Income tax as currently structured is a progressive tax, which means those who have a higher capacity to pay more tax do pay more, while those on lower incomes pay less. Increasing income tax does not have to impact on low-income earners' spending power. They will continue to spend all their net pay on goods and services, which churns the economy and creates jobs. Increasing the GST reduces low-income spending power, which hurts the economy. High-income earners' spending and saving habits won't change, even if top marginal rates are increased. Contrary to Joe Hockey's claims that income tax increases would dampen economic activity, increasing the GST would be far worse.

    Mike Fajdiga, Beaumaris

    How about a budget that hits rich?

    Wouldn't it be wonderful if our government presented a budget that hit the rich, instead of low-income earners? This is what such a budget would do: abolish tax breaks for big mining, raising $10.5billion; reinstate the price on pollution, raising $18billion; implement the original super profits tax on big mining, raising $18.6billion; impose a $2 per tonne levy on thermal coal exports, raising $1.7billion; reduce tax avoidance by taxing discretionary trusts (excepting farmers) the same as corporations, raising $3.6billion; implement a millionaires tax on incomes over $1million, raising $637million; apply a public insurance levy on the big four banks that are "too big to fail", raising $16.8billion; introduce a progressive superannuation tax system, replacing the 15per cent flat rate, to prevent tax loopholes being rorted by the mega-rich, raising $10.16billion. Quite easy, really.

    Mike Puleston, Brunswick

    Labor's submission is crucial

    If one thing is to come from this taxation white paper, let us hope it is genuine reform. The last tax review yielded an extra tax or two, but no structural change, and the Coalition in opposition refused to co-operate. A review, especially one about tax, will always invite thousands of submissions from diverse groups. Yet, the most important submission must surely come from the Labor Party. Bipartisanship is crucial to this exercise because, without it, neither party will have an appetite for lasting reform in an election year.

    "The age"
     
  9. JulieW

    JulieW Well-Known Member Silver Stacker

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    Whatever happened to the 'tax' on HFT financial transactions?
     
  10. col0016

    col0016 Active Member

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    I'd find that very easy to get behind if they offset it by lowering income taxes.
     
  11. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    So the original U.S. version was:

    - the "Buffett rule" is the "basic principle that no household making over $1 million annually should pay a smaller share of their income in taxes than middle-class families pay".

    But in Australia, a nation with higher salaries and higher cost of living expenses, it will be $350k and probably not indexed. Why do I feel there's a catch? This just feels like some sort of discincentive to working hard rather than meaningful tax reform.
     
  12. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    It would probably end up, somehow, adding even more fees to the management of mandatory super contributions. Never trust the government to implement something like that without a caveat that sucks more money from average employees and further enriches those we are supposed to think are getting penalized for their business activity (I read the ASIC report on this and Australia doesn't have anywhere near the issue with HFT compared to the U.S.)
     
  13. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    Besides fundamental issues with punishing success, I think you'll find the governement's definition of rich will creep downwards.

    Now, obviously, we don't want to encourage any activity that would grow the economy because that might result in more of those dirty "rich people". So ultimately the government will just have to tax the remaining middle and low income earners even more because innovative and hard working Australians will eventually be punished so much that they'll simply give up or move offshore.
     
  14. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    The government simply needs to make wiser choices win the tax income it currently receives, and look towards encouraging economic growth rather than looking to blame taxpayers.
     
  15. hawkeye

    hawkeye New Member Silver Stacker

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    Your average taxpayer expects much more than that and makes it very clear around election time. There's just no incentive for the government to do that. The one who makes the best promises wins. They can never fulfill those promises because, well, if they could then that would mean the other party has an opportunity to make better promises which means the other party is more likely to get in.

    At the end of the day, in democracy, there is absolutely no incentive for the party in power to do the right thing. So it's kind of pointless to expect them to.

    EDIT: Democracy: where everyone steals from everyone else and the best thieves win.
     
  16. JulieW

    JulieW Well-Known Member Silver Stacker

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    I think the "death of the middle class" is proceeding apace here in Oz.

    Just need a few more ducks to line up.
     
  17. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    The government encourages this by opportunistically promoting things that will require more spending (omg, a terrorist death cult is coming for each and every one of us, so we must spend more on surveillance of citizens and increase military expenditure) or things that have caught the public imagination as being bad and therefore should be taxed, usually in ways that target exactly the wrong people and everyone ends up paying more taxes, levies, etc.
     
  18. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    Let's just hope the government and their propaganda arm don't suddenly decide that people who own precious metals are the new evil class and must be levied.
     
  19. SpacePete

    SpacePete Well-Known Member Silver Stacker

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    Arrr, grumble grumble..... I'm going to sleep.
     
  20. wrcmad

    wrcmad Well-Known Member Silver Stacker

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    Like they would know anyway... :lol:
     

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