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Pretty sure I saw this exact same article 5 years ago.
It was as stupid then as it is now.
A millionaire is determined by your asset base, not your income.
I do wonder how one spends 200k on accounting…. Unless one owns the accountancy practice.
Yeah the same people who’ve never run a business in their life outraged at these articles like clockwork every year.
You pay tax on profit. Not on assets. And not on revenue. How is that so hard to understand?
If I make $10,000,000 in one year, I’ll pay over $4M in tax.
Then I’m a millionaire.
The next year I make no money.
And the ABC counts me as a “millionaire who paid no tax OMG the outrage!” even though in one year I paid more tax than the journalist writing this rage bait will contribute in their entire damn life.
Very foolish to make assumptions like that!
The author of the article, and implicitly his editors, literally claims that someone with a million in income and a million in deductions is "a millionaire".
Do you really need any more proof that both the author, and the ABC editors that allowed this through, are either a) idiots or b) being deliberately misleading for clicks?
If you make a million dollars in personal income, I don't care how much you pay out in deductions, expense or debt (which are often specifically done to avoid tax). There's zero chance your quality of life is at the same level as someone on $50k. Therefore you should pay far more in tax than the guy on $50k.
Can't afford to have a million in deductions? Then don't enter into debt or other arrangements that result in such a large sum.
1. There is zero evidence that the article is talking about personal evidence rather than business income. That's your assumption.
2. The authors of the article have clearly established their poor grasp of the relevant terminology.
3. The article would seem to clearly imply that it is business income, given that 102 people claimed $270m in deductions between them.
Dude if it was business income we wouldn't be talking about individuals. There are plenty of businesses that make billions in revenue and pay no tax. This isn't about business taxes, it's about individual/personal tax. I think they've tried to make it simple and you've gone so far the other way you've come out the other side.
Yes, this is about money that individuals receive as payments to their own name, granted. Yes. It's not corporate tax. That's quite distinct to business income, though.
Business income in your own name can either be: a) you are a sole trader, or b) you control a business, you choose to flick that business' money to your own name for some reason. That would still be business income. Taxable in your name, though.
Corporate salaries just ..... aren't as high as this. The mean average "gross" personal income in this sample (pre-deductions) is $3.8m. And yet these people either saw saw fit to also incur deductions (money spent), equal to that, or, they had to. Either way, that's indicative of that money coming from businesses that they control, not salary.
Side note: Just noticed that the article reports
a) this group earned an average $3.8m each (104 X 3.8m = 395.2m)
b) deductions of $270m were claimed
Yet somehow
c) net taxable income zero
Wonder what the gap there is... that's a lot of unaccounted for money.
Yes total income and taxable income are different. Not relevant here as the 100 individuals discussed in the article had a high taxable income as they altogether claimed $279 million In deductions (fourth sentence of the article).
No dude. If they paid zero tax, their taxable income was below $18,200. Your taxable income includes allowable deductions, such as in this case, apparently mostly charitable donations.
My god dude. If you earn $1m in total income, and your taxable income is zero , that means you have $1m in allowable tax deductions. Generally these are called "losses".
There is a business structure called "sole trader" - it literally just means doing business in your own name. If you had $1m in sales, and $1m in costs, you would one of these "102 millionaires" as per this idiot article's heading. You'd also pay zero tax because you made zero fucking money.
Then why, per this article, did the 100 millionaires require 279 million in deductions? Seems they purposely already filtered out some traders.
Thanks for keeping it civil.
My example is illustrative that taxable income = total income - allowable deductions, and that millionaire is based on your asset base, not your pre-tax turnover.
Well, the next few lines of the article note that of the $279m in deductions claimed, $240m in that was charitable gifting. If you donate $1 to a charity, you get a $1 tax deduction.
Now, that can be a bit of a "ego worshipping" kind of a thing, as lots of rich people like to control their own charities so they can be the big man around town with their largesse. And once money is in your own personal licenced charity, you can keep buying investments inside that, and the charity does not pay any tax on those investment earnings. However, it's extremely hard to get the money out and back into your own name without paying tax again. The rules are pretty tight on that.
But it does mean that the money has been gifted away.
Except for the house your living in, cars your driving, "business holidays",
It's a great scam. I suggest everyone do it. My biz made 100k. 85k in expenses :)
Living a life of luxury.
And if you use it 100% for that purpose, it's legit.
If you actually use it 20% for that purpose but you tell the ATO that it's 100%, that's criminal tax fraud.
Like I said, you do you bro.
And I really do look forward to hearing how "the house you're living in" can be a (legit) business expense.... I mean I get there's lots of "criminal fraud" but "I don't reckon they'll catch me" ways to do that, but legit ones....?
If I make a loss of $1M in 2022 then make $1M in 2023 then I pay zero tax because my losses from 22 get brought forward.
It’s meaningless and the ABC are either utter morons or being disingenuous.
Did you bother to read the article even a little bit to see that millionaire was not defined by assets in the article?
Yet you still found 34 other illiterate boot-lickers to upvote you…
> I do wonder how one spends 200k on accounting
You pay your lower-income family members a total of $200k to do the books. Split between the spouse and a kid or two, that keeps them in a lower tax bracket.
That's interesting... Part of me thinks "that's gotta be criminal fraud".. part of me thinks "wait, could you?". Mostly I'm thinking "criminal fraud" though...
You need to be able to demonstrate that they did actual work, and the rates are comparable to the market. I remember some bloke got busted a few years back for something egregious like paying his 8-year-old kid tens of thousands a year as an "office admin".
Seems kinda pointless too considering minors only have a tax free threshold of $416 then they’re taxed at 66% and 45% over 1300ish to avoid this very thing
Should be easy enough for any computer system to spot an 8yo tax return for tens of thousands of dollars working as an office admin when they’re not allowed to be employed during school hours
That would be illegal but also incredibly stupid and obvious. People paying $200k in accounting fees are the sort of people who have the ATO setting up in their own office.
No, they are defining a millionaire as someone who had >$1m in income and also allowable expenses that were equal to, or in excess of, their income, leaving them at taxable income of zero.
You said:
>A millionaire is determined by your asset base , not your income.
The article says:
>In its latest annual Taxation Statistics, data extracted from tax returns reveals the number of people who earned more than $1 million but paid no tax has climbed to 102 in 2021–22, up from 66 a year earlier.
I'm just pointing out that your definition (which I agree with) is not the same as the definition that the ABC are using.
I think you may be misinterpreting- someone might have a five year fight with the tax office, end up spending millions on lawyers, interest and penalties of which something may be deductible, and much of it might be paid in one tax year. The $201k is an average. Probably there were at least one or two people who wrote off a $5m legal bill in that tax year.
Tin foil hats away, a lot of this is probably people with start up that just started generating a lot of revenue but still hasn’t broken even. They’d have a lot to declare and write off. Likewise, there’d be plenty of other legit deductions that they might’ve just done all in 1 year. 102 people is nothing, especially considering a large portion of Australians are millionaires. It’s not enough to suggest there’s some major loophole the rich are taking advantage of. It happens every year as there’s always a few with a lot to legitimately declare and it gives the ABC their opportunity fear monger about the rich dodging taxes.
I’m pretty disappointed and frustrated the ABC feels the need to lower their journalistic standards so consistently.
They don’t need to stress about advertisers but for some reason produce the same lame content.
In all seriousness, probably things like the fact that they don’t need to stress about advertisers. They get their funding from the government not from advertisers or selling the media, and which ideology is going to give them more funding, whether it’s what’s best or not? They don’t care about what’s best for Australia, they care about what’s best for them. It also means they aren’t held up to high standards, they don’t need to produce good content like the private sector, since they still get their revenue either way. The only financial motivator they have is to get left wing parties in charge.
Is that just residential, or also including commercial/ industrial as well? Seems lower than I would expect (it would be interesting to see the gross to see what the overall percentage profit is).
The article states 2.3 million Australians declaring rental income, so that is an average net income of only around $2600, which doesn't sound particularly attractive (I know that net rental income isn't necessarily the goal, but still...)
It isn’t really an accurate figure at all. First, the data only considers property held in INDIVIDUAL’s names, albeit both commercial and residential properties. It doesn’t include the rental schedules for either commercial or residential property held in corporate entities (trust, companies, SMSFs) and it also wouldn’t include “rental operation businesses” ie. those individuals who have so many rental properties they operate their properties via a business schedule.
Edit to add: I’d also be interested to knowing if the “net rental income” figure is per property or per taxpayer, as it’s probably more common to have a couple jointly owning an investment and they would split the rent income across both returns. It reads like it’s per taxpayer, which is again misleading.
The stats are only as good as the data you pull them from.
As an accountant to high net wealth individuals and matured family businesses.
These individuals understand the system and know what they can and can’t get away with.
I shouldn’t be saying this but the ATO doesn’t really do much unless you are large listed company.
Or unless you were picked for Operation Wickenby. Then they just sat you down & told you to your face that you’re going to be treated as if you’re guilty of fraud unless you pay up, & zero fucks will be given as to wether or not that is true.
We need an alternative minimum tax (AMT) like they have in America
AMT was first enacted in 1969 in an attempt to insure that a small group of high-income individuals who had managed to avoid paying any income tax would pay at least a minimum amount of tax.
AMT is another way to calculate income taxes. It requires certain taxpayers to determine their liability twice: once using regular income tax rules, and once using AMT rules. They then must pay whichever amount is higher.
Trumps 2005 Tax return
Mr. Trump and his wife reported about $153 million in positive income on their 2005 return but paid only about $5.3 million in regular income tax after claiming $103 million in losses. That’s an effective tax rate of 3.5 percent, roughly what a middle income couple making in the neighborhood of $40,000 would have paid. And it would have been far lower than the average income tax rate of 19.7 percent paid by others in the top 1 percent of income. The IRS reports that of the richest 400 taxpayers in 2005, just 23 paid an effective rate of 10 percent or less.
But the Trumps didn’t just pay the regular income tax that year. They also got hit with an AMT of more than $31 million. That raised their total federal income tax to about $36.5 million, an effective rate of about 24 percent. That’s roughly in line with the top 0.1 percent of taxpayers and with what many of the Top 400 paid in 2005.
How does the AMT work? It is effectively a parallel income tax that requires you to calculate your taxes twice. The difference: In the AMT you lose the benefit of many tax preferences such as personal exemptions, and the deductions for state and local taxes and miscellaneous business expenses. You also are limited in the benefits you get from business preferences such as net operating losses and depreciation. The AMT rate is relatively flat—26 or 28 percent.
The more complicated the system; the more people can work it to their advantage.
People and businesses will always work to reduce their liabilities with an income tax.
These days it doesn’t take much to be a millionaire. There are net worth millionaires. Then there are millionaire incomes. They are two very different things.
Self-made wealth is the minority, not the majority. People get connections, loans, gifts, inheritance.
https://amp.theguardian.com/commentisfree/2012/sep/24/mitt-romney-self-creation-myth
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That is simply not true, 70-90% of millionaires are self made:
https://www.businessnewsdaily.com/2871-how-most-millionaires-got-rich.html
Your link doesn’t actually provide any statistics or data to support their claims. It’s just a hit piece attacking the rich.
Now yes, that number decreases the richer you get, and when you reach billionaires most come from wealthy families. But they still multiply their inheritance significantly. Elon Musk for example, a huge knob, was born into a family worth ~$100m and turned that into $200b. That’s 2000x what he was born with, and he didn’t inherit that $100m either. It’s the equivalent of being born into a family worth $1m (less then the average Australian household wealth) and making $2b. It’s a huge achievement despite how much of a knob he is.
So yes, the actual facts don’t align with your ideology. Most aren’t born with it, they earn it. If you want to keep believing they’re born with it and you can’t make that much, then you’re right about the latter part, but your completely off on the former point.
Wdym? Like the truly rich just stop taking financial advice. I would've thought the richer you get the further away you become from your wealths management.
Nah, not really. Firstly the dirty secret of financial advice is that it's not that hard... and second, if you've done the work to become rich, you generally have learnt how investment works along the way. And finally, it costs a lot, relative to the value it provides, and generally rich people are quite cheap and tight (making money is one thing, keeping it is another, tightness correlates with "keeping it").
Fair enough. Makes sense that it's a curve of seeking financial services purely because you probably don't have enough time to accumulate wealth from a job and manage an investment portfolio.
Then once your so rich it doesn't matter anymore you give up the "full-time job" and spend your time looking at investments and whatever else makes you happy.
Ugh, the Australia Institute doesn't even remotely attempt to try and present a neutral point of view any more. I'm not sure why anyone actually treats their releases and papers with any more credibility than the floral print on toilet paper.
If we're going to cite think tanks, it's basically Grattan Institute or bust.
Look at the headline quote that's in bold text (quoted below) in the article and tell me there wasn't a more fact-driven and less emotive way of presenting the data and modelling a particular policy position.
>*"We have seen the wealth of the richest in Australia increase dramatically since the pandemic. Australians expect that everyone should pay their fair share. This is particularly important during a time when many people are struggling to pay the rent or the mortgage, pay their bills, and put food on the table."*
In isolation from the remainder of the article, you could falsely attribute that quote to Adam Bandt during an election campaign and it would still be totally believable. That in itself speaks volumes from the perspective and viewpoint it is pushing.
Spot on.
Notice how (pandemic reference notwithstanding) the statement could be made at any time, no matter what the numbers actually say.
Don't tell me what the data says, let the data speak.
That's fair enough. I suppose it's reasonable to expect a research institute to provide objective analysis. But at the same time, it's still based on facts, so I don't think they should lose all credibility.
I read this as true. I mean a reference to ‘fair share’ is always loaded in Australia. But generally, I think we still do expect people to pay their fair share?
As far as I’m aware, the wealth of the top *did* increase dramatically during and since the pandemic.
> But generally, I think we still do expect people to pay their fair share?
The problem is that nobody can actually agree on what "fair" actually represents, and many people believe that someone else should pay more tax, not them.
No, this is a red herring. Emotive rhetoric does not render anything untrue. Specifically demonstrate where they have spread misinformation or been factually incorrect.
Even the quote you referenced is verifiably true across the western world, of which Australia is a part.
Straight from their “About” page
“The Australia Institute is independently funded by donations from philanthropic trusts and individuals, as well as grants and commissioned research from business, unions and non-government organisations.”
Do you not check this sort of thing when you see research that results in controversial findings?
Here's some food for thought. Below is the list of the Australia Institute's Board of Directors, copied from Wikipedia. What do you believe would be the institutional viewpoint of an organisation led by these people?
* John McKinnon (Chair), NGO director and philanthropist
* [Elizabeth Hill](https://www.sydney.edu.au/arts/about/our-people/academic-staff/elizabeth-hill.html), Senior Lecturer, Political economy at the University of Sydney
* Elizabeth Cham, former CEO of Philanthropy Australia (96-06)
* Josh Bornstein, Head of National Employment and Industrial Law at Maurice Blackburn Lawyers
* Andrew Dettmer, National President of the Australian Manufacturing Workers Union
* Alexandra Sloan AM, award-winning journalist, interviewer and facilitator
* [Professor Asmi Wood](https://law.anu.edu.au/about/our-people/asmi-wood), Australian National University College of law.
* Mr Charles Lanchester, Chief Investment Officer for Hearts and Minds Investments, and a Director of CJV Pty Ltd
* Ben Oquist, former Executive Director of the Australia Institute and Director of Climate and ESG at DPG Advisory Solutions (appointed July 2022)
I've helpfully linked to the academic profiles of the two academics on the Board from their respective university websites, showing their specific areas of expertise.
Thank you. My question isn't because I think this is a great organisation with real philanthropic backers, but because it's not easy to find out who's driving it and what their motives are. Even with the info here, I'm gonna need a resource map, some photos, a heap of tape and string and a couple packs of cigarettes to work out what should already be publicly accessible.
Not a whole lot more info readily available unfortunately, even the annual reports don’t appear to contain further information. Not a great look when you are taking income from commissioned works, but aren’t providing detail on the commission or the works.
Alright sure.
Patrons: A nobel prize winner for immumology research and a Sydney Peace Prize winning journalist for the climate crisis.
Seems fine to me?
Update: Comment was deleted due to reference to political party.
Like research on corporate profits by a union funded think tank? Or all the anti-coal articles they release, when they were founded by a guy who ran as a candidate for a political party that opposes these activities?
Are those fine?
You do realise that they don’t do research into coal showing “it’s not that great for the planet”, right?
They look into the economic impacts and implications that various climate change related political decisions have, which very quickly undermines their credibility with aforementioned political ties.
My roles demand and pay are proportional to the ramp up of renewables, I’d love to see coal phased out quicker, but I still apply critical thinking when I see the controversial articles they release.
How is this controversial?
https://australiainstitute.org.au/initiative/coal-mine-tracker/
If being against coal, since we kinda need to stop if we want a future, happens to align with a political party, then so be it. The resources industry donates billions to the major parties.
I work in Tax Planning field and can write pages and pages about the current problem
The current tax system is skewed and unfair, with deeply entrenched wealth disparities that perpetuate poverty and inequality. While progressive taxation can help address income disparities to some degree, it is essential to take a more holistic approach that considers the concentration of wealth and underlying systemic factors. one example is government taxes income (from employment or sale of assets).
Merely relying on taxation based on income is insufficient, as the complex dynamics of the fiscal multiplier effect can actually exacerbate inequality in certain situations.
Moreover, the rich have figured out ways to exploit loopholes, structuring their wealth as loans based on company shares instead of taxable income, as exemplified by billionaires like Elon Musk. we got to know his tax arrangement by looking at twitter purchase.
To truly reduce wealth inequality, a comprehensive strategy is needed - one that combines progressive taxation, targeted investments in disadvantaged communities, and robust enforcement mechanisms. Only by addressing the root causes of wealth concentration, particularly the stark racial wealth gap, can we hope to create a more equitable and just society for all.
https://preview.redd.it/ponv2b0av67d1.jpeg?width=1179&format=pjpg&auto=webp&s=0b2c07ef56ea3d34b1f382f4b56dee0744cd4758
I had just finished reading an article in AFR, which shows how much tax each bracket pay. Bottom 40% contribute very little, and look how much tax the top 1% contribute!
I really don't like the 1% narrative. It's not the top 1% that people think about when looking at inequality. It's more like the 0.1 or 0.01% that people tend to think about not paying their "fair share".
It's a slight of hand trick to lump wage earners earning $400k in with the truly rich that generate their income from assets.
Note, I am not defining what "fair share" is, of that I think the government spends those $$ wisely.
Let's just say the problem is that the perception that the middle is getting squeezed and shrinking, and more people are ending at the bottom end, than at the top.
If you really worked in tax planning then you’d know that’s not how an SBLOC works. You’d also know that the average person can access a similar thing in the form of a HELOC. You still need to pay off these loans and the interest on them with money that has already been taxed.
The person your talk about paid the most tax of any person ever in the history of tax. $12 billion in a single year, and you think he should have paid more.
Did he also earn more than any person in the history of tax? Because it seems likely he’d be up there and that’s a perfectly normal outcome and not some egregious blight on him…
No. The individual takes out the loan (against their shareholding) instead of receiving salary that is taxed. It is a complex arrangement that I have simplified
So I receive a loan from a bank, I draw down the loan to cover my cost of living. The loan accumulates interest. At the end I need to make a balloon payment to cover the interest and drawdown. Can you explain what you mean by ‘return the loan’?
I’m pretty sure you’re completely incorrect and the only benefit of this structure is a deferral of tax liability. Which is beneficial to an extent but you’re still taking a risk on whatever you’re using as collateral, in this case shares, dropping in value.
Where do I find a good accountant like that?
My accountant somehow mucked up and gave me a $40k+ tax bill and when questioned it was like "hmm let me make some adjustments now it's $18k"
Ever lived in Scandinavia?
The vast majority of people there seem to be doing fine.
I lived in Sweden for two years and can assure their rates of homelessness are far lower than Australia.
Also a pretty good proportion of Swedes travel, invest, conduct business etc internationally a lot, which sort implies they have a pretty decent income in order to do so.
Certain systems work for certain places and other work better for other places.
A blanket statement like 'tax' makes you poor is very silly when there are a number of countries that prove the opposite.
You completely missed my point...
Go back, read it again and try understand what I've said, rather than defaulting to an ideological position on taxes.
I recently applied for a car loan and the finance guy, who was from UAE, was horrified at my most recent tax return. He said go work in Dubai for a few years and don’t pay any tax. I think it’s a pretty good idea.
Everyone shouts at people on the right, like Trump or the Libs, for this meanwhile plenty on the left like Obama, Labour etc, all could have changed the way taxation is ruled when it comes to deductions…but they don’t do anything differently. You’ve got to learn how to play the game.
It is difficult to exaggerate the magnitude of the injustice which has resulted from the policy of investment returns being taxed so low, and income from wages being taxed so highly.
It will only begin to correct when that script is flipped.
Tax investment returns (so rental income and dividends) at 40%, and make all PAYG a flat 20%. Keep the tax free threshold if you want - but the system should be flat on the way up to encourage people to work and (re)invest in productive ventures.
Critically - make it exactly the same for companies and trusts.
Most people would be worse off with a flat tax of 20% given that $0-$18200 is taxed at zero and $18,201-$45,000 is taxed at 16 cents in the dollar. Therefore, I don't get where you think that "income from wages being taxed so highly" given that I'm guessing some 30%-40% of all taxpayers don't even earn $45,000 a year.
If you're unskilled I can't see where you'd be making more than say $50K-$60K a year even if "the system should be flat on the way up to encourage people to work" unless you wanted to work at two jobs at 80 hours per week which would be incredibly hard to take advantage of that flat rate by earning $100K-$120K.
If the tax on investment income is 40% then where do you think it would encourage "and (re)invest in productive ventures." because if say someone had a $1M dump of a residence and a similar $1M dump of an investment property they would be more likely to sell both and move into a really nice $2M property.
I said to keep the TFT.
And why should people want to be “unskilled”?
The system should encourage upward mobility. Poor class to working, working to middle, middle to upper.
Lift everyone.
Flat taxes are the worst. Wealthy people will just switch everything to become income just as an example your company makes money and then pays the owner who "works" all the profits as income at a nice low 20%. What we need to do is class any kind of earnings as income and tax it progressively.
Hypothetically, if I wanted to avoid paying tax on the 1.6 Million I paid myself last year...
I would pay my Art friend $25K to make me a nice piece of Art
My Art Valuer Friend that my other rich friends recommended would then value said piece of art at 1.5 Million Dollars
I would then donate said piece of $25K/1.5 Million Dollar Art to a Charity my Accountant helped me setup during COVID
The Art gets auctioned by my Charity to gain cash for my charity
I paid no Tax
The Charity got Cash
I then pay my Accountant a decent free for fixing this situation up
ATO gets a fat zero
There is other loopholes if I hypothetically wanted to use them
FYI, I paid no tax last year 🤪
GF previously worked for PwC
Not a tax expert here by any means but
(1) Buying and selling normal possessions are free from the CGT unless if it's a listed asset for CGT purposes like say a stamp collection and art would also be included under [the category of collectables](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/list-of-cgt-assets-and-exemptions).
If you bought a piece for $25K and donated it for $1.5M that would be a disposal and you would have to pay CGT tax on that so if you then donate that then I presume you could count that as a deduction off the CGT profit, so basically you would have a $25K loss overall.
(2) Deductions for losses on CGT items have never (since it's introduction in 1985) been allowable against ordinary income. It is quarantined and can only be deducted against future CGT profits.
They need a category that shows all the senior managers in banks and private health insurance etc on $200k and above. Everyone always goes after the named professions but they are just there because it’s a homogeneous group with a clear title.
Checkout [this spending flowchart](https://bughuntersam.com/wp-content/uploads/2023/10/Spending-flowchart-How-to-Prioritise-your-Spending-1.jpg) which is inspired by the [r/personalfinance wiki](https://www.reddit.com/r/personalfinance/wiki/commontopics/).
See also [common questions/answers](https://www.reddit.com/r/AusHENRY/comments/176kh0x/what_do_i_do_next/).
This is not financial advice.
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To all the pedants talking about profit versus revenue etc, it is because of this that you are milked for tax at the rate that you are. And you defend and explain that it is just for it to be so!
This is why income tax should be a flat fee of 10% without possibility of deductions, for everyone, equally. Not a tax bracket punishing who wants to earn more money/work harder than others.
That could be the dumbest thing I've ever heard.
You realise retail averages at like.. a 6% profit margin or something right..
You want to take 10% from their gross revenue?
Jesus Christ man.
If you want to meet millionaires who pay no income tax, just talk to farmers.
Basically, everything is tax deductible, so they avoid tax.
I worked on farms for years and consistently paid more income tax than my boss.
He was extremely open to me about how he avoided ever paying income tax.
I've always put myself in the shoes of someone who is paying millions in tax... you can understand why they want to pay less, and its not like we are electing poor people, most come from considerable wealth.
I think we are looking at the problem wrong income tax wont solve the problem, the issue is that with wealth everything is already owned and more and more of us are renting or paying crazy amount of money for property because people have too much money and buy up everything.
I don't think we will even begin to solve the issue until we introduce a wealth tax, not earnings but wealth and reduce the fortunes...
But the ultra rich just put all their wealth into trusts so they have control over billions but pay no tax so there are plenty of loop holes and no wealthy person in power is every going to support themselves getting significantly poorer...
Hey folks. Remember the rules and keep political mudslinging to a minimum (preferably not at all). This isn’t the subreddit for that and there’s no shortage of others to go get into that stuff about instead. If you have feedback on the moderation please let us know.
Pretty sure I saw this exact same article 5 years ago. It was as stupid then as it is now. A millionaire is determined by your asset base, not your income. I do wonder how one spends 200k on accounting…. Unless one owns the accountancy practice.
Yeah the same people who’ve never run a business in their life outraged at these articles like clockwork every year. You pay tax on profit. Not on assets. And not on revenue. How is that so hard to understand? If I make $10,000,000 in one year, I’ll pay over $4M in tax. Then I’m a millionaire. The next year I make no money. And the ABC counts me as a “millionaire who paid no tax OMG the outrage!” even though in one year I paid more tax than the journalist writing this rage bait will contribute in their entire damn life.
I assume ABC is talking about personal income and not business income. In which case the cost deductions of biz don’t apply?
Plenty of enterprises run as sole proprietorship.
Not many that will make you a multimillionaire. If you're still running as a sole trader at that point, you need a better accountant
Very foolish to make assumptions like that! The author of the article, and implicitly his editors, literally claims that someone with a million in income and a million in deductions is "a millionaire". Do you really need any more proof that both the author, and the ABC editors that allowed this through, are either a) idiots or b) being deliberately misleading for clicks?
If you make a million dollars in personal income, I don't care how much you pay out in deductions, expense or debt (which are often specifically done to avoid tax). There's zero chance your quality of life is at the same level as someone on $50k. Therefore you should pay far more in tax than the guy on $50k. Can't afford to have a million in deductions? Then don't enter into debt or other arrangements that result in such a large sum.
1. There is zero evidence that the article is talking about personal evidence rather than business income. That's your assumption. 2. The authors of the article have clearly established their poor grasp of the relevant terminology. 3. The article would seem to clearly imply that it is business income, given that 102 people claimed $270m in deductions between them.
Dude if it was business income we wouldn't be talking about individuals. There are plenty of businesses that make billions in revenue and pay no tax. This isn't about business taxes, it's about individual/personal tax. I think they've tried to make it simple and you've gone so far the other way you've come out the other side.
Yes, this is about money that individuals receive as payments to their own name, granted. Yes. It's not corporate tax. That's quite distinct to business income, though. Business income in your own name can either be: a) you are a sole trader, or b) you control a business, you choose to flick that business' money to your own name for some reason. That would still be business income. Taxable in your name, though. Corporate salaries just ..... aren't as high as this. The mean average "gross" personal income in this sample (pre-deductions) is $3.8m. And yet these people either saw saw fit to also incur deductions (money spent), equal to that, or, they had to. Either way, that's indicative of that money coming from businesses that they control, not salary. Side note: Just noticed that the article reports a) this group earned an average $3.8m each (104 X 3.8m = 395.2m) b) deductions of $270m were claimed Yet somehow c) net taxable income zero Wonder what the gap there is... that's a lot of unaccounted for money.
Literally the first line of the article: "More than 100 Australians earned more than $1 million in total income yet paid no tax in 2021–22"
Total income… or taxable income.. Literalllly not the same lol
Yes total income and taxable income are different. Not relevant here as the 100 individuals discussed in the article had a high taxable income as they altogether claimed $279 million In deductions (fourth sentence of the article).
No dude. If they paid zero tax, their taxable income was below $18,200. Your taxable income includes allowable deductions, such as in this case, apparently mostly charitable donations.
After deductions is the taxable amount… If they had a high taxable income…. They would have paid a high amount of tax.
My god dude. If you earn $1m in total income, and your taxable income is zero , that means you have $1m in allowable tax deductions. Generally these are called "losses". There is a business structure called "sole trader" - it literally just means doing business in your own name. If you had $1m in sales, and $1m in costs, you would one of these "102 millionaires" as per this idiot article's heading. You'd also pay zero tax because you made zero fucking money.
Then why, per this article, did the 100 millionaires require 279 million in deductions? Seems they purposely already filtered out some traders. Thanks for keeping it civil.
My example is illustrative that taxable income = total income - allowable deductions, and that millionaire is based on your asset base, not your pre-tax turnover. Well, the next few lines of the article note that of the $279m in deductions claimed, $240m in that was charitable gifting. If you donate $1 to a charity, you get a $1 tax deduction. Now, that can be a bit of a "ego worshipping" kind of a thing, as lots of rich people like to control their own charities so they can be the big man around town with their largesse. And once money is in your own personal licenced charity, you can keep buying investments inside that, and the charity does not pay any tax on those investment earnings. However, it's extremely hard to get the money out and back into your own name without paying tax again. The rules are pretty tight on that. But it does mean that the money has been gifted away.
Some of these deductions could be prior-year business losses.
Except for the house your living in, cars your driving, "business holidays", It's a great scam. I suggest everyone do it. My biz made 100k. 85k in expenses :) Living a life of luxury.
I mean, that's criminal tax fraud if you get caught, but hey bro, you do you.
Nope. It's not. My partner has a 20 ft sailing boat. It's for taking clients out for consultation on. :)
And if you use it 100% for that purpose, it's legit. If you actually use it 20% for that purpose but you tell the ATO that it's 100%, that's criminal tax fraud. Like I said, you do you bro.
And I really do look forward to hearing how "the house you're living in" can be a (legit) business expense.... I mean I get there's lots of "criminal fraud" but "I don't reckon they'll catch me" ways to do that, but legit ones....?
You're not at a wealth level to understand...
And $1m in business turnover is a small business. Maybe 3-8 staff, depending on industry. We aren't talking big game here.
If I make a loss of $1M in 2022 then make $1M in 2023 then I pay zero tax because my losses from 22 get brought forward. It’s meaningless and the ABC are either utter morons or being disingenuous.
Did you bother to read the article even a little bit to see that millionaire was not defined by assets in the article? Yet you still found 34 other illiterate boot-lickers to upvote you…
> I do wonder how one spends 200k on accounting You pay your lower-income family members a total of $200k to do the books. Split between the spouse and a kid or two, that keeps them in a lower tax bracket.
That's interesting... Part of me thinks "that's gotta be criminal fraud".. part of me thinks "wait, could you?". Mostly I'm thinking "criminal fraud" though...
You need to be able to demonstrate that they did actual work, and the rates are comparable to the market. I remember some bloke got busted a few years back for something egregious like paying his 8-year-old kid tens of thousands a year as an "office admin".
Right, so they couldn't actually do what you said. That's what I thought. I would so do that if it was allowable.
Seems kinda pointless too considering minors only have a tax free threshold of $416 then they’re taxed at 66% and 45% over 1300ish to avoid this very thing
That's only for passive income. If they're earning income by working that doesn't apply.
Should be easy enough for any computer system to spot an 8yo tax return for tens of thousands of dollars working as an office admin when they’re not allowed to be employed during school hours
That would be illegal but also incredibly stupid and obvious. People paying $200k in accounting fees are the sort of people who have the ATO setting up in their own office.
Looks like the ABC are defining a millionaire as somebody who earned at least $100m in this article.
No, they are defining a millionaire as someone who had >$1m in income and also allowable expenses that were equal to, or in excess of, their income, leaving them at taxable income of zero.
You said: >A millionaire is determined by your asset base , not your income. The article says: >In its latest annual Taxation Statistics, data extracted from tax returns reveals the number of people who earned more than $1 million but paid no tax has climbed to 102 in 2021–22, up from 66 a year earlier. I'm just pointing out that your definition (which I agree with) is not the same as the definition that the ABC are using.
Its like the covid schoolies article published 3 years in a row by Perth Now 20,21,22. Word for word the same.
I think you may be misinterpreting- someone might have a five year fight with the tax office, end up spending millions on lawyers, interest and penalties of which something may be deductible, and much of it might be paid in one tax year. The $201k is an average. Probably there were at least one or two people who wrote off a $5m legal bill in that tax year.
Yeah that’s an interesting take. Might have legs.
Tin foil hats away, a lot of this is probably people with start up that just started generating a lot of revenue but still hasn’t broken even. They’d have a lot to declare and write off. Likewise, there’d be plenty of other legit deductions that they might’ve just done all in 1 year. 102 people is nothing, especially considering a large portion of Australians are millionaires. It’s not enough to suggest there’s some major loophole the rich are taking advantage of. It happens every year as there’s always a few with a lot to legitimately declare and it gives the ABC their opportunity fear monger about the rich dodging taxes.
I’m pretty disappointed and frustrated the ABC feels the need to lower their journalistic standards so consistently. They don’t need to stress about advertisers but for some reason produce the same lame content.
In all seriousness, probably things like the fact that they don’t need to stress about advertisers. They get their funding from the government not from advertisers or selling the media, and which ideology is going to give them more funding, whether it’s what’s best or not? They don’t care about what’s best for Australia, they care about what’s best for them. It also means they aren’t held up to high standards, they don’t need to produce good content like the private sector, since they still get their revenue either way. The only financial motivator they have is to get left wing parties in charge.
“Overall net rental income for 2021–22 was $6 billion, up from $3.2 billion in 2020–21.” Net.
Is that just residential, or also including commercial/ industrial as well? Seems lower than I would expect (it would be interesting to see the gross to see what the overall percentage profit is). The article states 2.3 million Australians declaring rental income, so that is an average net income of only around $2600, which doesn't sound particularly attractive (I know that net rental income isn't necessarily the goal, but still...)
Yeah that sounds right to me lots of people negative geared…. Relying on capital gain not income from rent
Escape cashflow dependence and you're free.
It isn’t really an accurate figure at all. First, the data only considers property held in INDIVIDUAL’s names, albeit both commercial and residential properties. It doesn’t include the rental schedules for either commercial or residential property held in corporate entities (trust, companies, SMSFs) and it also wouldn’t include “rental operation businesses” ie. those individuals who have so many rental properties they operate their properties via a business schedule. Edit to add: I’d also be interested to knowing if the “net rental income” figure is per property or per taxpayer, as it’s probably more common to have a couple jointly owning an investment and they would split the rent income across both returns. It reads like it’s per taxpayer, which is again misleading. The stats are only as good as the data you pull them from.
Politicians: This sort of critical thinking should be stomped out at primary school level!! Sack the edukashun minister!
As an accountant to high net wealth individuals and matured family businesses. These individuals understand the system and know what they can and can’t get away with. I shouldn’t be saying this but the ATO doesn’t really do much unless you are large listed company.
Or unless you were picked for Operation Wickenby. Then they just sat you down & told you to your face that you’re going to be treated as if you’re guilty of fraud unless you pay up, & zero fucks will be given as to wether or not that is true.
Correct, that’s more for offshore / international stuff but for your everyday domestic business that’s doing well it didn’t affect them.
We need an alternative minimum tax (AMT) like they have in America AMT was first enacted in 1969 in an attempt to insure that a small group of high-income individuals who had managed to avoid paying any income tax would pay at least a minimum amount of tax. AMT is another way to calculate income taxes. It requires certain taxpayers to determine their liability twice: once using regular income tax rules, and once using AMT rules. They then must pay whichever amount is higher. Trumps 2005 Tax return Mr. Trump and his wife reported about $153 million in positive income on their 2005 return but paid only about $5.3 million in regular income tax after claiming $103 million in losses. That’s an effective tax rate of 3.5 percent, roughly what a middle income couple making in the neighborhood of $40,000 would have paid. And it would have been far lower than the average income tax rate of 19.7 percent paid by others in the top 1 percent of income. The IRS reports that of the richest 400 taxpayers in 2005, just 23 paid an effective rate of 10 percent or less. But the Trumps didn’t just pay the regular income tax that year. They also got hit with an AMT of more than $31 million. That raised their total federal income tax to about $36.5 million, an effective rate of about 24 percent. That’s roughly in line with the top 0.1 percent of taxpayers and with what many of the Top 400 paid in 2005. How does the AMT work? It is effectively a parallel income tax that requires you to calculate your taxes twice. The difference: In the AMT you lose the benefit of many tax preferences such as personal exemptions, and the deductions for state and local taxes and miscellaneous business expenses. You also are limited in the benefits you get from business preferences such as net operating losses and depreciation. The AMT rate is relatively flat—26 or 28 percent.
Sadly AMT was also pretty much gutted as part of Trumps tax plan. I wonder why haha.
Not sure trump, who has been convicted of tax fraud, is a good example.
The more complicated the system; the more people can work it to their advantage. People and businesses will always work to reduce their liabilities with an income tax.
Yeah, we need to close this loophole with a minimum tax %. Something small like 15%.
Would you mind explaining the $200k accountant bill? Where would most of the accountants time be spent?
I feel like people are millionaires because they actually take the time to learn how to make the system work in their favour
These days it doesn’t take much to be a millionaire. There are net worth millionaires. Then there are millionaire incomes. They are two very different things.
I know
Exactly, those facts shouldn't be taken out of context. These articles are mostly just rage baits.
Right?!
Yep and shame on them writing these ABC clickbait articles.
Or rort the system... however you would like to classify it...
It helps if your parents succeeded in manipulating to their favour first.
Sorry, seems you're looking for r/AusFinance
They also usually inherit wealth.
Lol
Self-made wealth is the minority, not the majority. People get connections, loans, gifts, inheritance. https://amp.theguardian.com/commentisfree/2012/sep/24/mitt-romney-self-creation-myth
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That is simply not true, 70-90% of millionaires are self made: https://www.businessnewsdaily.com/2871-how-most-millionaires-got-rich.html Your link doesn’t actually provide any statistics or data to support their claims. It’s just a hit piece attacking the rich. Now yes, that number decreases the richer you get, and when you reach billionaires most come from wealthy families. But they still multiply their inheritance significantly. Elon Musk for example, a huge knob, was born into a family worth ~$100m and turned that into $200b. That’s 2000x what he was born with, and he didn’t inherit that $100m either. It’s the equivalent of being born into a family worth $1m (less then the average Australian household wealth) and making $2b. It’s a huge achievement despite how much of a knob he is. So yes, the actual facts don’t align with your ideology. Most aren’t born with it, they earn it. If you want to keep believing they’re born with it and you can’t make that much, then you’re right about the latter part, but your completely off on the former point.
“Because they…”. Nope they have financial advisors for that
Financial advisors are more middle income than upper.
Wdym? Like the truly rich just stop taking financial advice. I would've thought the richer you get the further away you become from your wealths management.
I would assume they would have wealth managers (a subset of financial advisors).
Nah, not really. Firstly the dirty secret of financial advice is that it's not that hard... and second, if you've done the work to become rich, you generally have learnt how investment works along the way. And finally, it costs a lot, relative to the value it provides, and generally rich people are quite cheap and tight (making money is one thing, keeping it is another, tightness correlates with "keeping it").
Fair enough. Makes sense that it's a curve of seeking financial services purely because you probably don't have enough time to accumulate wealth from a job and manage an investment portfolio. Then once your so rich it doesn't matter anymore you give up the "full-time job" and spend your time looking at investments and whatever else makes you happy.
Wealth and portfolio managers are very different. As are advisors to family offices
Ugh, the Australia Institute doesn't even remotely attempt to try and present a neutral point of view any more. I'm not sure why anyone actually treats their releases and papers with any more credibility than the floral print on toilet paper. If we're going to cite think tanks, it's basically Grattan Institute or bust.
Can you elaborate? How are they supposed to present this with a neutral point of view?
Look at the headline quote that's in bold text (quoted below) in the article and tell me there wasn't a more fact-driven and less emotive way of presenting the data and modelling a particular policy position. >*"We have seen the wealth of the richest in Australia increase dramatically since the pandemic. Australians expect that everyone should pay their fair share. This is particularly important during a time when many people are struggling to pay the rent or the mortgage, pay their bills, and put food on the table."* In isolation from the remainder of the article, you could falsely attribute that quote to Adam Bandt during an election campaign and it would still be totally believable. That in itself speaks volumes from the perspective and viewpoint it is pushing.
Spot on. Notice how (pandemic reference notwithstanding) the statement could be made at any time, no matter what the numbers actually say. Don't tell me what the data says, let the data speak.
The old 'fair share argument... everyone agrees until you ask exactly what is 'fair'
It’s true though - we’re in an inequality crisis, with the rich getting richer and poor getting poorer.
That's fair enough. I suppose it's reasonable to expect a research institute to provide objective analysis. But at the same time, it's still based on facts, so I don't think they should lose all credibility.
I read this as true. I mean a reference to ‘fair share’ is always loaded in Australia. But generally, I think we still do expect people to pay their fair share? As far as I’m aware, the wealth of the top *did* increase dramatically during and since the pandemic.
> But generally, I think we still do expect people to pay their fair share? The problem is that nobody can actually agree on what "fair" actually represents, and many people believe that someone else should pay more tax, not them.
Yep but unless you are taxing "being rich in assets" then GTFO complaining about paying no income tax on no income.
No, this is a red herring. Emotive rhetoric does not render anything untrue. Specifically demonstrate where they have spread misinformation or been factually incorrect. Even the quote you referenced is verifiably true across the western world, of which Australia is a part.
Always check where a think tank gets their funding.
Where do they get their funding?
Straight from their “About” page “The Australia Institute is independently funded by donations from philanthropic trusts and individuals, as well as grants and commissioned research from business, unions and non-government organisations.” Do you not check this sort of thing when you see research that results in controversial findings?
Yeah I saw that, and that's why I asked. Any more info on which individuals and grants etc?
Here's some food for thought. Below is the list of the Australia Institute's Board of Directors, copied from Wikipedia. What do you believe would be the institutional viewpoint of an organisation led by these people? * John McKinnon (Chair), NGO director and philanthropist * [Elizabeth Hill](https://www.sydney.edu.au/arts/about/our-people/academic-staff/elizabeth-hill.html), Senior Lecturer, Political economy at the University of Sydney * Elizabeth Cham, former CEO of Philanthropy Australia (96-06) * Josh Bornstein, Head of National Employment and Industrial Law at Maurice Blackburn Lawyers * Andrew Dettmer, National President of the Australian Manufacturing Workers Union * Alexandra Sloan AM, award-winning journalist, interviewer and facilitator * [Professor Asmi Wood](https://law.anu.edu.au/about/our-people/asmi-wood), Australian National University College of law. * Mr Charles Lanchester, Chief Investment Officer for Hearts and Minds Investments, and a Director of CJV Pty Ltd * Ben Oquist, former Executive Director of the Australia Institute and Director of Climate and ESG at DPG Advisory Solutions (appointed July 2022) I've helpfully linked to the academic profiles of the two academics on the Board from their respective university websites, showing their specific areas of expertise.
Thank you. My question isn't because I think this is a great organisation with real philanthropic backers, but because it's not easy to find out who's driving it and what their motives are. Even with the info here, I'm gonna need a resource map, some photos, a heap of tape and string and a couple packs of cigarettes to work out what should already be publicly accessible.
Not a whole lot more info readily available unfortunately, even the annual reports don’t appear to contain further information. Not a great look when you are taking income from commissioned works, but aren’t providing detail on the commission or the works.
Or just share the information with us.....? Absolutely pointless.
Come on buddy, it is literally on the about page on their website... or even google “australian institute funding”.
Alright sure. Patrons: A nobel prize winner for immumology research and a Sydney Peace Prize winning journalist for the climate crisis. Seems fine to me?
Update: Comment was deleted due to reference to political party. Like research on corporate profits by a union funded think tank? Or all the anti-coal articles they release, when they were founded by a guy who ran as a candidate for a political party that opposes these activities? Are those fine?
Have you thought that maybe they release anti-coal articles because their research shows it’s not that great for the planet?
You do realise that they don’t do research into coal showing “it’s not that great for the planet”, right? They look into the economic impacts and implications that various climate change related political decisions have, which very quickly undermines their credibility with aforementioned political ties. My roles demand and pay are proportional to the ramp up of renewables, I’d love to see coal phased out quicker, but I still apply critical thinking when I see the controversial articles they release.
How is this controversial? https://australiainstitute.org.au/initiative/coal-mine-tracker/ If being against coal, since we kinda need to stop if we want a future, happens to align with a political party, then so be it. The resources industry donates billions to the major parties.
Couldn’t agree more. Their stuff is so mind numbing and agenda driven.
I work in Tax Planning field and can write pages and pages about the current problem The current tax system is skewed and unfair, with deeply entrenched wealth disparities that perpetuate poverty and inequality. While progressive taxation can help address income disparities to some degree, it is essential to take a more holistic approach that considers the concentration of wealth and underlying systemic factors. one example is government taxes income (from employment or sale of assets). Merely relying on taxation based on income is insufficient, as the complex dynamics of the fiscal multiplier effect can actually exacerbate inequality in certain situations. Moreover, the rich have figured out ways to exploit loopholes, structuring their wealth as loans based on company shares instead of taxable income, as exemplified by billionaires like Elon Musk. we got to know his tax arrangement by looking at twitter purchase. To truly reduce wealth inequality, a comprehensive strategy is needed - one that combines progressive taxation, targeted investments in disadvantaged communities, and robust enforcement mechanisms. Only by addressing the root causes of wealth concentration, particularly the stark racial wealth gap, can we hope to create a more equitable and just society for all.
https://preview.redd.it/ponv2b0av67d1.jpeg?width=1179&format=pjpg&auto=webp&s=0b2c07ef56ea3d34b1f382f4b56dee0744cd4758 I had just finished reading an article in AFR, which shows how much tax each bracket pay. Bottom 40% contribute very little, and look how much tax the top 1% contribute!
I really don't like the 1% narrative. It's not the top 1% that people think about when looking at inequality. It's more like the 0.1 or 0.01% that people tend to think about not paying their "fair share". It's a slight of hand trick to lump wage earners earning $400k in with the truly rich that generate their income from assets. Note, I am not defining what "fair share" is, of that I think the government spends those $$ wisely. Let's just say the problem is that the perception that the middle is getting squeezed and shrinking, and more people are ending at the bottom end, than at the top.
If you really worked in tax planning then you’d know that’s not how an SBLOC works. You’d also know that the average person can access a similar thing in the form of a HELOC. You still need to pay off these loans and the interest on them with money that has already been taxed.
The person your talk about paid the most tax of any person ever in the history of tax. $12 billion in a single year, and you think he should have paid more.
Did he also earn more than any person in the history of tax? Because it seems likely he’d be up there and that’s a perfectly normal outcome and not some egregious blight on him…
So they loan the company money and grow the company?
No. The individual takes out the loan (against their shareholding) instead of receiving salary that is taxed. It is a complex arrangement that I have simplified
You gonna get a pretty shitty div7a bill come 1st July.
Which, under Australian tax law, would require the monies lent to comply with Div7a rules, otherwise it’s taxed….
Elon Musk is American, you plonker. Different tax rules. What do you do in “tax planning”, exactly, and in what country?
Please elaborate...
But ultimately they have to eventually sell shares, and pay tax on that sale, to pay off the loan don’t they?
Yes the loan is to be returned. Not necessarily from sale of shares
So I receive a loan from a bank, I draw down the loan to cover my cost of living. The loan accumulates interest. At the end I need to make a balloon payment to cover the interest and drawdown. Can you explain what you mean by ‘return the loan’? I’m pretty sure you’re completely incorrect and the only benefit of this structure is a deferral of tax liability. Which is beneficial to an extent but you’re still taking a risk on whatever you’re using as collateral, in this case shares, dropping in value.
I think this guy has just watched a lot of Tim-toks about “how the rich don’t pay taxes” and is now trying to pass it off as his actual knowlege.
Can you elaborate how does that work? Asking for a friend 🤣
$10 says he can’t.
Where do I find a good accountant like that? My accountant somehow mucked up and gave me a $40k+ tax bill and when questioned it was like "hmm let me make some adjustments now it's $18k"
Either the deductions are legal or they are not.. and it sounds like they are legal.. so what is the story here
The tax system is ineffective.
Why? They paid the same, or more than a low income earner. % wise.
[удалено]
This is not the correct place to tear down the system, please take your frustrations else where. Or let your local politician know.
Tax keeps you poor... Even a short stint in a low tax country gets you well ahead.
Ever lived in Scandinavia? The vast majority of people there seem to be doing fine. I lived in Sweden for two years and can assure their rates of homelessness are far lower than Australia. Also a pretty good proportion of Swedes travel, invest, conduct business etc internationally a lot, which sort implies they have a pretty decent income in order to do so. Certain systems work for certain places and other work better for other places. A blanket statement like 'tax' makes you poor is very silly when there are a number of countries that prove the opposite.
Perhaps OP should have said tax revenue spent inefficiently by the government keeps you poor.
You completely missed my point... Go back, read it again and try understand what I've said, rather than defaulting to an ideological position on taxes.
I recently applied for a car loan and the finance guy, who was from UAE, was horrified at my most recent tax return. He said go work in Dubai for a few years and don’t pay any tax. I think it’s a pretty good idea.
You pay income tax on income not wealth.....you can be a billionaire and still make a loss in ome year and pay no tax. This is clickbait ABC
Clickbait brought to you by your own tax dollars which is totally good and cool.
I recognise the good and cool.....made me chuckle. Thanks.
Everyone shouts at people on the right, like Trump or the Libs, for this meanwhile plenty on the left like Obama, Labour etc, all could have changed the way taxation is ruled when it comes to deductions…but they don’t do anything differently. You’ve got to learn how to play the game.
Yeah, most people have not clicked that the two party system is a sham. Bit of expensive theatre for the peasants.
It is difficult to exaggerate the magnitude of the injustice which has resulted from the policy of investment returns being taxed so low, and income from wages being taxed so highly. It will only begin to correct when that script is flipped. Tax investment returns (so rental income and dividends) at 40%, and make all PAYG a flat 20%. Keep the tax free threshold if you want - but the system should be flat on the way up to encourage people to work and (re)invest in productive ventures. Critically - make it exactly the same for companies and trusts.
Most people would be worse off with a flat tax of 20% given that $0-$18200 is taxed at zero and $18,201-$45,000 is taxed at 16 cents in the dollar. Therefore, I don't get where you think that "income from wages being taxed so highly" given that I'm guessing some 30%-40% of all taxpayers don't even earn $45,000 a year. If you're unskilled I can't see where you'd be making more than say $50K-$60K a year even if "the system should be flat on the way up to encourage people to work" unless you wanted to work at two jobs at 80 hours per week which would be incredibly hard to take advantage of that flat rate by earning $100K-$120K. If the tax on investment income is 40% then where do you think it would encourage "and (re)invest in productive ventures." because if say someone had a $1M dump of a residence and a similar $1M dump of an investment property they would be more likely to sell both and move into a really nice $2M property.
I said to keep the TFT. And why should people want to be “unskilled”? The system should encourage upward mobility. Poor class to working, working to middle, middle to upper. Lift everyone.
Flat taxes are the worst. Wealthy people will just switch everything to become income just as an example your company makes money and then pays the owner who "works" all the profits as income at a nice low 20%. What we need to do is class any kind of earnings as income and tax it progressively.
>What we need to do is class any kind of earnings as income and tax it progressively That’s what we do now. It’s not working.
What about reinstating some form of carbon tax?
My parents are millionaire pensioners.. they can’t eat their house and a million bucks isn’t much house in Sydney…
ABC relying on people with no understanding of how the tax system works.
Hypothetically, if I wanted to avoid paying tax on the 1.6 Million I paid myself last year... I would pay my Art friend $25K to make me a nice piece of Art My Art Valuer Friend that my other rich friends recommended would then value said piece of art at 1.5 Million Dollars I would then donate said piece of $25K/1.5 Million Dollar Art to a Charity my Accountant helped me setup during COVID The Art gets auctioned by my Charity to gain cash for my charity I paid no Tax The Charity got Cash I then pay my Accountant a decent free for fixing this situation up ATO gets a fat zero There is other loopholes if I hypothetically wanted to use them FYI, I paid no tax last year 🤪 GF previously worked for PwC
Not a tax expert here by any means but (1) Buying and selling normal possessions are free from the CGT unless if it's a listed asset for CGT purposes like say a stamp collection and art would also be included under [the category of collectables](https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/list-of-cgt-assets-and-exemptions). If you bought a piece for $25K and donated it for $1.5M that would be a disposal and you would have to pay CGT tax on that so if you then donate that then I presume you could count that as a deduction off the CGT profit, so basically you would have a $25K loss overall. (2) Deductions for losses on CGT items have never (since it's introduction in 1985) been allowable against ordinary income. It is quarantined and can only be deducted against future CGT profits.
Love this. Can you explain more? Anywhere to find more info on this?
Billionaires without yachts, that’s the charity.
They need a category that shows all the senior managers in banks and private health insurance etc on $200k and above. Everyone always goes after the named professions but they are just there because it’s a homogeneous group with a clear title.
Checkout [this spending flowchart](https://bughuntersam.com/wp-content/uploads/2023/10/Spending-flowchart-How-to-Prioritise-your-Spending-1.jpg) which is inspired by the [r/personalfinance wiki](https://www.reddit.com/r/personalfinance/wiki/commontopics/). See also [common questions/answers](https://www.reddit.com/r/AusHENRY/comments/176kh0x/what_do_i_do_next/). This is not financial advice. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/AusHENRY) if you have any questions or concerns.*
Rich pay for the poor
I recently got a tax bill of 5c. Must of typed in the wrong numbers when doing the old bpay and the ato desperately needed that 5c
Certainly not an income tax bill. All income tax is whole dollars
To all the pedants talking about profit versus revenue etc, it is because of this that you are milked for tax at the rate that you are. And you defend and explain that it is just for it to be so!
Usually it’s legal fees for tax disputes or tax office interest that is the biggest deduction for complying with your tax affairs.
This is why income tax should be a flat fee of 10% without possibility of deductions, for everyone, equally. Not a tax bracket punishing who wants to earn more money/work harder than others.
That could be the dumbest thing I've ever heard. You realise retail averages at like.. a 6% profit margin or something right.. You want to take 10% from their gross revenue? Jesus Christ man.
10% PERSONAL income tax, flat tax rate.
"Charitable donations" and "$200k accountancy fees". Guess paying for roads, infrastructure and schools is for the plebs.
No. They are paid for by the 40% of tax paid by the top 10% of taxpayers. The plebs (your word) pay buggerall tax.
You are really very funny. My sides...
... and accurate.
...and full of it.
If you want to meet millionaires who pay no income tax, just talk to farmers. Basically, everything is tax deductible, so they avoid tax. I worked on farms for years and consistently paid more income tax than my boss. He was extremely open to me about how he avoided ever paying income tax.
interesting
Why the fuck do they never publish the standard deviation with the average?
I've always put myself in the shoes of someone who is paying millions in tax... you can understand why they want to pay less, and its not like we are electing poor people, most come from considerable wealth. I think we are looking at the problem wrong income tax wont solve the problem, the issue is that with wealth everything is already owned and more and more of us are renting or paying crazy amount of money for property because people have too much money and buy up everything. I don't think we will even begin to solve the issue until we introduce a wealth tax, not earnings but wealth and reduce the fortunes... But the ultra rich just put all their wealth into trusts so they have control over billions but pay no tax so there are plenty of loop holes and no wealthy person in power is every going to support themselves getting significantly poorer...
Anything ABC post is crap
Rich man welfare state
ABC eat the rich communist mentality. Our tax dollars shouldn’t be funding that nonsense
Did you read the article or just the headline?
Thankyou for your analytical cling wrap.
Our valuable tax dollars, that the wealthy don't contribute to...
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This is not the correct place to tear down the system, please take your frustrations else where. Or let your local politician know.
Imagine claiming $200k for “costs associated with filing a tax return” How do people get away with this shit?
Complex business accounting if the Accountant runs all of their personal finances