The GST is a consumption tax
Not really. It is one of many taxes that we have.
What I would like to see is one flat fee that covers all expenditure and not the levels of exceptions and additions that we currently have.
GST - Should it be increased?
- Thread starter Roachy
- Start date
Not really. It is one of many taxes that we have.
What I would like to see is one flat fee that covers all expenditure and not the levels of exceptions and additions that we currently have.
Not really? Im pretty sure you'll find that it's a consumption tax. It may be one of many taxes we have but it's still a consumption tax.
I don't see how it's anything but a consumption tax. It's charged on CONSUMPTION of goods and services by consumers, while businesses effectively do not pay it as they are not 'consuming'.
Thing is, though, a tax system more dependent on GST would be more regressive (or at least, a system that has other taxes is more easily tweaked to be more progressive).
People on lower incomes spend a higher proportion of their income on consumption, while those on higher incomes spend a lower proportion on consumption (the rest being savings).
Increase the GST but cutting other taxes, and you'll likely end up taxing lower income people more, especially if you cut some of the exemptions we currently have (like food).
People on lower incomes spend a higher proportion of their income on consumption, while those on higher incomes spend a lower proportion on consumption (the rest being savings).
Increase the GST but cutting other taxes, and you'll likely end up taxing lower income people more, especially if you cut some of the exemptions we currently have (like food).
This notion seems to have crept in as the conventional wisdom, but it is wrong. The States removed all taxes and duties as agreed except for one - Stamp duty on non-residential property conveyances. If you are interested you can read more here:
http://www.budget.gov.au/2007-08/bp3/html/bp3_main-12.htm
People are often under the mistaken understanding that they were going to remove stamp duty in their resi-property conveyance.
If the States removed all taxes and duties as agreed then why did we pay stamp duty on our mortgage, why did we pay stamp duty on my wifes new car and when I bought my second hand car I had to pay stamp duty to get it registered. GST has been here for over 14 years and yet we still have stamp duty burdens, if the government were serious about this they could have abolished stamp duty from day one. They last government implemented or increased 43 taxes, some without a mandate, yet it has been over 14 years and they have failed to honour their promises to remove stamp duty.
So when some of the posters here say increase GST and reduce some other tax, they should look to history and see where it leads.
The answer is in the link I posted. The confusion is the erroneous premise that all Stamp Duties were to be removed. This was never the case. Only 10 defined duties and taxes were to be removed, and it was to be done progressively when GST revenues matched the revenue forgone by the state taxes.
NSW was the last to remove mortgage duty in 2011 according to the table.
It is an urban myth that all state stamp duties were to be removed.
are you being sarcastic?
Except that the higher income earner will spend more volume of dollars than the lower income earner.
For eg; the higher income earner might buy a pair of Jimmy Choo shoes and an Ipad air, and go out for dinner a few times - all in one week.
While in the same week, the battler might only buy a few groceries to go with the ciggies, beer and another hour of ink on the tatt.
I giggled at this post. Very nice.
So far people hate the idea of upping the GST. Does this mean that these same people enjoy the current services provided by the states?
like jakbak I'm confused.
GST = Goods and Services Tax.
What wasn't done when the tax was introduced was encompass all spending ie food, many services (finance, health) and other exemptions like residential property.
On the other side of the equation, there's enforcement. In some countries where the VAT or equivalent exists, the consumer can be fined heavily for not having a tax receipt for purchases (also needs to be enforced here).
So there's no need for a change in the rate just a broadening of the revenue base.
I might just be the only person who seems to get that the states provide what they can in the way of health, policing, education etc but the public just keep demanding more and more.
For example, I make some choices. I avoid going to Surfers Paradise and Fortitude Valley in the wee hours of the morning. Hence I do not require the services of the police for my personal protection out there.
I do not drink a litre and a half of Coke each day and I do not require the services of the public health dentists to fix my teeth.
And
other contentious issues coming.....
But I had better not say anything here on this family-friendly forum
For example, I make some choices. I avoid going to Surfers Paradise and Fortitude Valley in the wee hours of the morning. Hence I do not require the services of the police for my personal protection out there.
I do not drink a litre and a half of Coke each day and I do not require the services of the public health dentists to fix my teeth.
And
other contentious issues coming.....
But I had better not say anything here on this family-friendly forum
It's not about dollars, but about percentage. Higher income earners already pay a higher dollar figure of taxes than lower income earners. They gain from tax advantages on investment income. Dividend franking, capital gains discounts, etc.
To put it another way, a broadbase, higher GST will take away more, in % terms, from lower income earners than higher income earners. To me, that's the definition of a regressive tax.
but they can never gain more than they lose, so at the absolute minimum they pay is the same, albeit unlikely unless they have a lot of dog resi IPs or something
Not entirely true, depreciation and franking credits both have gain and dont 'lose'
