Lets talk about Tax baby, you and me

I like tax, I see how it works and I’m not against tax.

Dan Tehan is my Federal member for Wannon, I can vote for him or not, so I try and keep up with what he is saying.
In his opinion piece, Dan Tehan (Australian Financial Review, October 19, 2015) threw around some ideas about taxation. He didn’t state any particular preferences but he did put out some examples that are happening elsewhere in the world.

“In the United Kingdom they have started to cut at the bottom and David Cameron has promised to lift the tax free threshold, the Personal Allowance, to £12,500 by 2020. The aim is to then align the minimum wage with the tax-free threshold, effectively making the minimum wage tax free.”

Then later in the opinion piece he quoted “For those on the minimum wage [in Australia], which the Productivity Commission puts at $33,327”

So for this premise let’s raise the tax free threshold to $33,337 per annum, minimum wage.

People earning over 37,001 should still pay the 19% tax rate for the amount earnt between $18,200 to $37,001, take it or leave it, just my opinion.

People earning over $33,328 should still pay the 19% tax rate for the amount earnt between $33,328 to $37,001. The difference being $3673 per annum with tax payable of $698 per annum or $13.42 per week just to be pedantic 😉

Anyway here goes…

So $33,327 minus the tax free threshold of $18,200 ($33,3270- $18,200) = $15,127 taxable income. At the 19% tax rate that equals a maximum of $2874.13 per year of $55.28 per week.

That would equate to a maximum of $141,516,800 in tax per year (12.8 million workers, 20% pay this tax rate = 2,560,000 people paying $55.28 per week ( maxium)

If you deduct 10% for personal savings off $33,327 you get $29,994.30

$29994.30 would be the maximum spent per individual per year on good and services (GST)

The GST payable on $29994.30 goods and services provided to these people could be $2999.43 per year or $57.68 per week per person on average.

That would equate to a maximum of $147,664,246.16 in GST tax per year (12.8 million workers, 20% pay this GST rate = 2,560,000 people paying $57.68 per week ( maxium)

This would equal to a net gain for the government of $6,147,446.16 per year.

While this doesn’t sound much it does have some great multiplier effects.

A better standard of living for those in that income bracket
Potentially Better health outcomes
Potentially Better education outcomes
More people in work
More money being spent
Lower administration costs for businesses
Simplified taxation process
More regular income for the government
There are no tax dodgers
And there are no Dole bludgers/scammers either but I will save that for my next post…

This post is part of the “My Wannon Electorate Project”. The Democratic process is a two way street. We in Australia are obliged to vote for federal, state and local governments. This is my way to engage with the people who are elected to represent me in the various tiers of Government. @3373 @DanTehan ‪@Louisestanley‬ ‪@MichaelOConnor‬ #3373 #DanTehan ‪#‎Louisestanley‬ ‪#‎MichaelOConnor‬ I hope you do the same because by talking to each other, we can understand each other better and make our world a better place

Read the Whole article here…

http://www.dantehan.com.au/2015/10/opinion-income-tax-at-its-use-by-date/
Some of the data I accessed for this post
http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6306.0Main%20Features3May%202014?opendocument&tabname=Summary&prodno=6306.0&issue=May%202014&num=&view=
http://www.abs.gov.au/ausstats/abs@.nsf/lookup/4102.0main+features202014
http://www.tradingeconomics.com/australia/personal-savings
http://www.humanservices.gov.au/customer/enablers/centrelink/newstart-allowance/payment-rates-for-newstart-allowance
http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6105.0Feature%20Article55July%202014?opendocument&tabname=Summary&prodno=6105.0&issue=July%202014&num=&view=