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26 August 2014
by John Passant

How about increasing taxes on the rich?

Finance Minister Matthias Cormann has suggested if the government can’t get the rest of its Budget attacks on the poor, the sick, the disabled, the unemployed and workers through the Senate, it will consider tax increases.

I agree. Taxing the rich and well off could easily address the Budget ‘emergency’ and have enough left over to adequately fund better public health, public education and public transport as well as a move to a fully renewable energy society over the next decade. Not to mention decent pensions at a decent retirment age, decent disability pensions, decent unemployment benefits.

Imagine a wealth tax applying to the top 20% of wealth holders, those who own almost 50% of the more than $6 trillion of Australian assets. Even a 1% wealth tax on these people would yield about $30 billion a year.

Abolishing the superannuation tax concessions for the top 20% would recoup some of the $15 billion annually in revenue foregone.

Some of that revenue foregone if abolished would flow into negative gearing. OK, so allow rental losses only to be offset against rental income. This quarantining of negative gearing losses would yeild a few billion.

Capital gains on assets held for more than 12 months are discounted by 50 percent. Eighty percent of taxable capital gains are made by the top 20%. They benefit from this concession to the tune of billions. Tax capital gains like all other income. There’s a few more billion in revenue.

Real rent taxes on all resource companies and banks would raise tens of billions without impacting on their required return.

Deputy Commissioner Jim Killaly told us in 2012 that between 2005 and 2008 40% of big business paid no income tax. After the global financial crisis the figure is likely to be much higher. When they do pay tax, their effective tax rate (on average about 20% but in some industries like mining much lower) is well below the company tax rate of 30%. Maybe a minimum company tax imposed for example on their assessabler income think sales revenue) rather than taxable income is one way to recoup some tax from these non-taxpayers.

This is just for starters. Over to you Matthias Cormann to tax the rich.

I am sure these and the many other suggestions for taxing the rich will be taken up by this progressive far sighted government. Flying pig alert. If only unions would get off their arses and fight for better wages, for jobs, against this government’s attacks on their members and their members’ family and to tax the rich.
Another flying pig alert.