Flat Tax Rate. (1 Viewer)

[Not-That-Bright]

Fuck, did you even do HSC Economics you retard?

Give me an example of a country that has cut high marginal tax rates and collected less revenue as a result.

There are plenty of examples of the opposite

In 1981 the Reagan administration in the United States cut the top tax rate from 70% to 50%, a move denounced as a massive handout to the rich.

Instead of losing US$1 billion revenue as forecast, the US government collected US$9 billion more instead.

Russia abandoned its progressive tax scale in 2001 and adopted a flat 13% income tax rate. The result? A 50% increase in revenue within two years.

Even the high tax countries in Europe are desperately trying to cut their top rates in order to restore the principle of reward for effort and more equal treatment off all, even the so-called wealthy.

But the best example of all comes from right here in Australia.

In 1996, when the Howard government came to power, the corporate tax rate was 36%. At that stage, company tax collected in 1996-97 was $18.32 billion, or 14.1% of total revenue.

The Howard government cut the company tax rate to 30% by 2000-01, and they predicted that this would cut their revenue by some $3.4 billion by 2003-04.

Instead, the absolute opposite happened.

By 2003-04 company tax collections totalled $32.4 billion, or 18.4% of total revenue.

Since 1996-97 company tax collections have increased by 77%, while inflation has gone up a cumulative 22%.

 

[Xayma]

Of course this great economy doesn't come without costs.

Inflation will occur, purely on the basis of greater demand, suppliers will charge more, any net saving will be lost and the government would be left with fewer dollars from tax revenue.

 

[Vahl]

Lower taxes actually boost government revenue by stimulating economic activity

Well, genius, in fact lower taxes in this instance reduce economic activity through limiting the real drivers of growth in an economy such as Australia. That is: Education and research which are by necessity mainly provided by the government as this is a fair and efficient means of achieving a high standard.

Any level of flat taxation would in effect lower the governments absolute revenue either through less taxation from the wealthy in the case of a low flat taxation system or through less stimulus for growth from the lower income earners consumption if a high absolute tax threshold is set. Lower consumption means less income for capital owners(the wealthy) and thus less capacity to pay taxes etc. You are mad.

 

[absolution*]

Give me an example of a country that has cut high marginal tax rates and collected less revenue as a result.

Thats not the point and has nothing to do with flat tax rates. Show me one country that has adopted a flat tax rate with positive benefits.

Look at the broaders implications of what youre saying. You cant just boost economic growth without there being consequences. As i outlined above, apart of inflationary pressures arising you also get disparity growth between exports and imports. Both of which force a CONTRACTIONARY POLICY stance. You need to stop looking at the issue through a key-hole.

 

[absolution*]

Of course this great economy doesn't come without costs.

Inflation will occur, purely on the basis of greater demand, suppliers will charge more, any net saving will be lost and the government would be left with fewer dollars from tax revenue.

Wow, theres an echo in this thread?!

 

[Not-That-Bright]

Thats not the point and has nothing to do with flat tax rates. Show me one country that has adopted a flat tax rate with positive benefits.

Look at the broaders implications of what youre saying. You cant just boost economic growth without there being consequences. As i outlined above, apart of inflationary pressures arising you also get disparity growth between exports and imports. Both of which force a CONTRACTIONARY POLICY stance. You need to stop looking at the issue through a key-hole.

RUSSIA! THE BALTIC STATES!!!
HELLO?!

Xayma, it's easy to say that... but it isn't what happens in practice.

 

[Xayma]

Wow, theres an echo in this thread?!

It happens when I open a thread and dont get around to reading it for awhile.

Humans are greedy, give them the opportunity and they will take whatever they can. In your case it is this desire to achieve. Supermarket chains will be able to undercut more, forcing near all others out of the produce market (for example), which then gives them complete control to set which prices they want.

 

[absolution*]

HAhahaha. You better close this thread before you great even furter shitted upon NTB. Russia, an example of exemplary economic policy? Bwhahahaha. Baltic States. BWhahaha. GDP of $25 and a can of anal lube.! bwhahaha.

 

[absolution*]

Xayma, it's easy to say that... but it isn't what happens in practice.

Um, yes it is. Its simple economics you big ball of arse!

 

[Not-That-Bright]

Um, yes it is. Its simple economics you big ball of arse!

You obviously haven't kept up with the huge growth that countries like latvia have been experiencing..

 

[Vahl]

Thats not the point and has nothing to do with flat tax rates. Show me one country that has adopted a flat tax rate with positive benefits.

Look at the broaders implications of what youre saying. You cant just boost economic growth without there being consequences. As i outlined above, apart of inflationary pressures arising you also get disparity growth between exports and imports. Both of which force a CONTRACTIONARY POLICY stance. You need to stop looking at the issue through a key-hole.

I feel that NTB is really just attempting to justify inequalities, and cement his perceived position in society.

 

[Vahl]

You obviously haven't kept up with the huge growth that countries like latvia have been experiencing..

As have other nations such as China, and the Newly Industrialising Economies in the 1990's, and up to today. This high growth rate is primarily due to the low starting base. Ie, their systems were very inefficient and moving into more efficient methods of production will obviously yield a higher rate of increase on the starting base than new means of production employed in already efficient nations such as Germany, the US and Australia.

 

[absolution*]

You obviously haven't kept up with the huge growth that countries like latvia have been experiencing..

If thats not a joke it is insanely stupid. Id rather not respond til i find out which it is.

 

[Vahl]

ABC News time!

 

[Not-That-Bright]

I've just been trying to dismiss this notion that absolution brought up that cutting taxes means decreased revenue.
It is wrong.

 

[Vahl]

I've just been trying to dismiss this notion that absolution brought up that cutting taxes means decreased revenue.
It is wrong.

Cutting taxes does mean decreased revenue in both the long run and short run. Despite the current account implications, inflation and forex implications, you need to understand that Australia is a knowledge economy. Services barely operate with the current tax intake, reducing the intake compromises the ability of Australian governments to provide the necessary education services and support services( such as health) that contributes to Australia's wealth and growth. Therefore cutting taxes will mean less revenue in the long term as Australia will have difficulty if our strengths are not invested in.

Lower taxes = higher growth works in huge economies such as the US which are not as dependant on international changes in the business cycle. + the US has a large working poor with which to produce its products and promote growth etc.

If you believe that absolution is wrong then why do you not prove this in a logical way?

 

[Not-That-Bright]

What about encouraging innovation and entrepeneurialship?
Isn't that what would TRUELY re-invigorate our economy?

By the way, look at the example of howard's business tax cuts... and the revenues after them, compared with the revenue loss people expected.

 

[Vahl]

What about encouraging innovation and entrepeneurialship?
Isn't that what would TRUELY re-invigorate our economy?

By the way, look at the example of howard's business tax cuts... and the revenues after them, compared with the revenue loss people expected.

This system is based on greed. Greed is transient and as such unsustainable in the long term. It has been shown that feeling part of a work community produces better results than granting a financial incentive.

Innovation can be achieved through teamwork and a positive environment rather than financial incentives. eg. look at the awesome Russian technological achievements without 'entrepreneurship'

The argument for entrepreneurship is a justification for inequality. There is no justification for inequality.


What would reinvigorate our economy would be a greater focus on equality and teamwork for the good of the collective. This DOES work, despite the skeptics, like neoclassical economics did in its evolution, and does, it just needs some time to develop to its most productive state.

 

[absolution*]

What about encouraging innovation and entrepeneurialship?
Isn't that what would TRUELY re-invigorate our economy?

By the way, look at the example of howard's business tax cuts... and the revenues after them, compared with the revenue loss people expected.

Tax cuts to business and tax cuts to consumers are completely different. Ie. Tax cuts to businesses do not create export/import trade problems and inflationary pressures.

 

[Shuter]

Tax cuts to business and tax cuts to consumers are completely different. Ie. Tax cuts to businesses do not create export/import trade problems and inflationary pressures.

Of course they don't.... and you call yourself an Commerce student.

I support this to a point that I can't be bothered, and will just state a 3% on every transaction is probably the best method.