Joseph Stiglitz: Australia should not follow the American path to inequality

Aus22 said:
Even in Australia with the welfare State and Progressive taxation the rich pay less than the poor A person on $150,00 has a a 33% tax rate. They get benefits for their company , allow to have an expensive house and still get tax benefits . That if they pay tax in their own country.
In the recent budget it was found by treasury experts that it effected the lower incomes more than the Middle class or even the upper class despite a tax increase
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Frankly, your observation is naive ... it's easy to holler about tax equality, but you don't want it ... you only think you want it.

First of all, $150K x .33 = $50K.

Benefits from the company are not a factor ... that is a business decision made by the owner(s) on the value of the person and what he can do for the company. The cost of that is passed on to - surprise - the middle and lower classes in the form of suppressed wages and increased product prices.

As for your so-called treasury experts ... of course, taxes affect the lower incomes more than the upper and middle classes. That's how it works - every politician knows it. But, admitting that doesn't get you re-elected.

You can raise the taxes exclusively on the top 10%, and the lower class will STILL suffer more than the rich. Costs are simply passed down to the consumer ... since there are more poor than there are rich, the poor will beat the cost of the tax increase via increased goods costs and income that doesn't keep pace with the increase in the cost of living.

It is politically expedient for politicians to jump to the bully pulpit and insist on increased taxes on the rich, so that they can give more free stuff to the poor. But .. it just doesn't work that way. EVERY increase in taxes is borne by the poor and middle class ...

So, why the hell would you want to raise taxes?
 
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Australia Unemployed rate is now 6.4% below the USA figure. Is Obama doing something right or our Conservative PM Abbott doing something wrong?
 
Aus22 said:
Australia Unemployed rate is now 6.4% below the USA figure. Is Obama doing something right or our Conservative PM Abbott doing something wrong?
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Depends ... does your Conservative PM know how to lie about the figures, how to change them until they say what he wants?? Our President does ....
 
Aus22 said:
Australia Unemployed rate is now 6.4% below the USA figure. Is Obama doing something right or our Conservative PM Abbott doing something wrong?
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Depends on what the definition of unemployed is. Our true unemployment number is somewhere in the teens. And that doesnt count the millions of fraudulent disabled claimants. Dont know what you definition is.
 
I should have said our official unemployment rate is worst than the official US unemployment rate. I do not know whether the official figure is accepted but it is by both parties here. It does include people not include people who work for one hour a week or more. The government says it reflex people registering and looking for jobs in greater numbers
 
Australia Tax Rates after Abbott Temp tax

0=$18,200 Nil
$16201 -$37,000 19c each $1 over $18,201.
$37,000-80,000 $ 3,572 plus 32.5c f foe each $1 over $37,000
$80,001 - $180,000 $ 17,547 plus 37 c for each dollar over $80,00o
$180,001 and over $ 54,547 plus 45c for each dollar over $180,00o.
There is also a medicare levy of 2% reduced to $1.5 % but there is a proposed doctor's charge of $7 a visit not yet passed.

The temp levy is 2% for people earning more than $180,000 for three years.
 
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The US Tax Rate is:


From ................ To .................. Tax Rate ................ Over
$0 ....... ..... $17,850 ................. 0% ........................ $0
$17,850 ...... $72,500 ......... $1,785.00 + 15% .......... $17,850
$72,500 ......$146,400 ...... $9,982.50 + 25% .......... $72,500
$146,400 .....$223,050 ..... $28,457.50 + 28% ........ $146,400
$223,050 .... $398,350 ..... $49,919.50 + 33% ''''''''' $223,050
$398,350 ..... $450,000 .... $107,768.50 + 35% ..... $398,350
$450,000 .......................... $125,846.00 + 39.6% .. $450,000
 
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So, if I do my math right ....

$72,500 in Aus incurs $15,289 in taxes, while in the US it is $9,982
$400K in Aus incurs $153,547 in taxes, while in the US, it is $108,345.50

But, what is really interesting is when you look at the impact on the lower vs. higher income brackets ...

For instance, if a person makes $50K, in Australia, his effective tax rate is 17.5%, whereas in the US, it is 13.2%

If a person makes $100K, in Australia, his effective tax rate is 24.9%, while in the US, it is only 16.8%

If a person makes 750K, in Australia, his effective tax rate is 41.4%, while in US, it is 32.6%.

From that, we can see that both countries use a progressive tax structure (the more you make, the more they take) when pro-rated by income.

But ... I wonder ... why does Australia have a more onerous tax burden on its low and middle income? I'm not familiar with the Australian income distribution structure. Is the increased tax load on the lower and middle class necessary for government operations, or is the government providing increased services that have to be paid for?
 
It is True That Australia seems to have a higher tax on low and Middle income. However our rate on the top income is much lower than the USA. This may be due to the policy on our political parties or to the power of middle income earners in the USA.
Of course Australia has far more benefits, free education to end of high school, free hospitals and for moment doctors, We also have a pension paid by the government not just superannuation paid by employers and workers.
Business in Australia do receive subsidies and most are eligible for the pension.
The very rich usually do not pay Australian taxes but pay taxes in a low tax country.
 
Aus22 said:
Of course Australia has far more benefits, free education to end of high school, free hospitals and for moment doctors, We also have a pension paid by the government not just superannuation paid by employers and workers. Business in Australia do receive subsidies and most are eligible for the pension.
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Those things are not "free"... The taxpayer is handed the bill for all of it, and what the taxpayers cannot pay, is then funded by government through deficit spending.
 
Most Educational and medical expenses are free to the user in Australia. Of course the taxpayer pays a subsidy through taxation. But our taxes are not much higher that the USA. Our deficit is also lower.
 
Aus22 said:
Most Educational and medical expenses are free to the user in Australia. Of course the taxpayer pays a subsidy through taxation. But our taxes are not much higher that the USA. Our deficit is also lower.
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Maybe we should compare the size of your bureaucracy to the size of ours. I think that would probably demonstrate the folly of big government, its inefficiencies, and its cost.

I'm pretty sure, other than that measurement, we would need an in-depth analysis to determine the relative efficiency of each government. For example, how many miles of federal roads does your government maintain relative to ours? How many acres of national parks relative to ours?

The point is simple - ALL governments are interested in increasing their power base. ALL governments are consumers, not producers. ALL governments - are you ready for this? - are a necessary, but very predatory, evil. It is our job to keep them under control.
 
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We do have a large Public service. The present government is trying to reduce this. For example it is reducing our government owned TV and radio network in Asia. I am not sure this is good for our relations with our Asian neighbours but it does save money. A you can see we still have some areas owned by the government that you do not. I suspect our road are comparable to yours. Both countries are very large so this is expensive Sometimes this is paid by partnerships with private companies with toll roads. We do have a large railway connection paid by state governments. This includes passenger trains in country areas.

I suspect we have more national parks due to the influence of the greens. Many of these are in remote areas
 
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