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The Rich Need Tax Cuts Or Else They’ll Just Stop Making Money!

budget1Once upon a time there was a Treasurer who was very, very concerned about delivering a surplus. But that was in another galaxy far, far away.

In Australia we have Joe Hockey. Who has “spending” under control now, but there’s still more to be done. The deficit is much larger than it was under the last Swan Budget, but he has the solution. We need to give tax cuts to those on the top rate because if we don’t they may stop working.

I know, I know, some of you are going to wonder how reducing revenue will help the Budget get back into the black, but the Liberals have the answer to that one: Quick, bomb Syria.

In case you persist and say, how are you going to pay for the tax cuts, the Liberals can calmly point out that they stopped the boats.

When you ask what’s that got to do with the fact that reducing revenue will actually put the Budget further into the red, you’ll be reminded that it was Labor that insisted on wasting money on things like women’s refuges when a simple ad campaign is all that’s needed to stop domestic violence.

If you give up and say that, well, a Budget Deficit is probably a good thing because it’ll stimulate the economy, you’ll be told that it’s thinking like that which caused Australia to be in such a mess and that things have to be paid for, and that’s something that the Left don’t understand.

And the tax cuts will be paid for with the reduction in spending that the Liberals have achieved. So said Assistant Treasurer Josh Frydenburg, so don’t you worry at all.

A surplus is just around the corner. Like the tax cuts.

Which can only happen after the election. Although Joe wasn’t very specific about which election. It’s certainly not the Canning By-election. It may be the one next year. Or the one after that. Or when they actually get round to having one in North Korea. But definitely after an election and not in the next Budget.

But you can be sure that it’ll happen because the Liberals are a party that cuts tax. Take the GST. They’ve just cut the figure at which you have to pay it on overseas goods from $1000 to zero. If that’s not a tax cut, what is?

And they’re talking about making it 15% rather than 10%. But that’s not a new tax. It’s just an increase of an old one. And it’s not really an increase because we’re about to bomb Syria and, as we said before the previous election, personal income tax needs to come down and the boats need to be stopped so that we can have jobs and growth.

Income tax, you see, is a disincentive to work. And it’s only by reducing income tax that we’ll encourage people to work extra hours.

Because we want people to work extra hours. Not to go home to their families. We don’t want to share the jobs around and have two people working twenty five hours. No, we’d rather remove the tax disincentive so that one person can work fifty hours and the other one doesn’t have a job.

Of course, not all jobs work that way.

With some jobs, you couldn’t find a way of giving a person’s overtime to somebody else. And, of course,  with jobs like this all overtime is voluntary. Nobody ever gets forced to work extra hours. With all jobs, your boss comes to you and asks what hours do you want to work, and because of the high income tax rates, lots of people just say that not only do they want no overtime, but it’s not really worth coming in after Thursday lunchtime so just dock my pay and I’ll see you Monday.

And with other jobs, well, they’re just high paying ones where you work as much as needed to get the work done. You know, like being in charge of the NBN which thanks to the Liberals is going to come in on time and under budget. Well, sooner than Labor’s and whatever the eventual cost Labor’s would have cost more and not used those state of the art copper wires. Anyway, high rates of tax – that’s the reason I haven’t ever taken on a job paying in excess of a million a year – I’d be losing half of it to the government.

Yep, this is why companies have such trouble finding CEOs, nobody wants to earn that sort of money because they’ll have to pay so much tax.

As for people earning money through investments, well, because of the high tax rates most of them have decided to simply bury it in the backyards because they don’t want to earn a single dollar that might cost them 47 cents in tax.

Although one wonders why Joe’s wife has a place in Canberra when she’s so well off that surely the tax rate must be a disincentive to her charging him rent.

Whatever, personal tax rates are a disincentive to work.

Cutting penalty rates on the other hand is not a disincentive to people working at all.

 

27 comments

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  1. jim

    As usual great post and makes the Liberal seem to be doing great things for our country well SEEM to, plus I got a laugh or two as well cheers.

  2. brickbob

    How a buffoon like Hockey ever rose to the top is one of the mysteries of the known universe.

  3. Rossleigh

    Jim, I have this recurring dream where some Liberal may read my posts and offer me the job as Abbott’s speechwriter and no matter what nonsense I write, he says and nobody notices that it’s even more absurd than what he said the week before.
    I have this recurring reality where I suspect that this has already happened in reality to somebody else…

  4. John

    The dole is classed as taxable income.

  5. Lawriejay

    “Although one wonders why Joe’s wife has a place in Canberra when she’s so well off that surely the tax rate must be a disincentive to her charging him rent.”

    Delicately, positively and precisely put QED !

  6. Matters Not

    Yes if it’s ‘black’, then assert it’s ‘white’. If it’s ‘short’ then aver it’s ‘tall’. If it’s ‘wet’ then affirm it’s ‘dry’. The point being any politically ‘uncomfortable’ ‘fact’ is always easily countered by insisting on the exact opposite.

    And if, on the rare occasion, a ‘troublemaker’ from the MSM questions your construction of reality take them on a Gish Gallop.

    Never, never retreat from a lie when once uttered. Accordingly, the claim that Adani’s Carmichael coal mine will create 10 000 new jobs, despite Adani’s own experts asserting that the real figure is about one-seventh that number, goes through to the keeper.

    The 10 000 figure has been repeated again and again in the Parliament but the claim that the Honourable Member is misleading the Parliament has never been made. One wonders why.

  7. keerti

    Brickbat! I’m surprised. Don’t you know the scum always rises to the top!?

  8. wayne johnson

    we have had two years of abbot and we are sick of his lies we want you gone tony even if you have god himself running in canning and i dont think god would run with tony abbot either way you will lose

  9. Harquebus

    “The rich” is not a politically correct term. They are now called “job creators”.

  10. musicinhills

    Its not the lnp at blame it’s the wealthy

  11. Damo451

    Harquebus ,looks like you watch a little Bill Maher with that comment ,if not look him up on YouTube ,very astute and great sense of humour

  12. stephentardrew

    The guy is an idiot of the first order. Here comes the middle class bribes while screwing the low income and unemployed. The debt? Let’s just blow that out some more and get elected then really screw you poor sods. So here we are back at the first budget but now we have a new strategy. Tax relief for some and when that fails to stimulate the economy it will be those welfare bludgers, disabled while selling off infrastructure and the whole bag of neo-con sucking up of wealth as a gift to the one percent. In the mean time sign the TPP and its Christmas time for the corporates and their goal of global hegemony. That is the main game.

    It is time to realise dear friends they do not give a blind damn about you or your capacity to survive. You are unsuccessful leaners and deserve what you get. Less than a million a year and you warrant little or no attention.

  13. Wally

    The rich (and the rest of us through our superannuation funds) would be much better off if this useless pack of idiots did something to stimulate the economy. The share market was struggling before the arse fell out of it today. As a result of todays losses there will be many rich people getting a tax concession anyhow so Joe doesn’t need to do anything.

  14. gangey1959

    @ Brickbob. Its called negative buoyancy, and has come about because his head is firmly wedged into his party leaders rectum. Negative buoyancy means that he won’t actually make it to the top but will always be somewhere at or about the surface. A bit like a turd.
    I do like the idea of job sharing. Maybe I could share with a few pollies. Lets face it, they all have a butt-load of work to do here in Australia in order to fix what they have f*cked up, and I have all this spare time on my hands due to my work being covered by 457 visas and offshore production. I would happily do their travel component, and only charge economy rates, so the entire population would be better off. Except for chrissy pynes kids who would miss out on their annual fireworks show. DOH !

  15. Kaye Lee

    Trying to understand Hockey on taxation gives me a headache. He frowns and says he is worried about bracket creep – so change the brackets. What’s so hard? Why do we need white papers and national conversations? The top tax bracket changed from $62,501 in 2003-04, to $70,000 in 2004-05, to $95,000 in 2005-06, to $150,001 in 2007-08 and finally to $180,001 in 2009-10, where it remains.

  16. Audioio

    Hockey is just repeating the usual neo-con bullshit. If you needed proof, compare Minnesota to Wisconsin.

    Didn’t Hockey cite “bracket creep” as one of his motivations for discussing this? I fail to understand why we still have tax brackets. For at least the last 30 years, any desktop computer has been powerful enough calculate tax based on a continuous curve. If such a scale were introduced, no one would suffer from bracket creep.

  17. kizhmet

    Joe Hockey does my head in as well, Kaye Lee. Changing the brackets is far too simple – and sensible.Doesn’t matter what Hockey starts on about, it never ever makes sense. In this particular instance, however, a room full of tax experts were equally flummoxed.

  18. Kuhr

    Wonder if this partner of one of our friends is one of these ‘all or nothing’ high income earners Hockey bleats on about. A former accountant who left his job due to stress when his marriage dissolved seven years ago, he has since gone to many job interviews, received many job offers, but rejected them all because ‘I won’t settle for less than 150K per year. He lives in his parents basement, and seems determined to hold out for 150K per year or more forever.

  19. Harquebus

    Damo451
    You are correct in your assumption.
    Cheers.

  20. Keitha Granville

    No, no, no, Kaye, Joe has to have a White Paper, or a discussion or a committee, or something. He can’t work that out by himself, what do you think he is, a Treasurer ?
    As usual I am left laughing, and then sobbing, at your writings Rossleigh.
    Why can’t anything be done ? Why are they still the government ?
    Aaarrrggghhhh !!!!!!

  21. Wun Farlung

    I reckon he (Hokey) must have been pissed when CEO of the openly conservative Accountants Union ripped into his speech yesterday and on ‘Our ABC’ this morning. Can’t seem to find anything in Google searches from indicating Turdoch dunny papers reported it

  22. Carol Taylor

    From none other than The Australian *shock*

    The latest contribution on the subject by Joe Hockey yesterday was a very poor effort indeed — a mess of muddled thoughts and contradictions.

    http://www.theaustralian.com.au/business/opinion/joe-hockeys-tax-speech-was-truly-awful/story-fnp85lcq-1227497515202

    What has been mooted so far? – tax cuts for the rich, tax cuts for the poor and middle earners, lower company tax rates and apparently the whole things can be paid for by sacking a few more public servants…on top of the 16,500 already sacked.

  23. Anomander

    Agreed entriely Kaye. Unfortunately there are too many cretins who don’t understand the basics of how progressive taxation works.

    Australia has the following progressive income tax rates (for the 2012–2013 financial year): 0% effective up to A$18,200; 19% from $18,201 to $37,000; 32.5% from $37,001 to $80,000; 37% from $80,001 to $180,000; and 45% for any amount over $180,000.

    If you’re earning over $180,000 per year, only the portion of your salary above that amount is paid at the top rate, not the whole bloody lot.

    Besides, if you’re earning over $180k per year, you’re in the top 2-3 percentile and wealthier than 97% of the population.

  24. win jeavons

    Tax based on a continuous curve was considered by Hawke government back benchers about 25 years ago. Too hard then, but a sensible one now. The top earners already get more breaks now, and some seem not to pay any tax now, so why shed a crocodile tear for them . The planet needs humans who live more lightly on it, not super consumers. Also I agree that it should be stated , clear and loud that only top dollars are taxed at top rates. Again, if lower tax and better pay encourage more work , then pay low income workers MUCH more, so they work MUCH harder!

  25. mars08

    All I’ve heard from the MSM…. and Coalition bobble-heads on this topic… goes something like this…. “bracket creep” “oooohhhh ah bracket creep” “bracket creep bad” “bracket creep” “bracket creep is going to get you” “cut taxes because, bracket creep” “let’s defeat bracket creep” “all Australians are in danger from bracket creep” “tax cuts good, bracket creep baaad” “the Coalition will protect you from bracket creep”

    That’s the approved, official line they’re running with. The notion that, as you wage rises (hahahaha, good one) you will fall victim to bracket creep. THEREFORE it is in everyone’s interest to cut taxes. EVERYONE’S interest…. apparently. Never mind that the wealthy have the most to gain, by far! The govt is appealing to the aspirationals who believe that their illusory small fortune is under threat from insidious bracket creep. And the clueless msm, as usual, is playing along.

    Creeps…. indeed.

  26. Matters Not

    Anomander wrote:

    Besides, if you’re earning over $180k per year, you’re in the top 2-3 percentile and wealthier than 97% of the population.

    Probably true, but ‘earning’ has a number of dimensions. ‘Income’ as a concept, for example, goes far beyond what you earn in the form of ‘salary’ which is somewhat linked to the rate of ‘economic’ growth. Put simply, the rate of ‘economic growth’ will in large part effect your salary earnings. But being in possession of ‘capital’ changes the dimensions somewhat.

    The real story is that the rate of ‘capital’ return (in developed countries at least) is greater than the rate of economic growth.

    The long-term result is that those who have accumulated the ‘capital’ and invested same will get a greater ‘return’ than those who ‘work for a living’.

    Thomas Picketty writes extensively on that very issue.

  27. Doug Anderson

    ” Keitha GranvilleAugust 25, 2015 at 10:41 am
    No, no, no, Kaye, Joe has to have a White Paper, or a discussion or a committee, or something. He can’t work that out by himself,”
    May I break in with a little humor?. Did you hear about the constipated treasure, he worked it out with a pencil :-).

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