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  1. 1. Agree that reducing income tax for a land tax negatively impacts honest low income tax payers


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7 posts in this topic

An implementation of a land tax which is net tax balanced for the goverment requires that low tax payers cover the income tax lost from high tax payers.

Someone paying $Xold income tax that now pays $Xnew income taxand pays $Ynew (due to the populace now paying sum(Xnew + Ynew) == sum(Xold) ) has effectively won if Xnew + Ynew is less than Xold and lost if not.

i.e. if a person in a median house paid 100Kpa income tax now and a net balanced tax change means that they pay 50Kpa income plus 5K pa land tax their total tax load has reduced by 45Kpa.

This can only be made up to balance the governments tax input by increasing the tax load on everyone that paid less than 100Kpa income tax previously. If the land tax was 5Kpa that would mean 9 people living in median houses would pay the same income tax as before but have the extra 5K land tax added.

Unless one assumes that the vast majority of people (in this case 90%) are cheating heavily on their taxes this scheme would negatively impact low tax paying people.

I believe most low tax payers are in fact low earners as well and so do not support reduction of income tax to encourage a land tax.

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You are talking low income earners, so they would likely pay marginally higher rent, they pay no income tax now after rebates so I imagine it would have a negative affect on them but it will be pretty marginal. If the government actually uses the money to build more infrastrucuture for our cities then in time they might even be able to afford to buy a house again, but this is long term and highly speculative relying on government to do the right thing, so I had to vote yes...

The middle of the road majority however will be positively affected if they dont own property and negatively affected if they do.

The top earners if they own large amounts of property will be negatively affected if they dont they will be positively affected.

You are basically taking infrastrucuture away from people who own property and giving it to everyone, so expect those who own propery to be worse off.

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You are talking low income earners, so they would likely pay marginally higher rent, they pay no income tax now after rebates so I imagine it would have a negative affect on them but it will be pretty marginal. If the government actually uses the money to build more infrastrucuture for our cities then in time they might even be able to afford to buy a house again, but this is long term and highly speculative relying on government to do the right thing, so I had to vote yes...

The middle of the road majority however will be positively affected if they dont own property and negatively affected if they do.

The top earners if they own large amounts of property will be negatively affected if they dont they will be positively affected.

You are basically taking infrastrucuture away from people who own property and giving it to everyone, so expect those who own propery to be worse off.

Property owners that own a single average property and pay above average tax would be better off.

I think that if net income tax payments mirrored roughly the standard deviation of house valuations it would work out eventually (assuming a pefect government).

However house valuations are mostly within a couple of multiples. 500 odd is the median sydney house and I doubt there is a significant percentage above say 1.5 million (a multiple of 3). I don't know many people living in those houses.

Net income tax payments go from median income of about 12K up to ludicrous multiples, I know many people on 150K+, close to 50K income tax, a multiple of about 4.

I suspect this would be a very efficient way of moving money to the high income tax payers and it would come from the low tax payers.

This is only fair if the majority of low tax payers are cheating and should be paying the high taxes.

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Property owners that own a single average property and pay above average tax would be better off.

I think that if net income tax payments mirrored roughly the standard deviation of house valuations it would work out eventually (assuming a pefect government).

However house valuations are mostly within a couple of multiples. 500 odd is the median sydney house and I doubt there is a significant percentage above say 1.5 million (a multiple of 3). I don't know many people living in those houses.

Net income tax payments go from median income of about 12K up to ludicrous multiples, I know many people on 150K+, close to 50K income tax, a multiple of about 4.

I suspect this would be a very efficient way of moving money to the high income tax payers and it would come from the low tax payers.

This is only fair if the majority of low tax payers are cheating and should be paying the high taxes.

If you are single you really dont pay tax untill you earn over 20k, as you get low income offsets and the like.

If you are a family you dont really pay tax till you earn over 50k after family tax benifit part A and B.

Yes you pay income tax but the government gives it back to low income earners in tax benifits.

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If you are single you really dont pay tax untill you earn over 20k, as you get low income offsets and the like.

If you are a family you dont really pay tax till you earn over 50k after family tax benifit part A and B.

Yes you pay income tax but the government gives it back to low income earners in tax benifits.

Good point, it is much worse than I said :)

Net tax for median is lower than the 12K hence the multiples are higher. House multiples stay the same.

Hence a reduction in income tax to offset the land tax would be much worse for low tax payers than I illustrated.

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Good point, it is much worse than I said :)

Net tax for median is lower than the 12K hence the multiples are higher. House multiples stay the same.

Hence a reduction in income tax to offset the land tax would be much worse for low tax payers than I illustrated.

I did say yes to the survey for that very reason. The negative affects though will not be very dramatic at all assuming they do not own property. If they do, they will be smashed by land tax their is no question about it if they own property in Sydney.

But this is only low income earners who own expensive property. I do not know how extensive such a group is?

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I did say yes to the survey for that very reason. The negative affects though will not be very dramatic at all assuming they do not own property. If they do, they will be smashed by land tax their is no question about it if they own property in Sydney.

But this is only low income earners who own expensive property. I do not know how extensive such a group is?

Low net tax payers with a median house get hammered.

60% of australians own houses, average children per family is 2, median income is 60K, net tax neutral with 2 kids is about 100K.

How much more extensive do you need?

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