Personally I would like the tax system to be less complicated. For example let’s have a look at personal income taxes for Australian workers. Below is how we are currently being taxed:
TAXABLE INCOME TAX PAYABLE ON THIS INCOME
$0 – $18,200 No Tax
$18,201 – $37,000 19.0%
$37,001 – $80,000 32.5%
$80,001 – $180,000 37.0%
$180,000 + 45.0%
Then the above rates do not include the Medicare Levy of 2.0% that we all have to pay as well.
Companies have been paying a flat rate of tax, currently 30%, for as long as I can remember and it seems to be working – so would it be a good idea if personal rates of tax for individual workers were a flat rate of tax as well? We could still keep the existing tax free threshold where wage earners do not pay any income tax until they have earned over $18,200 per year but after that it could possibly be a flat rate of tax, regardless of the amount that is earned – just like we have for companies.
Ideally the individual flat rate of tax would be exactly the same as the company rate of tax – I think that this would be a huge step towards making the tax system a lot less complicated. By the way, I don’t think that the company tax (and if we were lucky enough to one day have a flat rate of tax for individual wage earners) needs to be as high as 30% – I think it should be less than that – I wonder if it would be possible to have both the company tax and the individual income tax both at 20%? I know that the government still needs tax dollars to keep the country going but I would think they can do it more efficiently and equitably by raising the GST.
And while we are looking at simplifying the taxation system we should abolish things like all the stamp duties we pay and the fuel levies and company payroll taxes, just to name a few.
At the end of the day, both the companies that make the largest profits and the wage earners who earn the largest incomes will both pay the largest amounts of taxes with flat rates as they will be paying 20% of a larger amount – so it’s fair from the point where the wealthier companies and individuals are still paying a larger amount of tax than someone who is earning less.
In summary I think we would all benefit by having a simple flat rate of tax – one that would be the same as the company rate of tax and one that would be around 20% – this would leave wage earners and companies with more money in their pockets than they would undoubtedly spend on goods and services, and/or on further investments. I would prefer a tax system where we have more dollars in our pay packets every week and pay more tax in GST whenever we buy something that we want to buy.
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