Wednesday, May 10, 2006

Aussies get tax cuts


It's not much but better than nothing.
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The Australian Federal government is full of pork, subsidies, welfare for middle class parents (sounds familiar?) and special grants for everything from Tasmania to subsidies for airlines to remote locations. In spite of this nonsense, the Sydney Morning Herald reports Treasurer Peter Costello announced some meagre tax cuts in the Aussie budget last night because the Federal Government is now virtually debt free, meaning it spends nothing on interest payments, so needs to collect less taxes.
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The tax cuts are meagre:
Top rate of 47% down to 45% with the threshold raised to A$150,001
Second rate of 42% down to 40% with the threshold raised to A$75,001
30% rate remains, threshold raised to A$25,001
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Plus a cut in fringe benefits tax and increases in low income tax rebates that mean some pay no income tax on the first A$10,000.
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The leftwing blogosphere bemoans tax cuts to the rich (yawn), those people whose money it was in the first place. Jordan Carter in his Orwellian newspeak claims that it is money taken from the poor to pay the rich - what screwed up world does he inhabit?
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Simple lesson to socialists:
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People on high incomes make those incomes from work or investment that they undertake with their own time, effort, brains and money. It is THEIR money before the beloved bosom of nanny state gets her craggly claws on it. Letting them keep an additional 2% of it is about taking LESS from people who MAKE money. The poor don't pay for the running of the state, in most cases they are net recipients or free riders.
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Why?
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Well let all the wealthy Australians earning more than $A75,000 leave and then the poor can get "their money back", and then watch them struggle to find doctors, lawyers, architects, airlines, food or indeed most of the things that business brings them.
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As Costello said, last year rates for lower income Australians were cut, now top rates are being cut and those that get more back do so because they pay more tax.
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From a libertarian perspective it is pathetic, although a small step in the right direction and more than Labour in NZ (or the UK) has done. If the fat in the Australian Federal Government was trimmed then Aussie would gain enormously by cutting rates a lot further and from the efficiencies of abolishing subsidies that prop up inefficient activities and regions. For example, A$1 billion is being pumped into the ABC and SBS to convert the TV channels to digital over ten years - why don't the viewers pay? A big hand out for breeders as well.
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However, as long as Aussie rides on the back of high mineral prices, it has no incentive to seriously reform further.
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Don Brash is saying this will see more kiwis going to Aussie to earn more money with lower taxes, it certainly wont discourage them!

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