Do we really need a tax cut?

[davidpretorius]

Would people get cranky if the government halted the tax cuts to try and alleviate inflation pressures.

I know it would be a "broken promise", but would people care if they broke this particular promise?

[iceman]

Interest rates going up = bad.
Tax cuts = good.

Tax cuts = more spending = higher interest rates = bad.

Tough decision.

[netwolf]

Sometimes our Politicians really make me wonder... Foreclosures are on the up in NSW. Before you had a few now there are Bank Auctions mostly in Western Sydney. I dont know how any can stomach the idea of someone loosing there house or farm. Its sense less. I dont mind paying more tax if it means this will stop, but then i am not a politician or bureaucrat.

[Rodstar]

I think a promise is a promise, and should be kept.

The major problem we Aussies have is that we have too much credit debt. If people used the tax cuts to reduce their personal debt, we would be cushioned from the impact of rising interest rates.

Don't forget that those with money to invest actually benefit from rising interest rates.

I think the Rudd government should prioritise a clamping down on reckless marketing and behaviour by lending institutions. The Banks truly do prey on the weak and vulnerable, and deserve to be kept in check.

[Starkler]

If this promise was broken I wouldn't dare go near a radio or tv during the next election campaign.

Damned if he does, damned if he doesn't.

For the record I would support targetted tax cuts to those around average full time earnings and below. High income earners have already had theirs.

[GTB_an_Owl]

have to agree with you there Rod

the lending bodies make it too easy to borrow money
and when it goes pie eyed - WE pay for it - not the lending bodies

they just put their rates and charges up

lending rules need to be changed - bring back the 20% deposit and percentage of income rules

geoff

[h0ughy]

tax cuts = more astro gear

[Ric]

I prefer an interest rate cut any day to a tax cut. It still equates into astro goodys.

Cheers

[Nightshift]

I dont get the moderation of this forum, I thought we were not allowed to start threads based on politcs or religion?

This thread is 100% based on a political arguement that could easily encite aggrevation, if I made my own personal comment on this topic I know it would ruffle some feathers, so, my opinion is that the moderators should lock this thread now before the inevitable happens and stick to some kind of continuity with moderation, either allow politics and religion or ban it but stop this maybe/maybe not policy.

[GTB_an_Owl]

i would think it was an economics question rather than political

but that's just ME

geoff

[Ric]

I agree Geoff, I see it as a question/discussion on economics

Not that I know much about that anyway :lol:

Cheers :)

[avandonk]

The real problem here is that ordinary Australians are taxed at rates that would make the rich leave the country. The simple premise is not political as both sides were going to do much the same thing. We are overtaxed as individuals compared with the largess shown companies and the company 'welfare'. If we got decent Government investment in infrastructure which benefits all of us, i would forego any tax cuts.

But then again I remember all the previous financial stuff ups perpetrated by financial geniuses right back to the late sixties. Funny thing is, the ordinary man ends up paying for it!

If you look through history you will find that NOTHING has fundamentally changed. Only the names of the guilty will change. The modus operandi does not!

Bert

[Miaplacidus]

You mean you people are paying tax..?

Seriously, dead weight arguments aside, the question really is whether governments should accumulate surplusses and what should they do with them.

More and better training positions to contain inflationary wage pressures, investment in infrastructure to unblock bottlenecks and improve productivity. (Those coal ships banked up off Newcastle are a national disgrace.) Renewable energy investment. Hospitals, schools, pensions. Then tax cuts.

Just MHO.

[GTB_an_Owl]

if you don't borrow money - who cares what the interest rate is ?

unless your an investor that is

geoff

[ving]

tax cuts = more lenses...

inflation = less lenses?

6 of one...

[mick pinner]

so what does a small tax cut do for the individual? nothing. multiplied by a couple of million people, inflation. to grab a couple of dollars now is ridiculous when you consider what it will do to long term interest rates.

[rumples riot]

Yes give me a tax cut. I paid 42,000 last year in tax and I could spend that more usefully on more astro gear. LOL. I don't care if interest rates go up as I own everything I have and want my money in my self managed super to sky rocket.

Sorry for all you people who have mortgages.

[wavelandscott]

It does not matter...Interest Rates are likely to go up either way.

Either the Fed steps in and raises rates in an effort to slow inflation or...

Lending institutions raise rates to recoup losses from bad loans (from too easy credit here or abroad).

The better economic question is related to the size (if any) surplus a government should run versus the services they provide.

While I dislike paying my "fair share" of tax as much as the next guy/gal (and know that I pay tax here and overseas!)...For improved service in public goods (such as public roads, public hospitals, public schools, public etc.) I'd be willing (but not happy) to let them keep a bit of my tax cut...

The question is who can better spend the money to generate the most "good"...

[xelasnave]

I don’t understand why we see that we have a surplus. as a Nation...the Federal Government can boast a surplus however it seems all the State Governments (maybe the Local Governments. I don’t know) carry huge deficits... so where do we really stand.

And why are the States in hock anyways? Where has all the cash gone from the sale of any asset that was not nailed down...Federal or State that is the case... we have to rent what once was ours..buildings phones roads bridges..what gives?


It seems we have an illusion that we are doing well because we see the Federal picture and yet each State is in debt to the eye balls...

So what is the real picture? I ask because I don’t know.
Does anyone here understand and able to comment.

I think something really needs to be done about the slack lending that leaves us with the recurring crisis that this time around is called the prime loans problem..

Each time one hears the news another bank admits to what must have been know months ago that that have been stung... it is as if we let only a little be know at a time no one will notice.. and besides the personal lose via super funds all will have to pay higher interest because they stuffed up..

A decade ago it was Home Fund in this country and a little before in the USA is was the Saving Trust Crisis..
It seems to me that folk run around set up loans that not only will come back to destroy the borrower if they don’t refinance before the axe drops but then on sell their group of loans to other financial institutions sorrtta like it is selling a good business..the folk buying don’t really look at what they are buying into as I suspect they are represented by Super Funds and Banks who are interested in buying "big" deals and really do not look at the solidarity of the business they buy... as a result those who made the bad loans get good cash and move on leaving shareholders in Banks and Super Funds holding their sick baby..it seems like a criminal and recurring event that the little guy loses out on each and every time...

Has anyone looked at their super fund and how the current crisis has made them need to work a few years longer?

This is maybe a distorted view and I welcome input and discussion as this loan thing happens every decade or so and its seems to claim "poor" victims whilst some must make huge profits.

Also on the subject of interest rates why can a Government no find some other way of controlling fiscal policy.. after all what they do when they put up interest rates is really putting someone out of a job..that last guy they put on now has to go..the approach where the economic books openly state "the optimum unemployment policy" as a means to control the economy seems to me a sad condemnation upon our inability to come up with something better.
Sorry if this is a bit all over as I really know so little about economics I thought that maybe an astronomy forum would be a good place to raise the above matters as maybe most of us are in the dark...

hope this makes some sense
alex

[mick pinner]

speaking of self managed super funds, have you seen the stock exchange today another 6-8 billion down the drain.

[xelasnave]

I no longer have to look at the day to day market..I realised months ago it was so sick many deaths were inevitable... I said so..in a thread by pointing the US market depends on rate drops..well with the rate so low they can not drop it as far as it has to go..the last time they had this situation they had some range in the order of 10 they could drop over years now they have only a few percent they need to drop over months... pretty simple approach on my part but that is the way I see it.

The sheer surplus of money to throw into the exchange has left folk not understanding what a decent investment is...how can one class a share that gives a dividend of 1% good??..fools say well it is going to go up capital gain and all that... well capitalisation of the rturns say most shares are worth about 25% of their listed value in my book... the market is crazy it runs on gambling principles not investment principles...

To me one needs a decent income return and the promise of capital gain to keep with inflation... this was once the way of it but now shares go up if next year so and so may make a deal in which they may make money...
Apple announced a new ipod..shares up... will it make money ..who knows who cares just buy some shares ... mob driven capital gains are always doomed .....

Look back at Amozon at one stage someone figured if they had a monopoly on book sales world wide and sold every book in the world their shares were still many many fold over their listed price... still their shares went up higher ..so the market culles those with more money than sence.

The folk who move your money around dont see it the way I do no doubt... but they are really not interested in you they are interested in a commission nothing more ..thats life.

alex

[xelasnave]

Anyways as to the original question ..yes if course we each personally do..it is our money...when the concept of GTS or VAt or whatever it started life as was a mere seed of economic idealism it was presented as a tax that would see all other tax abolished..yeh is that what we got...nope...
And as much as Pauline was maligned the thing that really brought her down was the economic platform that was hidden quickly by the racial jazz...they worked out that a simple 2% turnover tax would see all income tax un necessary..but "those" who would loose in that arrangement..I never really could understand who "those" were... must have had some pull...Politicians who were more racially pred than her all of a sudden jumped on her dangling from strings from who knows where...and from both sides no less ..how strange..do you really thinj they gave a ratz about her ratial thing???
alex

[kljucd1]

Hi,

I earned my pay so I want to keep it...simple. Mind you I am happy to pay out for most Government services and am happy to help support people, who are actually in need.

I also haven't borrowed beyond my means and then thrown a couple of credit cards in on top of it all, so I am not particularly interested in interest rates.

Regards

Daniel...

[xelasnave]

Never a borrower or lender be...
alex

[mick pinner]

that may be a saying in fantasy land but try applying it to the real world.

[xelasnave]

I have :D dont owe a cent and wont lend $5 to a dying relative....
I was the biggest borrower I knew once... part signatory to 2 million back in the 80,s...but now no way... If I dont have the cash I dont get it..even if that means walking and living in a hole in the ground and eating boiled rice ...but life is so much better you would not believe.

alex:):)

[mick pinner]

l'm sure your world works for you Alex and l'm glad it does however applying your previous quote would mean no one would own a house or be able to drive the economy the way it needs. to adopt the quote once we no longer have a need for borrowing somehow shows disdain for those that still do. some people do fall on hard times and l for one am glad if the situation arises that l have a family to rely on and them on me.

[mark3d]

interesting thing i read the other day; when ipods first came out if instead of buying one you spent the same on apple shares they would be worth $10,000 now ;)

[xelasnave]

No distain here Mick and I only got to this point a couple of years ago... by good luck after a life time of trying... and I live in a shack ..no fridge, no floor coverings ..nothing like most folk.. outside bathroom very primative.. If I borrowed $100,000 I could fix it but I have made my choices the way I have and although it is hard it is not impossible... and after a while you dont miss what most call necessities...

If you sold me up there is no fortune thats for sure.

Still I do feel many are talked into debt past what they need and can afford when if they could just hold on and move past that time things could be better ..
AND I am probably not as tuff on family or friends in need as I make out I guess.
I dont think many would swap places with me really as they would be going backwards in most cases
alex

[xelasnave]

:lol::lol::lol:
If that does not provide a case for crazy I dont know what does

alex:):):)

[duncan]

Give me a tax cut!. I've given up all hope of ever owning my own home.
Average price up here is almost $400K. Rents average $300/wk. It is a national disgrace. Maybe if interest rates go through the roof there will be more rental properties and prices will come down accordingly, maybe/maybe not. But in the meantime i'm struggling as are a lot of others.
When i hear what bank CEO's are getting and what the Pollies are getting it makes ya wanna puke!!!!:mad2:
So share it around and give us low to middle income earners a decent break for once. Not a piddly $10/wk.
Sorry for the rant.
:(:mad2::mad2::(

[mark3d]

first the money for the tax cuts isnt even real yet.. its future revenue projections.. based on things like migrant workers not taking their superannuation with them etc. so who knows how much there will be.

i wonder whether the tax cuts were ever a serious proposition or instead just the election campaign ante. the liberals knew for a year they were going to lose so the tax cuts was a gamble - it could have got them back into office in which case they would have worried about them later, if not it would always be guaranteed ammunition for next election.

with economies of scale 1 x $30bn buys a hell of a lot more than 20 million x $1500. $30bn buys serious infrastructure - imagine that spent on alternative energy implementation. compared to 20 million plasma tvs - which will just be 20 million piles of junk in a decade.

lets skip the tax cuts.

[xelasnave]

Get ready to buy Duncan the time is approaching where you may see the opposite to what has gone on for so long unchecked...good luck mate:thumbsup:
alex:):):)

[xelasnave]

Does the term buying votes mean anything to you...
alex:):):)

[duncan]

HeHeHeHe! Thanks Alex. Your comments always brighten up my evenings. Specially with all this Damn cloud around.
Cheers:thumbsup:

[xelasnave]

Mate that makes me more happy than you know...
but seriously once I used to make my money buying when everyone was selling... and for the first time in over a decade I have started looking for something... buy when ther eis blood in the streets I have here it said and there is a message there I feel... if all these billions are being lost and forclosures everywhere you will have a chance I feel... buy some land even if you dont live on it if you can because it will go up again...my first house was $10,000 (1968) and I can remember saying to a mate one day it will be worth double ..he thought I was mad..well it went up a little more than that.
alex

[duncan]

Yeah Alex. I'm just waiting for my work to start up again up Weipa way. Couple of months work and i might look at some shares and then some land.
Land with clear skies (oh how i wish)LMHO:rofl:
Cheers:thumbsup:

[mick pinner]

we are by the sound of it a lot alike Alex, although l could not become as minimalist as you the last two houses l have bought have been smaller than the previous not bigger, certainly against the norm.
as we get older Sue and l find we need less and less but appreciate what we keep so much more

[Miaplacidus]

(Way to start a cool thread, David.)

[xelasnave]

As you probably know I was a real estate agent
..the way it goes a couple start with a small flat, then get a small house, have kids, the a bigger house with the rumpus and maybe the pool for the kids..are there for a short time.. the kids leave so they get a smaller house then finally go back to the small flat,

I lost pretty well everything in the last bush fire..which got me into minimal over night..and then when the wife left I found I could live like a homeless man... real meals were a drag ...I cook more for the dogs than me...
But the good thing with the fire I got so depressed my Son bought me a scope which I would not have accepted if I had not been down and out...

But as you get older ..at least I find..you dont need so much stuff..you only have to clean it maintain it etc..and fashion? why bother that is only to impress girls and I dont need that in my life... simple is not bad for me anyways.

alex:):):)

[acropolite]

Tax cuts are unnecessary when we don't have enough to spend on health or education. Corporate welfare (google if you don't understand it) in the form of MIS schemes etc, at the expense of a failed health and education system is IMHO criminal.

[duncan]

I agree with you to a point. So tax the crap out of those who earn over 1mill a year. How greedy can you get. No-one is worth $14million a year.(Bank CEO's)
Cheers,
Duncan

[xelasnave]

I looked it up.

I was wondering why our education system is the way it is.
One would think it would be the best investment that could be made yet you have to pay.. I mean Uni is not cheap .. all I can see with Uni is it is regarded as an export business rather than what it should be ..education.

I read someplace that we are a major exporter of education ..what a way to see education..an export.

AND what better investment in a Nations people than looking to their health... It should take priority over adds telling us how good the Government is one would think..which is really a form of corporate welfare ..what a way to channel money to your mates...

Every now and then some fool comes up with the newest economic rationalism and gets his ideas into fashion and we get stuffed...what fool said it was best to sell all the real estate in Canberra and lease it back... I think they want prisons owned and run by private companies.. thats not Government that is abdication of responsibility.

AND what happened to free milk in schools anyways? Was that not a wonderful thing to do for kids... well would I be stupid to suggest that the folk who benefited most by that removal may have been the soft drink companies.



alex:):):)

[space oddity]

Tax cuts are not needed at this time of the economic cycle. With an economy running supposedly at capacity(strange that nothing seems to be made here in Aus) the extra money sloshing around will merely stimulate inflation. Interest rates will wind up rising again as a result of this- more mortgage pain. Even the retirees will not gain - inflation will downgrade the value of their principal. Typical politicians - making promises they have no intention of keeping, just to get power:(. Realistically, tax cuts should be made in better ways, eg to stimulate the middle classes to be able to afford to have quality kids-the type that might get in to astronomy. The current system discourages those with a work ethic having kids and encourages bludgers to have kids(the $5000 baby bonus buys plenty of beer or a few weeks worth of drugs:screwy:) Please remember, the kids with bum parents are likely to become bums themselves. This next generation will suposedly be producing goods and services that will maintain OUR living standards in retirement. If they are a pack of bludging bums, WE will have to work much longer for a shorter retirement and LESS time for astronomy:(. And who says this thread has nothing to do with astronomy!

[timelord]

Guys it's all an illusion--If you recieve a tax cut then the various institutions like banks and utilities will raise their charges or interest rates figuring we have some extra money that they can bleed from us, take the example of the first home buyers grant--as soon as it was anounced the real estate agents put up the price of every property for sale by the corresponding amount virtually the next day! net result nill for the recipients and more profit for the money grabbers, it really is all smoke and mirrors.

[xelasnave]

Well I think the world economy is in melt down as we speak :shrug:... can hear the news in the background... so that will take care of the inflation maybe:D.

I think the problem has more to do with the resolve of the Government to fix what it should fix..I have little doubt that with or without tax cuts spending could be adjusted to better meet the real and pressing needs of health and education... and confronting the growing problems re energy and make some hard choices.

Timelord I saw first hand what you speak of with a particular hand out..it was needed but somehow the publicans ended up with most of it... which when you think of it is a recycling of the tax dollar given the tax on booze.

Is the news really bad market wise? I must have a look... hope my comment that things are only 25% of theri listed value has not got out:eyepop:
AND history says if real bad we must have a major war unfortunately

alex:):):)

[xelasnave]

ICAP chief economist Matthew Johnson said he was surprised over the continuing losses, which were higher than expected

"You don't want to be the one catching the falling piano."

What a line:lol::lol::lol:

alex:):):)

[duncan]

Hey Alex it sure does seem to be taking a nose dive. Just checked the satellite picture. Only another hour and i should get to see the moon.:thumbsup:
Cheers

[Starkler]

Aus stock market 20% down from its November high point I heard last night.

Biggest losers are those about to retire. Are they really losers? Was the value at the high point something real or just illusionary? My head hurts.

[xelasnave]

From the news

The US Federal Reserve on Tuesday slashed a key interest rate by a hefty three-quarters of a percentage point, the biggest cut in more than 23 years,

How low can they go?
not much ;)and that is the real problem:scared:.

alex

[xelasnave]

There are losers.
Companies will go to the wall hard working folk will loose their jobs.
The way it works is a company sees it has an income flow so it borrows more money rather than paying off the loans it already services.
The creation of corporate wealth is very much an illussion however for oridinary folk who suffer when the stuff hits the fan is unfortunately very real.

I do not consider the buying of a company ..then laying off some of the work force..there by improving the bottom line to justify a recapitalisation to be weath creation..(so many companies kid themselves this way ..efficiency is a given not something to claim they are richer) however the numbers say the company is worth more..short term maybe but in fact the company is worse off..and those chickens are now coming home to sit and cluck.

It will be interesting to see how th market responds..if it picks up it only puts off the day of reconning simply because the system I suggest as being the norm will still go on...

Now is the time to ask your land lord for a rent reduction or your mortgagee for a lower rate.. they now need you not the other way about.

Still it is hard to stop a charging bull (or bear) with reason as your sword.
alex:):):)

[xelasnave]

Duncan now you will see you are better off than you think;)..your value is there and it costs little to enjoy it.
The secret of life is to go broke slower than the rest. It is all relative you will loose little other than what the weather will take from you.
alex:):):)

[fringe_dweller]

*yawn* and surprise surprise the market rebounds to its old self, for the second time in recent weeks - me, i put my faith in the 400 million new millionaires in asia - bout negates the US problems

sure is some distasteful stuff written amongst these lines, funny I remember an australia where people werent obsessed with money, and class - what happened? did i miss something?

[cahullian]

Fix the schools and the hospitals before putting money back into peoples pockets is what I say.

Gazz

[duncan]

Hey Alex,
Guess what!?
I stayed up till 5:30am and the cloud didn't dissipate.
Like you said though it is all relative, I did have fun on the puter.
And the missus is up in Normanton for a week (6hours away),LOL.
Batchelorhood is great sometimes,LOL:lol:
Cheers:thumbsup: