By figuring out who got what piece of the excess revenue that was generated by lower unemployment and the China-led resources boom since 2004, we get a better idea of the reform hurdles ahead for the Rudd Government. Assuming that no government will want to take money off people, how do you fix a system that is, in many respects, overly generous?
The mixed result in the analysis of Australia’s tax and handout system shows how much further the Rudd Government has to go in order to achieve its stated goal of a simpler, fairer and more jobs-friendly regime. The analysis shows that 97,000 families in the top half of the income ladder lost family payments because of the budget. However, the clawback was offset by 53,000 new family payment recipients coming from the bottom half of the ladder, due to other tax changes.
The Rudd Government has bowed to pressure from the Greens and Independent Senator Nick Xenophon and slashed the proposed income thresholds for the Medicare surcharge to $75,000 for singles, although Health Minister Nicola Roxon wants to leave the proposed new threshold for couples unchanged at $150,000.
The candidates echoed each other in assessing the threat from the financial crisis as severe enough to warrant government intervention. But Senator John McCain said that he would press on with his plan to extend the Bush tax cuts and to cut others. Contrary to the warnings of fiscal analysts, he said he could still balance the federal budget, which was falling deeper into deficit even before the financial crisis, by the end of his first term.
The income-tax-free club now covers 42.2 per cent of the nation’s 9.754 million families. But middle earners just outside the tax-free zone are caught in a new personal tax pincer, with 134,000 breadwinners being pushed up the scales from 30c to 40c despite Labor claiming it would “increase the take-home pay of all taxpayers”.
After making his mark as a backbencher challenging then treasurer Peter Costello to slash income taxes, new Opposition Leader Malcolm Turnbull wants to streamline the system and pre-empt the Rudd Government’s own inquiry into tax and welfare review, which is being led by Treasury secretary Ken Henry.
A study coming out Tuesday from scholars at Columbia, Harvard, Purdue and Michigan projects that 20 million Americans who have employment-based health insurance would lose it under the McCain plan. For starters, the McCain plan would treat employer-paid health benefits as income that employees would have to pay taxes on.
Peter Costello has all but ruled out running for the Liberal leadership. “I’m not seeking the Liberal Party leadership,” the former treasurer said in an interview. “They say: ‘Oh we’ve had a bad week, better bring Costello back.’ I think that’s basically what happened. And I said: ‘No, I’m not seeking the leadership, I don’t want the leadership.’
More and more Swedish prostitutes want to pay taxes in order to receive the social welfare benefits that come with doing so. Income recorded on prostitutes’ tax returns gives them the right to sick-leave pay, parental leave benefits, and a pension.
Amid the train wreck that the Senate became last week there was one consistency - everybody concerned claimed they had a mandate. The highlight was when the Coalition and Family First’s Steve Fielding knocked off the increase to the luxury car tax, worth $555 million over four years.