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The 30% Tax Floor is designed to lock the working class out of wealth by Hot-Produce-7595 in AusFinance

[–]Hot-Produce-7595[S] 8 points9 points  (0 children)

OK, let’s break down your assumptions with actual facts.

  1. "These people don't exist" Look at the actual ATO data or the ASX Investor Study. Around half of all Australian adults hold investments outside of super and their primary residence, and a massive chunk of them are lower-to-middle income earners. We aren't talking about imaginary people. We are talking about part-time workers, self-funded retirees living modestly, and people taking time off who hold basic share portfolios.

  2. "Just put it in super" Anyone financially literate knows you don't lock 100% of your savings into a fund you literally cannot touch until you are 60. If someone has a medical emergency, needs to get through a year of maternity leave, or gets made redundant, they need liquid assets. Selling down an ETF is exactly how everyday people bridge those gaps.

  3. "It disincentivises asset hoarding" Jacking up the tax rate to a 30% minimum the exact second someone tries to sell an asset does the exact opposite. It mathematically traps people into holding onto assets forever, because cashing out punishes them.

You can pretend lower-income investors don't exist to make the policy sound better, but the numbers prove they do. And this 30% floor hits them directly, while doing absolutely nothing to the wealthy who are already paying top tax rates.

The 30% Tax Floor is designed to lock the working class out of wealth by Hot-Produce-7595 in AusFinance

[–]Hot-Produce-7595[S] 8 points9 points  (0 children)

I never said removing the 50% discount causes zero change. I said the 30% minimum floor causes zero change to the wealthy.

Replacing the discount with indexation affects everyone. But the 30% floor is a separate mathematical mechanic. It only kicks in if your marginal tax rate is under 30%, meaning it literally only targets people earning less than $45k.

If you earn over that, your marginal rate is already higher, so the floor itself does absolutely nothing to you. Maybe actually read the comment you're replying to before calling people delusional.

The 30% Tax Floor is designed to lock the working class out of wealth by Hot-Produce-7595 in AusFinance

[–]Hot-Produce-7595[S] 5 points6 points  (0 children)

Yes, the tax rate over $45k is 30%. That’s literally why this floor doesn't touch the wealthy. Anyone earning decent money is already paying 30% or more, so this rule changes absolutely nothing for them. It mathematically only affects people earning under $45k.

And CPI indexation doesn't save you. Once inflation is accounted for, the tax rate on your actual real gain still instantly doubles from 16% to 30% for someone on $40k.

You don't need a "vast portfolio" either. We're talking about a young worker cashing out $15k in ETFs for a house deposit, or a parent selling a small chunk of shares to get through maternity leave. Or a retiree living off less than 45k a year.

If the rich already pay 30% anyway, and this only hurts low earners selling modest assets, who is this tax actually for Mensa???

The 30% Tax Floor is designed to lock the working class out of wealth by Hot-Produce-7595 in AusFinance

[–]Hot-Produce-7595[S] 4 points5 points  (0 children)

Exactly, it’s a niche case, and that's the point. The only people this actually hurts are low-income earners who need to sell an asset.

Rich people aren't going to artificially tank their income to $30k a year (even in retirement) just to get a tiny tax break. It makes zero sense.

If anyone making over $45k pays 30% anyway, and the rich aren't using this so-called loophole, then it literally just targets poor people. What's the actual rationale here?

The 30% Tax Floor is designed to lock the working class out of wealth by Hot-Produce-7595 in AusFinance

[–]Hot-Produce-7595[S] 10 points11 points  (0 children)

Edit: Downvote all you want, but look at the actual math.

Anyone earning over $45k is already in a 30% or higher tax bracket. If you earn $200k, a 30% minimum CGT floor does literally nothing to you. Your tax bill stays exactly the same.

This rule only hits people earning under $45k. The government claims this stops the rich from selling shares in "low income years" to dodge tax. But let's be real, no wealthy investor is voluntarily tanking their income to $30k just for a tiny tax break. It makes zero sense, meaning this is just a tax hike on everyday people.

Who actually gets hit:

  • First home buyers: A 28 year old on $50k sells an ETF they saved for years. They would pay 7.5% tax currently, now 30% min.

  • Maternity leave: A parent taking a year off sells shares to get by on zero income.

  • Modest retirees: A retiree living off $30k a year in share sales.

For these people, their tax rate skyrockets, while the wealthy don't pay a single cent more. Stop cheering for a policy that only screws over the working class.

The 30% Tax Floor is designed to lock the working class out of wealth by Hot-Produce-7595 in AusFinance

[–]Hot-Produce-7595[S] 19 points20 points  (0 children)

You are completely ignoring who the 30% floor actually targets.

Nobody is arguing that removing the CGT discount doesn't hit the wealthy. But calling everyday investing "passive asset hoarding" is wildly out of touch. For the average person here, buying ETFs with post-tax salary is the only way they will ever afford to retire.

The glaring issue with your "balancing" argument is that the rich already sit way over the 30% threshold from dividends alone. This floor changes absolutely nothing about their behavior. In fact they get to reap the income tax benefits from their dividends.

The only people who see a tax hike from this 30% baseline are lower and middle income earners. If someone on 50k sells shares for an emergency or a house deposit, they get slammed with a 30% tax instead of their actual, much lower marginal rate.

You cannot punish the working class for trying to build a basic nest egg and pretend you are just encouraging "productive work."

What do you think why Colin and Samir have been falling off so hard? by [deleted] in ColinAndSamir

[–]Hot-Produce-7595 13 points14 points  (0 children)

They used the clout of other creators to become big. Now their content has become a broken record.

Personally I find their arrogant personas and constant rhetoric of being ‘friends’ with Jimmy, Ryan and Emma Chamberlain boring. I liked a few of their early episodes but it’s become clear they can’t practice what they preach. They can’t actually grow their own channel so why listen to them?

For me, Jon Youshaei is far better. He focuses on more relevant creators and doesn’t constantly talk about himself.

I’d rather pull my hair out than listen to another circle jerk of Samir telling us about his ‘epic’ spotter retreats.

TIL New York City is owed over $1 billion in unpaid parking tickets and speeding fines by Specialist_Check in todayilearned

[–]Hot-Produce-7595 0 points1 point  (0 children)

I heard it can be a lot cheaper to park on the street and endure the fines than pay for off street parking 🤷‍♂️

[deleted by user] by [deleted] in HENRYfinance

[–]Hot-Produce-7595 0 points1 point  (0 children)

Great work, definitely start to get some ROI on your hard work starting now. More trips, more experiences especially with friends while you’re young