Introduce flat tax for low income earners and unemployed.

income-tax/taxation/baby-boomers/federal-government/

6 August 2014
| By Jason |
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Income tax should be levied on a flat basis across all income recipients including the unemployed, benefits recipients and low income earners according to KPMG partner Bernard Salt.

Speaking at the Associated Advisory Practices conference Salt stated the levying of tax across all people drawing an income was essential in developing a culture of contribution.

"The problem we have with our tax system is there is a sector that does not connect with how their lifestyle is funded and they don't care either," Salt said.

"The push back against the Federal Government's changes to the tax burden is that many agree there is a need to pay more tax but are saying ‘Just not me right now, I have had rough trot'. This attitude touches on sense of entitlement that exists within the nation."

Salt said there was a need to change the idea that past economic growth driven by "good terms of trade, industry booms and dumb luck" was normal and baby boomers who have paid tax should not expect to be able to access the pension system as they have done in the past.

"The wind at our back that gave us untold prospeorty will turn to the front but more boomers remain with their hands out and less workers paying tax."

"Managing the volume of expectations and the values of expectations from boomers will be critical for planners to understand that sector as they move from full time work into full or part retirement," Salt said.

He also rejected claims that high income earners were not paying sufficient levels of tax and as a result were required to pay income tax and superannuation levies.

"It is an ideological myth that the rich don't pay tax. The top two per cent of tax payers pay 25 per cent of tax but are being targetted for more tax, and the opprobrium of the nation for being rich, not by ill gotten gains but by hard work."

"No-one defends this group because its seems a bit like defending smokers rights. It seem legitimate to discriminate against some people in this country."

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