Gus echoes the complaints of many – that our tax system is too complicated. He asks personal finance expert Noel Whittaker how it could be simplified.
Is our tax system too complex for the ordinary tax-paying person? Do you believe it should be simplified? What changes would you propose?
A: I am not sure if it’s too complex for the average person, but I do think it’s unfair when a person who earns just $37,000 a year has to pay one-third of any future earnings in tax. Of course, it gets worse as people move up the tax scales, and once they reach $180,000 a year they are losing nearly half of any extra income and tax.
In my opinion, the most obvious and simplest way to reform our tax system is to flatten the marginal tax rates, and increase our Goods and Services Tax (GST) to 15 per cent with no exemptions. This is what has been done in New Zealand. That country runs a budget surplus and has no stamp duty, payroll tax or capital gains tax.
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Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature, and readers should seek their own professional advice before making any financial decisions.