theprestige
Penultimate Amazing
Australian retirees to become the richest in the World
- Thread starter lionking
- Start date
Then why quibble over this word, if there is no problem?
theprestige
Penultimate Amazing
I have a problem with portraying this as not a tax, when it functions as a tax. I want to know what lionking is celebrating, when he says it's not a tax. Because to me, it seems like we're celebrating a government-mandated program, funded by compulsory payments from the citizenry. If that's the case, why bother saying it's not a tax.
When you say something isn't a tax, I think of things that are being done voluntarily by private individuals and groups, without government compulsion. My 401(k) retirement plan, for example. My employer offers it voluntarily, and voluntarily sets their own matching level. Not a tax. On the other hand, money is taken out by the government to fund Social Security, a government-mandated (and goverment-administered, in this case) retirement program. That's a tax.
So, again, I want to know why bother not calling this a tax? It's not voluntary, and it funds a government-mandated program. I don't have a problem with any of that, except the misleading terminology.
It's almost like lionking is trying to gaslight us into thinking this kind of successful retirement program has been achieved by voluntary action of private corporations.
And it is important that lionking concedes this point because …?
As a matter of fact, I can agree with you that it is a tax, in the absence of a clear definition of what a tax is. But here we know exactly how super is implemented, so nobody is gaslighted if they follow the thread. In Denmark we have a similar scheme, though on a much smaller scale, and it only supplies a tiny supplementary pension. I don’t care if that is called a tax, or not (it isn’t called a tax).
theprestige
Penultimate Amazing
I don't care if he concedes the point or not. I would just like to know what he's trying to say.
Sure, and I bet you don't go around telling people the Danish accomplished this scheme without raising taxes. It might be technically true, but in practice the Danish government is forcing employers to pay into this fund. So their compulsory payments are going up anyway. Kinda feels like a tax, no?
Wow. Redefining a tax as something that is not collected by government is amazing gymnastics. There must be some ideological reason for this, but I can’t put my finger on it.
Here is as good a definition of tax as I can find:
“A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.”
This definition does not apply to superannuation as it is not collected by government.
Here is as good a definition of tax as I can find:
“A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.”
This definition does not apply to superannuation as it is not collected by government.
Last edited:
theprestige
Penultimate Amazing
Congratulations. Australia succeeded without forcing employers to pay into a government-mandated retirement fund. They succeeded by... forcing employers to pay into a government-mandated retirement fund. A rose by any other name is still a rose.
Norman Alexander
Penultimate Amazing
You didn't mention "tax" there. So we aren't talking about roses, are we.
rjh01
Gentleman of leisure
Wrong. Anyone can set up a fund where employees can pay their super into. There are heaps of them.
theprestige
Penultimate Amazing
Please try to keep up.
theprestige
Penultimate Amazing
My point is that the government makes employers pay into these funds. That's the "government mandated" part of the program. From the employer's perspective, these coerced payments function identically to a tax. If the government weren't making them pay, I wouldn't call it a tax.
Norman Alexander
Penultimate Amazing
That's what WE have been saying. You seem to be stuck in this "tax" rut.
Norman Alexander
Penultimate Amazing
I think I see your problem. The government making people pay things to others is not a tax. The government making people give money to the government for government purposes is a tax.
Do you think your 401(k) scheme is a tax? The US government doesn't think so. Our super scheme is just a variant of that, with slightly different rules.
The money was still mine, but I couldn’t touch it until I retired, so no, it didn’t feel like a tax. Tax money is usually spent on education, health care, military, and so on.
novaphile
Quester of Doglets
We also have Social Security. In this case, it would be the 'Age Pension'.
It is for anyone who has insufficient assets and savings after they reach government retirement age.
For me that would be age 67. (It varies depending on birth year and sex.)
There is a complex asset and income test, to determine if a person is eligible for the pension.
(It is very unlikely that I'd qualify for it because of my assets.)
If a person owns their own home and qualifies for the Age Pension, it would probably be adequate.
(The primary place of residence does not count against the asset test, up to a value...)
If a person has never worked, and has no assets, it doesn't look sufficient to me.
(There are often stories about people being unable to pay their rent, if the Age Pension is their sole income, especially if they're on their own.)
Note, it is not legal to divest your assets to qualify for the pension, but, apparently, many try.
theprestige
Penultimate Amazing
The US government does not require that employers provide a 401(k) program to employees.
Why bother to point out that it's not a tax, when nobody even asked? What are we supposed to understand from that? That the government *doesn't* make employers pay?
Norman Alexander
Penultimate Amazing
Sure. But when they do, is that considered taxation?
You brought this up describing super as a tax.
So it sounds a lot like how the US funds Social Security except that Australia actually invests the money instead of just being a ponzi scheme?
Social security is paid by what's called a payroll tax. Essentially the employer pays a percentage of what they pay the employee and the employee has an equal amount taken out of their salary as a tax.
To clear, I could totally be wrong, probably am, not sure I understand what superannuation actually is but it does sort of sound like what I described above.
Social security is paid by what's called a payroll tax. Essentially the employer pays a percentage of what they pay the employee and the employee has an equal amount taken out of their salary as a tax.
To clear, I could totally be wrong, probably am, not sure I understand what superannuation actually is but it does sort of sound like what I described above.
Also, the argument above appears to be:
Resolved, Government mandating that employers spend money on specific programs meant to benefit employees is a tax?
I tend to agree with prestige, I think. If a government takes money from me in order to spend on something, that's clearly a tax. Technically it's not a tax if they just force me to spend the money on that thing myself but, it's not exactly all that different either.
Resolved, Government mandating that employers spend money on specific programs meant to benefit employees is a tax?
I tend to agree with prestige, I think. If a government takes money from me in order to spend on something, that's clearly a tax. Technically it's not a tax if they just force me to spend the money on that thing myself but, it's not exactly all that different either.
A side issue I suppose, but this is not true. It’s perfectly legal provided it’s in certain areas - an extremely wide range of areas. You can renovate your house, buy a new car, even go on long overseas vacations. Centrelink doesn’t even look into what you do with it, you just have to give a reason other than “gambling, drugs and hookers”.
I know this for a fact as I have done it and qualify, quite legally, for the full Age Pension as well as superannuation. This is the “sweet spot” that I mentioned earlier that most people don’t know about.