According to Joe Hockey, a lower company tax rate “would reduce the incentive for tax planning and profit shifting from Australia.”
Of course, this argument has been used before. Two of George W. Bush’s economic advisers suggested that tax cuts for the rich would reduce their desire for tax avoidance, leading to a better overall revenue take for the government. So how successful was this?
Well, according to John Quiggin in Zombie Economics:
“Subsequent work found that the results of Feldstein and Lindsey were overstated, and led to the commonsense conclusion that best way to minimise tax avoidance was to tighten up on tax loopholes and tax havens.”
But it’s an interesting concept being floated by Joe. Companies making billions of dollars – which is a lot of money, in case you, like Barnaby Joyce – don’t have the concept of a billon – have the need to squirrel their profits into some offshore company to reduce their tax bill to almost nothing. However, if we charged them slightly less, then they’d happily pay it, forgoing some of the billions in tax they’re now avoiding.
Yeah, Joe, you’ve convinced me! How about we apply the same logic to other areas of government.
For example, we could double the minimum wage to increase the incentive for people to work.
And, education. We could eliminate the need for students to cheat on their exams by making the marks higher.
As far traffic goes, if everyone started work an hour later, they could miss peak hour. (Yes, I know, I’m just using Joe Logic here.)
What else? Ah, drug addicts often commit crimes to feed their habit. By supplying free drugs we could quickly halve crime statistics.
No, that’s last one’s just silly. If an addict breaks the law, he should be punished. We shouldn’t be providing ways for him or her not to break the law. (Unless, of course, their addiction is to money.)
Ah, I have it. We want to reduce emissions, so instead of punishing or fining the biggest polluters, we’ll give them money, not to put as much carbon dioxide into the atmosphere.
(Although, I can’t see why we’re worried about carbon dioxide being put into the atmosphere, because as someone argued, it’s a naturally occurring thing, necessary for life, so how could it be harmful? Yes, it’s just like that silly requirement for pool fences because water is a naturally occuring thing, necessary for life, so how could anyone drown?)
Anyway, I’m looking forward to the next Budget, because I wrote a few months ago, the new plan from Joe and Tony is to argue that they’ve pretty much fixed up the Budget mess, give us some nice surprises, then call an election before the polls head south. With what they hope is a more compliant Senate, they can ram through the nasties in their next term of office. And, if they lose the early election, at least Tony will have achieved his main aim.
Stopping Turnbull becoming PM!
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