Skip the work and save part and go straight to invest, you’ll be better off
Today Australian Industry Group chief executive Innes Willox is giving a speech in which he will assert that broadening the base of the GST and raising the rate must play a “central role in a [tax] reform package.”
Mr Willox, whilst saying tax reform should not be about “individual self-interest”, advocates the company tax rate be cut to “no more than 25 per cent” in the next couple of years, a reduction in the overall number of taxes, a reduction in personal income taxes that “reduce the incentive to work” and broadening the land tax base to reduce duties on residential properties.
If that’s not individual self-interest I don’t know what is. Mr Willox is paid a lot of money to represent the interests of big business and any pretence otherwise is laughable.
“Tax reform cannot simply be about taking the burden off the rich and placing it on others. But neither should it be about shifting all responsibilities for paying tax to the wealthy,” he will say.
The absolute chutzpah of these people, in the face of the mountain of evidence of tax avoidance by the wealthy and by companies, is astonishing.
Whilst it is true that the top 10% of Australian earners pay about 50% of the total income tax take, they also take home an astonishing 30% of all income with about a quarter of it coming from sources other than wages, salaries and pensions. The share taken by the top groups has been climbing since the early 80s.
As for reducing company tax, almost a third of Australia’s largest companies are paying less than 10¢ in the dollar in corporate tax as is. It is also worth noting that the corporate tax rate in the US is 35% as compared to our 30%.
Between 2004 and 2013 some $80 billion was lost through ‘legal’ corporate tax avoidance through the use of subsidiaries in tax havens and so-called “thin capitalisation”, where local entities are saddled with huge debts to reduce tax liabilities in Australia. An overseas arm of the company borrows money at very low interest rates and then lends it to the Australian arm of the company at exorbitant rates.
Almost 60 per cent of the ASX 200 declare subsidiaries in tax havens.
Data suggests that if all ASX 200 companies paid the full 30 per cent rate of company tax, the budget would gain around $8.4 billion more revenue a year.
Turnbull’s three-word slogan, “work save invest”, is poor advice. As our taxation system stands, you are far better off to skip the work part, forget saving – just borrow the money, then invest it and sit back. Your ‘hard work’ and willingness to ‘take a risk’ will be rewarded. And if things go bad, declare yourself bankrupt so your creditors wear the loss and start fresh with some new risk funded by other people’s savings.
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22 comments
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Michael Peters
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Kaye Lee
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Wally
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Sir ScotchMistery
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Matters Not
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Kaye Lee
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townsvilleblog
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David
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jimhaz
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Kaye Lee
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i have a nugget of pure green
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Matters Not
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Kaye Lee
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Matters Not
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Kaye Lee
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MargCal
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Wally
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Matters Not
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Florence nee Fedup
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Matters Not
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Wally
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townsvilleblog
Return to home pageMe thinks the first question to be asked of anyone quoted or interviewed is their package and assets (including Cayman type) on the same level as title, resume, etc – then what they say or advocate has some meaningful context.
The average income of high income households rose by 7 per cent between 2011-12 and 2013-14, low income households experienced an increase of around 3 per cent in average weekly household income, while middle income households changed little since 2011-12.
In 2013–14, couple families with dependent children had an average household income of $1,011 per week, which was similar to the average for all households at $998 per week.
By comparison, after adjusting for household characteristics, one parent families with dependent children had an average household income of $687 per week.
The bottom 30% of people received 13% of all income and held only 3% of all wealth in 2011–12.
Every statistic available suggests it is NOT high income earners who need any help. Why start with GST which will hit middle and low income earners the hardest?
If we really want to reform the tax system lets do it in a way that holds our government/s accountable/answerable for their performance without any smoke and mirrors or avenues to bullshit their way around the issue/s. Sounds like a fairy tale but if the focus of tax reform is based on an objective it can be achieved.
For example: Set a flat tax rate of 30% for everybody (companies and individuals) with a tax free threshold equivalent to unemployment benefits and 10% GST on everything except essential services like health care. Setting the GST on everything and removing splits makes business accounting easier and fraud detection much is simpler than the current system. At the end of each budget period or bi-annually the tax rate would be adjusted to balance the books so it would be obvious how well/poorly the government is performing.
The concept of simplifying the tax system could also be expanded to force other countries to balance their trade with us and eradicate our trade deficit. If a countries imports and exports with Australia are equal their imports enter tax free but if they export more to us than they import from us during a trade period an import levy would be applied to recoup the trade deficit. If a country imported more from us than they exported to us they could exchange the import credits with another country that had a trade deficit with us.
This system would force countries into free trade agreements, if they want to avoid import duties on their exports they would have to allow Australian products to enter their market duty free. No compromises, quotas or haggling to implement individual free trade agreements would be required and trading partners would be forced to have reciprocal trade to avoid being penalised.
I am certain there are flaws to be ironed out of my concept and many other factors to be included to stop tax evasion but instead of moving the tax burden from the wealthy to the poor and/or vice versa reforming our tax system should overcome the inherent problems with the existing system. Primarily a tax system must make it easy to adjust revenue to meet expenditure requirements, stop tax evasion and control the trade balance.
Willox is a proven pillock, like that stupid cow he followed on in the role.
GST is the only tax that effects ONLY those who can’t afford it. The wealthy end of town don’t notice it in the normal day to day business of buying shit. The poor see an extra $20 or $30 added to their grocery bill and the fuel bill and so on, and they really know it’s there.
Seriously, we are f*cked as a country.
It’s down the US track we race.
And because here in Australia we have some distance to go, then it’s essential to re-elect Malware. And the punters will because he is so ‘nice’.
Great graphs here.
In 2014-15 only 27% of taxpayers were in the top two brackets (ie above $80,000).
In other words it will be the 73% of us who will suffer under the GST broadening sadly 73% of the population are not switched on to politics and so will be done over, again.
Timely piece Kaye Lee, have posted to my Twitter account where it will receive good coverage
I’ll retire in 5 years on a low super pension and do not own any housing – so the extra 5% GST could make me really struggle. Might force me into taking a lump sum to buy a flat, which could then mean I’ll become a gov pension burden at 70 should I survive that long. I noticed someone else here said a similar thing recently.
The way things are set up jimhaz, you would be silly not to (altruism aside). When the ‘family home’ is not considered in any form of means testing, most people use the five years between accessing super and eligibility for the age pension to spend their cash. (btw if you are only 5 years off retirement you won’t have to go to 70 – they haven’t passed that yet and Labor’s change to 67 is grandfathered).
this whole furphy about taxation reducing the incentive to work. tell you what Inne, if you don’t want to work because you may pay a smidge more tax, then don’t, someone else will be glad to.
re company tax, ok then, lets drop the tax rate to 25% ONLY for those companies with a turnover of less than $250k. and then let us introduce a progressive company tax scale so that for every $250k turnover above that you pay an extra 1% tax.
See what you get when you work hard.
Yes! These people really, really need a tax cut as an incentive to work harder, get more reward and make Australia a fairer place.
http://www.afr.com/brand/chanticleer/gail-kellys-parting-gift-ends-the-era-of-bumper-bank-pay-20151111-gkvyv9
You will be pleased to hear that Malcolm Turnbull has replaced Maurice Newman as economics adviser. Unfortunately he replaced him with regular IPA contributor Alex Robson who wrote in one of his articles:
“Outlawing price-fixing is a violation of private property rights. Preventing price-fixing is theft.”
So much for the honeymoon. Alex’s idea of “fair” and mine differ greatly.
https://ipa.org.au/library/59-4_DAVIDSON_ROBSON_TEXTOR.pdf
He is also a ‘climate scientist’ like Newman.
https://ipa.org.au/news/1342/ipcc-pulls-numbers-out-of-thin-air
Yes the pig now has some lipstick but it’s only the ‘image’ they’re trying to change.
What’s the difference between Turnbull and Abbott? Turnbull has his photo taken on public transport. That’s about all I can see so far, other than the new paradigm of course. Pretty words are nice Malcolm and the honeymoon has been a pleasant relief but sooner or later we have to get back to the housework.
So that will be me, altruistically “not” worrying about how I’ll survive on the pension because I’m more concerned about how Mal and his mates are getting on. And just so there’s no doubt, I’ll be voting for that self-serving Josh Frydenberg. Yeah, right – not!
Wally 10.49 am: if the focus of tax reform is based on an objective it can be achieved.
Of course it can. Name your objective and off you go. We know what the objective is – that the rich get richer. The LNP are now actively working towards that goal …. as they always have been. They’ve put their minds to it and they’re actually very good at this wealth transference business.
Kaye Lee
“What’s the difference between Turnbull and Abbott?”
Turnbull walks like a human, Abbott walks like the missing link, has scars on his knuckles too.
Turnbull can string more than 3 words together and his sentences actually make sense.
Unfortunately the words may have changed, the delivery is better but the policies still suck.
Thankfully Turnbull doesn’t wear budgie smugglers in public, he is less out there than Tony.
No matter how one slices and dices it, a 50% increase on the GST if applied to all transactions would have a significant effect (I’ll leave the affective elements out of it for the moment). Today we went shopping to ALDI, and spent $102.00 (approximately – and all figures hereon will be approximate)). The ‘docket’ showed that of the $73.00 (listed A) spent, there was zero GST. The other expenditure of $29.00 (listed B) included a GST of $2.90. Neither here nor there.
However, if the GST was to be applied to all my expenditures today and raised to 15%, then my ‘Great Big Tax Increase’ would be from rise from $3 to at least $10.00. A GST effective rise in the order of 300%. As I say, my figures are approximate but I believe conservative.
Please tell me where my error is?
“Turnbull can string more than 3 words together and his sentences actually make sense.”
Sorry. at the end of the day, Turnbull makes less sense that Abbott’s three words, if that is possible.
Waffle is the word that comes to mmd from majority of Turnbull’s answers.
Latest notice from the ASX (and in full).
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See how it works. BHP Billiton Ltd. (BHP.AU) sells our coal (product’s first sale) to BHP Billiton Marketing based in Singapore, the company’s principal marketing entity. And its first sale is at a ‘cheap’ price. The BHP Singapore company then ‘on sells’ it to Japan, China and the like at the ‘market’ price which is somewhat higher than the price paid in Australia. It’s called ‘Transfer Pricing’ and in the case of BHP it’s ensuring the profits are made in Singapore where it has negotiated tax treatment far below that calculated in Australia.
I don’t think it’s necessary to point out that not one tonne of our coal actually arrives in Singapore.
The ‘big Australian’ is now a ‘big’ tax cheat. And it’s why we have a revenue problem.
Matters Not
Found the liability was for July 1, 2005 through to December 31, 2012 but wonder when the shortfall in royalties was detected and when the initial demand was made. The obvious question is did Campbell Newman know about it and sweep it under the carpet? The story behind the scenes could be bigger than the tax bill.
BHP on Thursday said its BHP Billiton-Mitsubishi Alliance (BMA) in October received a tax reassessment demand totalling $186 million in royalties and $102 million in interest.
The tax bill relates to the period of July 1, 2005 through to December 31, 2012, during which time BHP itself paid around $2.4 billion in royalties to the Queensland government. https://au.finance.yahoo.com/news/bhp-court-over-288m-qld-052402530.html
http://workinglife.org.au/2015/12/18/revealed-the-tax-details-you-were-never-meant-to-see-now-unions-want-full-disclosure/