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Tag Archives: tax

Dear Mr Murdoch

By Bob Rafto.

Dear Mr Murdoch

Life’s good for an old fella it seems and may you live long to enjoy it. However, there is a growing chorus of voices who would prefer that you don’t.

What I wish to write to you about is my disgust towards your attitude that Australia is a mere entry in a balance sheet: one where paltry tax is paid but where your yields and power are great. One where you are able to squeeze $882 million from a Murdoch friendly government. One where you can be seen in the likes of Google, Apple and Microsoft (to name a few) and collectively benefit from the ‘legitimate’ evasion of what denies Australia an alleged $10Billion in taxes.

murdoch taxThe Australian tax system has been designed with its current rates to generate sufficient tax revenue to help meet Australia’s many needs. Yet you, Mr Murdoch, are our country’s greatest risk as you endeavor to avoid paying your share of this tax. This all adds up to not only derailing our economy but denying services to any number of Australians.

So in effect, as the society becomes less affluent it will impact on demand for goods and services and undoubtedly it will impact on your own profits, as it will on any corporation with business in Australia. It’s commonsense. On the other hand, if you paid your taxes you are helping to build the economy which in no doubt will increase the profits of your goods and services, yet you choose to be a corporate leaner on 23 million Aussies.

Australia is the country that catapulted you to become one of the richest and influential persons of your time and your thanks to this great country is to rip off its citizens with a behaviour that I compare to that of a common corporate thief.

I believe there was once an admiration of your achievements by the Australian public, however this sentiment has been changing rapidly over the past few years and the sentiment emerging is now one of hate.

In simple words, Mr Murdoch, you are a burden on the tax system. In my eyes you are stealing from us.

Keep this in mind, Mr Murdoch, if you and the others keep on taking and taking there will be a point when there will be nothing left to take.

Yours in contempt

Bob Rafto

 

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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Tax And The Bleeding Obvious!

Ok, most of the focus on discussions about the GST has been about how it’s a regressive tax and how it affects the poor more than the rich.

But there’s one other thing in this debate that hasn’t been prominent in discussions or commentary. If the GST is widened to include items currently exempt, how will that affect Health spending?

Given that a large chunk of health spending is paid for by the various governments, will they just be charging themselves more, or will the rebates stay the same and it’ll be up to the patient to make up the difference. In other words, will it be a “price signal” by stealth?

Even if the government does the right thing and increases its share by the increase in the GST, this will obviously lead to a blowout in Health costs which, of course, will have politicians arguing that it’s just not sustainable. (Interesting that the blowout in the costs of offshore detention never leads to screeches of how this spending isn’t sustainable. On a state level, one never hears that the massive increase in the cost of running prisons doesn’t mean that the “tough on crime” policy isn’t sustainable!)

Either way, it fits in well with the Liberals’ plan to destroy Medicare. Why they want to do this is a mystery to me, but it’s always been their policy either explicitly or part of their hidden agenda since Gough first introduced it.

Of course, the likely scenario is that widening the GST base will be discussed, but dismissed on the grounds that it would make it unfair on those struggling with their grocery bills, health costs or school fees. And when, Malcolm magnanimously rejects broadening the base, then a mere extra five percent will seem the reasonable alternative – in much the same way that removing Abbott led to the big poll bounce. “Gee, Malcolm answered that question by talking on something vaguely related to the actual subject and he didn’t way anything about stopping the boats. He’s so much better!”

Of course, the Liberals do some very strange things. I’ve never been able to fathom why they stop any increases in the superannuation guarantee every time they get into government. Howard froze it when he got in, and Abbott did the same. Given their rhetoric about people needing to plan for their retirement and the government not supporting them, one would have thought that increasing everyone’s super would be something they’d be right behind.

When it comes to superannuation, I’ve always wondered why it’s subject to a flat tax of fifteen percent. I’ve always thought that it would be better if there was a threshold before it was taxed. For example, imagine the first five thousand dollars was exempt from tax and the rest was taxed at twenty percent. This would be a big boost to the lower income earners and people would need to be on an income of more than $100,000 before they were paying more. The tax on super earnings could also work on a similar arrangement.

But I don’t expect we’ll hear much about changing the taxes on superannuation. It’s about as likely as the government using the phrase “a great big tax on everything” when refering to the GST.

 

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Malevolent

redactedfamilyoutcomes

 

The 2014 budget omitted the table of adjusted family outcomes that had been in every previous budget since 2005. The analysis was done by treasury and available for inclusion but that it was not there indicates it was deliberately omitted. The figures went to Cabinet, so they were fully aware of the allegedly inequitable outcomes. Was it omitted for political reasons? The Coalition and its budget already have a problem with the public believing (and increasingly, and justifiably so) that it is unfair. Long-term observers have held the suspicion that the Coalition governs for its mates, the well-to-do, the elite, the born-to-rule set, and nothing in the budget, nor the Coalition’s rhetoric and off-budget policies since, have given cause to doubt this. For just a few examples, consider:

  • University FEE-HELP changes to impact disproportionately on poor graduates
  • A permanent hit to pensions and welfare vs. a short-term levy for the rich
  • The $7/visit co-payment for GP visits (the well-to-do might complain over a copayment but it is the poor who will simply stop going.) This might also reduce rates of vaccination in Australia, putting the whole country at greater risk.

The perception that the budget is unfair is widespread and even having an effect on business support for the Coalition’s policies. Could the Coalition cope with further documents showing that the poor would pay disproportionately for the Coalition’s fictitious “budget repair process”, and that the Coalition knew about it and went ahead anyway?

Fairfax and other outlets have sought this information, and failed to receive it. Accordingly they and other analysts have done their own sums on the basis of published figures. The analysis confirms that the poor will be harder-hit than the wealthy.

Joe Hockey has been up in arms about Fairfax publishing this analysis. “It doesn’t tell the whole story,” he says. “It doesn’t reflect the fact that the rich pay more tax, and that the taxes of the average wealthy person pay the social support for an average four recipients of welfare.” Fairfax’s reporting “failed to take account of the higher rate of income tax already paid by higher-income households”. “Fairfax reporting has been malevolent,” he says.

Let’s pause for a moment and consider Hockey’s reported statements on the issue of equality, tax and welfare.

“In fact, just 2 per cent of taxpayers pay more than a quarter of all income tax. Maybe these taxpayers would argue that the tax system is already unfair.” “The average working Australian, be they a cleaner, a plumber or a teacher, is working over one month full time each year just to pay for the welfare of another Australian.” http://www.abc.net.au/news/2014-06-11/hockey-tries-to-set-straight-perception-budget-is-unfair/5516718

What does this say about Joe Hockey’s fundamental concept of social welfare? In a nutshell, it suggests that he is either beholden to, or at least panders to, selfishness. In Hockey’s world, it is portrayed as a bad thing that people with resources assist those without. This is a profoundly anti-charitable approach.

Our society has put in place progressive tax systems, effective social welfare structures and a range of subsidies, payments and tax breaks in an ongoing and long-term attempt to find a comfortable middle ground, where the privileged can continue to prosper whilst the downtrodden are assisted to keep their heads above water. Obviously Mr Hockey, and the Coalition, believe that the middle ground has trended too far in one direction. The problem is that society as a whole does not appear to agree with them.

Of course higher income households pay more tax. That’s the whole point of a progressive tax system. To argue that it’s justified to penalise low income workers more because they pay less tax is an attack on the very principle of the sliding scale. That’s an ideological position and it’s a valid choice, but it should be understood as such. Penalising more or less on the basis of tax rates entails an effective change in those rates. In other words, arguing that you can implement changes that hurt the poor more than the rich because the rich already pay more tax, is effectively arguing for a tax cut for the rich, or an extra tax for the poor, depending on how you want to look at it, and it is in no way an equitable outcome.

Let’s take a step backwards and approach this differently. Assume that every Australian is going to pay the maximum $844/pa as a result of the 2014 budget. Now you start handing some of that money back in concessions. $50 to this group, $100 to that, $327 to the top bracket. Why do you do this? Because they’re already paying a lot of tax. You are levelling the playing ground. You are moving closer to a situation where everyone pays the same amount of tax. This is the opposite of a progressive tax system.

Malevolent: adj. “Wishing evil or harm to another or others.” With his 2014 budget, Mr Hockey is seeking to specifically do harm to those who belong to a different socioeconomic class than himself. Now who’s being malevolent?

Yes, Mr Hockey, the 2014 budget is indeed unfair. It does increase inequity. You’ve known it since well before the budget was announced. And the way you’re talking about it, and responding to the questions about its unfairness, seems to indicate that the unfairness is quite deliberate. I’m not entirely sure that’s the message you were trying to achieve.

Why This Post Is Not About Ian Thorpe Even Though A Lamb Roast Might Still Cost $100!

“As some of you may have guessed, I’m a practising heterosexual. Yeah, I don’t know why that would be of interest to anyone either, but I just thought I’d save Sir Michael Parkinson the trouble of asking me!”

My Facebook status last night.

 

I guess the trouble I have with the discussion about Thorpey’s big announcement is the idea that it’s a big announcement.

And the trouble I have with saying “Who cares?” is that it makes it sound like we’re dismissing something that would have been a difficult personal decision.

But I think that I most have a problem with the person I heard describe Ian Thorpe’s decision to reveal that he’s gay as “brave”.

Yep, good on him for coming out. But if we still regard this as brave, then that’s an indictment on us as a society. This just shows that we still have a long way to go. It should be of no more newsworthy than my pronouncement.

“Wow, Rossleigh, you’ve admitted to being straight – how brave of you!”

(Well, maybe a little bit more, given that more people have heard of him.)

But I guess that’s the difficulty. What’s the most supportive response from the public for him as individual? So what? or You’re really brave! And what implications does either have to the young teenager coming to terms with his or her own sexuality?

In a display of hypocrisy worthy of Tony Abbott, I’d like to suggest that the main issue of today shouldn’t be Thorpey’s sexuality. (Yes, so why am I writing about? Yes, yes, I know with a contradiction like this I could join Abbott’s front bench or take over Andrew Bolt’s job.)

There are more important things we should be talking about. Like the fact that Abbott said today in Parliament that unless the Carbon Tax is repealed lamb roasts could still hit $100 just as Barnaby predicted. (Actually, I think that it’s inevitable – eventually – even without the Carbon Tax)

Or even the fact that gay marriage is described as a needless distraction every time it’s brought up. (Well, just legalise it and it’d be less of a “distraction”…)

Or let’s just think about the way in which we perceive what’s important.

Poster homeless jp

Stay awesome. Tell the truth. Be who you are.

Cheers.

 

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