Top 40 Tax Dodgers 2019

[mmm....shiney!]

@Silver260, if we take Denmark for instance, the common rhetoric is that they have the best roads, best schools, best health system - well that's what the Danes believe. According to some sources you're better off getting cancer say in the USA than Denmark because you'll have a better chance of surviving. In Denmark it may be easier to see a doctor, but you'll wait an eternity to be treated. Apparently this is improving however whilst at the same time personal tax rates have declined. I guess the message there is that it's not the level of personal income tax that determines the quality of life, but how effectively governments are able to implement policy.

 

[harry_mr]

That's exactly right. Adam Smith made this clear over 200 years ago but still the assumption is that businesses exist to provide jobs. They don't. Jobs, wages and profits are the outcome of consumption. The more consumption, the more jobs, the more wages, the more profits and the more needs and desires being satisfied. And yes there is no reason why we can't have perpetual growth in a world of "finite" resources.



I don't follow what you mean by "tax derived from these workers is of course different to company tax". Are you referring to income tax?

Ideally the government should be lowering both the personal tax rate and the company tax rate as each impacts the economy differently, mainly due to the time it takes for impacts to take effect and long term outcomes. Essentially, personal tax cuts take less time to impact and provide a short term gain whereas corporate tax cuts take longer but lead to greater prosperity.

https://theconversation.com/explainer-how-company-versus-personal-tax-cuts-boost-the-economy-56497

In the current economic climate the government should be wielding its fiscal policy wand as opposed to relying ono the RBA to wield its monetary policy wand. This means lowering taxes. It could also increase spending on projects like infrastructure construction but this tends to benefit those closest to the trough resulting in owners of construction companies and construction workers getting big fat pay cheques, and an increasing sense of entitlement, at the expense of others. One thing we shouldn't do is seek to tax corporations or the wealthy more - there is no long term positive outcome implementing such a policy.

Correct, income tax. However I see issues with lowering income taxes at this point in time mainly consumer confidence is so low people will hoard the extra cash or pay down debt, or stack exactly what the government doesn't want to happen. Cant build much consumer confidence with weak leaders at the helm. Make these corporations pay their fair share of company tax, or what they'll pull out of Australia? see you later, others will fill the void left behind.
Its not about increasing tax its about paying their share to operate in our markets, using and maintaining our infrastructure that benefits their operations, which they are clearly not paying towards so the Gov looks for other ways to cast the tax net wider and implement a $10k cash ban to capture more Good and Services tax, WTF. Who's the soft target, joe blo average, who's the hard target, large entity.

 

[wrcmad]

I'm going to play devils advocate, and say that there is evidence ( historical and contemporary), to suggest that there are long term positive outcomes with higher taxes ( or at worst little harm ).

The Scandinavian countries have the most highly taxed citizens / businesses in the world. Yet they have some of the lowest levels of income inequality and highest happiness ratings globally, as the funds are used to support social programmes / subsidies.

The US had a top marginal rate of 91% in 1960 ( 70% by 1969 ) . The decade of its highest growth rate, and lowest income inequality.

What has changed in the global economy, to make such taxation regimes detrimental to an economy? ( Other than every governments race to the bottom, regarding taxation rates.)

Thoughts??

Thoughts: What has changed is that motivated, productive, hard-working people woke up and got sick of funding income equality for the undeserving.
Income equality is a rubbish, disincentivising philosophy dreamt up by the commies.

 

[mmm....shiney!]

Correct, income tax. However I see issues with lowering income taxes at this point in time mainly consumer confidence is so low people will hoard the extra cash or pay down debt

Reducing private debt is exactly what is needed in a balance sheet recession.

Make these corporations pay their fair share of company tax

“Fair share” is a value statement, it doesn’t make good economic sense to set economic policy on values.

Its not about increasing tax its about paying their share to operate in our markets, using and maintaining our infrastructure that benefits their operations

The end goal of production is consumption. Yes corporate operations benefit from the provision of government funded infrastructure but consumers benefit even more.

Who's the soft target, joe blo average, who's the hard target, large entity.

The soft targets are businesses as they have to be audited. Joe Blow Average probably never has to sit through an audit in his life.

 

[harry_mr]

Reducing private debt is exactly what is needed in a balance sheet recession.
Have your cake and eat it too? Don't spend pay down debt but remember to keep consuming...spending.


“Fair share” is a value statement, it doesn’t make good economic sense to set economic policy on values.
Correct that's why we have a stipulated corprate rate of 30% on profit, hows that working out suing loop holes.


The end goal of production is consumption. Yes corporate operations benefit from the provision of government funded infrastructure but consumers benefit even more.
Yes and demand drives production. Consumers benefititing more than an entity is subjective, what evidence do you have Shiney? and lets not confuse an individuals tax with the entity's tax, if the upkeep is not paid by the entity due to accounting trickery then ultimately its the individuals tax that pays for upkeep.


The soft targets are businesses as they have to be audited. Joe Blow Average probably never has to sit through an audit in his life.[/QUOTE]
Again subjective, I know several individuals that have had ATO audits, several tradies, as well as many companies.


Its got me beat why people know in their own mind that they are fudging the figure to avoid their share of the tax burden and justify this as ok. Yes taxes get wasted and misallocated but they might leave individuals alone more if others paid their dues.

 

[harry_mr]

Double up

 

[mmm....shiney!]

Ok I’ll have one more go from a different angle.

Whether or not the federal government manages to increase its tax revenue from corporations by concentrating on compliance is unimportant to the economy. Rather they have two choices to attempt to kick start the economy, one is by reducing taxes and the other is by increasing spending.

Now sovereign governments don’t need taxes to fund their policy programs. They can just print money. The function of taxation is to control inflation (and more insidiously, to control the population). Let’s say just for the sake of the argument that we agree that corporations are engaging in tax evasion. If that is the case then from a “fair share” standpoint, when it comes to funding government business - the amount of tax the government collects from the corporate sector is completely irrelevant. The government doesn’t need taxes to pay for roads. We don’t pay income tax to fund airports. Corporations don’t pay company tax to fund ports. We pay income tax simply because we have to, and governments collect taxes in order to manipulate the amount of public surplus/debt in the economy.

So the issue of corporate tax avoidance is not about a "fair share" because the income revenue pool doesn’t fund government expenditure. It’s simply a matter of whether they’re doing it legally or illegally.

 

[wrcmad]

Its got me beat why people know in their own mind that they are fudging the figure to avoid their share of the tax burden and justify this as ok. Yes taxes get wasted and misallocated but they might leave individuals alone more if others paid their dues.

I consciously fudge the figure as much as I can, and it gives me a great sense of pleasure and self-satisfaction.
Why?
Because terms like "fair share" are thrown around all too often as a grandstanding of moral righteousness, without any basis or substance.
Before we can even make judgement on those who avoid tax, we have to define what a "fair share" is.
"Fair share" can definitely not be defined by the current progressive tax brackets, as that blatantly defies any equal treatment, and thus fairness.
"Fair share" can also not be defined by the likes of a single taxpaying individual, as it would most definitely result in a self-bias of not having to pay as much as the "other bloke".
So, in order to even start this discussion, I'd like to hear where you get your definition of what my "fair share" is?.

 

[JulieW]

I've just read that of all the recommendations of the Henry Review of 10 years ago, or so, precisely 2 much modified suggestions have been followed up.

From Wikipedia:

The report made 138[3] specific recommendations, grouped under nine broad themes.[4]

1. Concentrating revenue raising on four efficient tax bases: personal income, business income, private consumption, and economic rents from natural resources and land. Other taxes may be retained if they serve a specific policy purpose such as discouraging smoking or traffic congestion. Taxes fitting into none of these categories should eventually be abolished.

2. Configuring taxes and transfers to support productivity, participation and growth.

3. An equitable, transparent and simplified personal income tax: a much higher tax-free threshold (around AUD 25,000), only two tax brackets, and a simplification of superannuation, deductions and offsets.

4. A fair, adequate, and work supportive transfer system.

5. Integrating consumption tax compliance with business systems.

6. Efficient land and resource taxation.

7. Completing retirement income reform and securing aged care.

8. Toward more affordable housing: substantially increase rent assistance, gradually move to a uniform land tax and remove transfer taxes (stamp duty), and gradually move to a neutral treatment of rental and owner-occupied housing.

9. A more open, understandable and responsive tax system.

Reception
Rudd government
The major item from the Henry Review implemented by the Rudd Government was the move to create a resources Super Profit Tax. The proposal was highly controversial, and following the appointment of Julia Gillard as Prime Minister, was replaced by a Mineral Resource Rent Tax.[5] Most of the remaining recommendations were not implemented.
​

After the mining lobby created a 100 million dollar fund to fight the Review's recommendations (specifically the resource profits tax), and after the total assault of Murdoch and the miners along with the destruction of Gillard following the propaganda attack against her, the future governments wouldn't touch the review or recommendations with a 10 foot pole.

Anyone interested can read the actual recommendations here:

http://www.greenwoods.com.au/media/1377/the_henry_tax_review.pdf

Polls and market research constantly shows that Australians are happy to pay taxes for outcomes such as medicare and care of those unable to help themselves. There is a general "anti'- Industry bias as it is seen as tax avoiding and exploitative.

My own view is that I don't understand how the ATO does not have the teeth to disassemble the artificial structures that avoid tax in favour of and endless web of paper companies in the Bahamas and other 'tax havens' and punish miscreants and put tax orders on companies who have a fantasy structure to move profits offshore. In response to Shiney's usual points regarding the plus and minus of industry vs government, I'd be interested to see if a cost benefit analysis would actually work out to our benefit if we disposed of the 'freeloader' companies that don't pay tax but avail themselves of the infrastructure (e.g. would we be in the black if we kicked out Amazon.Au and absorbed the job losses, but balanced that with the benefits that would flow to local businesses) Most probably Harvey Norman would be happy with this sort of arrangement.

So for 'fair share' I favour a simple system. I know that there are deep criticisms of flat tax rates, but my 'pub test' thought is that a flat tax rate of 10% (ie a tithe), combined with the current GST (which I would like abolished, but that won't happen) If the GST was abolished, then I'd have a constant review of luxury and industry specific sales tax rates at rates from 10-50%. GST is regressive and hurts many. Applying sales tax can guide the population using the carrot and stick concept.

Used correctly, the tax system could be used to support local industry and actually improve the lot of people. So 'fair share' to me would involve almost a restructure of government, which is one of several thousand reasons my ideas would never see the light of day!

 

[mmm....shiney!]

I'd be interested to see if a cost benefit analysis would actually work out to our benefit if we disposed of the 'freeloader' companies that don't pay tax but avail themselves of the infrastructure

Taxes don’t pay for infrastructure so the fact that companies use public roads etc is a moot point regardless of whether they pay taxes or not.

(e.g. would we be in the black if we kicked out Amazon.Au and absorbed the job losses, but balanced that with the benefits that would flow to local businesses).

We may be but we would be poorer. Comparative advantage is a key driver of prosperity as it rewards efficiencies and punishes inefficiencies. Australian manufacturing has been punished because it is inefficient. Australian drylands farming is rewarded because it is efficient. Attracting foreign investment is one of the means by which we take advantage of comparative advantage.

Used correctly, the tax system could be used to support local industry and actually improve the lot of people. So 'fair share' to me would involve almost a restructure of government, which is one of several thousand reasons my ideas would never see the light of day!

Taxes do not fulfil that function. Fiscal policy does but not the act of taxing. Taxation is just a tool to control inflation. If a government wants to help then it does so by manipulating the public deficit or surplus by either taxing more or taxing less. Government surplus = public debt. Government deficit = public credit.

This debate seems to be going around and around in circles primarily because people do not understand the function of taxation and to a lesser extent don’t understand the ta regime as it relates to companies.

 

[harry_mr]

I consciously fudge the figure as much as I can, and it gives me a great sense of pleasure and self-satisfaction.
Why?
Because terms like "fair share" are thrown around all too often as a grandstanding of moral righteousness, without any basis or substance.
Before we can even make judgement on those who avoid tax, we have to define what a "fair share" is.
"Fair share" can definitely not be defined by the current progressive tax brackets, as that blatantly defies any equal treatment, and thus fairness.
"Fair share" can also not be defined by the likes of a single taxpaying individual, as it would most definitely result in a self-bias of not having to pay as much as the "other bloke".
So, in order to even start this discussion, I'd like to hear where you get your definition of what my "fair share" is?.

Maybe you wouldn't feel the need to consciously fudge the figures as much as you can if a fair share was being paid by all. I'm not sure of your self satisfaction reasoning so care to explain?
The term fair shares origin is unknown however in most Australians mind it would conjure up a meaning of what is reasonable or expected of and not knowing you, your situation, or even referring to you in post I have no desire to get in a slinging match with you about whats your fair share.
My OP was merely that most of these companies are paying $0 company tax on revenues up to $30 billion using financial magic. Further they take enjoy all the infrastructure spoils we have to offer, yet the government is looking into how to chase GST on cash transactions over $10k.
If that all sits well with people that a sense of Robin Hoodness that they are beating the Government (in effect the Australian public) out of revenue that if half got wasted the other half might be spent on improving the country for its people rather than ending up in an offshore bank accounts.

 

[JulieW]

Just a few points.

Yes tax is a tool of fiscal policy. Using taxation scales as a tool of fiscal policy I thought was implicit in the discussion - so yes we agree. I don't think the RBA would agree though that taxes are to manipulate the deficit or surplus.

Taxation and inflation is incidental. Tax was applied to the oldest profession, long before inflation was but a twinkle in the eye of thieving governments. I am fairly old fashioned in that I believe taxes are for public works for the good of the society, and the support of those unable to help themselves. There seems such a sociological disaster in society that taxes have been siphoned off into a lot of areas they should not be used. For instance, I consider taxes raised on roads, should be used for maintenance and public works and infrastructure - not diverted to 'general revenue' where the pollies can feed their own particular hobby horses.

"Comparative advantage is a key driver of prosperity as it rewards efficiencies and punishes inefficiencies."
Yes, but only when crony capitalism is excluded from the picture. We're talking best worlds, so I'd be quite happy to see MacDonalds closed down for tax avoidance, and the local equivalent start up.

My point is that the tax system is way to complicated and so it will never achieve what it should whilst it is in such disarray. Hence my flat rate and targetted sales tax concept. About as simple as I can imagine and when things are that simple, any tomfoolery is obvious to all.

 

[harry_mr]

Taxes don’t pay for infrastructure so the fact that companies use public roads etc is a moot point regardless of whether they pay taxes or not.



We may be but we would be poorer. Comparative advantage is a key driver of prosperity as it rewards efficiencies and punishes inefficiencies. Australian manufacturing has been punished because it is inefficient. Australian drylands farming is rewarded because it is efficient. Attracting foreign investment is one of the means by which we take advantage of comparative advantage.



Taxes do not fulfil that function. Fiscal policy does but not the act of taxing. Taxation is just a tool to control inflation. If a government wants to help then it does so by manipulating the public deficit or surplus by either taxing more or taxing less. Government surplus = public debt. Government deficit = public credit.

This debate seems to be going around and around in circles primarily because people do not understand the function of taxation and to a lesser extent don’t understand the ta regime as it relates to companies.

Fuel taxes in Australia
From Wikipedia, the free encyclopedia
Jump to navigation Jump to search
The main fuel tax in Australia is an excise tax, to which is added a Goods and Services Tax ("GST"). Both taxes are levied by the federal government. In Australia, like Canada, the GST (in Australia's case of 10%) is applied on top of the fuel excise tax. In some cases, businesses may be entitled to exemptions or rebates for fuel excise tax, including tax credits and certain excise-free fuel sources.

The "double dipping" (GST imposed on the excise tax) was fully compensated for by lowering the excise at the time the GST was introduced in 2001[citation needed]. While the excise stopped being indexed for inflation in 2001, it was reintroduced in 2014 (see History below).

The tax collected is partly used to fund national road infrastructure projects and repair roads, but most of it (approximately 75%) goes into general revenue.[1]

 

[mmm....shiney!]

@harry_mr, Wikipedia is wrong, it’s probably because the common view of taxation in a monopoly fiat currency system is misunderstood and outdated.

That’s not unusual, even central bankers don’t understand it.

 

[harry_mr]

Taxes don’t pay for infrastructure so the fact that companies use public roads etc is a moot point regardless of whether they pay taxes or not.



We may be but we would be poorer. Comparative advantage is a key driver of prosperity as it rewards efficiencies and punishes inefficiencies. Australian manufacturing has been punished because it is inefficient. Australian drylands farming is rewarded because it is efficient. Attracting foreign investment is one of the means by which we take advantage of comparative advantage.



Taxes do not fulfil that function. Fiscal policy does but not the act of taxing. Taxation is just a tool to control inflation. If a government wants to help then it does so by manipulating the public deficit or surplus by either taxing more or taxing less. Government surplus = public debt. Government deficit = public credit.

This debate seems to be going around and around in circles primarily because people do not understand the function of taxation and to a lesser extent don’t understand the ta regime as it relates to companies.

Here's a question because I see people quoting aspects of MMTs tax controlling inflation and sovereign nations governments using MMT as an open cheque book and not needing taxes like its been in use forever.
How long do people think MMT policy has been in use in Australia and paying for its development 10, 20, 30, 40 years?

 

[mmm....shiney!]

Short answer: it’s been in use since we floated the AUD but it hasn’t been in use.

 

[harry_mr]

Short answer: it’s been in use since we floated the AUD but it hasn’t been in use.

Really that long, Im no expert on it but I would have thought a lot less than that.

 

[wrcmad]

Maybe you wouldn't feel the need to consciously fudge the figures as much as you can if a fair share was being paid by all. I'm not sure of your self satisfaction reasoning so care to explain?

OK.
I resent having anyone arbitrarily mandating what constitutes my "fair share", especially when it is obvious to any reasonable logic that my slated tax liabilities are way over and above my fair share.
Thus, it gives me great satisfaction to play the game of "adjustment", and right the wrongs of our current system.

The term fair shares origin is unknown however in most Australians mind it would conjure up a meaning of what is reasonable or expected of and not knowing you, your situation, or even referring to you in post I have no desire to get in a slinging match with you about whats your fair share.

As mentioned above, this is a conversation to nowhere when my "fair share" cannot even be defined. As shown above, the progressive tax system can never be defined as fair. Thus, I use my own definition of "reasonable".
My "situation" is irrelevant to the current status quo of "fairness" - the current system defines my situation as a raw number of income after deductions. So I use this rule to adjust my "situation".

My OP was merely that most of these companies are paying $0 company tax on revenues up to $30 billion using financial magic.

As mentioned before, tax isn't liable on revenues, so you need to stop focusing on this misleading number.
I would suggest there is no financial magic involved, but merely "situational adjustment".

 

[mmm....shiney!]

Really that long, Im no expert on it but I would have thought a lot less than that.

From my understanding when Nixon took the US off the gold standard all of the old ideas about government revenue, reserves and other stuff associated with using a commodity-backed currency just didn't apply any more. When it comes to governments paying for goods and services, defaults, outcompeting the private sector etc, MM theorists argue that classical economic theories are somewhat redundant because the government has a monopoly supply on the creation of money.

So if we look at your concern that corporations are profiting from utilising public infrastructure yet not paying their "fair share" of taxes to help maintain that same public infrastructure so the burden falls upon the individual taxpayer, that is a classical view of the function of taxation. Pre-1972 if you like. It doesn't apply any more according to MMT.

Does that mean the future is bright and we'll all be shitting butterflies instead of bricks? I'm not sure.

I'm still an advocate of classical economic theory because I don't believe the State should have a monopoly on currency. But for now I'm having to think more like a MMT student.

 

[mmm....shiney!]

Yes tax is a tool of fiscal policy. Using taxation scales as a tool of fiscal policy I thought was implicit in the discussion - so yes we agree. I don't think the RBA would agree though that taxes are to manipulate the deficit or surplus.

That's because they're monetarists, they are mainstream classical theorists who either don't understand MMT or dismiss it.

Taxation and inflation is incidental. Tax was applied to the oldest profession, long before inflation was but a twinkle in the eye of thieving governments. I am fairly old fashioned in that I believe taxes are for public works for the good of the society, and the support of those unable to help themselves. There seems such a sociological disaster in society that taxes have been siphoned off into a lot of areas they should not be used. For instance, I consider taxes raised on roads, should be used for maintenance and public works and infrastructure - not diverted to 'general revenue' where the pollies can feed their own particular hobby horses.

Under an economy with a commodity-backed currency system you're right. But that doesn't exist any more.