http://www.abc.net.au/unleashed/stories/s2889517.htmAs we move into the annual Budget period read a little widely on taxes, beginning with this interesting view of taxes in history. Naturally when taking this kind of long historical view the Henry Tax reforms suggested earlier this week seem mild, but there is some significance amongst the suggestions: http://www.theaustralian.com.au/business/in-depth/henry-tax-review
Interpret:
Which stakeholders would be affected negatively by the suggestions? Who would benefit?
Evaluate:
Which elements of this review are a response to Australia's recent (last decade) economic performance and which take a more long term view?
4 comments:
"LABOR'S tax reform package is driven by the fiscal deficit, the coming election and the resources boom, its aims being to protect the revenue base, guarantee no individual loses and stage a redistribution from rich miners to broader economic and social stakeholders.
It is a narrow conception of tax reform. No taxes are eliminated. The overall tax burden is not reduced. This is not a policy objective. The heartland areas of personal income tax, indirect tax, the welfare system, family payments and ineffective state tax bases are not confronted. This is a highly political conception of tax reform. The burden of higher taxes falls on companies and employers. No pressure is applied on the states to improve their tax arrangements." Paul Kelly, May 5 The Australian.
There seems to be much cynisism about the tax reform Labour is planning to undertake. There is also concern about the effects of the tax reform:
The government argues that in defiance of economic logic, a new multi-billion dollar annual mining tax will actually increase mining output and therefore increase tax collections, which can then fund other commitments and promises.
The government wants more from the mining sector while taking actions that will slow it down. The government is tapping the brakes to slow the mining sector down and let the rest of the economy catch up.
But the more likely outcome - projects deferred, lower growth, and a new enthusiasm for off-shore investment - will mean revenue gains from the new tax could be much, much lower than the government anticipates. Locking in future spending on a gamble on future commodity prices is an interesting approach.
There is also concern about the effect on small businesses with superannuation changes which would balance out any benefits gained from the small decrease in company tax.
The Government has picked up just four measures out of 138 recommended by the Henry Review despite having made a big show about its reform credentials. So when the Treasurer calls this "reform of a lifetime" he is maybe exaggerating a bit.
And when he describes a two percentage point cut in the company tax rate as "historic", well that just sounds equally silly.
Some say that there are political motivations for the actions the Gov. has and hasn't taken, with an election looming, picking populist policies out of the broad and wide ranging Henry report, and to take the heat away from the Government's other actions.
Also, an interesting thought I found doing some wider reading:
I sometimes wonder which is worse: the government or the Mafia. Oh wait; they may as well be the same thing.
If you're wondering how the logic of this admittedly brash remark works itself out, try the following. It's simple; just publicly refuse to pay your taxes. The government will come for you and the police will try to throw you in jail. If you resist, you will be shot. Pay up, or get a bullet in your head. It's essentially the same tactic employed by Mafia thugs.
Webby
in the ABC Taxation's violent history report, Chris selects various events in history alluding either indirectly or directly to tax reform...."one" must be critical and observe that this is extremely bias, we live in the future and taxes are a critical part of the government be it labor or liberal. on the contray many "Aussies" know that we have extremely high taxes compared to the rest of the globe. another point Chris's article failed to see, if we imaging that our tax system is a rudder on a boat, in relation to this society can change direction and can be manipulated in what ever way we feel. in relation to this statement increased taxes could effectively lead to the demise of things such as, diabetes, traffic congestion (e.g the Clem 7 tunnel,) could see the end of Emphysema, and could possible see less of inner city drunken violence. we shouldn't actually make laws prohibiting activities smoking, drinking or fatty foods because that is socialism and Instead, you should send a price signal and let the market respond. if we view the more rational side of this argument Abbott's new tax reform plan Quote "
1) the selective tax on large corporations which would see them funding paid parental leave, effectively subsidising other corporations (including potential competitors)
2) the tax grab needed to pay for his carbon reduction scheme - instead of adopting a free market approach he would use a soviet-style intervention"
the proposed tax on mining. threatens one of our most valuable industries; type 1 land, one of the sources of Australian prosperity"
I would say it makes a few Australian people prosperous & rich, it does nothing for the rest of us except cause untold damage to the environment.
Some of the tax money should be pumped into renewable's and figuring out what we might do when all of our resources are depleted.
First of all, WOAH!
"And, of course, the government wastes a hell of money too: the government ignored the overwhelming majority of the Henry tax recommendations, but the review still cost taxpayers $10 million."
Chris Berg
Interpret:
Which stakeholders would be affected negatively by the suggestions?
The mining sector would be negatively affected by the imposed 40% "resources rent tax". It would mean a decrease in revenue.
Who would benefit?
Companies would benefit due to the 5% tax rate decrease which would result in an increase in revenue.
Individuals would benefit as a result of the increased personal tax-free threshold. Earn more, pay less tax.
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