28th Mar 2018
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Tax cuts for big business should be buried for good
Author: Ben Hocking
Bury big business tax cuts for good

The Government has been forced to put off a vote on its tax cut for big business after failing to secure support in the Senate.

While this decision has been welcomed by welfare groups, unfortunately the Government is planning on trying to put it back on the agenda for the Budget session of Parliament in May.

In the intervening period, the Government will be working hard to get two more crossbench senators to try and support this legislation and get it across the line, most likely Victorian Senator Derryn Hinch and South Australian independent Senator Tim Storer.

Hinch has most recently been talking to the Government about trade-offs in the areas of help for pensioners, affordable housing and assistance for the older unemployed. If he gets his way on some of those things, that would be better than nothing, but it will just be a drop in the ocean compared to the billions in revenue the Government will be sacrificing from the Budget.

The Government aims to reduce the tax rate for companies with a turnover of more than $50 million from 30 to 25 per cent.

Once you cut $36 billion in revenue from the Budget, as these tax cuts will do, that money will have to be found elsewhere. Where do you think they will look first? If I were a betting man, and I am, I would punt on welfare payments, social services and pensions. These areas of government spending are already in the gun and when the Budget deficit continues to worsen on the back of tax cuts to big business, they will make an even stronger case for cutting spending.

Treasury modelling even assumes these company tax cuts will be matched by cuts to services and higher taxes on people instead.

Australian Council of Social Service (ACOSS) Chief Cassandra Goldie said: “If the company tax cuts are passed, and personal tax cuts are also given, it is inevitable that social security will be cut further, and we’ll all have to pay more or wait longer for essential services such as doctors’ visits, hospitals, aged care and education."

Worse still is the fact that company tax cuts will largely benefit foreign shareholders and the Big Four banks.

Australia’s Big Four banks are some of the most successful in the world and are making record profits. According to The Australia Institute (TAI), the tax cut will net them an extra $9.5 billion dollars in the first 10 years, with $2.8 billion of that figure going to just the Commonwealth Bank alone.

The benefits of the company tax cut mostly go to foreign shareholders, not to Australian shareholders due to Australia’s dividend imputation system.

The spurious claim that lower company tax rates are linked to employment growth has also been comprehensively debunked by TAI.

Also a secret Business Council of Australia survey found that fewer than one in five leading chief executives had said they would use the proposed cut to directly increase wages or employ more staff. The Australian Financial Review reported that “more than 80 per cent said they would either use the proceeds to boost returns to shareholders or invest in the company”.

Any discussions surrounding tax reform need to serve the national interest, not just the vested interests of large corporations.

What do you think? Should the Government abandon its tax cuts for big business?

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    COMMENTS

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    Old Geezer
    29th Mar 2018
    10:35am
    Rubbish company tax needs to be halved from30% to 15% and the government will collect heaps more tax than it does now.
    Cowboy Jim
    29th Mar 2018
    10:46am
    Got a point Old Geezer! Business will relocate to where the taxes are lower and profits higher; with Trump and the Europeans lowering their taxes and our Asian neighbors being substantially lower we do
    not have many options. It is not our Age Pensions that are a problem
    - it is the non-working life style some of us have adopted. Some will never work as they have adjusted their needs to the stipend the Govt
    is handing out. Other countries just do not have THAT problem and we have to come to terms with that. The oldies are easier to attack than the youngsters on benefit because APs have mostly worked and do have assets the non-workers will never have.
    GeorgeM
    29th Mar 2018
    1:25pm
    Absolute rubbish.
    MICK
    29th Mar 2018
    6:29pm
    You clearly have vested interests OG. Conflicted. A rich man protecting !
    Tax cuts for the rich are being driven by the Business Council of Australia which is funded by multinationals and rich Australians and their companies. These groups care nothing about average citizens. There only aim is to transfer money meant for all Australians to exist on to their own bank accounts.
    Make no mistake this government is a part of the same self interest wealthy cartel which is driving it and is its legislative arm.

    Please stay out of such arguments OG and better still do not prostitute yourself in this pursuit. The whole issue is distasteful to the extreme and those driving this need to pack up and move to their tax shelters.
    Jim
    29th Mar 2018
    7:39pm
    Well at least Mick has finally revealed his true colours, if you don't agree with his point of view, whatever you say is not worth listening to and you should just stay out of debates where he has an opinion. Keep the red flag flying, you are not on the payroll by any chance!
    MICK
    30th Mar 2018
    12:30am
    By all means have a "point of view" supported by THE FACTS.
    I have argued the lie of Trickle Down Economics on this website. I have argued wealth shift to the top end. I have argued the lie of company tax cuts on this website.
    Respectfully Jim all you a a handful of right wings spokesmen can do is throw mud. That is about the difference between us mate.
    As Benjamin Disraeli once said "I may disagree with what you say but I will defend to the death your right to say it". I'll agree with this IF you have genuine supporting arguments rather than the brain dead factless attacks which the righ always uses.....because they cannot defend the indefensible.
    Cheers
    Jim
    30th Mar 2018
    5:39am
    I disagree with your point of view, the difference between us mate is I respect your right to an opinion, you comments clearly show that you do not respect anyone else's. I am not a right winger and never have been, I have had many dealings with Bill Shorten when I was a member of the Union , which I was for more than 50 years, I know him as being a bully, as being concieted and many other distasteful characteristics which I probably can't mention, he was totally inept as a leader and can't be trusted, that is my problem with the current opposition. To answer part of you proof question I agree that trickle down economics doesn't necessarily create jobs on its own, but what does tend to happen is the better the investment opportunities, which might be the differences between a business staying viable or closing its doors, it can also influence overseas investors to invest their spare cash here instead of some other country with a better tax structure, it might just give us some stability which is something I don't believe can happen under Shorten.
    MICK
    30th Mar 2018
    5:55am
    Interesting comment. Whilst I prceive Shorten to be a dill you may want to look at Turnbull a bit and compare the two. One is advocating for a fair go whilst the other wants to turn working Australians into poverty driven slaves and hand the wealthy everything. One is trying to steal democracy whilst the other is not tampering with the system which has worked for so long. One has hidden the dealings of the rich behind a wall of secrecy whilst the other has not.
    I'm sorry you believe the lie of Trickle Down Economics and the man who wants it. This scam has turned American workers into slaves and you seek to see the same happen in this country.
    If I call you out Jim it is not because I have a dislike of you. It is because your politics leads to slavery and I am not having a bar of that. Sorry if that offends but I stick up for average people. Cheers.
    Jim
    30th Mar 2018
    6:17am
    You certainly don't offend me, as I have said I respect other people's opinion, scaremongering isn't an opinion it's the tactic used by both spectrums of politics, my politics are very central and I have voted mostly Labor over my life time we have had some very good leaders in the Labor part, Bob Hawke and Paul Keating are two that come to mind, I don't consider you are calling me out on anything, I think you view on turning people into slaves is a bit far fetched and goes somewhat to trying to create a false class warfare, this tactic is commonly used by political parties that have few ideas other than to attract votes from people that believe everyone else's life is better than theirs and they want what you have, it's called the politics of envy, it has been very evident over the last few weeks with the discussion regarding imputation tax, which tried to pitch pensioner against pensioner, that's the politics of the current opposition.
    MICK
    30th Mar 2018
    6:35am
    Jim: I am not scaremongering. I am giving the facts and drawing conclusions. Other countries have been through cycles and how things worked, or otherwise, are worth more than all the words and lies in parliament. Call me whateveer you like but debate the facts.
    My apologies for often playing the man.
    This government is rotten to its elitist core and Australians need to fear what it is doing to democracy and wealth distribution. As I have often said I support neither side of politics....but if it were a choice between Shorten and Turnbull based on their intentions then I would go for Shorten. I don't like the man at all but the alternative is slavery. I guess you cannot see it coming. Neither does the lobster in the pot being heated until it is too late.
    Just to addree your last statement I do not begrudge the rich doing well. What I begrudge is the top end of town stacking the cards against hard working Australians, avoiding their tax liabilities and trying to turn workers into destitute slaves. Call that the politis of envy if you wish. I call it wholesale betrayal of the country....better known as traitor behaviour. And you wonder why the current lot send me into a flap.
    Jim
    30th Mar 2018
    7:27am
    At least we can agree on some things, all politicians are in it for what they gain personally, for some it's wealth for others its power, I certainly disagree that Shorten is the better of the two evils, his politics are the politics of popularity, which will ruin the country as quickly as any other type of politics, I have always been a glass half full type and have a firm belief that we are still one of the luckiest countries in the world and hopefully will continue that way, we have a resilience that many other countries lack, we are still respected around the world, the only way we will become a country of slaves is if the politicians have their way and reduce us to continually sqabbiling amongst ourselves and distract us from their ineptness, we may have different ideas on the best way forward maybe neither side has the answer, but creating a divide between us certainly isn't the answer.
    MICK
    30th Mar 2018
    1:21pm
    We'll have to agree to disagree Jim. You may want to go to America. I have personally seen the divide. It is sickening. Those who support the current low life government are handing the wealthy want they demand: EVERYTHING. I won't convince you of that until it is too late though and that is the real tragedy. People believe the mountain of lies and are taken in by the marketing...and will truly deserve a nation in which average citizens become slaves. Not if but rather when.
    Latest shot over the bow id inquiry into ABC about anti commercial behaviour supported by Murdoch team. Imagine running an inquiry into right wing propaganda during election campaigns. Here we go! It's game on. Cheers.
    Anonymous
    2nd Apr 2018
    8:29am
    The government's own figures support the contention that company tax cuts WILL NOT drive growth and WILL NOT benefit the economy. They have declared the benefit will be less than 0.5% and will take up to 20 years to be felt.

    In the UK, company tax cuts created one of the world's best tax havens, drove the wealth of the top 5% up 20%, reduced GDP, generated 0 benefit for 85% of the population.

    Our effective company tax rate is already a relatively low 17%.

    80% of companies ADMIT OPENLY that they will use the gain to benefit shareholders or invest in the company (probably in technology that displaces workers and drives unemployment up and wages down).

    We CANNOT AFFORD THIS. The national debt is growing at a terrifying rate. We simply do not have the capacity to indulge in the luxury of handing out tens of billions to companies to boost returns to foreign shareholders.

    The FACTS speak for themselves and even the government had to concur. The very fact that Hinch will consider a ''deal'' says the policy is BAD and he knows it. It's WRONG to even think about a ''deal''. The policy should be judged solely on its merits, and judged on its merits, it bad.
    Bottle-O-Rum
    29th Mar 2018
    10:48am
    You have it right Old Geezer. It is Economics 101. Even Labor argued for low company taxes before they were so corrupted by Green ratbaggery. Unfortunately, this publication is hard left wing.
    MICK
    30th Mar 2018
    12:35am
    So anything which goes against you is "hard left wing"? You might want to go watch Fox News or join Andrew Bolt. The difference between these media outlets and this one is they do not allow an opposite view. Only theirs. Try posting something which does not support their rich man's ideaology and see what happens to your post.

    FYI if Labor proposes tax cuts for the wealthy I will go after them. The corporations playing one country against another should be brought to an end. This benefits....wait for it....the wealthy, who are behind the constant calls for less tax FOR THEM.
    Rae
    31st Mar 2018
    10:51am
    Lowering Corporate Tax rates to compete for investment isn't a problem.

    We are a sovereign Nation so can issue funds for home needs at any time.

    The tax cut money will flow overseas so won't create inflation.
    Investment funds will hopefully flow back in.

    Coming along with the protracted currency wars, tariffs etc it's not a bad idea.

    It shouldn't effect service delivery here as we can issue funds for that outside of tax revenues quite easily.
    Anonymous
    2nd Apr 2018
    8:35am
    Don't bother to look at what happened in other nations where company tax cuts blew the budget - the UK, for example. And don't bother to look at the figures the government agreed were correct - less than 0.5% benefit that will take 15+ years to be felt.

    We can't afford these cuts. We have a government and opposition constantly trying to destroy the lifestyle of Australians (particularly retirees), based on claims of unaffordability, yet Turnbull wants to hand out to wealthy companies based on ''gut instinct'' when even he admits the data proves him 100% wrong.

    We already have a low company tax rate. Comparison with other countries is deeply flawed because their system of taxation is different. The US, for example, has a far, far higher rate than we do because of the complex layered tax system.

    80% of company CEOs openly declared that the Government's theory in support of this policy is WRONG. They will NOT spend on increased jobs or wages. That should be the end of the debate.
    dstark
    29th Mar 2018
    10:51am
    What blinkered vision some folk have! Companies are an incorporated form of people pooling their resources to build a business that employs people to provide goods and services to customers. Company income tax rate should be NIL, and the shareholders taxed at their marginal tax rate when the company distributes its profit to the shareholder as a dividend,

    This was achieved by imputing to the shareholders the profit and the tax on that profit paid - called dividend imputation tax. Pity Your Life Choices does not explain the tax law instead of its ignorant rant.
    Old Geezer
    29th Mar 2018
    10:55am
    I agree.
    Peanuts
    29th Mar 2018
    1:05pm
    Agree; even overseas shareholders have to pay withholding taxes. The government could reduce Australian Company Tax and maintain (or even increase) withholding taxes (for both overseas Companies and Individuals).
    MICK
    30th Mar 2018
    12:37am
    The prime benefactors from low taxes are CEOs and their executive staff followed by wealthy people who own a lot of stock. Ordinary shareholders do get a sniff but they get the peanuts.
    Your post needs to put company earning into perspective. VERY FEW ordinary people even own shares. Get it?
    Rae
    31st Mar 2018
    10:55am
    I agree.

    As to ordinary people not owning shares that is a choice they make.

    If instead of lining up for lotto and lotteries they directed that money into an index fund over time they would have a saving pot.

    A few peanuts can create a bag of peanuts over time that then keeps increasing due to compounding.
    Anonymous
    2nd Apr 2018
    9:00am
    Spot on there, Rae. We need more incentive for people to own shares. Currently, they get a fat reward for spending on lotto tickets and restaurant dinners - favoured in retirement with pension and concessions and even talk of excluding them from cruel taxation policies designed to ensure shareholders who saved for retirement are beaten into poverty!

    I would agree with 0 company tax if there were tight restrictions on salaries and benefits for senior execs and directors. The problem is that the profits don't flow to shareholders. We have CEOs who have enjoyed 500% salary increases over a period when wages have barely moved.

    I read about a small country in Europe (can't recall the name) that solved a massive debt and deficit problem and accompanying social problems by ruling that nobody could ever earn more than X times the lowest wage/salary paid in the organization. That applies right across government and all private enterprise. From memory (which is bad!) I think X might have been 11. Thus, if the toilet cleaner in Parliament House gets $10 per hour, the PM can't get more than $110 per hour. If the tea lady in a company gets $9 per hour, the CEO can't be paid more than $99 per hour.

    While we don't limit obscene salaries and benefits to execs and directors, asking shareholders to pay the tax and making company tax $0 wouldn't work well. But combined with other measures to guarantee distribution of profits, it could be an excellent solution that would silence lying Shorten with his crap about franking credits, and benefit everyone.
    Glen48
    29th Mar 2018
    12:50pm
    ABC survey tells companies will pay more to share holders and/or back in to the Company..Feds say there will be more jobs vacant so workers will demand more while the Feds bring in more 457 workers,
    KSS
    29th Mar 2018
    1:39pm
    Point of order here. The 457 visa no longer exists (except for those already here on it).
    MICK
    30th Mar 2018
    12:38am
    The point is as already shown THERE WILL NOT BE MORE JOBS because those who stand to gain will pocket almost all of the extra cash. You must be dreamin' Glen.
    GeorgeM
    29th Mar 2018
    1:24pm
    Very bad idea from the Liberal Govt, and MUST be abandoned as they are not capable of sensible thought. They claimed the Budget couldn't afford it as justification for the revised nasty Assets Tests for pensions from Jan 2017. Now, they can suddenly afford $65 Billion hand-outs to big business??? Most of which will go to foreign shareholders. We need a Govt for Australians!
    Hinch MUST NOT do horse-trading with this Govt to get pathetic concessions.

    The only reasonable tax compromise is if they first ensure ALL pay fair and reasonable taxes, AND Fix the Failed Pension system at the same time as follows:

    Implement a MINIMUM TAX system - by which Businesses MUST pay at least 20% of Gross Revenue before taxes. (An alternative is to allow ONLY LOCAL LABOUR, MATERIALS and INTEREST for borrowings as Deductions before a MINIMUM TAX of 25% on such Net Revenue).
    Also, a MINIMUM TAX on Individuals of at least 30% without allowing ANY DEDUCTIONS (rate is higher than company taxes as Individual Taxes include 7.5% tax for paying Aged Pensions since 1946).
    Implement a Universal Pension system - All Individuals with minimum 15 years Residence to get full Aged Pensions on reaching Age 65 with NO Assets, Income, Partner or any other tests - this will also allow Centrelink to be removed from administering Aged Pensions saving large costs for the Budget and removing stress for pensioners, as ATO can easily administer this through simple Software to send out payments.

    NO OTHER JUSTIFIABLE BASIS FOR REDUCING COMPANY TAXES!
    Old Geezer
    29th Mar 2018
    1:36pm
    Many businesses would fold overnight if they had to pay 20% income on their gross revenue as they would not be viable. I doubt one single petrol station in the country would be viable as their margins are so slim.
    GeorgeM
    29th Mar 2018
    1:49pm
    I don't mind such a Minimum Tax system applying from a certain threshold, OG, to mainly target the large companies who are avoiding fair taxes. My point is to fix the tax intake issue before giving any hand-outs, besides fixing the failed pension system for all retirees at lesser admin cost to Govt.
    Old Geezer
    29th Mar 2018
    2:29pm
    Pension system has failed at all> People have just got greedy and want more.
    GeorgeM
    29th Mar 2018
    11:49pm
    Glad you agree pension system has failed! Maybe the typo reflected your real unconscious agreement! It is clear you don't understand logic, in spite of many detailed explanations from OGR & others, so I won't bother. Clearly you are either an ex-politician / bureaucrat getting assured undeserved pensions or a paid Liberal-party stooge paid to make such negative comments to help your party, or a rorter of the system who somehow expects to lose if the system is changed.
    MICK
    30th Mar 2018
    12:40am
    OG: small business is in a totally different basket to big business and multinationals who export their profits to offshore tax shelters and claim poverty status.
    I fully support the government helping small business. THEY ALMOST NEVER DO!
    Peanuts
    29th Mar 2018
    1:28pm
    I would suggest that the biggest fundamental problems are:
    + sustainability; short term handouts to garnish votes will eventually lead to a Greek scenario
    + continual change; people will loose incentive to save for retirement
    MICK
    30th Mar 2018
    12:42am
    And more and more taxes and push for lower worker pay rates. That is what debt does and the current government has been driving up debt with nix to show for it. It can't last.
    Illuminati
    29th Mar 2018
    2:36pm
    You quote the The Australia Institute and ACOSS. TAI is run by Ben Oquist, former Chief of Staff to Australian Greens Leader Senator Bob Brown. His predecessor was Richard Denniss. Still TAI's Chief Economist, he was a former Senior Strategic Advisor to Bob Brown. Why didn't you just quote "independent" advice from The Greens?
    Rae
    31st Mar 2018
    11:19am
    Yes. A tax cut to the multinationals might keep investment dollars coming.

    I'd like a guarantee they won't raise the GST or bring in Land Taxes to compensate.

    Shifting taxes from big foreign owned companies to mums and dads at home is not such a great idea unless you are a foreign investor.

    The dual citizenship of so many parliamentarians is starting to look a bit like a conspiracy against the Australian people.

    Was Whitlam's plan to Nationalise our resources bad enough to destroy the country in retaliation? It appears so.
    Brissiegirl
    29th Mar 2018
    2:42pm
    The tax cuts are necessary so Australian businesses compete with countries/investors that already have much lower rates. Funny how Bill Shorten applies the politics of envy believing the workers of this country are too dumb to understand why company tax cuts are necessary. Of course he is the Bill Shorten who loves social climbing with the rich he then complains about. You don't help the poor by tearing down the rich. Of course with only 10% of Australian workers belonging to unions, hypocritical Shorten still thinks overpaid union bosses are in charge of everyone else and that employers are all evil. It's the big companies that invest and grow their businesses whilst employing the majority of workers. It's not Shorten's grubby, trouble making unions with their paltry 10% membership doing the hard work.
    Anonymous
    2nd Apr 2018
    8:51am
    Which countries are those, Brissiegirl? We actually have a very LOW company tax rate. It's being incorrectly compared with countries that have nominally lower rates but effectively higher due to the structure of their tax system.

    The government admits that the modelling shows it will take 15+ years to feel a benefit of no more than 0.5%. The UK lowered its rates and boosted the wealth of the top 5% by 20% with 0 benefit to the other 95%. The results in the US were similar. 80% of companies have declared they will not increase jobs or wages. There just isn't a solid argument. When asked to substantiate their claims that the cut was needed, both MT and ScoMo said they were working on ''gut instinct'' and ''common sense''. They dismissed the economic modelling when it proved them wrong, but oddly they were screaming ''the modelling... the modelling'' when they thought it would prove them right.

    I agree you don't help the poor by tearing down the rich. Nor do you help them by demolishing the middle class and upper working class - and those are the people paying for these tax cuts that we can't afford. We need policies that will drive job growth. Boosting the incomes of foreign shareholders and fantastically wealthy CEOs and company directors won't help Australia, and 80% of company CEOs openly admit that that's where the tax cuts will go. They have already shown their hands. Record profits over the past 2 years and wage stagnation!
    HarrysOpinion
    29th Mar 2018
    3:28pm
    In Australia, corporate tax revenue, out of the total combined tax revenue, represents only an 18% contribution. So the 2017-2018 Budget states. If you reduce company tax from the big corporations you reduce the 18% corporate tax revenue contribution by about 3%. To balance the Budget estimated tax revenue where do you think the shortfall will come from? It has to come from Budget expenditure. The largest expenditure is Social Welfare. This explains the recent robo-debt campaign by the government on welfare recipients in order to boost its company tax reduction policy bill. It's a pity that the federal government in the past got rid off its full ownership of the Commonwealth Bank, otherwise it would be rolling in billions in revenue every year if, it had the 'nous' to run a bank business, But, it didn't have the courage nor the intellect to be entrepreneurial to generate a billion dollar profit making finance / bank company. Which begs the question. How can these morons run our nation's treasury? Perhaps, the inept, useless politicians are thinking of privatising the Federal Treasury as well.
    Old Geezer
    29th Mar 2018
    4:08pm
    Wrong if you cut company tax you will receive more revenue and the further you cut it the more revenue you will receive.
    HarrysOpinion
    29th Mar 2018
    4:25pm
    So, I suppose you have financial model to share with us, to support your comment?
    Old Geezer
    29th Mar 2018
    4:46pm
    I do know as an accountant that as company tax falls the cost of write offs will make them unviable. A company has a potential tax bill of $4 million so he pays accountants $3 million which reduces his tax to $1 million. If his potential tax is only $3 million why would he pay accountants to reduce it to zero. Nothing in it for him. If his potential tax bill is $2 million it makes no sense to pay the accountants $3 million at all.
    HarrysOpinion
    29th Mar 2018
    9:13pm
    If a company has a tax bill of $4million and gives away $3million to accountants in order to pay tax of only $1million, this company is not achieving anything except spite against the federal government's treasury. But, in doing the deed, the company is feeding the accountants $3million extra gross operating profit which means that the accountants will have a higher tax bill and perhaps a higher net profit after tax. Accountants being creative creatures might be able to offset the extra $3million in gross operating profit with tax deductions but will still have a higher tax bill. At the end of the day the federal govt treasury will not get its due $3million but perhaps $2million or $2.5 million depending how creative the accountants can take it to the edge of ATO rules. So whatever the federal gov Budgets as incoming company revenue it will not be achieved because the company was spiteful and the accountants creative like "thieves in the night" to take up to $1million off the government's Budget expectations.
    As for the rest of your simplicity. If the tax bill was $3 million he would not pay the accountants $3million he would pay $2million and if his tax was $2 million he would pay the accountants $1million. Every instance has its relativity OG. But, since you were an accountant I can now understands your creativity. Your model doesn't prove "if you cut company tax you will receive more revenue and the further you cut it the more revenue you will receive", all it proves is that the govt will get less revenue.
    MICK
    30th Mar 2018
    12:46am
    OG: You are pushing the government wagon again mate.
    Please explain HOW you can get more tax when you lower tax rates?

    The only way you can get more tax is to increase taxes on workers, suck money out of anything and everything which benefits average citizens and flog off more national assets. All are coming.

    Oh yes....I'm waiting for you to run the BS about more money for business to invest. IT DID NOT WORK IN AMERICA. All that happened is the wealthy became mega rich and struggling Americans became destitute poor and needed full tim jobs + food stamps on top of that. It will be no different in Australia. You know that.
    Rae
    31st Mar 2018
    11:42am
    OG why would business pay one accounting firm that $3 million when it could be paid to the Government to provide the infrastructure, security and cashflow to customers instead.

    Do Corporations really hate the people to this extent? It's preposterous.

    Again I ask are we being destroyed because we had an excellent mixed economy of Social Democracy making other neo liberal governments look bad?
    Kaz
    18th Apr 2018
    11:59am
    Great comment Rae and I can’t see that anyone responded. It seems that greed comes before fairness.
    Jim
    29th Mar 2018
    5:28pm
    The biggest claim from those on the left is that big business pay little or no tax, so if that were true then no matter how much you cut company tax, it can't possible make any difference to the budget, so if company tax drops to 25% companies will be saving a further 5% of tax so if I do my sums correctly, companies who pay no tax now will be paying 5% less in future, but isn't that still zero? Or to put it another way, if the ATO is going to lose $65 billion in tax which represents 5% of tax they collect from buisness does that mean buisness is currently paying $390 billion in tax, which equates to $15600 approx for every person in Australia, I would hardly call that nothing. I do agree that we should be chasing overseas corporations that are actually not paying tax at all on the profits earned here.
    MICK
    30th Mar 2018
    1:04am
    Do yourself a big favour Jim, do some research on how many multinationals and wealthy Australians now use offshore tax shelters to export their profits and avoid tax. Many multinationals do so and our own PM has his wealth stashed in an offshore tax shelter and nothong is ever done about it. That's wrong. Tell me about tax receipts.
    I love your last bit....instead of trying to hide the problem perhaps give tax paid as a PERCENTAGE of income. That would let readers compare apples with apples. Giving the amount of dollars disguises the huge profits many corporations make, including the obscene payments to their CEOs and top management team. And that is after dodgy tax deductions and accounting practices.
    Jim
    30th Mar 2018
    5:56am
    Have a look at what I stated, the point I was trying to make is If these companies are not paying tax which is what many people are complaining about, how then can a tax cut be of any benefit to them, if they are paying zero now how much will they pay with a 5% cut, it's still zero, you are the one trying to cloud the issue, if you want to put it as a percentage of income, let's work it out, at 30% tax rate they are paying zero, now let's see at a 25% tax rate they are paying zero. If you have another look at my comment I also stated that we should be chasing those companies that are not paying tax.
    MICK
    30th Mar 2018
    6:40am
    You have a perfectly valid point there except those who are now paying tax will be paying a fair bit less. Around $50 billion less...which struggling workers will be expected to pay for. They're the ones who have had no real pay increases for 10 years whilst the top end have been putting up their rates like the health care industry year in and year out.
    The issue is that tax shelters and the game of EXPORTING profits should be declared illegal and those defrauding the nation of taxes should be issued with back taxes. That would be the right thing to do.
    You seem to have little interest in confronting the issue Jim so let's call a spade a spade, please.
    Jim
    30th Mar 2018
    7:39am
    I have been calling a spade a spade, I will try and repeat my original comment in regards to people claiming some companies don't pay any tax, so therefore a tax reduction for those companies can make no difference at all, that was the total intent of my comment, and had nothing to do with tax minimisation of exporting profits or any other comment to cloud the issue, I also stated in my original comment that we should be chasing the companies that are not paying tax. But just as an aside regarding not paying tax, how many people complaining about others not paying tax do you think have ever had a job done for cash in hand, thereby robbing the country of GST and income tax that is being avoided?
    HarrysOpinion
    30th Mar 2018
    10:48am
    We all know that corporations will take ATO tax rulings to the very edge. Some will risk it over the edge, knowing that, if they are caught out. it will cost them in legal fees, fines and paying back the due tax back plus interest. But, if they don’t get caught out, it was worth the risk.
    Such corporations are not concerned about loss of face because; it seems that, it is some kind of corporate martyrdom to be a corporate tax “Ned Kelly” of getting away from paying their due tax obligations. The government will not take them to “jail” because if it did, it would have to do the same to all corporate tax cheats and there are so many of them that, it would partly collapse the commerce world and affect the nation’s economy if you were to close them down. And, the public who are shareholders, are not shocked because, after all, the corporate tax thieves were doing it for the shareholders benefit as well.
    So it’s a “great game of tax minimisation and avoidance”. Some say, it’s the best game in town. It’s no disgrace.
    All of this exists because the government allows such mentality to exist.
    It’s like watching shoplifters. Except when shoplifters are caught out, they go to jail.
    MICK
    30th Mar 2018
    1:27pm
    And that is how the game proceeds HS.
    You are correct that THE GOVERNMENT will not stop this tax avoidance fraud...because they are accepting electoral donations/bribes to look the other way.
    I do disagree with you about the system collapsing if the game was ended. Companies are in this for profit and they would first of all employ lobby groups to run anti government media campaigns (the anti Mining TAx campaign is prime example). The they would join the many com[anies who have set up shop in Tax Havens and finally they get on with business if all these came to nought. It's a game in which the current government is a major player and in bed with the crooks.
    Rae
    31st Mar 2018
    11:50am
    A money transaction tax of a very tiny amount would catch all the billions leaving for foreign shores.

    There would be no need for any other taxes at all.

    If Corporations left someone would take their place. We are a resource country and those resources will still be here.

    There is no vacuum while cashflow is strong.

    The Government could ensure demand through redistribution policy.

    The UN has done the research on this.

    As Corporations increasingly take over whole countries it will become a global solution. There is no other way especially with AI and robotics increasingly replacing workers.
    VeryCaringBigBear
    31st Mar 2018
    4:31pm
    A transaction tax is GST on steroids. Heaven forbid us with such a tax. Pensioners will be taxed more than their interest just to move their money into term deposits.
    Rae
    1st Apr 2018
    5:14am
    That isn't true VCBB. The UN suggested 0.05% would be adequate.

    If people are putting large sums into <2% interest bearing bank deposits they need dissuading anyway. The low interest rates are a sure sign of a global economy on it's last legs.

    There would be no GST of 10% on everything we need bar raw foods. Gods and services would drop in price for the ordinary consumer.

    Those who chose would save and the speculators and very wealthy and Corporations would finally have to pay something. It would solve a bit of the high volume computer generated trading going on.

    It would be a few dollars on term deposits but a few thousands when a Corporation like Glencore moves it's billions overseas to avoid paying anything at all.

    Blue collar jobs are now gone or going and with increased use of robots white collar jobs will go next.

    Right now we depend almost entirely on ordinary worker's income taxes and GST to pay for services.

    Privatisation destroyed the income producing assets once supplying public funds. It also added another layer of costs for leases and contracts to companies requiring fancy offices and expensive running costs.

    Some other form of collection is needed and the UN research shows a transaction tax would be a solution.

    Sorry if you have to finally pay something.

    The alternate solution of higher GST and Land taxes will cripple aged pensioners and the Corporations will still take off free with they billions as they don't pay GST.
    Anonymous
    2nd Apr 2018
    8:41am
    Jim, the argument I keep reading, from the likes of OG, is that lowering the tax rate will stop avoidance. In other words, asking someone to pay 30% results in them paying a fancy accountant to ensure they pay 0, but asking them to pay 25% will make them pay it honestly. I DON'T THINK SO! That would have to be the most ridiculous nonsense I've ever seen written.

    Bottom line Is it's been conclusively evidenced that tax cuts WILL NOT DRIVE GROWTH and therefore we can't afford them. That SHOULD end the debate, but there's no end to greed and selfishness, sadly.

    The entire tax system is a disaster. I agree with Rae. A transaction tax would be far better than the nonsense we have at present, and increasing GST and Land Tax is just going to cripple those who can least afford it.
    alinejordan
    31st Mar 2018
    9:27am
    i don't see how cutting the company tax on big corporation matters since we all know they arrange their affairs to pay tax in countries that hardly charge any...
    Rae
    31st Mar 2018
    11:52am
    Exactly why the UN is pushing for a global solution to the problem that makes tax havens obsolete.
    VeryCaringBigBear
    31st Mar 2018
    4:32pm
    Wouldn't be nice to be the country where they did actually pay tax?
    Franky
    31st Mar 2018
    4:36pm
    with so many companies paying no tax anyway, it won't make much of a difference. I don't agree on lowering company tax, there are many other factors why a company will re-locate. I don't buy the argument that we'll get more business activity. Australia, let's face it, is at a location disadvantage for any multinational company, and we also lack the educated work force. This is why so many migrants are brought into this country.

    3rd Apr 2018
    1:50pm
    A friend just reminded me that the government promised cutting penalty rates would drive job growth. It didn't! Unemployment increased slightly - possibly contributed to by reduced spending by those who lost a massive chunk of their income. Many part pensioners also lost a huge chunk of income and that wouldn't have helped.
    Anonymous
    3rd Apr 2018
    4:34pm
    another simplistic opinion.

    what other economic factors were at play between the time penalty rates were cut and unemployment figures rose ?

    same argument with the part pensioner comment
    Anonymous
    3rd Apr 2018
    6:00pm
    Any excuse will do for rusted-on LNP supporters. Fact is, the LNP has NOT delivered. Why should we believe their ''gut instincts'' when they admit the data says they are wrong, when so far they have not been right about much at all?

    3rd Apr 2018
    4:32pm
    Just reading the comments from the economic illeterates including the author of the above article, makes me think the future is bleak indeed
    Turnbull needs to make this bold decision for the good of the country, but there are too many short sighted, stupid and politically motivated left wingers who are hell bent on destroying our economic future simply because they dont understand economics or are just plain stupid and selfish
    Anonymous
    4th Apr 2018
    1:06pm
    I think the economic illiterates are those wanting to put billions in the pockets of greedy company CEOs and directors who already declared it won't benefit the nation, after seeing that the same action in other countries demonstrated that the result the data says to expect - ie. no more than 0.5% benefit in 15+ years time - is exactly what transpired.
    Kaz
    18th Apr 2018
    11:50am
    You would be one of those illiterates from your disrespectful comments Raphael. Oh, and Turnbull is not bold.
    Kaz
    18th Apr 2018
    11:48am
    Trickle down is spin, investors look at more than the tax rate and greed is running this country at the moment. You don’t have to like a leader, the party just has to care about the country and ALL it’s individuals so it makes good policy. We are currently in dire circumstances both environmentally and socially and if we want to be a fair country, we need intelligence governing it. We don’t have that, just greed.


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