Australian Politics Forum - Corporate tax avoidance costs us tens of billions

Bam

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Re: Corporate tax avoidance costs us tens of billions
Reply #15 - Jul 12^th, 2016 at 9:15am

crocodile wrote on Jul 11^th, 2016 at 11:29pm:

Grappler Deep State Feller wrote on Jul 11^th, 2016 at 10:48pm:

That, my son, is precisely why we have company tax - and at a reasonable level of 30% on profit ONLY ... an amazing deal that Jo and Joe Bloggs don't get.... and that is why it should be raised and not lowered... because of the opportunity to hide tax.

The alternative is to tax the Packers of the world for everything they get for free as a fringe benefit contributing to a deemed level of real income.

How about that then?

Ideally, it should be abolished. Not entirely practical with the benefit of limited liability but needs to be much lower.

And if company tax is abolished, what then? Do we shift to a full user-pays system for companies where companies pay the FULL COST of EVERY service that is currently subsidised by taxpayers?

Each 457 visa costs the taxpayer about $25,000 per year (unemployment benefits for one unemployed Australian is about $14,000 plus support services for one unemployed person is another $11,000). Companies only pay about $2,000. The cost of each 457 visa should be increased to $25,000 per person per year to meet the full cost of that visa to the taxpayer.

Every university graduate costs up to $200,000 for their degree and companies currently pay nothing when employing graduates (other than the salaries). Companies should make a contribution to pay for those graduates, such as an auction for the best graduates from any course. It's better though simply to tax all companies to fund a well-educated workforce so they can benefit.

Corporate welfare costs the Budget tens of billions. Every cent of corporate welfare - and this includes drought assistance - would need to be scrapped.

We currently subsidise company vehicles that travel on roads that everyone else pays for. No more vehicle subsidies. Instead, company vehicles would need to be taxed for every kilometre they drive. Because fuel excise doesn't cover the full cost of roads, they would need to pay an odometer tax every year that varies according to the size of the vehicle that could be as much as $1 per kilometre. And no more company discounts from toll roads either. Full price!

And this is just a few examples. Companies use a lot of resources and services that are paid for by taxes, and it's simply nonsense to expect them to pay no tax while not contributing to the cost of services they use.

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Bam

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Re: Corporate tax avoidance costs us tens of billions
Reply #16 - Jul 12^th, 2016 at 9:35am

Grappler Deep State Feller wrote on Jul 11^th, 2016 at 10:48pm:

That, my son, is precisely why we have company tax - and at a reasonable level of 30% on profit ONLY ... an amazing deal that Jo and Joe Bloggs don't get.... and that is why it should be raised and not lowered... because of the opportunity to hide tax.

The 1500 largest companies make a combined profit that is about 10% of their turnover. They only pay tax on their profits, so their tax burden is about 3% of their turnover. That is not a large tax burden. Someone working full time on the minimum wage pays a higher percentage of their tax on their gross income (about 10%) than these largest companies.

So we can tax companies on turnover, not profit, and use the proceeds of the turnover tax to reduce tax on profits. With a turnover tax, no deductions would be allowed. Something like a 1% turnover tax would be fair, if paired with a reduction in the tax on profits to 20%, or even 15% if we also abolish dividend imputation and make deep cuts to corporate welfare.

Dividend imputation made sense when the company tax rate was 49% but if company taxes were lowered to 15%, dividend imputation really makes no sense anymore and the administration costs become significant. And as for corporate welfare, much of it is just largesse for private profit. We pay so much corporate welfare to foreigners, we spend more subsidising wealthy foreigners than we spend subsidising poor foreigners with foreign aid.

If you think a 1% turnover tax is too high or a mad idea, just consider that income tax for private individuals can be as high as 45%. If individuals can bear a 45% top rate of income tax, companies can bear a 1% turnover tax.

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John Smith Gold Member Offline Australian Politics Posts: 75162 Gender:	Re: Corporate tax avoidance costs us tens of billions Reply #17 - Jul 12^th, 2016 at 9:40am Bam wrote on Jul 12^th, 2016 at 9:35am: Something like a 1% turnover tax would be fair, plenty much in line with what I was thinking as a solution to all the multinational tax avoidance. It's not like they're suddenly not going to sell their products here if we do introduce it.
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Swagman

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Re: Corporate tax avoidance costs us tens of billions
Reply #18 - Jul 12^th, 2016 at 9:43am

Bam wrote on Jul 12^th, 2016 at 9:35am:

The 1500 largest companies make a combined profit that is about 10% of their turnover. They only pay tax on their profits, so their tax burden is about 3% of their turnover. That is not a large tax burden. Someone working full time on the minimum wage pays a higher percentage of their tax on their gross income (about 10%) than these largest companies.

...and just how many people do the top 1500 largest companies employ? How much tax do these people pay? How much of that turnover is on-spent into the economy that employs the rest of the tax-payers who pay all the welfare and the ever compounding cost of Govt? Sad

All the Left's anti-corporate mentality does is shoot the economy and hence the electorate as a whole in the foot. Roll Eyes

Bash the top 1500 companies and you just bash everyone.... Huh

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John Smith Gold Member Offline Australian Politics Posts: 75162 Gender:	Re: Corporate tax avoidance costs us tens of billions Reply #19 - Jul 12^th, 2016 at 9:45am Swagman wrote on Jul 12^th, 2016 at 9:43am: How much tax do these people pay? THEY pay the tax, not the company. Trying to credit the company for taxes that others pay is despicable
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Bam

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Re: Corporate tax avoidance costs us tens of billions
Reply #20 - Jul 12^th, 2016 at 10:00am

Swagman wrote on Jul 12^th, 2016 at 9:43am:

Bam wrote on Jul 12^th, 2016 at 9:35am:

The 1500 largest companies make a combined profit that is about 10% of their turnover. They only pay tax on their profits, so their tax burden is about 3% of their turnover. That is not a large tax burden. Someone working full time on the minimum wage pays a higher percentage of their tax on their gross income (about 10%) than these largest companies.

...and just how many people do the top 1500 largest companies employ? How much tax do these people pay? How much of that turnover is on-spent into the economy that employs the rest of the tax-payers who pay all the welfare and the ever compounding cost of Govt? Sad

All the Left's anti-corporate mentality does is shoot the economy and hence the electorate as a whole in the foot. Roll Eyes

Bash the top 1500 companies and you just bash everyone.... Huh

35% of those top 1500 companies pay no tax for various reasons - no profit that year, carried forward losses applied against profits and so on. Some of these companies are profitable companies that contrive to avoid tax. Every one of those companies that pay no tax are contributing nothing to the tax take and are being supported by everyone else, even though they use services that are paid for by taxes. If we brought more companies into the tax system, the tax burden for other companies and individuals can be lowered.

You're the one that keeps posting about the tax burden being borne by so few. That includes companies, so why are you against the idea of a turnover tax? Huh

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« Last Edit: Jul 12^th, 2016 at 1:35pm by Bam »

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Grappler Deep State Feller

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Re: Corporate tax avoidance costs us tens of billions
Reply #21 - Jul 12^th, 2016 at 11:45am

Swagman wrote on Jul 12^th, 2016 at 9:43am:

Bam wrote on Jul 12^th, 2016 at 9:35am:

The 1500 largest companies make a combined profit that is about 10% of their turnover. They only pay tax on their profits, so their tax burden is about 3% of their turnover. That is not a large tax burden. Someone working full time on the minimum wage pays a higher percentage of their tax on their gross income (about 10%) than these largest companies.

...and just how many people do the top 1500 largest companies employ? How much tax do these people pay? How much of that turnover is on-spent into the economy that employs the rest of the tax-payers who pay all the welfare and the ever compounding cost of Govt? Sad

All the Left's anti-corporate mentality does is shoot the economy and hence the electorate as a whole in the foot. Roll Eyes

Bash the top 1500 companies and you just bash everyone.... Huh

All of which is irrelevant, Swag - the fact is they have earned income by utilising all those resources, the same as Jo and Joe (the workers they employ) did using their resources, and companies do not pay income tax at the same rate as Jo and Joe Bloggs, and are constantly pushing for lower and lower tax.

How about we slug them with the tax scale that the individual pays - then listen to the whines... instead of 30% the majority would be paying the top bracket....

How many workers would give their eye teeth to pay the lowest bracket, especially in the current climate of hidden inflation (mainly through privatisation) reducing the purchasing power of your dollar while raising your costs of living... thus putting pressure upward on incomes to match.....

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