Contributed by Jim Hayes
The big push to enforce a corporate tax cut is still on. It might have stalled in the Senate, after last May’s budget, Treasurer Scott Morrison’s three stage plan is still on the books.
Knowing that this big tax benefit is extremely unpopular, sleight of hand has been used to mix it in with personal tax cuts and the deliberate failure to make a clear distinction between big and small businesses. This has been deliberately engineered to cause confusion among the Australian population.
Alongside this has come a new campaign by the Murdoch media. It has long been the champion of the big business tax cuts. In fact, this one of the company’s that regularly pays no tax and has a vested interest in legitimising tax avoidance.
It’s most recent salvo is the misleading use of on a Newspoll survey, to pretend that most Australians are on the government’s side. This is not exactly true, because the poll did not ask respondents whether they were in favour or against the tax. It asked how they would prefer it to be implemented. Nor were they asked whether they for or against corporate tax cuts. No separation was made between big business and small business, and by implication, from income tax cuts to those on low and medium incomes. Of course, people running smaller businesses struggle enough as it is, without having to pay huge amounts of tax. This is why more tax should be taken from the bigger businesses who won’t feel the impact of tax as much. For smaller businesses, it can be daunting trying to sort out your tax payments on time, which is why a lot of companies have contacted GeekBooks to get their help with tax payments and other financial responsibilities. Accountancy firms offer a wide range of services of accountants, portfolio managers, bookkeepers, payroll, and customer service staff. These organizations could not only provide expert guidance but also, help you sort out finance-related worries. Perhaps more businesses should consider using business accounting services and accountants, it should limit mistakes and improve accuracy.
Currently, smaller businesses pay similar levels of tax to bigger businesses. This survey asked multiple questions about tax, but they weren’t clear. This meant that some people answered incorrectly. Additionally, the Government tried to release false information. It is misleading to present this as something other than it is.
The Australia Institute has produced modelling that shows in the income tax component, it is the top 20 percent of income earners that will get most of the benefit and 60 percent will get nothing at all. Of the total of $26 billion less tax being paid, $12.6 billion will not be paid by those on the highest incomes
This information has been held back from public view for the most part.
Something else not seen worthy as deserving a mention, is that these tax cuts are designed to dismantle the progressive component of the current system. This means that those who are better off pay a little more, to help redistribute national income downward and help the less well off.
If people had been asked whether they agree that the tax rate for big corporations should be lowered, that small business should be treated differently, and the income tax system should be progressive, the answers would have been different.
A carrot is provided with the up to $530 offset for incomes between $48,000 and $90,000. This is used to hide that in the pipeline there is a bigger cut for those earning over $90,000. The 32 percent threshold will be increased up to $200,000. Then the higher 37 percent rate for the richest will be abolished. In dollar terms, they will be paying a lot less tax as the changes roll out.
Less tax being paid, also means that there is less in government revenues. Who is going to pay to maintain existing government services, or are they going to be cut further still? This would not only have an impact on the standard of living for many people, it will lessen the government’s ability to intervene in the economy, in the face of market failures and to develop future needs.
The new income tax cuts, together with the lowering of corporate company tax represent a significant retrograde step for Australia. The problem is that no clear alternative has been put forward yet. This is not merely a matter of amounts. It calls for a different type of taxation system. What exists is already too regressive. And existing loopholes allow corporations to pay no tax at all. They need closing. Taxation should be a better means for income redistribution, and it should be a much more effective tool for discouraging inappropriate investment and encouraging investment in the economy’s and society’s real needs.
Bill Shorten has promised Labor will protect the worker and has questioned the scrapping of the top 37 percent rate. He says 4 million will get twice what the government is offering. This has been joined by a promise to spend more on health and education, and the money would come because there will be no support for the $80 billion corporate business tax cut.
Nevertheless, Shorten’s promises lack detail and have been open to misrepresentations. They have a positive side, but they are somewhat timid and do not provide an answer to a taxation system that needs to be re-invented, so that it works in the opposite direction to what the government is trying to impose.
The liberals are scum, as if Murdoch and the IPA want it so that the average Aussie has a better life ?