Contributed by Jim Hayes
Something is wrong when billionaires go about paying no income tax, while everyone else is being denied the right to enjoy the same luxury. They can do this because the law provides them with loopholes and hey can pay for experts who will work it for them. Then they can claim this money back from paying taxpayers as a taxation expense. The yare rewarded for paying no tax.
Defenders of this obvious inequality are quick to brand anyone who questions it as engaging in the politics of envy. Perhaps this makes sese to those who believe self I the only value work thinking about. News flash. There are those who don’t look at the world through the same lens.
This is why so many are incensed about hearing that analysis by the Australia Institute of information from the Australian Taxation Office (ATO), which shows that 66 individuals pocketing an average of 14.5 million paid no tax. Analysis by the Australia Institute showed that they were aid $219,000 for help to avoid paying tax in 2020-21. This shows that they were tax receivers. Not just avoiders of paying tax.
Photo by David Maguire/ABC News
And the Australian government continues to be on track to deliver a major cut to the nominal rate next year. Estimates ae that this will mean at least $313 billion taken from Australian citizens by 2033.
Angst against this is not envy. It is standing up for justice. After all, we live in a society where we are dependent on each other. Even billionaires. This dependency exists at and outside work. None of us could eat without those who produce the food, deliver the services, provide our transport and so on.
Working together harmoniously, is how society grows and every individual within it can potentially enjoy a better life. Tax avoiding billionaires take away from this. In a world where there is only so much to go around, their greed means that others go with less. This runs counter to the value that all should be regarded as being equal.
A society that where equality truly exists will insist that all have the right to expect their needs to be met, and at the same time recognises that because of our interdependency, each has certain obligations to others. One of them is to contribute, according to one’s capacity, to ensure everyone gets a fair share.
Taxation is a means by which a society ensures greater fairness and equality, and those who evade their responsibility to contribute their share stand against fairness and equality. This does not mean an absolutely level playing field or that individuals should not be rewarded for extra effort. But really, does a tax free ride for billionaires fall into this category?
Cartoon by Megan Herbert
As distastefully as it is, income tax avoidance at the top end is only a little part of the tax avoidance industry. Company tax law allows much more scope. Major companies pay no or very little company tax. Back in 2019 the ATO was supposed to have warned the four big accounting firms that they were being watched and would be dealt with if they persisted with doing the wrong thing. This year we have the PwC scandal. Nothing has changed.
The money taken from Australian citizens is likely to be north of $1 trillion every year. But the absence of transparency means that we don’t know the full extent of it. And this doesn’t properly count the use of tax free havens, about which we were given an insight via the WikiLeaks release of the Panama Papers on 3 April 2016. These have subsequently been added to by the release of the Paradise and Pandora papers.
There were more than 1000 links to the Panama data, involving at least hundreds of billions of dollars every year. Yet nothing has been done to put an end to this form of tax evasion.
Ensuring that each contributed their share and that each enjoys their fair reward for taking part in the collective effort to create the wealth, it is necessary to put an end to tax evasion at the top end.
This means doing away with the legal provisions that underline the advantages for those on the highest incomes. Because of their capacity to contribute more, they should be paying more income tax than others. Company tax must be brought in line with this. The use of tax free havens to avoid paying tax at home must be outlawed.