ga('send', 'pageview');
John Passant

Site menu:

May 2013
M T W T F S S
« Apr   Jun »
 12345
6789101112
13141516171819
20212223242526
2728293031  

Tags

Archives

RSS Oz House

Share

Authors

Subscribe to us

Get new blog posts delivered to your inbox.


RSS Blog RSS

Site search

Miniposts

Keep socialist blog En Passant going - donate now
If you want to keep a blog that makes the arguments every day against the ravages of capitalism going and keeps alive the flame of democracy and community, make a donation to help cover my costs. And of course keep reading the blog. To donate click here. Keep socialist blog En Passant going. More... (4)

Sprouting sh*t for almost nothing
You can prove my 2 ex-comrades wrong by donating to my blog En Passant at BSB: 062914 Account: 1067 5257, the Commonwealth Bank in Tuggeranong, ACT. More... (12)

My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. http://sharonfirebrace.com/2014/02/11/john-passant-aust-national-university-canberra-2/ (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. http://sharonfirebrace.files.wordpress.com/2014/02/4-2-14-john-passant-aust-national-university-canberra-end-of-the-age-of-entitlement-for-the-needy-but-pandering-to-the-lusts-of-the-greedy.mp3 (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole
(0)

Sick kids and paying upfront

(0)

Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. http://sharonfirebrace.com/2013/12/03/john-passant-australian-national-university-8/ (0)

Advertisement

Links:

Abolish the GST and tax the rich instead

So Labor is running a scare campaign on what the Liberals might do with the goods and services tax. Of course the Liberals want to broaden the base to include fresh food, health and education in the regressive tax and increase the rate from 10% to 12.5%.  So too secretly would Labor if there were no political impediments. The extra $20 billion appeals to both sides and to the States and Territories in whose name the tax is notionally levied.

Instead of arguing over keeping a highly regressive tax or making it even worse, I have an alternative suggestion. Abolish the GST. Get rid of it. Send it to hell.

Replace the GST with a wealth tax and increased income tax rates on the rich and capital.

Why? Because workers and the poor would be better off overnight. Lenin put the case well when he said:

We see that the demand put forward by the Social-Democrats—the complete abolition of all indirect taxes and their replacement by a real progressive income tax and not one that merely plays at it—is fully realisable. Such a measure would, without affecting the foundations of capitalism, give tremendous immediate relief to nine-tenths of the population; and, secondly, it would serve as a gigantic impetus to the development of the productive forces of society by expanding the home market and liberating the state from the nonsensical hindrances to economic life that have been introduced for the purpose of levying indirect taxes.

Here are a few examples with very rough guesses about revenue to make up for the loss of GST revenue of around $45 billion.

The top 20% own 62% of Australia’s wealth, which is in total about $6 trillion. So they own roughly $4 trillion. The bottom 20% own less than 1%.

So a wealth tax of 1% on the top 20% (none of whom will be workers but rather capitalists and their managerial class and upper middle class) would yield, by my calculations, $40 billion a year. What better way to get those who have benefited the most from the 2 decade long boom to help all of us survive the coming recession?

According to Essential Vision 64% of Australians support increasing taxes on big business. We could increase the company tax rate to 35% from its current 30%.  There’s $10 billion. Now, this gain would be offset by an automatic increase in tax credits for shareholders, known as dividend imputation. So halve dividend imputation. Billions.

61% of business is non-taxable, with mining companies on 73% the highest non-taxables. Twiggy Forrest’s Fortescue Metal’s Group has paid no income tax in the last 16 years and with accumulated losses and credits is unlikely to pay any income tax before is 20th anniversary of tax free status.

During the battle over the Resource Super Profits tax the Treasurer estimated that the effective tax rate (tax as a percentage of accounting income) of mining companies was between 13% and 17%, the difference depending on whether they were foreign owned or Australian owned. The company tax rate (tax as a percentage of taxable income) is 30%.  Now there is debate about the accuracy of these figures but they might hint at the general direction of the mining companies low contribution to the income tax coffers.

As Martin Parkinson, the Secretary to the Treasury, has said:

Mining companies account for about a fifth of gross operating surplus, yet only around a tenth of company tax receipts, primarily because tax receipts from the industry are affected by the high levels of investment occurring in the sector and the consequent level of depreciation deductions.

In other words the effective tax rate of mining companies is about half the 30% company tax rate.

It is not just mining companies. Starbucks has paid no income tax since it set up in Australia in 2000. Google has revenue in Australia of between $1 billion and $2 billion for Australian sources but paid., according to some reports, only $74000 tax in Australia last year.

Between 2005 and 2008 40% of big business paid no income tax and after the GFC the figure is likely to be higher.

A minimum company tax based on turnover would get some money out of these tax bludgers. Billions.

Labor could abolish tax concessions for the rich and big business. $20 billion. This includes the superannuation tax rort for the rich.

What about quarantining rental negative gearing losses to be offset only against future rental income? Billions.

Tax capital gains like all other income and abolish the 50% general concession to bring in $5 billion.

Make the income tax rate steeply progressive by increasing tax on income over $120,000 a year rapidly and impose a 100% rate on incomes greater than $210,000. Those earning $210,000 make up 1% of personal income tax payers, the top 1%.

Impose not only a one percent wealth tax on the rich. Impose a wealth transfer tax on them. Tax the gains on their homes. Billions.

Impose a super profits tax on all super profits – not just coal and iron ore but all minerals and other industries like the banks. $20 billion.

This gives you enough money not only to fund socially necessary activity on public education, health and transport, and addressing climate change. It also gives you enough to abolish the regressive the GST. That would cost $45 billion.

There are many more progressive tax changes I or others could suggest.

This isn’t ‘socialism’ but it will make life better for workers and the poor. Enough of the charades Labor and the Liberals are playing over tax. Abolish the GST and soak the rich till their pips squeak.

Advertisement

Comments

Comment from Ross
Time May 20, 2013 at 5:26 pm

Get this John.Our Bank’s derivative investments are now $20 trillion or 13 times our GDP.They call it insurance but is really a form of gambling using our mortgages as collateral.

Just a 1% tax on their derivatives will yeild the Govt $200 billion in revenue.This represents over $18,000 in tax for every working person.

Why is there not a super profits tax on banks?