Friday 29th of March 2024

the same old shell game ....

the same old shell game ....

New boy Turnbull promises "fairness" on tax reform but as Sydney Morning Herald's Michael West tweeted re the laughable "kidnapping" claims by the Big End of Town, it's the Government that has been kidnapped by them and the ransom is us, the people. Dermot Daley agrees.

Ii is a matter of record that Liberal/Coalition governments in Australia approach taxation reform as a question of entitlement and, as coached by entrenched right-wing think tanks, with a duty to reward their backers according to the backers’ instructions.

Labor governments, with the exception of Whitlam, have been too timid to address the real issues, even when these are presented in compelling bullet-point form. (Hawke and Keating turned out to be closet Liberals.)

Howard proclaimed that no GST would come out of his office and then he went away on a camp with a few mates and came back with his singular addition to the great big knot of red tape and in doing so committed to a partial shift in responsibility for tax collection from the government onto business.

Rudd was offered a pragmatic platform for reform by way of the Henry Tax Review, but was unable to comprehend it in total and insisted on allowing only two out of 138 premises to surface. Then he proceeded to confound the public by blurring these two objectives and ultimately succeeded in getting nowhere.

Gillard failed to market the carbon tax as what it really was — a pollution tax.

Abbott ... the least said about Tony Abbott the better.

Now we have the “new boy” who is promising to put everything on the table, but is beholden to forceful lobbies that will do anything to keep the playing field tilted in their favour — as they did so well when rebutting the “greedy profit” tax that could have been implemented during the resources boom (but was ignored by Howard and mishandled by Rudd).

As the “new boy” Turnbull says, it is important that we have the discussion and adding something to the effect that the public will appreciate what is fair enough.

Knowing that reasoned debate will yet again be hijacked and muddied by the self-entitled, I submit the following synopsis of how real tax reform in Australia in 2015-16 could be achieved. I’m no expert, so please see it as a draft proposal.

The principle of tax reform is to get rid of inefficient and outmoded taxes while retaining a fair impost on the society to ensure that the society flourishes. A flourishing society will be recognisable in that it provides an adequate safety net for those less able to fend for themselves.

There is ample research and modelling available to demonstrate what constitutes poverty, so our society must ensure that poverty is eradicated while at the same time hard work and initiative are rewarded. In the present economic environment, all the rewards appear to be biased towards the fortunate (i.e. lucky) and the entitled, rather than genuine hard workers or the disenfranchised.

At the head of the review, the only non-negotiable item must be that there is no change to the GST as it is already regressive and serves the well-heeled better than it does the battler.

There must be no increase in the rate and absolutely no broadening of the GST base onto fresh produce, health or education. The existing 10 per cent GST achieved the objective of eliminating confusing sales tax. Any change now would be a money grab, and would impact disproportionately on the 60 per cent or so of the population who manage week by week.

The second point to note is that there should be no reason to change income tax rates, except perhaps to allow modest threshold adjustments to manage bracket creep. Howard introduced tax cuts using the wealth of the resources boom and Australia now has a low index of income tax compared to other world economies so further cuts are not warranted.

Income is traditionally taxed on the basis of ability to pay, and modern societies have operated reasonably successfully with staged levies on low, medium and high income earners.

A constant is that we all have to understand that we can’t spend what we haven’t got.

As for the super rich, you don’t even seem to appreciate what you’ve already got, so stop being greedy. Go away and Google “philanthropy”.

Thirdly, true tax reform must address the point blank bleedin’ obvious which, here and now, is undeserved middle-class welfare, and the sense of entitlement so strongly defended in the Abbott/Hockey era.

It would be a proper smart move to balance the ledger.

You on negative gearing. You’re abusing an idea that is past its time. Stop taking affordable housing from your children’s generation. You’ve had a good run, so move on. Get over it.

You on superannuation perks. Cop it sweet. You can’t milk the cow and expect to eat its Wagyu beef at the same time. Get real. Stop expecting the rest of us float your lead balloon.

Superannuation pension streams above a median threshold should be taxed as any income.

Capital gains tax should be flat and fair and include any incidental gains derived from all forms of speculation and windfall. There is no such thing as a free lunch.

Fourthly, tax reform should actually reform the revenue gathering process and remove taxes that duplicate and complicate other taxes. We could effectively eliminate payroll tax, stamp duty and many other entrenched levies across the three tiers of government that were supposed to have been tackled in the review that delivered the existing GST.

Finally, there are other avenues available whereby new and fairer approaches to revenue management could be implemented.

The 138 recommendations in the Henry Tax Review should be revisited, if for no other reason than that it is the work of a competent professional team of taxation experts.

Then there is the Tobin Tax, a small surcharge on all financial transactions, which has been proposed as a means to end world poverty and global debt.

There could be a tiered land-title tax to eliminate iterations of existing rates and levies.

Land used for primary production might be one category; forestry and mineral extraction could be another; home ownership and residence at one level, and investment residential property at another; commercial and industrial land would be separate categories again. This low value (three or five per cent) broad-based tax would be set by the market value of the property, adjusted annually.

Furthermore, Australia could become a world leader by eliminating prejudicial tax shelters for any and all religious entities; with the only exemptions being allowed for non-prejudicial education centres and certified humanitarian charities.

The main thing about taxation reform is that those delegated to work through it need to keep focused on the bigger picture and remain objective over who will gain and who will lose from each incremental change.

The other essential element of reform is to ensure that the process does not get waylaid by those with vested interests. The reforms should follow an open debate, where the opposing points of view can be deconstructed and reconstructed by any interested parties. The bottom line is that the best interest of the national economy will be served when the best interests of the greatest number of stakeholders are met.

The success of any proposed taxation reform will be, as the “new boy” says, that people will regard it as fair. The essence of fair taxation is that it should not be punitive, it should not hurt and it should be simple and manageable across all revenue streams.

The proof of the pudding, as the saying goes, will be in the eating.

Tax reform: Here we go again clutching at straws

 

shifting cash and "donations"...

Swiss prosecutors on Friday requested assistance from Malaysian authorities in investigating massive theft from a state-owned firm at the centre of a graft scandal.

Swiss investigators said they believed around US$4bn had been stolen from Malaysian state-owned companies, funding that was earmarked for economic and social development projects in Malaysia...

 

 

...

 

The Malaysian prime minister, Najib Razak, has been under heavy political pressure over allegations that hundreds of millions of dollars were missing from deals involving 1MDB.

He has for months denied accusations that huge payments into his own bank accounts – just before a hotly contested 2013 general election – were siphoned from the now-struggling state-owned company.

Najib was cleared of corruption on Tuesday when Malaysia’s attorney general said the Saudi royal family was the source of the US$681m “donation” to his personal accounts. But the announcement triggered derision and fresh questions in a country well used to graft allegations.

read more: http://www.theguardian.com/world/2016/jan/30/swiss-investigators-say-us4bn-stolen-from-malaysian-state-owned-companies

 

Meanwhile in the USA:

The co-founder of the Liberty Reserve digital currency service has pleaded guilty to money laundering conspiracy, days before he was to go on trial accused by US prosecutors of enabling criminals worldwide to launder more than US$6bn.

Arthur Budovsky, 42, admitted he knew Costan Rican-based Liberty Reserve was “susceptible” to be used by criminals, including for Ponzi schemes. He pleaded guilty in Manhattan federal court on Friday.

“I knew what I did was illegal,” Budovsky, in blue jail clothing, told US District Judge Denise Cote.

Budovsky faces up to 20 years in prison. He is scheduled to be sentenced on 6 May.

Liberty Reserve operated what US prosecutors called one of the world’s most widely used digital currency services, which was used by criminals involved in hacking, child pornography and drug trafficking.

The company was shut down in May 2013 amid US efforts to crack down on the use of digital currencies including bitcoin to evade law enforcement and launder illicit proceeds.

read more: http://www.theguardian.com/us-news/2016/jan/30/digital-currency-firm-co-founder-admits-to-us-money-laundering-charge