Via: http://enpassant.com.au/?p=11511
Want a budget surplus? Looking for billions in savings? Easy. Tax the rich. Cut their subsidies.
The tax system is a disguised spending program, worth, according to Treasury, $113 billion last year. This is equivalent to 30 percent of all Federal Government spending and receives no attention when the Labor and Liberal neoliberals talk about cutting spending.
Attacking the $113 billion in annual tax expenditures – the tax lurks where income isn’t taxed or where extra tax deductions are given – could focus on the largesse to business and raise many tens of billions. Cutting capital gains tax concessions to business alone would raise up to $10 billion.
A wealth tax, gift and inheritance taxes, taxing the profit on the sale of the homes of the super rich – these too could raise billions from the big end of town. Not to mention raising income tax rates on the rich and big business and reducing dividend imputation.
What about abolishing the fossil fuel subsidies to business? An extra $10 billion there.
Now all of these would have consequences. Business would try to raise prices and/or sack staff.
But that could be met with strict price controls on the profit bludgers, mandated job retention and creation and wage policies that reverse the flow of wealth to the rich from the poor and working class. And if there is a threat of a capital strike nationalise the company or industry under workers’ control.
So maybe taxing big business might produce enough money to wipe out the budget deficit, improve our public health, education and transport systems and have enough left over for addressing climate change. So let’s do it.
There goes another porcine parachute.
The reason the neoliberals don’t raise this disguised spending program in the tax system is simple. It is spending on the rich and powerful. It is disguised spending on the one percent.
Treasury estimates are that direct spending through the tax system on business totals about $8 billion. On top of that the capital gains tax concessions give billions each year to business and the rich.
And the superannuation concessions, which overwhelmingly favour the rich, are actually a disguised spending program worth more than the pension.
Why doesn’t Labor tax big business and stop spending tens of billions on the rich through the tax system. Labor?
So here we have a Government and Opposition intending to attack the poor and ordinary workers to save a few billion when a few simple tax measures – like taxing the family homes of the rich, and abolishing the superannuation tax lurks for the millionaires, and getting rid of the tax concessions for capital gains – would raise tens of billions.
Funny, I don’t hear either side of conservative politics actually suggesting attacking the tax rorts for the rich.
Both like to keep these dirty little details of spending on the rich quiet because that is who they rule for.
It gets worse. In a speech in February last year Deputy Commissioner of Taxation Jim Killaly said that 40 percent of big business (those with a turnover greater than $250 million) had paid no income tax in the three income years between 2006 and 2008. He also said twenty percent of those companies were actually making accounting profits.
The global financial crisis is likely to have increased the number of big businesses not paying income tax to perhaps 50 percent or more. The latest ATO statistics show that for 2008/09 60 percent of all business (not just big business) paid no income tax.
Analysis by Adele Ferguson and Stuart Washington in the Sydney Morning Herald showed that most industries actually pay much less than the headline 30 percent company tax rate. For the finance sector for example they found the figure was 20 percent. For mining companies it is between 13 and 17 percent.
In other words almost half of all big business pays no income tax and those that do mostly pay much less than the notional 30 percent headline rate.
What is to be done?
Read more here...
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