Active Thinking Topic 09 - Who Should Pay Tax? Who Does Pay Tax?

Monday 5 July 2021, 6:30 pm - 8:30 pm

Any replies to the organizer - thormay@yahoo.com

Venue: Cafe Brunelli, 187 Rundle St · Adelaide (You must buy a drink or something. We are 'renting' the space for 2 hours)

About Focus Questions: a) Please read them before you come to the meetup. Think about them so you have more than "instant opinions" to offer. b) Feel free to add more focus questions. c) THE FOCUS QUESTIONS ARE JUST A MENU TO CHOOSE FROM. From this menu we can discuss whatever seems interesting. d) Focus questions are not intended to push one viewpoint! You can adopt any position you wish. We actually like friendly disagreement - it can lead to deeper understanding

Focus Questions

1. What do you think you should be taxed on? What kind of tax? How much?
 
2. Should tax be used as a form of social control? (e.g. alcohol, cigarettes, housing, vehicles, pollution, religion, charities & so-called non-profit enterprises, research incentive exemptions etc). Why/why not?

3. Some political parties seek to make taxation less progressive. That is, they want to rich to pay the same percentage of taxation as the poor. GST is such a tax (= flat tax). What are the arguments for and against flat taxation?

4. Hundreds of Australian companies pay no tax, including many of the biggest companies. Many multinational companies (e.g. Google, Apple, mining and oil majors) also pay little or no Australian tax. Why does this situation exist? What can be done about it?

5. Large scale and small scale tax avoidance is a major 'industry' in Australia and every country. How can tax avoidance be minimized? What should be the penalties for tax avoidance?

6. The bigger a country is, the harder it is for citizens to see a connection between the taxes they pay and what the taxes are spent on. What are some ways that this social contract can be made more fair and transparent? How good is the Australian situation in terms of value for (tax) money, compared to other countries?

7. The Australian tax laws and administrative rules run to tens of thousands of pages. They are too complex for ordinary citizens to understand. In fact, nobody entirely understands these laws. Why does this situation exist? What can be done about it?

8.What is a fair share of government revenue to be contributed by personal income tax? .... Australian individual income tax paid in 2019-2020 was 42% of revenues at all levels of government (AUD$231,198,000,000 of AUD$552,033,000,000). Total federal income was $486.3 billion in 2019–20 (24.5 per cent of GDP). https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_
Library/pubs/rp/BudgetReview202021/AustralianGovernmentRevenue  ). In USA income tax contributes about 50% of federal government income.

9.What is a fair share of government revenue to be contributed by company tax? .... Australian tax on enterprises in 2019-2021 was AUD$95,378,000,000 or 17% of all government revenues. Note: The official company tax rate is 30% or 27.5% on businesses with less than $50 million in turnover. In other words, only a bit over half of the supposed tax rate is actually collected. (In 1986 the company tax rate was 49%).

10. Here are other major contributors to Australian government revenue. Is the balance fair? Payroll tax $25,105,000,000 / Property taxes $33,743,000,000 / Goods & Services taxes $142,324,000,000 / Use of Goods & Activities (e.g. vehicles) taxes $22,291,000,000 .

Extra Reading

ABS (2021) "Taxation Revenue, Australia - Statistics about taxation revenue collected by the various levels of government in Australia - Reference period: 2019-20 financial year." Australian Bureau of Statistics @ https://www.abs.gov.au/statistics/economy/government/taxation-revenue-australia/latest-release

Wikipedia (2021) "Taxation in Australia" @ https://en.wikipedia.org/wiki/Taxation_in_Australia

ABC (16 June 2021) "Telstra, AGL, ANZ, Macquarie Group among employers making some workers pay for superannuation rise". ABC @ https://www.abc.net.au/news/2021-06-16/telstra-agl-macquarie-superannuation-guarantee-wages-pay-budget/100216528
Nicholas Shaxson (16 June 2021) "Making sure the ‘big people’ pay their taxes would be a boost to democracy." The Guardian @https://www.theguardian.com/commentisfree/2021/jun/16/taxes-democracy-loopholes-havens-billionaires [Quote: From 2014-2018 the richest 25 Americans, many of them monopolists, saw their wealth surge by more than $400bn, while paying taxes worth just 3.4% of that. Meanwhile, average American wage earners in their 40s saw their wealth rise by $65,000 – and paid $62,000 in tax."]

Richard Denniss (16 June 2021) "Scott Morrison is the accidental architect of a carbon tax – whether he likes it or not". The Guardian @ https://www.theguardian.com/commentisfree/2021/jun/16/scott-morrison-may-be-the-architect-of-a-carbon-tax-whether-he-likes-it-or-not  [ Quote: "Who would have thought that Scott Morrison would be the one to reintroduce a carbon tax? And who would have thought it possible to design a carbon tax on Australian polluters that delivered revenue to the treasuries of other countries? Welcome to the topsy-turvy world of “border tax adjustments” in which other countries get to decide the amount of tax that Australian polluters pay, and the way in which they will pay it".]

David Lawder (May 21, 2021) "Hacker tax: US to target cryptocurrencies - The Biden administration’s tax enforcement proposal would require that cryptocurrency transfers over $US10,000 ($12,860) be reported to the Internal Revenue Service and would more than double the IRS workforce over a decade, the US Treasury said on Thursday". Brisbane Times @ https://www.brisbanetimes.com.au/world/north-america/hacker-tax-us-to-target-cryptocurrencies-expand-irs-workforce-20210521-p57tu1.html

Tax Policy Centre (n.d.) "About 50 percent of (USA) federal revenue comes from individual income taxes, 7 percent from corporate income taxes, and another 36 percent from payroll taxes that fund social insurance programs. The rest comes from a mix of sources" TPS @ https://www.taxpolicycenter.org/briefing-book/what-are-sources-revenue-federal-government

Peter Hartcher (10 November 2017) "Why it has never been more important to tax the rich". Brisbane Times @ https://www.brisbanetimes.com.au/world/north-america/why-it-has-never-been-more-important-to-tax-the-rich-20171110-gzijdb.html

Shane Wright (April 8, 2021) "Global company tax overhaul on track as US presses for minimum rate - The world’s richest nations including Australia are on track to agree by the middle of the year on a new way to tax multinational businesses to halt “unfettered tax competition” that could leave countries struggling to pay for vital infrastructure and services." The Age @ https://www.theage.com.au/politics/federal/global-company-tax-overhaul-on-track-as-us-presses-for-minimum-rate-20210408-p57hgf.html

Peter Hartcher (June 8, 2021) "New deal sets scene for Australia, China to squabble over who gets to tax big miners". Brisbane Times @ https://www.brisbanetimes.com.au/national/new-deal-sets-scene-for-australia-china-to-squabble-over-who-gets-to-tax-big-miners-20210607-p57yq4.html

Paul Wiseman and Marcy Gordon (June 9, 2021) "America’s uber rich pay next to no income tax at all". Brisbane Times @ https://www.brisbanetimes.com.au/world/north-america/america-s-uber-rich-pay-next-to-no-income-tax-at-all-20210609-p57zaw.html
 
Tim Falk (Mar 29, 2021) "Beginner’s guide to cryptocurrency tax in Australia - What you need to know about paying tax on your cryptocurrency in 2020." Finder.com @ https://www.finder.com.au/cryptocurrency-tax-guide

Robert Gottliebsen ( May 17, 2021) "Finally, some tax justice for small business". The Australian @ https://www.theaustralian.com.au/business/economics/finally-some-tax-justice-for-small-business/news-story/b5eb572a3b50edd56f6cc983ed34fbad

Greg Jericho ( 8 June 2021) "Some of Australia’s highest earners pay no tax, and it costs them a fortune". The Guardian @ https://www.theguardian.com/business/grogonomics/2021/jun/08/some-of-australias-highest-earners-pay-no-tax-and-it-costs-them-a-fortune

Paul Sakkal and Patrick Hatch (June 22, 2021) "‘Magnitude was unbelievable’: Crown tax underpayment raised in 2012 - a number of Crown’s directors were “shocked” by revelations the company may have underpaid up to $272 million in gaming tax to Victoria." The Age @ https://www.theage.com.au/business/companies/magnitude-was-unbelievable-crown-tax-underpayment-raised-in-2012-20210622-p5838d.html

Shane Wright (June 18, 2021) "GST deal to leave federal and state budgets deeper in the red - A deal struck by Scott Morrison in 2018 to quell West Australian anger over its share of the GST will deepen the federal budget deficit by at least $7.5 billion and could carve $1 billion from the Victorian and NSW budgets over the longer term". Brisbane Times @ https://www.brisbanetimes.com.au/politics/federal/gst-deal-to-leave-federal-and-state-budgets-deeper-in-the-red-20210616-p581g0.html

Jonathan Stempel and Eva Mathews (June 24, 2021) "Warren Buffett resigns from Gates Foundation, has donated half his fortune". Brisbane Times @ https://www.brisbanetimes.com.au/world/north-america/warren-buffett-resigns-from-gates-foundation-has-donated-half-his-fortune-20210624-p583r5.html [Quote: "He has since 2006 donated more than $US41.5 billion of Berkshire shares, including more than $US32.7 billion to the Gates Foundation. The overall total is now equivalent to about $US100 billion because Berkshire’s stock price has risen. ... "Over many decades I have accumulated an almost incomprehensible sum simply by doing what I love to do,” Buffett said. “Society has a use for my money: I don’t.” ..Buffett said his donations have resulted in only about 40 cents of tax savings per $US1000 given."]

Monica Greig (June 24, 2021) "Cybersecurity software pioneer John McAfee found dead in [a Spanish] jail cell". Brisbane Times @ https://www.brisbanetimes.com.au/world/europe/cybersecurity-software-pioneer-john-mcafee-found-dead-in-jail-cell-report-20210624-p583ri.html  [Quote: "Known for his eccentric behaviour, McAfee, was a pioneer of anti-virus software, introducing his eponymous program in the 1980s. McAfee, who said in 2018 that he had fathered at least 47 children, lived in Belize for several years. .. He had been indicted in Tennessee on tax evasion charges. He also was charged in a cryptocurrency fraud case in New York. .. He said in 2019 that he had not paid US income taxes for eight years for ideological reasons. That year, he left the United States to avoid trial, largely living on a megayacht with his wife, four large dogs, two security guards and seven staff". ]

Maureen Tkacik (24 June 2021) "US billionaires don’t pay tax, and our politicians don’t seem bothered". The Guardian @ https://www.theguardian.com/commentisfree/2021/jun/24/us-billionaires-tax-returns-propublica-plutocracy  [Quote: "the 25 richest billionaires in America added $401bn to their net worths between 2014 and 2018 and paid about 3% of that amount in taxes"]





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Who Should Pay Tax? Who Does Pay Tax? (c) Thor May 2021 

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