The recently released Pandora Papers, a trove of nearly 12 million documents, shines some light on the mechanisms by which the wealthy squirrel away their gains. One example jumps out: Tony Blair. The former British prime minister and his lawyer wife Cherie purchased a multi-million-dollar townhouse in London as her office but did it in such a way as to avoid paying a tax on the sale. In this offshore financial sleight of hand, they skipped out on paying several hundred thousand dollars to the very government over which Blair once presided. The maneuver, which was perfectly legal, is salient for two reasons. First, Blair himself had initially railed against tax dodges of this nature. “Offshore trusts get tax relief while homeowners pay VAT on insurance premiums,” he said as Labor Party leader. “We will create a tax system that is fair which is related to ability to pay.” Second, Blair celebrated a “third way” that was supposedly an accommodation between socialism and capitalism. When it came to global markets, Blair wanted “to remove regulatory burdens and to untie the hands of business,” as he put it in a celebrated 1999 speech.
Australia is one of only a handful of developed countries that does not have a death duty but the economic case for redistributing funds from wealthy estates back into public coffers is growing as inequality rises.
Source: Should a death tax be reintroduced in Australia?
The world is finally recognizing the harms of corporate tax avoidance. But the OECD’s solution to the problem is designed by rich countries, for rich countries. We need an alternative.
Source: The Global Tax System Is Broken. We Can’t Trust Rich Countries to Fix It.
OECD chief Mathias Cormann has brokered a deal for a global minimum corporate tax rate. OECD (CC BY-NC 3.0 IGO) Some of what’s been uncovered in the Pandora Papers is illegal (“evasion”) but much might not be (“avoidance”, aided by anonimity). The effect is the same. Dollars that ought to have been paid in tax are withheld and used for the benefit of people who aren’t keen to admit to owning them.
Source: The Pandora Papers show the line between tax avoidance and tax evasion has become so blurred we need to act against both
ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits. Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.
Source: The Secret IRS Files: Trove Of Never-Before-Seen Records Reveal How The Wealthiest Avoid Income Tax | HuffPost
Hardly a radical recommendation
LONDON (AP) — The Group of Seven wealthy democracies agreed Saturday to support a global minimum corporate tax rate of at least 15% in order to deter multinational companies from avoiding taxes by stashing profits in low-rate countries.
Source: G-7 Nations Sign Pact To Make Corporations Pay Fairer Taxes | HuffPost
Diesel vehicles produce particulate which is hazardous to health when significant quantities have been ingested. They and petrol vehicles both produce carbon monoxide and other environmental nasties. It is rational to introduce price signals to modify behaviour that is injurious to health and welfare and governments have done this for decades. So why the proposal to tax something that is environmentally better than the alternative, such as energy efficient electric/hybrid vehicles? Since the justification is apparently that all vehicles should be treated equally to fund repairs, maintenance and new road construction, why doesn’t the transport industry ‘pay its way’ when its competition, the railway system, is forced to. Sounds like vested interests – doesn’t it? What do you think?
Source: Cigarettes, whiskey and electric cars – » The Australian Independent Media Network
Netflix Australia has produced a brilliant fantasy. Suspend disbelief now! Netflix claims it made a loss in Australia last year, in the year of Covid when we were locked down watching too much Netflix. You can watch this latest Netflix fantasy for just $41, the price of its financial statements from the corporate regulator ASIC. What’s the scam? Netflix’s 2020 fantasy accounts show revenue in Australia of just $20.5m. If you assume their 12m subscribers here pay a basic rate of $10 a month, that’s $1.4bn in revenue. So what happened to this $1.4bn? Netflix and its co-conspirator EY are “doing a Google”, that is, the caper Google used to rely on to pay zero tax before it was forced to resort to another scam. They just book their income here to an associate offshore and the minuscule amount of income they book here is “service” fees from Netflix in the Netherlands and the US. Tax seeped in at just $581k. They claim they actually turned cashflow negative in the year of Covid.
Source: Netflix: What’s the Scam? – Michael West
How incompetant is the ATO ?
The tax paid by superannuation funds on their earnings is often less than 10%, much lower than the headline rate of 15%, according to research by the University of Technology Sydney. And in an industry worth $2.7 trillion, this means a huge difference in the tax take for government. Callum Foote reports.
via Australia’s super funds pay up to 33% less tax than advertised
Meanwhile Trump authorised Treasury to stop the $1,200 cheques sent to those that owe the government any money. (ODT)
Canada has become the latest country to refuse pandemic bailout money for tax dodgers. Prime Minister Justin Trudeau joins leaders of Denmark, Poland and France in axing financial aid to corporations registered in offshore tax havens. Noel Turnbull reports.
Should tax dodgers get taxpayer-funded COVID-19 bailout? – Michael West
The Coalition’s philosophy is about restraining tax as a share of the economy, even if that means it will need to shrink government spending as a share of GDP (in ways that are not yet unexplained).
Labor is signalling that it is more comfortable with the tax share creeping up — mostly thanks to increased contributions from high income earners — but it will make sure lower income earners don’t end up worse off.
Who says elections aren’t a contest of ideas?
Your income tax questions answered in three easy charts: Labor and Coalition proposals side by side
This is a classic example of how to lie with statistics. It’s shameless but effective propaganda, which is why the people with the most to gain from it pay propagandists to spread it widely. Anyone pushing this is trying to fool you, and you should ignore anything they say on any subject.
This means the rich pay a far lower payroll tax rate than regular people. A nurse making a salary of $50,000 per year pays (counting both the employee and employer side) 12.4 percent in OASDI taxes (for Social Security and disability insurance). But a sitcom star making a thousand times that, or $50 million a year, will pay the 12.4 percent only on the initial $130,000 of their salary, working out to a total OASDI tax rate of just 0.03 percent on their $50 million. And because OASDI taxes are only levied on earned income — meaning, money you make from a job — a billionaire investor with a $50 million annual income from dividends and capital gains will pay exactly zero percent in OASDI taxes. (Keep Reading)
via Don’t Fall for the Right’s Favorite Lie About Taxes
Mnuchin is not yet complying with the Democrats’ request for Trump’s tax return partially because he does not see “the legitimacy of the asserted legislative purpose.”
The history of the provision shows, however, that Congress enacted this measure to enable investigations into private individuals and the highest-ranking government officials to ensure that they are not getting favorable treatment or evading their taxes.
Maryanne Trump Barry, the president’s sister, resigned her seat as a federal appeals court judge on Thursday to avoid an investigation into her ― and her brother’s ― alleged tax fraud.
via How A Spat Between Two Rich People Gave Congress The Power To Get Trump’s Tax Returns | HuffPost Australia
We need to set this anti-tax nonsense aside. Tax is how government pays for itself. Indeed, it is necessary to fund all the crap that conservatives love. On a wider scale, tax is citizens contributing financially to their society. This in turn pays for the government services those citizens enjoy. This is Rousseau’s social contract. In the modern world, this means that everyone contributes to the cost of, and enjoys, health, education, infrastructure, transportation and other essential services. But that’s communism according to conservatives. My response to that is if you hate socialism so much, resign from office immediately and claim not one penny of that big, fat pension. As I have said previously, conservatives do not hate socialism per se, they hate certain recipients.
The anti-tax propaganda needs to go and we need to, as the line goes, be a society, not just an economy.
via Tax Cuts: The Great Conservative Scam – » The Australian Independent Media Network
the system is designed by the lackeys of those who have an interest as a class in not paying tax, or in paying as little as possible. The argument that companies “pay all the tax as legally required” fails to address the question of why the tax system is rigged in their favour.
Speaking of political influence, it is interesting to note that some of the big contributors to the political coffers of the Coalition are also companies which pay no tax.
As Gareth Hutchens and Nick Evershed reported in The Guardian:
… the Greens have pointed out at least eight of the largest companies paid more money in donations to the Labor and Liberal and National parties in 2016-17 than they paid in corporate tax that year.
Chevron paid $82,228 in political donations in 2016-17, Origin Energy $103,574, Woodside Petroleum $279,000, Whitehaven Coal $30,000, and Santos $102,516, but none of them paid corporate tax that year.
Even when they are making a loss (either because of market conditions or tax avoidance or other circumstances) should big business not be paying a contribution, such as an operating fee or licence perhaps to the rest of us? This could be based on their gross income for the privilege of carrying on business here, and using the infrastructure, educated workforce and other benefits paid for by our taxes.
They do elsewhere (ODT)
via Big business: Legally avoiding tax the Australian way
About one-third of large companies have failed to pay tax, even though they made a gross profit, but the Tax Office says most have good reasons, according to the latest corporate tax transparency report released today.
Of the 2,109 entities monitored by the ATO in data covering 2016-17, 66 per cent paid tax although the remainder did not as they claimed tax losses and concessions that can go back several years.
via One-third of large Australian companies paid no tax, ATO data show – Politics – ABC News (Australian Broadcasting Corporation)
Wealth inequality is even greater than income inequality and is on the rise, says new report
via Use inheritance tax to tackle inequality of wealth, says OECD | Inequality | The Guardian
Let’s start at the beginning. We knew the Liberals, in concert with their media arm, the Murdoch press, would launch a propaganda scare campaign against Labor’s very sensible, fiscally responsible, wealth-inequality battling policy to no longer give self-funded retirees cash they don’t need. How did we know? Because that’s what the Liberals and their media arm, the Murdoch press, exist to do. The sky is falling. Everyone is ruined. The economy will rise up like an angry god and smite us all for hurting those who have bestowed trickle-down wealth upon us. And so on and so forth.
I must admit, it’s a sad turn of events that the likes of Leigh Sales on ABC’s 730 is also playing this game, seeking out Lyle-we need those dividends to live-Essery, to show their sad sad faces on TV, to tell Labor how naughty and mean they are for hurting Jean and Lyle, who did nothing to deserve this. But that’s the thing. Jean and Lyle did do nothing to deserve this magical cash-back bribe from Howard and Costello, other than possibly considering voting for Pauline Hanson, and no one should be rewarded for that dirty idea.
via We need to talk about Jean – » The Australian Independent Media Network
The tax treatment of earnings generated from owning shares is complicated. Because it is complicated most people think it is boring. Because it’s boring we don’t discuss it much. However Australia’s dividend imputation system is important, unique to the world and comes with approximately a $30 billion dollar a year price tag. So whatever you think about Bill Shorten and Chris Bowen’s announcement it is a good thing they have got us talking about one of the least understood aspects of tax policy in Australia.
The complexity of the Australian tax system hides many sins, one of the most inequitable of which is the fact that some of Australia’s wealthiest citizens pay negative tax. The ATO actually hands other people’s money to some of the wealthiest people in the country. Indeed, while Centrelink chases some of our poorest citizens for seven-year-old debt, one lucky non-taxpayer actually received $2.5 million in “tax credits” in a single year.
via How some of the wealthiest Australians pay ‘negative’ tax
This is not what Malcolm Turnbull is saying in Australia. To complain according to Finance Minister Corman is just “Envy Politics” that Corporations and the rich are getting richer. (OD)
While corporations are enjoying a permanent tax cut which has mainly benefited their shareholders, small businesses also say the law has done little to even the playing field
Just a few months after President Donald Trump’s tax reform passed, small businesses are pushing back against Republican claims that the law will bolster their ability to hire new employees and give out raises to workers—as corporations reap the vast majority of the benefits of the legislation.
Large corporations made clear even before the plan was passed in December that they would use the $1.3 trillion they expect to save as a result of the law to line the pockets of their shareholders—not invest in their employees and new hires as Republicans claimed. Now, small businesses are saying that their workers aren’t benefiting much from the tax law either.
The advocacy group Businesses for Responsible Tax Reform polled entrepreneurs in Maine, Arizona, Tennessee, and Nevada and found that seven in 10 had no plans to hire new employees as a result of the tax plan, while 60 percent said their workers would not be given raises.
More than half of the owners said the law favored large businesses over small ones and did nothing to put smaller companies on a level playing field with big corporations.
via Further Debunking GOP Claims, Small Businesses Say Tax Bill Won’t Bring Benefits to Workers
The Koch Brothers alone will spend $20 million on ads selling the tax bill. This is a drop in the bucket compared to the $1.4 billion they stand to gain every year in tax breaks. It’s also a tiny fraction of their overall campaign spending on the 2018 midterms elections, which is projected to reach $400 million.
The Kochs have their work cut out for them. A new poll from Politico shows most workers report seeing no increase in their take home pay after the new tax laws took effect.
This is important.
The whole premise behind adding $1.5 trillion to the debt, giving massive handouts to the ultra-wealthy, and giving a tax break to the nation’s most profitable corporations was that working folks would also get a bit of cash.
Turns out, they’re not seeing that money. But the PR push is having an impact.
via As workers notice no Raise, the Tax Scam Is Starting to Sink In | Informed Comment
CityLink toll road operator Transurban paid no company tax to the Australian government for three years despite revenues of nearly $6 billion.
via Almost $6 billion revenue, but CityLink operators pay no company tax
But how much tax revenue is bleeding? The answer is, almost exactly the same quantum as the $30-40 billion annual deficit.
via Austerity, deficits and the tax the Coalition won’t collect
The free tax ride for religious institutions in Australia is about 400 years past its use by date, argues Brian Morris. In 1587, Dr John Bridges coined the phrase “A fool and his money are soon parted”. Just 14 years later Queen Elizabeth the First issued her 1601 Statute on Charities making “the advancement ofMore
Source: Money And Religion: The Greeks Got It Right. They Tax The Church. – New Matilda
The Turnbull Government’s $4 billion raid on tax-dodging multinationals appears to amount to little more than the natural dividend of hiring extra staff to the depleted ranks of the Australian Tax Office, according to tax transparency campaigners and Labor.
Source: Multinational tax crackdown in budget shows cuts to ATO cost millions, says Labor
John Passant examines negative gearing and the sectors that continue to benefit from this and other tax concessions favoured by the Turnbull Government.
Source: The tax concessions Turnbull won’t abolish all overwhelmingly favour the top 10%
The measure, once pushed by the White House, will today be backed by the Greens. They argue the funds raised could be used to help reverse cuts to health and education. Max Chalmers reports. The Greens are set to become the first significantly sized Australian political party to support the implementation of the ‘Buffett Rule’, aMore
Source: Greens Target High Income Earners With ‘Buffett Rule’ To Return Billions To Budget – New Matilda
Whether it’s pressuring Telstra over same-sex marriage or receiving tax breaks, organised religion has enjoyed a fair amount of power. Polling suggests that could be about to change.
Source: The Church and its weakening grip over Telstra and taxes – The Drum (Australian Broadcasting Corporation)
Wilson Parking seems to be burdened by uncannily high costs.
Source: Wilson Parking’s tax numbers appear to defy economic reality
Income tax for the states. Really? Yes, really. That’s the plan Prime Minister Malcolm Turnbull is putting to the states and territories at the Council of Australian Governments meeting tomorrow in Canberra. The Coalition has been looking ragged for much of 2016, after walking back from tax reform in the shape of a higher goodsMore
Source: Trainwreck Tax Plan: The Wheels Are Falling Off Turnbull’s Government – New Matilda
Four Corners reporter Marian Willkinson reveals how hard it was to get through the front door of law firm Mossack Fonseca — the parallel world of tax havens.
Source: Panama Papers: Mossack Fonseca leak takes Four Corners on a taxing journey into a parallel universe – ABC News (Australian Broadcasting Corporation)
Face reality: we can’t vote for better schools and hospitals in state elections and lowers taxes in federal elections and expect to get both.
Source: Why the states should charge income tax
Paying tax has become optional for 56 of Australia’s highest earners. Newly-released tax statistics show each of the 56 paid next to no income tax in 2013–14, not even the Medicare Levy, even though each more than $1 million.
Source: Meet the 56 millionaires who pay next to no income tax
Multinational corporations are taking advantage of global tax treaties to avoid paying their fair share, thereby fueling poverty around the world, according to a groundbreaking report released this week.
Source: Rip-Off Tax Treaties ‘Making the World More Unequal’ | Common Dreams | Breaking News & Views for the Progressive Community
Many of us would welcome bracket creep if it meant actually getting a pay rise.
Source: Bracket creep is code for cutting high-end taxes
There must be a debate about the ethics of tax avoidance and evasion. Board members who approve this behaviour should be forced to answer for it
Source: Wayne Swan: Tax avoidance impoverishes us all. Fighting it requires challenging the powerful | Opinion | The Guardian
The tax booby trap left behind by Labor’s former assistant treasurer David Bradbury was designed to blow up in the face of the Coalition in 2015.
Source: Tax disclosure exemptions for Australia’s richest preserved in 11th-hour deal
Large private companies face having to disclose how much tax they pay after the Senate overturned a controversial shield law passed by the Turnbull government less than a month ago.
Source: Senate repeals tax secrecy law after ‘astroturf’ revelations