Here is an interesting link about a transaction tax, aimed at the big end of town banking.

http://robinhoodtax.org.au/how-it-works/

A similar tax, of say 2% could be introduced here on every single, every day transaction..

It is suggested we could abolish EVERY OTHER FORM OF TAX.

So viewing the article suggested we could have different levels of TT for different transaction.

Surely it's worth considering.

Short on detail. The rich don't get that way by paying tax.
Anti conservative.
The one % are convulsing.
Barter system would flourish.

Why don't we at least trial a transaction tax?

Rechtub, you answered your own question with your first statement:

<< … a transaction tax, aimed at the big end of town banking. >>

Yes, it is aimed at the big end of town. You know – that mob that the government is in bed with!

THAT will indeed be the big and probably insurmountable stumbling block to giving this thing a trial run.

Hey I agree that it is a damn good idea. I said so some years ago on OLO when Pauline Hanson’s One Nation Party was espousing it.

According to Barnaby Joyce our banks are exposed to $ 15 trillion worth of derivatives.Just a small tax on their scams will reduce our taxes enormously.

No political party will do it.That's why we need a new one.

Lets tax stupidity - there will be more than enough to go around!

i agree with your headline
why not indeed..we lead the world [lol]..
in taxing smokers and pensioners..via green compulsory taxation[half my bill is service acces charges..and other govt revenue raising..then 10%gst on top..!

yet here..the world is frightend
but that little test tax..on money..!*!..>>not work..
would really be..frontrunning..for once..

but..they with money
can afford to fight back..!*!
unlike smokers and govt service users.

the lack of front/running..reveals the lie..or the ju-liars/liar-lawyer$$

who knows
it just might bring the HIGH*..dollar down,...as well as provide a HUGE..!..*REVENUE stream

karma demands it.!*!

[either that
or re-deflate true value back into coin.[you cant keep bleeding the poor..

tax those who gain the advantage..who get the benifit..
let users/or more specificlly..ABUSERS pay the extra*

also how come capitalist/bwanker$'s..can leverage money 33 fold?
yet govts cant..!*!

>>[something rotten..when our cash
in a capitalist bank can be fractionally reserved 33 times..yet our tax dollars cannot!

govt paying bankers,..LOL>>..lending from bankers
its just insane..tax the money..flat rate..

front*run..for real!*!*!
for once.

..ya mob of liars.
lawyers serving criminals
60%..of our govt are/were lawyers..defending the rich but guilty..

bailing them*out..by taxing us to death..then fractional reserving the banked cash 33 times..

thus/lending the govt the bailout..lol..AT intrest

its insane
fractional reserve our taxes..not our savings!*!

tax it as its spent..where its paid..
not where the tax write off avoids them paying it.

fractional reserve our taxes..not our savings!*!
why can we bank..intrest free for fee..with big moneycapital c-=ists..

that they leverage into cash flow
yet our own govt cant leverage iour taxes one cent
its just too insane for words..but the rich got lawyers..making laws

sepperating us from our only power
lawyer making laws..making capitalists rich off our leveraged savings
to repay via non leveragable taxes[i told rudd to do it..he got sacked we got the liar

but how come banks can do
what our govt cant do?

so its time for a level of lawyersw..to back the people
test id the capitalist runns ..or needs be attracted..all we can loose id a few pennies off our exchange rate

this will make jobs
tax it as its spent..where its paid..
not where the tax write off avoids them paying it.

and those using minimum..get all basic services for free
[call it a base divident..[the 10 %..LEAST ABUSING of govt services must get some free dividend..from govt..just as govt must leverage..our tax

just as we must front run..tax transactions
cancell all personal tax..under 40,000..[want to win win..or loose big time?

or restore true traditional value back into coin
no tax on coin...

if coin is a lie..
what is fractional reserving capital..
yet not the peons paying compulsorry as we go..tax.

tax all income exchanges
wage isnt income...bonus is.

It is the easiest way to collect tax, now that almost all transactions are electronic/computerised.
There's also no way to evade/avoid it, if you make domestic transactions compulsory (no offshore banking).

Problem is you can't "trial" it.
You need to abolish other taxes simultaneously.

We were led to believe GST would replace virtually every other tax, only to find it just tacked on to the existing system, with the major taxes (income, company, property, capital gains, fuel, tobacco) staying put.

A transaction tax that replaced *all* other taxes is something most people would probably support.
But like me, they fear it will just be an additional tax, rather than a replacement.

<<It is the easiest way to collect tax, now that almost all transactions are electronic/computerised.>>

Now they are, but this will no longer be the case!

<<There's also no way to evade/avoid it, if you make domestic transactions compulsory (no offshore banking).>>

You mean criminalising holding bank accounts in other countries and travelling with foreign cash?

Trying to hit the big end of town, speculation, hedge funds, shares and all that nonsense, all you get is hitting ordinary people, making the operation and accounting of everyday/saving bank accounts prohibitively complex for ordinary moms and dads.

Leaving aside the anti-business rhetoric for a moment...

>>Yes, it is aimed at the big end of town. You know – that mob that the government is in bed with! THAT will indeed be the big and probably insurmountable stumbling block to giving this thing a trial run<<

- thank you Ludwig - the only reason a transaction tax has not been implemented yet, is that no-one has worked out the detail.

There is no doubt that our tax system needs reform. I read over the weekend that out of the 150-or-so taxes in place in Australia, just ten provide 90% of revenue. A tax as simple as a transaction tax - which at base, is just a more sophisticated GST - would be phenomenally attractive to all.

Big business included. In fact, every business, large or small. The amount of time, money and energy that is wasted by businesses in keeping right with the taxman is absurd, in a modern, technologically adept society. It is a drain not only on productivity, but also on initiative and ingenuity.

So, such a scheme would undoubtedly be attractive to everypone

Oh, except the public servants, whose livelihood is depends on the creation, implementation, monitoring, adjusting, and enforcement of those those 150-plus taxes. I have no doubt whatsoever that their advice on a simplified tax system will be very much along the lines of Sir Humphrey Appleby's to Jim Hacker... "a very brave policy, if I may say so Prime Minister".

The Robin Hood Tax, as its name implies, is far more of a socio-political statement than a genuine attempt to propose a solution. As the article rehctub links to admits, they have no idea how to implement it, or how much it would raise, or whether it would even have the desired effect on behaviour.

Someone will crack the detail sooner or later. But be assured that when they do, there will be such weeping and wailing from the army of over-superannuated public servants dependent upon the status quo, you'd think it involved sacrificing your firstborn.

In my view it should be introduce, in a very small way, as a levy.

Let's say a 0.02% tax on all bank transactions.

After all, they (labor) had no problem introducing the alcopop tax, so why not this one.

Sure, it may cause some short term pain, but if it actually works, and can, at just 2% replace every other tax we have, surely it's worth a try.

I have little doubt most people go use another $209-300 a week in their kitty.

No more tax returns for the average wage earner and an extra say ten grand a year to spend.

As for low margin ventures, like the finance/shares sector, sure, have a much smaller tax.

But, every single dollar in this country, whether spent here, or hidden overseas, touches an account here at some point.

So there would literally be, nowhere to hide!

Don't forget, we've been here before.

>>In my view it should be introduce, in a very small way, as a levy. Let's say a 0.02% tax on all bank transactions.<<

For ten years we had FID and BADT. 0.06% on deposits, and from 15% to a fixed couple of bucks on withdrawals. A poorly conceived and badly implemented tax that created a lot of work for Banks, who of course passed it straight on to customers in the form of fees - over and above the tax, of course.

And Shockadelic's argument that "it is the easiest way to collect tax, now that almost all transactions are electronic/computerised" fails the real-world test too. One of the problems with FID/BADT was that no-one really understood how it was calculated. In fact, when it came to light in 2005 that the NAB had over-charged 140,000 accounts a total of $10 million over a period of twenty years... it turned out that none of the customers had actually noticed.

Both FID and BADT brought in a fair wodge of money, but they lacked a sound rationale. It just sounded like a good thing at the time.

Yuyutsu “You mean criminalising holding bank accounts in other countries and travelling with foreign cash?”

You can't spend foreign cash in Australia. You must convert it and the converters then need to re-convert this cash back to Australian dollars, and when they do wouldn't they be paid electronically?
Foreign cash conversion is not a very significant part of the economy anyway.

Criminalising holding foreign bank accounts?
I mean not being able to make *domestic* economic transactions through foreign accounts.
If your foreign accounts exist in regard to foreign income, no problem.
(e.g. Olivia Newton-John earns royalties and concert income in Australia, America, Britain, etc.
Only her Australian income is relevant for this tax, so she'd have to conduct all her Australian economic activity through a domestic account. Her American and British income is irrelevant.)

If you don't make local transactions compulsory, *every* big business (the prime source of revenue) would conduct all their affairs through foreign accounts and pay *no* tax.

I don't see how a simple percentage tax would be “prohibitively complex” for anyone (especially compared with the existing requirements, especially for small business owners) or Pericles, why anyone wouldn't “really understood how it was calculated”.

The examples Pericles gave was of multiple taxes at differing rates.
Hardly comparable to a single tax at a fixed rate, is it?

rehctub, one way I suppose you could do this, is to incrementally replace one tax after another, gradually increasing the rate from a very low initial rate.
Tell the public, we're introducing this tax to eventually replace all taxes, but we want to see what the returns are first, by trialling just one replacement (to evaluate the comparable rates/revenue collected).
So first, tobacco tax goes.
Once you know the comparable rates-to-revenue required, you raise or lower the rate as needed, then you replace fuel tax (using the same expected rate-returns formula), then something else, and so on.

There's no task quite so complex, Shockadelic, as making something simple.

>>I don't see how a simple percentage tax would be “prohibitively complex” for anyone<<

On the surface, of course, you are absolutely correct. A single rate for "transactions" is a no-brainer.

Now all you need to do is to define a "transaction".

Let's assume for a moment that the principal target of this tax is those wicked financial institutions, as rehctub's article, um, articulates:

"...a tiny tax on financial speculation by investment banks, hedge funds and other finance institutions that would raise billions to tackle poverty and climate change, in Australia and overseas"

(We all know, don't we, that "poverty" and "climate change" wouldn't see a red cent of the new tax - but leaving that aside for the moment.)

The first level of "simplicity" would be to determine which transactions you tax at 0.005% (I'm quoting the article here) and which do you tax at some other figure, that enables you to "average 0.05 per cent" (another direct quote). That in itself is not going to be easy.

Of course, since the tax is on "financial speculation", we also need to work out what that covers. Would it include, for example, the selling of one block of shares and the purchase of another? Or the purchase of a hedging instrument, to limit downside exposure?

Almost certainly, right? And that's ok, because we don't do that stuff, do we.

But we are still heavily involved. Just consider the impact on our superannuation, in which Australians have so far collectively invested $1.4 trillion. Would the tax encourage fund managers to linger too long in a poor investment? Or discourage them from moving to more attractive alternative investments? Or will they just charge you more in fees, to make up the difference?

Don't forget, the intention of this tax is to "raise billions to tackle poverty and climate change", presumably in amounts in excess of those presently allocated.

Make absolutely no mistake. Whatever form a "simple" transaction tax takes, we, the consumers, the general public, are going to pay for it.

Dear Shockadelic,

<<You can't spend foreign cash in Australia.>>

What stops you?

Currently there is no special reason to do so, but with this new tax more people will transact with cash in general and foreign cash in particular (especially if due to increased demand there won't be enough Australian notes to go around). People will even start asking to receive their wages in cash, Australian or otherwise, or in silver/gold. There is no need even to convert it, just to look up the official rates on the internet.

<<I mean not being able to make *domestic* economic transactions through foreign accounts.
If your foreign accounts exist in regard to foreign income, no problem.>>

Great, so exporters will never repatriate their income, they will just use foreign visa cards and paypal accounts to order overseas goods by mail, enjoy their money when they travel overseas, take some back in cash and when they buy things in Australia or need to pay their employees, they will transfer the price/wages directly to the seller's/employee's overseas bank account.

<<I don't see how a simple percentage tax would be “prohibitively complex” for anyone>>

For simple, ordinary poor people it will be extremely frustrating to ear-mark money in the bank for different purposes and between family members. Those cents taken off whenever moving money between one's own accounts or of family members will create a mess. Then when money is transacted, lent and returned between friends and family, or paid for small services, endless fights will ensue about the correct sum and who is liable for the missing cents. Mis-calculation of those cents will often cause a 3-cent overdraft, which would either incur serious bank charges or cause failures to pay a bill.

Pericles Now all you need to do is to define a "transaction".

The transfer of currency between accounts.
Need a definition of “account”? Pur-lease!
How about the definitions already stated in tax and banking laws? OMG!

“which transactions you tax at 0.005% (I'm quoting the article here) and which do you tax at some other figure”

I wouldn't support that anyway. One tax only, one rate only.
And I'd prefer to rip the whole band aid off, rather than the piecemeal gradualism I mentioned before (that was a suggestion, but not a recommendation).

“Would it include, for example, the selling of one block of shares and the purchase of another? Or the purchase of a hedging instrument, to limit downside exposure?”

If that involved the transfer of currency between accounts, yes.

“Would the tax encourage fund managers to linger too long in a poor investment?”

Don't they do that already? Buy and hold, buy and hold, buy and hold.

“Don't forget, the intention of this tax is to "raise billions to tackle poverty and climate change”

Um, no. It's intention is to simplify the tax system. As far as I, and most single tax advocates, are concerned.

“we, the consumers, the general public, are going to pay for it.”

And this differs from the current reality how?
You don't think all the taxes businesses pay aren't included in the shelf price?

Yuyutsu “Me:<<You can't spend foreign cash in Australia.>>

Y: “What stops you?”

Ever heard of *legal* tender? There may be no official prohibition, but just try it and see how far you get.
“Yes, Jenny, the know the milk is $1.95 in Australian dollars, but I just checked the exchange rate for Thai baht and....”

“more people will transact with cash in general”

And they will *withdraw* it from an account?
The business will *deposit* most of it in a bank?
Or will the local supermarket keep it's daily takings of $17,000 cash in the loading dock?

“and foreign cash in particular”

Not if it's explicitly prohibited in law, and it will be.

“exporters will never repatriate their income”

No the seller is *domestic*, so any income they receive is “domestic” and would need to be paid into an Australian account.

“when they buy things in Australia or need to pay their employees”

They would need to withdraw or deposit using only domestic accounts.

“Those cents taken off whenever moving money between one's own accounts or of family members will create a mess”
“Mis-calculation of those cents will often cause a 3-cent overdraft”

If the tax is calculated *prior* to transaction approval, the tax amount will already be calculated and not available for use.
If you try to transfer more than “amount + tax” the transaction will be denied.
The tax owed will not show in your available balance. No confusion at all.

Your family's banking affairs are your own decision.
If you trust each other, you could do all your transactions through *one* account if you wish. Why don't you trust them?
If you want independence from your family, there is a price to pay for that.

“endless fights will ensue about the correct sum and who is liable for the missing cents”

Only if your family and friends are stupid and forget they get taxed for every transaction.
Stop making so many damn transactions *between* accounts!

No need to get your knickers in a twist, Shockadelic.

>>The transfer of currency between accounts.
Need a definition of “account”? Pur-lease!
How about the definitions already stated in tax and banking laws? OMG!<<

It would seem that you do not agree with the Robin Hood Tax that rehctub used as his example.

Fair enough. But you haven't been particularly forthcoming with an alternative - except, of course, that it is to be a single rate. For all transactions. Whatever their size. So long as it is "between accounts". In Australia.

And you also are aware of the most important part...

>>You don't think all the taxes businesses pay aren't included in the shelf price?<<

Businesses don't pay taxes. We do.

So given that any tax will be passed on to us all via our consumption, would it be fair to say that any change in the taxation system will affect us all, in direct proportion to the volume of goods and services we consume. If that isn't your contention. I'd be interested to hear how else it would work.

But what none of the commentators has even attempted to work out is how quickly behaviours would change as a result of the new regime. Nor have any of the promoters, who run for cover under a shower of platitudes each time they mention the topic.

Since every transaction in Australia would be taxed at a percentage of its face value, it would make sense for the Banks to simply outsource their high-value transactions overseas. There would be no shortage of offers, all pitched slightly lower than the going tax rate. Because that's what businesses do.

Any thoughts on how you might solve that one, Shockadelic?

rehctub didn't specifically say he supported the Robin Hood tax, only a “transaction tax” “...on every single, every day transaction...we could abolish EVERY OTHER FORM OF TAX.”

The article actually proposes taxing only “financial” transactions (which confusingly only means currency and stock trading. Aren't all deposits and withdrawals “financial transactions”?)

“computerisation of transactions has turned the logistics of collecting the tax from being quite complicated to very straightforward”

Yet absurdly the proponent doesn't want to use this easy method to tax *all* transactions and replace *all* other taxes.
Why the hell not?!

No Mr Hood will only tax “financial” transactions and it'll just be an “additional source of revenue” (i.e. Just *another* tax, not a replacement).

This is just another one of those Eat-The-Rich-Quick schemes promoted by envious didn't-think-hard-enough Communist losers.

Want to tax the rich? Well this tax *won't* tax the purchase of their mansions, their fur coats, their Tiffany tiaras, their Rolls Royces, their Karl Lagerfeld suits, their liposuction or their private jet, so the rich are going to still have a sweet old time, baby.

A tax on *all* domestic transactions (deposits and withdrawals) would tax all these things *and* stock exchange trades as well, since trading must be done using a BANK ACCOUNT!

“Businesses don't pay taxes. We do.”

Are you living in a parallel universe?
Company tax, payroll tax, business income tax (in the owners' personal tax returns), capital gains tax, excise taxes, customs duties, fringe benefits tax, stamp duties, property rates.
You could also consider compulsory superannuation a “tax”.

Yes, these costs are usually passed on to the consumer in the price we pay, but the taxes are *paid by the business*.
Businesses also must do all the paperwork and payments regarding GST (even though “we” pay it).

“would it be fair to say that any change in the taxation system will affect us all, in direct proportion to the volume of goods and services we consume”

Yes.

“it would make sense for the Banks to simply outsource their high-value transactions overseas”

And I said that would have to be made illegal. Solved.

Dear Shockadelic,

<<“and foreign cash in particular”
Not if it's explicitly prohibited in law, and it will be.>>

So that's what I asked in the first place: Are you going to introduce prohibitions, left right and center - I thought the answer was in the negative, but I was wrong.

Yes, people will go for cash. If people have legal access to unlimited Australian cash, then they will use it (including in supermarkets, which will start using cash to pay their employees and suppliers). If government refuses to print more cash due to increased demand, then cash will become more precious and have more buying power, while electronic money will depreciate: it will either buy less, or will be refused altogether by shop-keepers.

So now the government will have to ban cash, so people will turn to barter and/or use personal IOU's, even bank cheques that will never actually be turned to a bank (soon there won't be any banks left anyway), but passed from hand to hand. Of course gold/silver/metals will have to be banned too. Mines will be fenced and miners searched as they leave, those mining in open fields will be shot and you will need a certificate from the marriage-registrar to allow you to buy a wedding-ring... I suppose that fake-marriages will abound... and so will all sorts of unofficial micro-banks, and as bank-safes will be banned as well, there will be a flourish of personal safes and people who charge others for keeping valuables in their safes and guarding it.

As the government cracks down on personal promissory-notes, shelves will become empty and trade will occur beneath the floor-boards.

Eventually, barter too will be made illegal, then when people will just share freely and give each other what they need, love will also be banned: the tax-office will say: "We know you received a kiss last Wednesday - you can't fool us that you haven't paid for it..."

So this is the country you want to live in? Myself and many others will leave it while we still can!

Yuyutsu, what have you been smoking?
What's with the hysterical overreaction?

Who's going to use foreign cash?
Every time you exchange, you are charged a FEE.
That fee would be more expensive than the tax!

"Are you going to introduce prohibitions, left right and center"

No, just centre.

If you are going to have a tax system *entirely* reliant on one and only one tax, then yes, there would have to be some legal changes to make sure loopholes are closed.
But not the ridiculous extremes you dreamed up.

People could use only cash now but are reluctant to store large amounts of it for security reasons.

If businesses routinely kept thousands in cash *on their premises*, the armed robbery rate would skyrocket.
Losses from robberies would be far more detrimental than a fractional-percentage tax!
If you get robbed, you lose 100%!

People currently use less cash and more electronic, for convenience and security.
A tiny tax is not going to change behaviour much.

To minimise avoidance, you could specify in law that all salaries/wages must be paid electronically (most already do this for convenience), and all transactions over a certain amount (e.g. $500).

If you are found to break the new law, the fine would be much worse than a fractional-percentage tax, so again it's just not worth it!

People can barter right now. How many do?

Hopefully a future government will ban ludicrously hysterical straw man arguments.
Or at least offer free shock treatment for the lunatics writing them.

Dear Shockadelic,

<<A tiny tax is not going to change behaviour much.>>

A tiny tax is not going to fill the government's coffers. Unless it is substantial and painful, it's just going to be one more hassle among many.

<<To minimise avoidance, you could specify in law that all salaries/wages must be paid electronically (most already do this for convenience), and all transactions over a certain amount (e.g. $500).>>

I don't do it for avoidance (the few times I received income in cash I reported it on my tax-return), I already pay most of my purchases/services in cash, that is whenever I am present in person at the shop rather than buy something over the internet. I always for example bought my cars in cash. I rather not leave an electronic trail of information behind me, linking me with what I bought. I suppose you also want to turn those whose religion forbids them to use electronic devices into criminals?

So what you suggest amounts to forcing surveillance plus something like the Indian salt-tax, requiring people to purchase something (banking) which they do not require, a collusion between government and banks.

Beyond all, this proposed tax is most unfair, it's completely arbitrary, it distorts free markets in an irrational way of having everyone trying to minimise transactions rather than considering the deal itself. Why should one, for example, pay 5 times more on the capital of their savings if they deposit it in 5 consecutive 1-year term deposits instead of one 5-year deposit? Why should one pay tax on their savings because their bank closed the branch nearby, gave them a poor service or behaved unethically so they had to move to another bank?

Comparatively, income tax is the fairest and most logical.
(yes, certain aspects of income-tax need to be simplified: introducing a flat rate, starting at negative-tax for zero income and removing most deductions, but it's better than what you suggest even as it is)

<<People can barter right now. How many do?>>

With your new tax, everyone will.

I suspect that Yuyutsu may be much closer to the realities of a transaction tax than is evident from your assessment, Shockadelic.

>>A tiny tax is not going to change behaviour much<<

That's a very bold assertion.

Entire industries have already been established, grown and flourished on the basis that people are reluctant to pay a penny more in tax than they are obliged to. And when you consider that in order to replace all other taxes, your new system needs to raise at least $14,000 from every man, woman and child in this country, every year, the incentive to search out alternate payment methods will become a daily imperative.

But this is not the key issue.

As you have already pointed out, "all the taxes businesses pay [are] included in the shelf price", and agreed with me that "we, the consumers, the general public, are going to pay for it".

In order to get us to pay the tax that they incur on our behalf, all businesses will have to raise their prices.

Across the board.

Because you cannot in reality price-discriminate your products on the basis of the ability of the consumer to pay, so...

Those least able to pay any increase in price will be hardest hit. Exactly the people, you will note, who benefit least from the abandonment of income tax.

Your new tax system will therefore a) benefit them not at all, with your cancellation of all other taxes, but b) disadvantage them in terms of their buying power.

A piddling tax of 0.02% on my own transactions will be almost unnoticeable, especially if my income is tax free. And I suspect this will be the attitude of rich and poor alike.

But because i) the tax has to be paid somewhere, and ii) the companies who pay it will pass on those costs to the consumer, it is the consumer who will pay.

$14,000 a head.

Yuyutsu “A tiny tax is not going to fill the government's coffers”

Current exemptions, rebates, deductions would be gone.
Companies now pay 30%, but on what?
*Net* income *after* they've deducted their stock purchases, salaries (including those big executive ones), advertising marketing expenses, new product development, truck fleet costs, dividends, etc.

Under a transaction tax, there are *no* deductions, so businesses would be taxed every time they spend money or receive money.

Stock traders would also be taxed every time they buy or sell shares, not just when they make a capital gain.

Black markets and tax evasion would not be justified.
The fines would far exceed the tax, you may as well just pay the tax and stop worrying about getting prosecuted.

All of these previously untaxed transactions are now taxable, so it all adds up to a lot, even with a small tax rate.

“religion forbids them to use electronic devices”

Who are these loonies?

“forcing surveillance”

You are already under surveillance by the tax office.
You will be, whatever taxes exist.

“requiring people to purchase something (banking) which they do not require”
“With your new tax, everyone will [barter].”

Not required? Then why were they invented? Security, convenience.
Want to keep all you money in cash under the bed? Go ahead. You'll regret it.
Want to never know what anything is worth, and spend half your life haggling? Go ahead. Give yourself a headache.

“it distorts free markets”

Actually it's completely *neutral*.
No product or service or person is taxed at a greater rate than another.
Deposits and withdrawals being taxed creates *no bias* toward saving or spending, imports or exports.

Changing accounts *within* the same institution could be exempted, if circumstances make it necessary (branch closing).

If you change banks, have 16 different accounts, don't trust your family to all use the same account, that is *your* choice. With choice comes obligations.

Pericles “your new system needs to raise at least $14,000 from every man, woman and child in this country”

Straw man.
If everyone had the *same* deposits and withdrawals as every one else, then yeah. Is that the case?

Some accounts will receive far more deposits or make far more withdrawals than the “average”, some far less.

“all businesses will have to raise their prices.”

That's a very bold assertion.
And like your “$14,000 a head”, complete bull.

With all existing taxes and their loopholes gone, prices might even go down. And people may have more to spend.

If prices go up, it's probably because the price was unprofitable, but the business could claim all kinds of alleviations that allowed selling at a loss.
So it was a phony dishonest price to begin with.

No matter what happens, the economy would adjust to a more realistic model, with no phony or biased factors.

Some of you are missing the point, and confusing the link, which is about the financial institutions, with normal every day domestic transactions.

Now as for the likes of Wollies paying cash and trading in cash, you have to be kidding.

I can just imagine the outcry from the share holders, not really knowing just how much they turned over this year.

Back to the tax.

Say you gross $1000 per week.

You would pay $20 tax when paid, into your account.

You pay your mortage, say $300, you pay another $6, you pay your car, insurances, utility bills etc, say another $200, the tax is $4, you then spend the rest, $500 on what ever and pay another $10 tax on those combined purchases.

So all up, you will pay $40 tax. THATS IT! Not one cent more.

So, you would have another say $200 per week to spend as you would under the current system.

Now the secrete is, your $1000 gets shifted around hundreds of times each day, collecting the small tax every time.

Share traders and the likes would pay a much smaller tax, as they simply shift money in huge volumes, from account to account, at times at very small profit margins.

The bottom line is a true TT would stimulate the economy, as the average punter would have an extra $200 plus EVERY WEEK FOR EVER at their disposal and, given it would replace most other taxes, it would relieve business of much of the red tape we work through UN PAID every day.

Who knows, it may even make employing enjoyable again.

I am convinced that a TT is the answer, as while an individuals money can only be spent once, it can be used time and time again and this is the basis of a TT.

It taxes money, not people.

rehctub, it seems you support what I do, a small tax on all deposits and withdrawals, not just financial institutions.

"Now the secret is, your $1000 gets shifted around hundreds of times each day, collecting the small tax every time."

This is what our opponents seem to miss.
The current system has high rates, because it's only the *final* net calculations that are taxed, with all intermediary transactions deducted or, in the case of GST, passed on to the next guy.

The current system also inspires evasion and avoidance.
Who wouldn't try to evade a tax of 30-50%?
Who would even bother evading less than 1%?

The current system also encourages poor money management in business, as those bad decisions can just be "deducted".

When you're taxed on all transactions you might think more carefully about whether you really need 600 new trucks, a logo rebranding on your 2000 stores, or giving all your executives unlimited taxi accounts.

Not sure whether you are deliberately missing the point, Shockadelic, or whether you have completely misunderstood the reality of taxation.

Let's start with the fact that whatever the medium, whatever the process, whatever the rules and regulations, taxation in this country puts over $300 billion into the government's bank account, Right now, this comes from many different sources including company tax, personal income tax and GST.

If you abolish these taxes, you still need to raise around $14,000 per man, woman and child in this country in order to balance your budget.

The few dollars that a transaction tax would cost you and me every year would not do that. It has to come from somewhere, so who actually has to sign the cheque to the ATO?

Companies, primarily. The vast majority of financial transactions do not just happen spontaneously, they are entered into in order to achieve a result - hedge a currency, invest in shares, lay off insurance risk - that is required by businesses. That's what Banks do. They have customers whose financial interests they are paid to protect.

If the transactions that make up that protection are going to raise billions of dollars needed by the taxman, that cost will inevitably be passed on to the Bank's customers. Those customers will, in turn, pass on that cost to their customers, and so on until it reaches you in the form of a price rise.

So prices at the till will rise to the tune of $14,000 per individual Australian.

Now, while all that is happening, all those people who had been taxed on their income before, have extra cash to spend.

Except for those who did not earn enough to pay tax. They would have no additional money, but would be faced with higher prices.

The fact is that all of the taxes in this country are ultimately paid for by you and me.

To put it as clearly as I can, where do the companies get the money to pay their taxes today?

From revenue.

Where do they get that revenue?

From us.

Pericles “Not sure whether you are deliberately missing the point”

I'm sure that you're deliberately playing petty troll games just because it's *me* saying something.

“If you abolish these taxes, you still need to raise around $14,000 per man, woman and child”

Presenting the statistic as “per capita” is a deliberate distortion.
Is that what happens now?
Does *every* person pay $14,000 tax, directly or indirectly?
No. Some pay lots and some pay nothing.

Many businesses currently pay *no* tax, simply because they've never made a profit, but the current system lets them keep going for years, claiming all those costs as “deductions”.

“The few dollars that a transaction tax would cost you and me every year would not do that.”

And you are ignoring all those big business and trading transactions, that are *not* taxed now, as they are “deductions” or only taxed when “capital gain” happens.

“that cost will inevitably be passed on to the Bank's customers.”

Another lie.
Banks are the *agents* who conduct these transactions, only they have access to the data. Nobody else could do it.

Like the GST, the banks DO NOT PAY the tax themselves, they're merely the simplest means of *collecting* it.
You're the one who completely misunderstands the reality of taxation.

“So prices at the till will rise to the tune of $14,000 per individual Australian.”

How do you live with yourself?

“The fact is that all of the taxes in this country are ultimately paid for by you and me.”

Yes, but only in *proportion* to your income/expenditure, so this is no different. Just simpler.

The people who receive big incomes and pay big prices will pay more total tax than others.
And little old lady pensioners will pay, as you admit “a few dollars”.

For someone who claims they want minimalist government, you sure do have a way of defending the status quo.
In another thread, immigration was fine as is, now it's taxation.

What government actions do you actually want to minimise or simplify, or are you just a “radical” impostor?

Doesn't work like that, Shockadelic.

>>I'm sure that you're deliberately playing petty troll games just because it's *me* saying something.<<

I am merely trying to bring some perspective to the discussion. My starting point as always is "money has to come from somewhere, it doesn't just magically appear".

>>Presenting the statistic as “per capita” is a deliberate distortion.<<

Nope. It's fact. No distortion. You can do the sums for yourself.

>>Does *every* person pay $14,000 tax, directly or indirectly?<<

Yes they do. They have to. Some of it directly, as in PAYG and GST, the rest indirectly, through company taxation etc. The tax that businesses pay also comes from you and me, don't forget. If you don't believe me, try to think of a tax that we don't ultimately pay for.

I say again, we pay all of it, despite your vehement...

>>Another lie. Banks are the *agents* who conduct these transactions<<

Exactly. Right now, they make money on the other transactions they perform - investments, mostly - and charge very little by way of fees. If you whack them a tax on those transactions, they will need to pass it on to their customers, or go out of business.

Or stop performing the transactions. Which will not do much for the tax collector.

>>Like the GST, the banks DO NOT PAY the tax themselves<<

Are you suggesting that banks do not perform financial transactions on their own behalf? Oh well, makes no difference. If they perform them on someone else's behalf, those customers will pay, won't they. Like, the businesses that will pass on the charges to the consumer...?

>>Yes, but only in *proportion* to your income/expenditure<<

After all that, you finally agree that we pay the tax. Directly or indirectly. Just like I said before.

Having seen the light on that inescapable truth, can you now see how it inevitably will hit the poorest, hardest?

Pericles “money has to come from somewhere, it doesn't just magically appear".”

And it will come mostly from people and companies with big incomes and big expenses, much of which is not taxed now, thanks to deductions and avoidance/evasion.

Please explain how Mrs Meriwether's purchase of a new Rolls Royce is going to be paid by anyone *other than* herself.
The money comes from somewhere all right. From her.

>>Presenting the statistic as “per capita” is a deliberate distortion.<<

“Nope. It's fact. No distortion. You can do the sums for yourself.”

The amount might be correct (prove it), but you know very well, it's not a “per capita” context.
The rich will pay more total tax than the poor (just like now), simply because they make more and larger transactions.
There is no “per capita” in this situation.

>>Does *every* person pay $14,000 tax, directly or indirectly?<<

“Yes they do.”

Yes, Mrs Meriwether, sole heir of the Meriwether fortune, pays $14,000 tax.

So does Mrs Johnson, widowed pensioner. $14,000.
(Oddly paying $14,000 tax on an income of $18,000!).

So does Luke Goldsmith, 3-year old kindergarten enrollee. $14,000.
And he doesn't even have an income!
It's a “fact”!

“If you whack them a tax on those transactions, they will need to pass it on to their customers, or go out of business.”

The BANK is not being "whacked"!
The *customer* is being taxed, the bank is just the agent collecting it.
The bank would have no costs, the government paying for software installation.

“Can you now see how it inevitably will hit the poorest, hardest?”

No, because your argument is complete bull.

I challenged you to a declare your support for the Revolution, Monsieur Pericles.
I seek confirmation of your intentions regarding the King.

What government actions do you want to minimise or simplify?

If you do not declare your intentions, perhaps in a new thread, you will have revealed your true nature as a traitor to the Revolution and will be forever remembered as such.
Pistols at dawn, Pericles.

If you don't want to take this discussion seriously, Shockadelic, just say so and we can stop right now.

>>I challenged you to a declare your support for the Revolution, Monsieur Pericles.
I seek confirmation of your intentions regarding the King.<<

I am completely and utterly in favour of a new, simplified tax system, one that progressively taxes the well-off in our society and lessens the burden on the lower income folk.

The only point that I am trying to get across - spectacularly unsuccessfully, it would appear - is that a "transaction tax" of the kind spruiked here is absolutely not going to achieve that.

In the spirit of "follow the money", which is always the most revealing of methodologies, I suggest that you apply some real-world thinking to the following:

1. Who actually will be signing the cheque to the Australian Tax Office, and where does the money come from that allows them to do so. Following that particular money trail will itself be very revealing, particularly in the context of "who ultimately pays".

2. Consider for a moment the spending habits of the rich, and ask yourself exactly how far that would go towards filling the $300 billion hole in government revenues that has been created by the abolition of "all other taxes". If we assume a million fat cats each spending a million dollars a year on their Rolls Royces, their Cartiers and their Kristal, a 2% transaction tax would still only deliver 7% of the required revenue. Where is the other 93% coming from?

Incidentally, you can pick pretty much any number you like as far as a) fat cats and b) annual expenditure is concerned. You still won't arrive at a realistic contribution to the overall tax take.

Once you have worked through those numbers, you will have your answer to the question, "why don't we at least trial a transaction tax".

Ooh, how dare I show a glimpse of humour!

I have taken the discussion seriously.
You're the one making ridiculous, distorted claims.

"that a "transaction tax" of the kind spruiked here is absolutely not going to achieve that."

Actually, nobody advocating it has claimed it would tax in a tiered fashion, quite the opposite.
It is neutral.

The main "point that [you were] trying to get across" was a total lie, about *every* person paying the same AMOUNT of tax.
Complete bull.

"I suggest that you apply some real-world thinking to the following:"

I've already addressed your questions.

The *transactor* pays a fractional-percentage tax on all deposits and withdrawals.
The banks merely collect it using their internal computer systems.
It is not a "fee" they themselves are charging customers.

Every individual therefore doesn't need to "sign a cheque", just as with GST, every consumer doesn't pay directly, the *businesses* collect it and forward it to the tax office.
It's just easier that way.

"If we assume a million fat cats each spending a million dollars a year"

The rich don't just spend, they earn and gain interest and capital gains.
They also employ.

To spend a million, you first need to be *paid* a million.
And the business paying you would need to *earn* a million.
To earn a million, customers would have to *buy* a million's worth of product.
To buy a million, customers would need to *earn* a million.
To earn a million, businesses would have to *pay* workers a million.
And so on.

Every time that million changes hands it is taxed, AGAIN.
Not just one transaction, but all the transactions before that, and after that.

Has Mr Serious heard of the "circular flow of income"?
There are no "final" transactions in the "real world".

"I am completely and utterly in favour of a new, simplified tax system, one that progressively taxes the well-off in our society and lessens the burden on the lower income folk."

More information please.
What's being taxed? How are the taxes tiered?

Oh.

Is that what it was, Shockadelic.

>>Ooh, how dare I show a glimpse of humour!<<

Sorry.

Yes, the French Revolution reference was humour.
Have you ever encountered that before?
If you plan on being "Australian" I suggest you get used to it.
We joke about everything, even serious things.

The underlying meaning was not a joke, and you still haven't answered the question (for the THIRD time!)

What taxation reform are you actually advocating? Be specific.

Or is it that you are really a "reformist" fraud, and are instead a card-carrying member of His Majesty's Status Quo Committee.
(Oops! I did it again!)

Cooee!

Looks like Pericles got lost in the Bush.

Oh well, if we ever find his remains, we'll put up a metal plaque:

"Here lies Pericles.
Troll. Fraud. Traitor.
Defender of the Status Quo.
R.I.P."

That's pretty pathetic, Shockadelic.

Even for you.

You take to any proposed reform with a chainsaw, then REFUSE (repeatedly) to say what tax reform you actually endorse!

You are the *epitome* of pathetic.

<< Cooee! >>

<< Troll. Fraud. Traitor. Defender of the Status Quo >>

Heee heheheheee!!

Chainsaw, Shockadelic?

>>You take to any proposed reform with a chainsaw, then REFUSE (repeatedly) to say what tax reform you actually endorse! You are the *epitome* of pathetic.<<

It needed no more than a gentle breeze to knock over such a poorly-thought-out concept.

If I had a viable alternative, I would present it, but I don't.

In the same way that I am confident that Rob Quiney is not yet a Test player, but would not for one moment consider putting myself forward to fill the No. 3 spot.

And Ludwig...

>>Heee heheheheee!!<<

Are you being childish on purpose, or is it your natural state?