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The Forum > General Discussion > Big end tax, we must look at the whole picture.

Big end tax, we must look at the whole picture.

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While it's easy to be caught up in the media frenzy about big business not paying their fair share, we must look at the whole picture before condemning them.

Firstly there is the amount of income tax and other taxes they generate, through direct employees and contractors, along with their employees and consultants that simply would not have jobs, or generate taxes if not for the big end of town.

Secondly, the reality is we have one of, if not the, most expensive places in which to do business, which means for large corporations to survive, they often have no choice other than to funnel much of their profits off shore to more tax friendly countries, BUT,, they still create jobs here which generates taxes and spending here.

Finally, our countries government provided services requires dollars by way of tax credits, not percentages so although some may get upset about the percentage they pay, think about the dollars they pay, the jobs they create and where we will be should we drive them away.

As I often say, be careful what you wish for because many large corporations are already questioning their reasons for doing business here and many developing countries are becoming quite appealing as potential business alternatives.
Posted by rehctub, Tuesday, 30 September 2014 9:26:21 AM
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Rehctub, spoken like a true Liberal supporter.

My mother always said it was best to support the Liberals.....they represented the middle classes, predominantly Catholics, tax cuts for middle class people, and big businesses.

I rarely did what my mother said...
Posted by Suseonline, Tuesday, 30 September 2014 7:38:51 PM
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ODD LOL
Posted by onthebeach, Tuesday, 30 September 2014 9:02:49 PM
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Dear Rehctub,

<<many large corporations are already questioning their reasons for doing business here>>

Then let them go - Good Riddance!

Smaller businesses and individuals are paying their taxes in full, so it's unfair competition.
Posted by Yuyutsu, Wednesday, 1 October 2014 12:21:10 AM
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Your argument when applied to banks does not work as with laws to require depositors to "bail in" failing banks and too ig to fail banks and too big to prosecute banks.
They do not pay there way.
Posted by Philip S, Wednesday, 1 October 2014 11:04:51 AM
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It is amusing when the large miners threaten to take their ball and go home if we do not let them play their way.
How I wonder are they going to take "their" mines away complete with the minerals in the ground?
OK there are some jobs at the moment but you can bet that if there is a downturn in for instance iron ore prices, they will lay off thousands and mothball the mines.
Sorry Rehctub but the idea that some morsels filter down to the underlings is a furphy that is so wrong it would be funny if it were not serious.
ALL companies should be made to pay not just tax but a great big tax.
If they do not like that, then get the hell out of Australia.
The minerals will not disappear but will be available for us when we want them and not just sold off for profits for offshore shareholders.
Posted by Robert LePage, Wednesday, 1 October 2014 11:25:19 AM
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... If they do not like that, then get the hell out of Australia.

Well Robert, with thinking like that you may just get your wish, which may make you happy, but what about the rest if us, or what about our elderly who rely on the subsidies these companies provide.
Posted by rehctub, Wednesday, 1 October 2014 12:09:21 PM
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Rehctub: Who gets the subsidies?
http://www.abc.net.au/news/2014-06-24/mining-trucks-go-about-their-work-in-the-mines/5545758
Mining industry receives billions of dollars in state subsidies: report
By Simon Frazer, Rachael Brown and staff 24 Jun 2014
The astounding profitability of mining has helped drive Australia’s prosperity over the past decade, but a report released today shows the sector has also been a major recipient of state government largesse.
Posted by Robert LePage, Wednesday, 1 October 2014 12:49:22 PM
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Who gets the subsidies you say Robert, well, less than half our population work, then, of those almost half receive more in the way of welfare than they contribute in taxes.

Of the remaining workers, many have investments which affect tax write offs, the same ones the media fails to mention in their hype fueled story.

And yes, miners do get tax consetions, but seriously, would you prefer no miners and no jobs? Because that's the reality if we take way the incentive fir them to do business in the worlds most expensive work platform.

Now while I'm not suggesting tax dodges are right, forcing these multi national huge employment generators to leave is not the answer either. The answer in my view is a fairer tax system for all.
Posted by rehctub, Wednesday, 1 October 2014 4:14:14 PM
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Rehctub:
Perhaps if our worthy leaders had not allowed so many visa workers in, there would be a whole lot more jobs available.
There are over a million workers now on special visas, that's a lot of Oz jobs.
But of course those well intentioned miners are able to employ people at a lot less than the going rate and make an even bigger profit.

As for preferring no miners and no jobs, well if the miners has spent SOME of their huge profits on training up a work force, there would be no need to import labour.
Posted by Robert LePage, Wednesday, 1 October 2014 4:37:12 PM
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No argument there from me Robert as I'm dead against imported workers. In fact, OLO history will show that I have said that if miners refuse to train our own, then revoke their licenses. Same goes for our one, if they refuse to be trained, then cut them off.

In fact, the amount of jobs created by the labor government is almost in line with 457's issued, and yes, Abbott is just as guilty. Stop them and stop them now I say because we are headed for a train wreck and if we don't make every single job available, available to locals, then even more than the current 70+% of our population will be on subsidies, of ome form or another.

But I plead that our law makers don't drive big business away, because along with them will go many of the jobs, as whether we like it or not they create most of the jobs we have, in one way or another.

Suze, are you aware that less than 30% of our population pays the bills and subsidizes everyone else, along with big business of cause.

How do you recon they will cope without big business to do their share of the heavy lifting? Especially given many of them would become either unemployed, or under employed.

As for me being a typical liberal supporter, just remember we can have anything we want, so long as there is someone there to pay the bill, which is the exact case for more than 70% of oir population.

So just remember, on average, 7 out of every 10 people you walk past are relying on big business and the other 3 for their financial support.

Be careful you don't bite the hand that feeds us I say.
Posted by rehctub, Wednesday, 1 October 2014 5:40:39 PM
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Rehctub, I don't have to worry too much about big business, but I have relatives with small businesses whose livelihoods have been adversely affected by the big guys.
They should pay more tax, and they can well afford to.

At least I will always have a job in the health business....there will always be sick people....
Posted by Suseonline, Thursday, 2 October 2014 1:45:11 AM
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You may be right Suze, but I would suggest your enemy moving forward will be heavily reduced wages, simply because the way we are headed there are goingmto be so many our of work that the working week as we know it may well be under threat. By that i mean the normal working week may well be more in the ordermof 30 hours over four days, or 25 hours over three nights, and while the rates of pay may not change, the gross wages would.

In fact, the only real answer I can see is a fairer tax system for all.

As for your freind in small business, I hear you loud and clear, as I've been there, done that and I can tell you the fun days in many small businesses, especially in the likes of retail are all but over, with the exception of the lucky few.

I got a hair cut from a hairdresser in a shopping centre yesterday, it cost me $26.50.

I can remember paying that from a similar type of small business ten plus years ago, so how well are they going considering their expenses have most likely doubled.

So how would workers feel if their wages had not risen in ten years, because that's the reality for many in SB today.

But, as I have said before, the amount of taxes paid by the top one percent has to be considered, not just the percentage they are perceived to be paying, because our welfare system, the one that supports 70% of our population, will be decimated if we dive these big players away.
Posted by rehctub, Thursday, 2 October 2014 7:56:59 AM
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rehctub,

You and Robert Page are absolutely right about the 457 visas. When this is brought up, though, people go on about the "lump of labour fallacy". Migrants do create jobs as well as taking them, but there is good evidence from around the world that mass migration depresses wages (i.e. isn't creating as many jobs as it takes). See e.g. the UK House of Lords 2008 report.

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeconaf/82/82.pdf

In many cases, people are paid too little to be net taxpayers, not because they aren't contributing enough, but because they have such weak bargaining power (partly due to mass migration) that most of the wealth they create is captured as profits by their employer, Some of them even need welfare to supplement their earnings just to survive. Waltons in the US is notorious for paying its workers so little they are eligible for food stamps and other forms of welfare. The minimum wage simply isn't enough to support one adult and one child. Here in Australia, this might be true for underemployed people who can't get enough hours. Many of those on welfare are kept there by the lack of jobs.

There is no evidence that we need to coddle Big Business by not expecting it to pay its fair share of tax. See these graphs for the enormous transfer of wealth and income to Big Business and the people at the very top in the US. See

http://www.vox.com/xpress/2014/9/25/6843509/income-distribution-recoveries-pavlina-tcherneva

and

http://www.businessinsider.com.au/what-wall-street-protesters-are-so-angry-about-2011-10?op=1#lets-start-with-the-obvious-unemployment-three-years-after-the-financial-crisis-the-unemployment-rate-is-still-at-the-highest-level-since-the-great-depression-except-for-a-brief-blip-in-the-early-1980s-1

Conditions aren't this bad in Australia - yet, but they are getting there. If you think that these sorts of profits and incomes are necessary to motivate Big Business, then why wasn't this true in the past? Why did a CEO in the US in 1965 do a good job for a salary that was 20 times the average wage, but now needs more than 200 times the average wage to do an equivalent job? Remember that the US economy was growing faster in 1965 than it is now. How are successful non-Anglosphere countries getting by without paying someone $4.5 million a year to run their postal service, etc.?
Posted by Divergence, Thursday, 2 October 2014 8:52:48 AM
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Butch; <<well, less than half our population work>> What do you want to do? get those kiddies out of the kindy's and into the coal mines!
Butch, you astound me with your apologist attitude to big business. They do very very well in Australia, the banks for example, are the most profitable per capita in the western world, $29 billion this year alone. The top 200 public companies do very well in Australia by any measure. How can you believe what you post. the reasons you give for them not to pay tax are nonsense.
Posted by Paul1405, Thursday, 2 October 2014 9:00:46 AM
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Divergence, CEO's wages, like normal wages are a percentage of income/profits. Given profits are now counted in billions, is the reason why CEO's are paid so well. Plus, they have share holders now and compliance issues like reporting to the ASX as an example. Big business is far more com,ex today than it was in 1965. Besides, anyone can be a CEO, the opportunities are there.

Paul, in any business you have income, less expenses, less deductions, then you pay tax on what's left.

Where's the problem?

Normal wage earners do it, and they don't invest billions and create thousands of jobs.

So are you suggesting it's fine for a wage earner to reduce their taxes, but not a mega business?

As for your suggestion I want kids to work, nice try, but you know full well I am simply stating a fact. The fact being that only three people out of every ten pay positive taxes, while the remaining seven rely on those taxes, along with the big ends taxes for their financial survival.

Do you think this three could carry the can without big business and their collective BILLIONS in taxes? No need to answer because it plainly obvious.
Posted by rehctub, Thursday, 2 October 2014 11:41:46 AM
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Twelve months or so since the Federal election and I am feeling
"embarrassed" as the Hon J W Howard would describe it. After many years voting mainly for the ALP at fed and State elections I ventured to the dark side and voted LNP in the 2013 election.
Yes, I was tempted by the siren call of our current dear leader, an honourable man, it must be said, who assured me that there would be no more backflips on budget decisions by any Government led by him. (unlike the ALP Rudd/Gillard Governments )
What has transpired is woeful and cowardly, at the first sign of falling numbers in the opinion polls the Tories went to water, reversing the 6 months waiting period to access the ( overly generous ) dole for the youth unemployed, code for the leaners of OZ society not to mention the likely backdown re the Medicare co payment imposition on the undeserving poor of this nation. What worries me most is that A Abbott will reverse his pledge not to increase taxes and charges on the heavy lifters of Australia, the put
upon wealthy...

cicero
Posted by cicero, Tuesday, 7 October 2014 1:46:41 PM
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cicero, not sure what you meant in your last sentence but, did you honestly think you could vote for the libs and have them continue down the same wasteful path as labor did, or, did you expect, as did I, that we were headed for pain. Pain simply because labor wasted so much.
Posted by rehctub, Tuesday, 7 October 2014 4:14:29 PM
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Come on Butch, be fair dinkum, like tens of thousands of LNP voters at the last election you too are just as disappointed in the Abbott Governement as any of them are. About the only bloke on this forum who wanted an Abboott victory and is not disappointed is me! They are delivering just as I expected. In some areas they are exceeding my expectations, a total cock up of a government!
To para phrase Keating “this is a conservative government that Australia had to have”. You don't know how bad castor oil tastes until you swallow a dose. Australia is having their conservative medicine now, they will get over it soon.
Posted by Paul1405, Wednesday, 8 October 2014 5:49:03 AM
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In one way the Neoconlibs are exceeding expectations.
I would say that they have as much chance of being re-elected as a snowballs chance in hell.
So with them out of the way after the next election there will be a chance of a "middle way" party to be elected .
Yes Abbott and gang will have done a lot of damage but time will heal.
Posted by Robert LePage, Wednesday, 8 October 2014 10:58:49 AM
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