VW Doubles Sales Pays Less Tax..ATO Please Explain....

[turbodewd]

tranq,

youre only focusing on salary and wages mate. Some Sydneysiders have become hugely wealthy thru home ownership - completely untaxed.

Also, I have a friend who is a software developer (backup software) his income goes to Brunei. His tax affairs are setup there.

So many people think income tax is a good tax! Its uneven. Tradies do a lot of cash jobs, but teachers and nurses simply cant.

GST is the future. This is why Sweden, yep Sweden, has a GST of 25%

If the GST was zero i guarantee there would be many wealthy Aussies who only pay tax via their land rates and maybe petrol excise.

[tranquilized]

Good points.

But I still stand by my own points - a high GST is a huge net that disadvantages those who can least afford it.

More effort in tackling tax avoidance would be preferable, rather than the easy option of raising the GST.

And Sweden would have to be among the highest taxed countries in the world wouldn't it?

[tranquilized]

The tradies vs teaches & nurses is a very good point, but don't forget tradies can easily avoid the GST as well - most woudn't be paying any GST on their fuel, tools, or if they were so inclined anything they buy for around the house from Bunnings.

An increase in GST would effect the tax avoiding types less as they can avoid the GST as well, but for everyone else - they pay more.

[turbodewd]

tranq

another issue is that income tax isnt means tested.

So 2 people on the same salary can pay the same tax even though one might own a 2 million dollar house.

how is that fair!?

Income tax is a joke and a game. And there are good players...and the rest of us.

I cant believe youre defending the hopeless income tax system Its swiss cheese and always will be.

[turbodewd]

Oh and one more.

Scenario 47

Rich immigrant moves to Australia. They are loaded and their money is in their bank account.

Do they pay Aussie income tax? No. But they pay GST.

Its a no brainer when you think about it.

I want the income tax paid by nurses and teachers to halved! Lift the pension too.

Then lift the GST to 15%...or higher. Noone can avoid the GST at Maccas, Hoyts or at their local Maserati dealership.

[Wretched]

Originally Posted by turbodewd

tranq,

youre only focusing on salary and wages mate. Some Sydneysiders have become hugely wealthy thru home ownership - completely untaxed.

Also, I have a friend who is a software developer (backup software) his income goes to Brunei. His tax affairs are setup there.

So many people think income tax is a good tax! Its uneven. Tradies do a lot of cash jobs, but teachers and nurses simply cant.

GST is the future. This is why Sweden, yep Sweden, has a GST of 25%

If the GST was zero i guarantee there would be many wealthy Aussies who only pay tax via their land rates and maybe petrol excise.

Agreed but I'd like to have everything covered under GST.
That way everyone pays their part.

[b0son]

Originally Posted by tranquilized

The tradies vs teaches & nurses is a very good point, but don't forget tradies can easily avoid the GST as well - most woudn't be paying any GST on their fuel, tools, or if they were so inclined anything they buy for around the house from Bunnings.

If you spend all your income, then yes, you can avoid paying GST. But that would mean the tradie would have no spare money for the sort of things that are not valid expenses for his business, such as food, mortgage, etc.

[tranquilized]

Originally Posted by turbodewd

tranq

another issue is that income tax isnt means tested.

So 2 people on the same salary can pay the same tax even though one might own a 2 million dollar house.

how is that fair!?

I would imagine there would be lots of possible scenarios that could end with this result. Many elderly people's primary residence is extremely valuable due to the property market explosions over the last decade or so. This doesn't mean they're flush with cash - it's all tied up in the house. They shouldn't be pressured to sell off their life-long home just to live. Or maybe person one wasted their money while person 2 saved for a house and/or put it into their mortgage. Of course these two people should pay the same amount of income tax. And don't forget, upon sale of the $2 million dollar house, the owner will be up for over $100,000 in stamp duty, which is another term for tax.

Originally Posted by turbodewd

Oh and one more.

Scenario 47

Rich immigrant moves to Australia. They are loaded and their money is in their bank account.

Do they pay Aussie income tax? No. But they pay GST.

This example is nothing more than a wholesale increase in taxation. I'm not arguing for or against that, but that's all it is. Obviously the rich immigrant shouldn't pay tax to the Australian Government for money they have earned in another country. You would assume (perhaps naively) they'd already paid tax on it where they came from. But yes, the bigger the GST the more tax this person would pay. A higher GST may result in them spending less, which has negative effects on the economy as a whole.

Originally Posted by turbodewd

I want the income tax paid by nurses and teachers to halved! Lift the pension too.

Then lift the GST to 15%...or higher. Noone can avoid the GST at Maccas, Hoyts or at their local Maserati dealership.

This isn't a bad idea, makes sense in a lot of ways. But it isn't the silver bullet, and as someone has mentioned this scenario would result in a drop of tax revenue for the federal government and an increase for the state governments, as per how things are structured at the moment.

Originally Posted by b0son

If you spend all your income, then yes, you can avoid paying GST. But that would mean the tradie would have no spare money for the sort of things that are not valid expenses for his business, such as food, mortgage, etc.

This is very true, but my point was more that it is easy for many people to avoid paying GST on many (not all) of their purchases, just as it is easy for many people to avoid paying their fair share of income tax. So the two approaches are similar in that regard - they can both be avoided. Admittedly it's more difficult with the GST.

[Adamz Ghia]

Thing is we're discussing this as if there would be no other changes to tax law. Obviously if we changed to a GST led taxation system, the rules and regulations around it would need to be overhauled too. Businesses wouldn't be able to claim it as freely perhaps. If your primary income is under the tax free threshold you should probably be on a Centrelink benefit anyway, so these could be raised. there is so much tax reform needed in this country it will take years and years. And in the current climate, it will probably never happen so good luck to VW, make the most of it while they can!

[Trump]

The idea of a broad-based consumption tax (a la GST) only works if local businesses keep on the straight and narrow by being the governments tax collectors. Should this blanket subservience evaporate, govco are in for a world of hurt.

And it wouldn't take much for them to say stuff it.

[IanC]

Originally Posted by b0son

And its the federal government that decides how GST gets carved up. No reason any taxation review couldn't look at how this is done.

The entire point is that a simpler tax system is harder to dodge and easier to police.

It isn't harder to dodge. Get a quote from a tradesman and if you pay cash you pay a lot less. He then gives you a list of stuff to buy from Bunnings or where ever. Yes, you pay GST on the stuff you buy but GST isn't being paid on his labour and he isn't paying income tax. Yes, I can be honest and insist on paying on a credit card or by cheque but I will be one of a very small minority.

[Adamz Ghia]

Originally Posted by IanC

It isn't harder to dodge. Get a quote from a tradesman and if you pay cash you pay a lot less. He then gives you a list of stuff to buy from Bunnings or where ever. Yes, you pay GST on the stuff you buy but GST isn't being paid on his labour and he isn't paying income tax. Yes, I can be honest and insist on paying on a credit card or by cheque but I will be one of a very small minority.

But that money will be spent eventually. Assuming he collected $100 and didn't pay say 20% GST he will have an extra $20 to spend later on and eventually it will be spent. You can dodge GST all you like but unless you're not going to spend a dime ever you will pay it eventually.

[Elks]

Back to VW for a minute.

They would have two things that would effect that result.

1. Currency shift back to 0.70c ish squeezing margins.
2. Better use of inviocing from the Singapore office. Increasing the buy price for VW Aus. Means less profit here at 30% and more ther at 12%

[danzvtil]

Originally Posted by turbodewd

tranq

another issue is that income tax isnt means tested.

So 2 people on the same salary can pay the same tax even though one might own a 2 million dollar house.

how is that fair!?

Income tax is a joke and a game. And there are good players...and the rest of us.

I cant believe youre defending the hopeless income tax system Its swiss cheese and always will be.

Hang on, they pay for their house after tax, they pay higher rates, water, gas, electricity etc because they are all based on land value, again this tall poppy syndrome-YOU have an expensive house, YOU must pay because that's fair!!?? Give me a break

[Sabantien]

And this is how they win.

We end up arguing amongst ourselves over what individuals should pay what tax instead of taxing the companies making multi billion dollar profits off our country, taking it all off shore, paying no taxes and then leaving us to clean up the mess they make (in the case of the mining industry).

The politicians pretend to represent the people who elect them, but their only concern is the big businesses who will no doubt be looking after them. Remember Joe Hockey being determined to make businesses pay tax? Turned around on that one quick smart once his masters gave the yoke a tug.