May 27, 2014 | Graham

Right algorithm, missing sizzle



I’m so impressed I had to blog this.

This advertisement:

ATO_Ad_14_05_27

 

appeared immediately over this post on our forum:

 

…Very true Yuyutsu, but also oversimplified. Take note that 30 percent of the Australian economy lurks in the dark area of the black market. 

…The proponents of this economy are not simply drug runners either; they are your every-day mums and dads that trade favors for cash in the area of trades for example, to avoid paying tax. They are your welfare recipient trading in illicit drugs to supplement meager income, and you name the rest for yourself.But… 

…Just like Greece; every day is sunshine…until! So have we arrived at the intersection called “untill” yet? 

…Looking at the despicable collection on a Canberra windy hill,and the totally corrupted political system that thrives on exclusion, we must be close!

And leads directly to a page about the “cash and hidden economy”.

Brilliant, except, given the tax department has placed the ad there because someone has mentioned the black economy, you would think that the ad would refer to the black economy. Maybe something in black and red with a hand holding a fistful of dollars with the caption “Paying in cash? Make sure the tax is paid. Severe penalties apply. Click here to find out more.” or something in that vein.

A logo doesn’t really cut it as a marketing device.

Full marks for trying, and there is obviously a compliance campaign on foot. Pity they didn’t spend the money on a decent advertising agency. Most people won’t click on such a bland “ad”, and even if they do, the landing page isn’t very persuasive either.



Posted by Graham at 2:17 pm | Comments (3) |
Filed under: Uncategorized

3 Comments

  1. Graham, we need real tax reform, to eliminate avoidance.
    In a 1.6 trillion dollar economy, a 18% expenditure tax, would raise 380 billions!
    This simple but vastly overdue reform, replacing all other tax devices, would bring the 95% of Australian corporations, [the real black economy,] who have moved their operations offshore, to merely reduce their tax bill, to be once again included in the tax paying demographic.
    Moreover, this tax would be collected from all international transfers or remittances, meaning a large part of the internet enabled black market, included in the fold.
    Given debit cards and eftpos, we are well on the way to a cashless economy.
    And given these mechanisms will also provide a money trail/expenditure record, that can also be taxed by an expenditure tax, most of the black economy, will be forced to pay a share at some stage of every transaction!?
    That said, there is no way to completely shut down the cash economy; and or, cashless swap and barter.
    Smart cards will replace cash in a cashless economy, and even that could be forced to join the tax paying queue if the Government, were to routinely change the color of money?
    And that is as simple as changing the ink in the printers, and having done that, give those using the mattress or a private vault to stash cash; say, around a month to change their banknotes for new ones; when the old color would no longer be legal tender.
    And in the first two weeks of that exchange, only incur a normal rate of expenditure tax, but double that in the third week, and double that again in the final week!?
    This extra cash would pay for any policing required to chase/change and eliminate this activity, and motivate compliance.
    Now, if the offshored corporations are dragged back kicking and screaming, into the tax collection fold, by the proposed unavoidable tax reform.
    The sheer increase in actual numbers, would allow the rate to be reduced, to say as low as around 5% marginally variable!
    A real saving would also accrue, as there would no longer any need to shell out tax compliance costs, which currently rip around 7% from the bottom line.
    This would also need to be a flat rate applicable to everyone or all expenditure!
    This then inclusive of returned compliance monies, would make our economy the lowest taxing one on the planet.
    And have many high tech manufacture/value adding and service provider companies, queuing too relocate here, along with a host of entrepreneurs, and cashed up self funded retirees?
    We could follow this long overdue pragmatism, with the roll out of cheaper than coal thorium powered power plants, which could be made a central part of myriad new industrial estates.
    I mean, 50 MW thorium reactors can be mass produced, and trucked on site as extremely wide loads, to begin operation within weeks of siting?
    Now if you combine the world’s lowest real tax impost, with the worlds lowest industrial 24/7 energy, [even hydros need mega miles of costly transmission lines,] Low labor high tech operations from around the world will queue to join in!
    Bringing their manufacture and R+D with them.
    Even where that also requires them to accept local partners; and train, resource and employ locally.
    The foregone GST, could be replaced by a direct funding model, for education and health, and augmented, by much more local autonomy, which would reduce costs by around 30%!
    Money which could be saved, or applied to the coal face as vastly improved funding, particularly in education; given the foregoing paradigm, would require every brain that could be employed.
    Replacing the current convoluted complexity, with a single stand alone expenditure tax, would improve household disposals by around 20%; more, as the offshored corporations are once again paying a comparatively fair share of a common tax burden.
    Meaning, a non contributory compulsory super of 15% is also immediately doable!
    Which must then be linked to proscribed pensions, rather than any lump sum entitlements, for obvious reasons!
    Meaning, many who wanted and able to work at interesting, well paid jobs, well into their 70′s, would be able retire on indexed incomes, higher than their average salaries!
    Finally, given the adoption of this measure, the tax rate can be marginally varied, to alone control all inflation and or stagnation, region by region, where and when necessary; meaning, interest rates could be made even lower, permanently!
    To turbocharge, the non mining economy.

    Self funded retirees, will bring with them a range of service needs, and low tech job opportunities, for those who just don’t have any other fit!
    Getting seriously self funded retirees to migrate en masse, would be quite massively assisted by housing at least as affordable in their home countries, and the roll out of [virtually self funded,] rapid rail!
    And if that rapid rail was the magnetron system, it would replace air travel as the quickest and most convenient means of interstate, CBD to CBD travel.
    The last two proposals, will further increase economic activity and grow the economy, which will also quite massively increase tax returns.
    It’s just not hard, but nonetheless, will indubitably encounter massive resistance from multiple vested interests, with skin and a future tied up in the current status Quo.
    We had no compunction whatsoever, shutting done our footwear and textiles industries, affecting the lives and incomes of over 60,000 people, for simple economic pragmatism!
    The proposed change would only impact negatively on the lives and current incomes of around 10,000 people, all of who, would be more than adequately compensated, by the new job and wealth creation opportunities, inherent in quite massive and ongoing economic growth.
    If a socialist economy can grow at 8% and better, then surely a competently managed democratic, free market economy, can do better?
    And we can, by keeping the economic basqueville hounds at bay, [debt laden foreign speculators,] and by investing in our own people and their better ideas; and, by promoting cooperative capitalism and family operations, with low cost investment loans!
    Well, if there’s a better purpose for the huge new surpluses, we could grow, then feel free to indicate what they would be?
    A sovereign fund, investing its capital n energy resources perhaps?
    Yes sure, but what do you do with the proceeds from that, once you have built the requisite capacity? And inside a decade!
    I mean, there’s hardly any limit on what we could do and achieve as a cooperating “Australian corporate entity”, empowered with vastly reformed and simplified tax.
    We have the resources needed to become the largest and most powerful economy on the planet!
    All we need are leaders willing to change our current course toward the economic abyss, in that new proposed direction.
    We also need to build a nuclear powered very fast freight forwarding, rail linked fleet.
    Not for what that could earn us now today, but what it can earn a decade from now, when we as a well managed economy, could virtually corner one of the most profitable enterprises on the planet; namely, bulk freight forwarding!
    None more than roll on roll off ferries, which incidentally would mean, we would no longer be a hostage to the whim and caprice of price gouging foreign operators!
    [Well it is arguably the most profitable business model on the planet!?]
    Reforming our tax system is just the very first step in a journey to becoming the richest most powerful economy on the planet!
    To underline and reiterate, we have everything we need, including vast untapped energy resources!
    The only thing demonstrably missing, is the political resolve/will!
    And that means, self serving political expediency, must be replaced by people serving pragmatism!
    Alan B. Goulding

    Comment by Alan B. Goulding — May 28, 2014 @ 12:47 pm

  2. Reportedly, 40% of our international guest corporations, most with budgets larger than many sovereign nations, pay no company tax to anyone?
    Other use sharp practice to avoid a fair share, with the result being companies paying on average, just 1-4% actual company tax.
    Among these sharp practices is sending the same sum of money through several subsidiaries, in a money merry-go-round, that creates a false impression of business activity, and invoiced costs!
    These same invoices can be used to garner funds at the best rates, or to avoid tax?
    Given the ATO treats each subsidiary, as a quite separate entity for the purpose of collecting, [or not,] tax!
    Consequently, we see companies recording record profits, paying record dividends, [or not,] and paying even less tax, let alone a super profits tax.
    Then there is a practice of creating a subsidiary or subsidiaries, in various tax havens, and have these same entities, charge the parent, often exorbitantly, for an accounting/booking service etc/etc and so on?
    Unlike many of those now parading before ICAC, they do provide invoices for these alleged services!
    So everything appears legal, or ship shape and Bristol fashion.
    And given our ATO, has no ability to examine the books of offshored entities, they have little other choice, but to accept the figures, however shonky they believe them to be?
    However, if you were to apply an expenditure tax to each one of these transactions, even on those funds went offshore as remittances or international transfers; and given you collected all this tax via the banking fraternity, there would be considerable unavoidable tax collected!
    If the rate were 18% of all expenditure, or transfers, then this practice would likely cease, with the service elements, alleged, returned to an onshore arrangement, to reduce costs, and the money go round would simply cease, given that or any other sum of money, could simply exhaust, if it/they took too many turns on the horses, so to speak!
    We’ve all have heard the stories around Google and Apple, and tip of the iceberg tax avoidance in the billions?
    And I dare say, Amazon and similar internet accessed marketers, do nearly as much business on these shores, to the eternal detriment of the honest Australian retailer.
    Who is after all, only asking for equal treatment, not favors!
    Pray tell, just what are the real impediments, that prevents our government from acting as outlined, to fix these avoidance examples?
    The 1953 double tax act?
    Well, they the government of the day created that act, and today’s parliament remain free to repeal it!
    Our trading partners remain free respond likewise, with a huge sigh of relief, even if that’s just a reactionary response?
    Alan B. Goulding.

    Comment by Alan B. Goulding — May 29, 2014 @ 9:42 am

  3. Just one other small point, an 18% expenditure tax, amended for the return of an averaged tax compliance cost factor of 7% is in effect, an 11% tax impost, and less as more players are added, due to the unavoidable nature, of an unavoidable tax!

    Comment by Alan B. Goulding — May 29, 2014 @ 11:22 am

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