The Left’s Smear Campaign on Business Revenue is Nothing but a Dishonest Lie

Kerrod GreamKerrod Gream takes on the perception that companies should be taxed on revenue that the left have been pushing since the ATO’s Corporate Tax Transparency Report for the 2013-14 Financial Year.

Following the release of the ATO’s Corporate Tax Transparency Report for the 2013-14 Financial Year there has been a spewing of memes, and distaste from those of the left about how businesses aren’t paying their fair share. These go along the line of “This company made x amount of revenue in 2013/14 but paid almost 0% tax” ignoring that revenue does not equal profit. Their 0% tax figures comes from comparing total revenue to the tax paid, rather than comparing taxable income(aka profit) to tax paid.

The CFMEU's dishonest attack on Boral, who paid their fair share of tax on taxable income.

The CFMEU’s dishonest attack on Boral, who paid their fair share of tax on taxable income.

The unions, all of which they themselves pay no tax, have been some of the worst on the smear campaign on business. Australian Unions are calling for Spotless to pay tax on their $2.2billion of revenue despite the fact that they made an operating loss in the previous financial year and are perfectly entitled to deduct that from their total tax paid. The CFMEU has quite possibly been the worst of the spread of misinformation, providing the image above but also attacking News Corp  and Brickworks(the offending image as of writing this article has been removed) over revenue and not profit. The left wing lobby group GetUp also continued to spread the misconception. Ignoring that 0.2% of companies pay 58.2% of company tax, as reported by Commonwealth Treasury Papers.

The top 0.2% of companies pay 58.2% of company tax.

The top 0.2% of companies pay 58.2% of company tax.

This adds in to various media sources playing into this game of taxing revenue with the ABC attacking companies claiming they paid effectively zero tax on their income. The Guardian creating a calculator to determine which companies you paid more tax than despite having taxable income viewable hoping the reader will conflate revenue and profit. To add to this Buzzfeed jumped on the bandwagon of business ignorance with an outline of companies’ revenue and tax paid, with no reference to actual profit. This intellectual dishonesty either screams of an intentional smear campaign on the productive sector; that is businesses that provide jobs and investment in Australia, or just an abysmal understanding of how businesses operate.  To add into this the Twittersphere has been attacking these companies all over, and openly advocating that revenue is the important figure, and arguing that the only reason they minimise their taxes is because of offshore funnelling of profits.

Michael West

And then Ben Eltham; a reporter for the leftist rag, New Matilda; openly admits that he doesn’t understand how a business operates by not realising that income coming in doesn’t take into account the actual costs of running a business. This includes investment, staff costs, financial costs, and the day to day costs of running a business. Revenue is only useful for looking at turnover compares to previous years, and not in looking at how much money a company actually made, as different sectors have different methods of markups.

Ben Eltham

These people and organisations keep conflating revenue and profit, not seeming to understand that they are two separate things. With revenue being total amount of incomings prior to any expenses being paid. Profits however are what taxes are placed on, because had Boral in the example above paid the 20% that the CFMEU are calling for them to pay on revenue that $855million in tax would turn a $173.3million profit into a $681.7 million loss. These people have no idea how to run a business, and would send every single business bankrupt if they got their way. The best part of the irony in all this is tax exempt organisations calling for organisations that pay far more than they do in tax to be taxed more.

All these organisations and people are the same people that are opposed to a broad based consumption tax in the form of the GST. They don’t get the mental gymnastics to oppose a revenue tax(the GST) while calling for revenue to be taxed. It seems that they don’t understand that costs get passed onto the consumer, and taxing revenue after the fact is just going to destroy business. Any attempt to attack the big end of town will inevitably hit smaller businesses harder, as they don’t have the structural base to bring about easy compliance with new tax and regulation.

Those on the left calling for taxing of revenue obviously haven’t read what was contained in the ATO report. The ATO even admits that low tax in relation to taxable income and revenue doesn’t necessarily mean that the company is dodging tax in that year, and there may be deductions from previous year’s losses that haven’t been accounted for and a range of other factors not outlined in the report. Had they actually read it, they’d understand why they’re just making themselves look incredibly uneducated. The transparency list is quite possibly going to be a mistake that the left use to prey on the ignorance of the masses.

These people wanting to tax revenue instead of profit clearly have no experience running a business, and even if they do understand want to see nothing but destruction of our industries, and jobs in Australia. The only saving grace of this is all the top comments on the memes being put out are correcting the difference between profit and revenue.

 

Kerrod Gream is Chairperson of Australia and New Zealand Students for Liberty, Deputy Director for NSW of The Australian Taxpayers’ Alliance, President of the University of Sydney Economics Society, and a branch Vice President in the Liberal Party.

Greens Policy 101

A Greens balance of power will lead to the Labor Party adopting at least some of their extreme agenda, writes Ron Thatcher.

Given the Labor Green preference alliance that could hand the Greens the balance of power in the Senate after the next election, I took some time to have a look at the Greens website, where I stumbled across their policy document.

It makes for interesting reading and should give rise to some serious questions by anyone considering voting or the Greens.

The Greens have already committed to supporting any scheme put forward in the next Parliament that puts a price on carbon. This in itself is astounding given they repeatedly voted against Labor's great green tax – the CPRS.

The Greens also have a policy of lifting the company tax rate to 33% and reducing tax concessions for companies. They want to lift the rate of tax on superannuation and establish a 50% top personal income tax rate. 

In a green world there would be a tax on family trusts and no concessional treatment of long term capital gains.

They also want to impose an 'estate tax' which is basically another name for death duties. 

Of course, this high taxing agenda would sit very well with Labor's own commitments to increase the cost of passports, alcohol, cigarettes, health insurance and mining. 

There might even be some agreement on what the extra revenue will be spent on.

The Greens for instance, want free gender reassignment surgery for those born with an 'intersex condition' even though 'intersex' would be recognised as a formal gender under green law.

They also want to prescribe heroin to registered users in line with the proposed 1996 ACT government heroin trial and introduce the regulated use of cannabis.

Now these are just some of their own policy initiatives that determine how taxpayers money should be best spent. 

In most other areas they are happy to outsource decision making to the United Nations. Yes, that's the unelected and hopelessly inefficient body that is dominated by the agenda of tinpot dictatorships.

The greens manifesto commits Australia to signing up to every protocol, agenda and agreement that this dysfunctional body cooks up – even the optional ones!

I noticed that Bob Brown's press release calling for a register of all businesses owned by citizens who subscribe to particular religious beliefs has been convientently greenwashed from the site. 

It makes you wonder how many other extreme green policies have been sanitised for this election campaign.

Handing the greens the balance of power would cost us all dearly and take Australia back to an age of socialism and extremism that the world had left behind decades ago.

Read more of their policy manifesto here.

Ron Thatcher is an engineer from Queensland.

Fiscal Policy: Taxes vs Spending

A friend of mine recently linked to this Harvard study comparing the results between changing spending rates and changing taxation rates:

We examine the evidence on episodes of large stances in fiscal policy, both in cases of fiscal stimuli and in that of fiscal adjustments in OECD countries from 1970 to 2007. Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases. As forfiscal adjustments those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over GDP ratios than those based upon tax increases. In addition, adjustments on the spending side rather than on the tax side are less likely to create recessions. We confirm these results with simple regression analysis.

Worth a read if you need even further confirmation that cutting taxes and spending is the way to go! 

(Posted by TVA)