APP policy: Taxation

The Australian economy is currently burdened with several unnecessary taxes, in particular those introduced by the Gillard government, such as the Carbon Tax and Flood Levy, which are to the detriment of businesses and consequently working Australians. This is mainly due to Labor’s dubious “guarantee” to deliver a surplus. The Labor government is institutionally dysfunctional and is caught up in the tax-borrow-spend-tax cycle that has plagued those Western economies which have been subject to socialist-leaning governments.

Redundant taxes
The APP calls for the repeal of the Carbon Tax (the “Clean Energy” bill and various other pieces of related legislation passed by the Gillard government).

The APP believes that we should focus on freeing Australia from the wasteful, bureaucratic spending, upon which these taxes are justified, in order to deliver a truly meaningful surplus, and ultimately fewer and lower taxes.

The APP also calls for the repeal of the Mining Tax and state-based Payroll Tax.

Payroll taxes are a disincentive to employ workers and it makes no sense whatsoever to have such a tax; payroll taxes should be scrapped to encourage employment.

The mining industry is already being taxed via state taxation royalties. The federal mining tax (Minerals Resource Rent Tax) should be scrapped, so that it does not work as a disincentive for the mining companies to operate and employ Australians.

What with income tax, GST (Goods and Services Tax), payroll tax, and the Carbon Tax, Australians are being taxed up to the eyeballs. When you add in all of the other charges, duties, levies, rates, and other hidden taxes that Australians are paying in addition to the income taxes that they already pay, it is little wonder that many families are suffering hard times.

The GST needs to be scrapped as it has acted as a brake upon business, including its nightmare of paperwork for small business people. Having to do quarterly tax statements instead of annual statements costs small business people so much time and stress, and lowers their productivity. When it is considered that many operators of small businesses are parents, adding more time-wasting bureaucracy and stresses is almost a crime against their families; we should be making businesses easier for Australian families to operate, not harder. Large corporations, with their economies of scale, deep pockets, and large pools of human resources, find dealing with the GST a much easier process. The GST is not only bad for business, it is bad for families, and should be discontinued.

Stamp duty on real estate to be abolished, as it is an additional and unnecessary tax that hinders businesses, makes buying family homes more expensive, and drives up real estate prices.

We recognize that there are workers who don’t like to work overtime when it pushes them into a higher tax bracket and that there are tradesmen that don’t like to take on extra work that would push them into the mandatory GST-agent bracket; such a reality is indicative of the fact that higher tax rates and taxation red tape is costing Australians money and productivity; this situation is made even worse when it leads to the loss of Australian jobs because small businesses avoid work for taxation reasons.

Rather than continuously hampering private enterprise with a myriad of government charges and regulations, we need to look for ways to reduce red tape for businesses and self-employed workers. We should be trying to help businesses succeed, not trying to develop more ways to make life difficult for them.

Flat tax rate
Anti-enterprise tax rates (so-called “progressive” tax rates) are a disincentive to work, to make money, and to employ people. Many workers become unhappy when they realise that they have entered a higher tax bracket. To consider the principle, it is common sense that if the government was to charge workers or small businesses a 90% tax rate once they reached a certain point of income, that the workers and businesses would not regard such work as worthwhile doing, and therefore ease off from working. So it is with anti-enterprise tax rates.

To encourage work and productivity, and therefore generate more employment, Australia needs a flat rate for income tax, so that no matter how much an employee or small business earns, such income will always be taxed at the same rate. This will encourage people to work more, earn more, and for businesses to employ more people. The encouragement of businesses and employees to undertake more work will add to overall national earnings and thus increase income tax receipts for the government; and so a flat tax rate will be financially responsible as well as more fully introduce the profit motive for both Australian businesses and Australian workers.

Therefore, we propose a flat income tax rate of 20% (to be inclusive of the current Medicare Levy) to be applied to all earnings over $20,000, with all earnings under that threshold to be tax-free.

We need to institute within Australia a working culture in the economic sphere that gives people proper encouragement to be working and greater incentives for making money for themselves. The current situation of having a welfare state mentality, conjoined with massive over-regulation and bureaucratic red tape, leads to an economic still water, where productivity is low and unemployment is high.

We should free up people so that they can more easily pursue their economic dreams, and create their own businesses, whilst still providing a welfare safety net for those unable to work. Rather than inhibiting people’s economic drive, we should be helping them to succeed, thus enabling better financial outcomes which will then flow on to the wider community, creating more employment and further economic success.

Double taxation agreements
To mount a comprehensive investigation into the double taxation agreements to which Australia is a party, whereby foreign multi-national companies avoid paying income tax in Australia; to look at the benefits to Australian companies operating overseas as compared to foreign companies operating in Australia, with a view to ensuring that multi-national corporations are not shirking from paying their overall fair share of taxation.

Corporation bank tax
The big corporations, especially the multi-national corporations, do not always pay their fair share of tax in Australia and this needs to be addressed. Further investigation needs to be carried out into tax avoidance schemes, such as those corporations which continuously carry on operations supposedly at a “loss”, or near to, thereby being able to pay little or no tax.

Tax avoidance schemes are many and varied, and need to be pursued, because too much of the taxation load is being carried by ordinary Australians. A corporations bank tax should be implemented upon all corporations to ensure that they are paying a minimum amount of taxation. The corporations bank tax is a tax upon withdrawals from the accounts of corporations in financial institutions, for example of 0.01%, and is similar in operation to that of the bank account debits tax which was in operation in Australia between 1982 to 2005, although this would be a bank tax for corporations only and based upon a flat rate. Corporations should be paying their way in society and we should not let the taxation burden fall so much upon the shoulders of small business people and ordinary workers.

We recognise the importance of balancing financial changes in economies. Therefore all important changes should be subject to financial modeling by the Australian Treasury or a similarly skilled institution, and be introduced upon a gradual basis where needed and as appropriate.