1.0 INTRODUCTION
The tax system in Australia is one of the most complex in the world and consists of about 125 number of taxes1 which due to its complexity, it contains many loopholes which are often taken advantage of aggressively. Tax avoidance refers to the use of loopholes in the tax system and using financial instruments and mechanisms inappropriately so as to get a tax advantage. Despite being legal, manipulating the law so as to avoid tax is unethical and the Australian government is doing their best so as to remove those loopholes. This essay is going to discuss about multinationals avoiding paying their fair share of tax, taxpayers tax avoidance and measures against tax avoidance.
2.0 BODY
At a time where tax is having a real impact
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Peter Matin stated in an article that 55 of the Australia's highest earners; earning at least 1 million managed to write down their taxable income below the threshold of $18200 and therefore paid no income tax at all during 2012-20134. The personal income tax system contains too many loopholes allowing a large number of Australians to not pay their fair share of tax. In 2014 the Australian Taxation office identified over 90000 people in Australia considered as high earners after having registered $30 million in untaxed liability and managed to recover only 50 % of it which in my opinion is a very unsatisfying situation. 5Eric Abetz said “Addressing tax avoidance is a critical step that will provide greater transparency and more equitably share the taxation burden”. If tax avoidance is not stopped, it will have a snowball effect; it will grow bigger and bigger unless stopped. No occasion should be made available for people to take advantage …show more content…
Scott Morrison said in an article that “Australia was “ahead of the curve” in implementing new laws against multinational who “profit shift” to low tax countries or tax havens”6. It was also mentioned that 80 billion dollar global businesses will face pressure to pay their fair share of tax. By implementing laws and introducing penalties, the Australian government is sending a load and clear message to every tax avoiding multinationals and Australian taxpayers which is that they firmly believe in equality in paying the fair share of tax. Former treasurer Joe Hockey introduced an-avoidance laws that impose penalties of more than 100 per cent on taxes found to have been avoided by multinationals7. This also acts as an incentive for multinationals to act in good faith and pay their share of tax owed. In order to tackle this problem efficiently, mutual understanding from the government, the tax office and the taxpayers should exist. The government and the ATO should work harder to identify any loopholes that could lead to tax avoidance and take precautionary measures accordingly so as to prevent or minimize tax avoidance. One exemplary measure taken by the ATO is Project Do It whereby 5600 came forward or expressed their intention to be under this scheme8. The project encourages people who are possibly involved in tax evasion schemes to come forward
In general, it can be said that the tax system in the United Kingdom attempts to reduce inequality and poverty, although it is seen by many as an unclear and unfair system. Tax scams and other avoidance measures are symptoms of a wider malaise in a regime that need to be more transparent and fairer (Telegraph View, 2014). However, for those in lower pay employment, its effectiveness can be seen through the income tax, which will deduce between 10% and 20% of their final income, compared to 40% to 50% of those in higher pay. In addition, measures such the national minimum wage and benefits in-kind guarantee that individuals in lower pay are provided with a minimum standard of payment as well as services that might not be easily accessible for them as much as there are accessible for wealthy people.
Throughout the world, in history and in present day, injustice has affected all of us. Whether it is racial, sexist, discriminatory, being left disadvantaged or worse, injustice surrounds us. Australia is a country that has been plagued by injustice since the day our British ancestors first set foot on Australian soil and claimed the land as theirs. We’ve killed off many of the Indigenous Aboriginal people, and also took Aboriginal children away from their families; this is known as the stolen generation. On the day Australia became a federation in 1901, the first Prime Minister of Australia, Edmund Barton, created the White Australia Policy. This only let people of white skin colour migrate to the country. Even though Australia was the first country to let women vote, women didn’t stand in Parliament until 1943 as many of us didn’t support female candidates, this was 40 years after they passed the law in Australian Parliament for women to stand in elections. After the events of World War Two, we have made an effort to make a stop to these issues here in Australia.
Our current system of taxation is a varied rate percentage based on different income brackets. Many say that it violates our constitutional rights through unequal taxation. Multiple deductions, loopholes, special rates, and a complex system of regulations all characterize our Federal Income Tax System, prompting many to question why it is still being used (Peters, 2013). The current system although bringing in over $3 trillion, taxes income multiple times, and includes the taxing of estate, labor, savings, and investments (National Priorities Project, 2013). The system itself is complex with over 20,000 pages of regulations, requiring a massive filing system, which is set up and maintained by an even larger IRS, requiring over $225 billion in compliance costs (Hall, 2001). One can be hard pressed to find an advantage in the current system, other than the fact that it provides the government with an enormous amount of funds, and it has...
The upper and lower quintile is represented by 20 percent, however over the last two decades Australians are noticing a change in the gap between inequalities. In Australia a study by the Australian Bureau of Statistics found that in 1994-1995 the lowest quintile of income earners was at 7.9% which in 2007-2008 was found to be 7.6% meaning that over the 17 years there has been an increase in the lower quintile by .3%. The highest quintile in the years of 1994-1995 was 37.8% this increased in the 17years between the two recordings and in 2007-2008 was observed to be 1.6% larger with 39.4%. This data indicates that the percentage of people in the lowe...
Inequality is existential in every economy but with the effective implementation of macroeconomic policy partnered with direct and indirect tax policies and safety net of minimum wages a more equal distribution of income and wealth in Australia is attained.
Indigenous Australian land rights have sparked controversy between Non Indigenous and Indigenous Australians throughout history. The struggle to determine who the rightful owners of the land are is still largely controversial throughout Australia today. Indigenous Australian land rights however, go deeper than simply owning the land as Aboriginal and Torres Strait Islanders have established an innate spiritual connection making them one with the land. The emphasis of this essay is to determine how Indigenous Australian land rights have impacted Aboriginal and Torres Strait Islander people, highlighting land rights regarding the Mabo v. the State of Queensland case and the importance behind today’s teachers understanding and including Indigenous
Otherwise, it would be theoretically possible for a person to earn more money but actually end up with less, due to the entire amount being taxed at the higher rate.
According to the Congressional Budget Office (CBO), in 2006, the top 20 percent of income earners paid almost 70 percent of all federal taxes. "There's been a huge myth created that the rich aren't paying anything, the rich pay a much higher rate than the poor” says William McBride, the Tax Foundation's chief economist (Sanandaji et al). The boom of the 1990’s was in fact not caused by Clinton’s idea to increase taxes on the top percent of American’s , but led by outside sources such as; massive reduction in military spending, the fall of the former Soviet Union, advancement in technology and manufacturing ultimately making workers more efficient, decline in oil costs, and no major wars. Many people interoperate Clinton’s high tax policy as finally making the wealthy pay their fair share and creating a more stable middle class. However, Clinton cannot be given full credit for this economic boom, and in fact many ignore the long term effects of his policy. America is built on a equality and ambition that should not be restrained by tax codes. Taxes should not be raised on the wealthy because the wealthy provide a majority of employment, they can invest their saving from taxes elsewhere, and they entitled to what they’ve earned ("Should the Wealthiest 1%”).
Indigenous Australians have had a controversial place throughout Australian history, with World War 1 being one of the main events in this topic. Although there were no aboriginals that went to fight in World War I, it was not that they didn't want to because of their violent history with the British, it was because the British didn't allow them to enlist for World War 1.
Economics lecturer Chris Hey wrote a piece for a Melbourne newspaper on the idea of a foreign aid tax, arguing that Australia could do more to assist developing countries by expecting all Australians to contribute. His argument is a very strong case for more action and uses persuasive language to get the point across effectively.
2. Explore the idea that Australia is the land of the fair go Statement of Intent: I am writing a persuasive speech to be conducted in Western Australia to the middle class citizens. The purpose of this speech is to persuade the audience to agree with the idea that Australia is still the land of the ‘fair go’. I would like to acknowledge the traditional owners of this land, the Noongar people, on which we stand today. Good morning ladies and gentlemen.
A tax haven is a country that offers foreign corporations and individuals relatively low corporate and income tax rates, with a politically and economically stable environment. Some tax havens are Switzerland, Hong Kong, Bermuda, Ireland, and the Cayman Islands. The United States government has been fighting against the movement of corporations because it is not collecting taxes from these corporations that it could have used to reduce government debt. However, corporations have found loopholes that exempt them from United States tax laws. Companies are moving their headquarters across seas for tax benefits to keep their shareholders content. The United States government needs to reduce its corporate tax system so the country does not lose more companies, jobs, and money to foreign entities.
The purpose of this paper is to illustrate the layout of taxation. I will differentiate the types of taxes and the roles that they serve currently. Subsequently, I will explain what equity, efficiency, effectiveness and transparency (EEET) are and show how they apply to taxation as a whole. Lastly, I will conclude how the EEET applies to the four tax types.
The government use of taxes plays a crucial role in today’s economy as well as personal finances, it has and will continue to leave its mark on the world we live in.
Tax expenditures are popularly known as tax loopholes or tax breaks. It departures from the normal tax structure and ...