By Rebecca Lemay
The GST has got to go! It's not just a tax, but part of a system of taxation, which in the words of Business Review Weekly "is about shifting the burden of taxation from capital to labour."
The GST widens the gap between rich and poor.
Under a GST, it is the poorest people who have become worse off while the richest have made substantial gains. According to ACOSS, the upshot of the GST has been that the top 20% of income earners are better off under the GST, while low-income earners are substantially worse off.
The cuts to personal income tax hardly compensate for the GST, and studies show they disproportionately benefit the rich. Those who earn $60,000 a year save $62 a week in income tax "compensation", while a worker on $20,000 per year gets about $4. Hardly enough to compensate for the GST.
On top of this, poor people who spend a bigger proportion of their income on essentials are slugged the full 10% GST, while the rich, who are able to save a high proportion of their income, avoid paying the GST on the money they save. They also profit from their savings and investments, thus further widening the gap!
The rich also save on luxury items, such as Porsches and fur coats, because the tax on these has decreased 45% to 10% a saving of $30,000 on a Porsche!
Charities who give money and services to people who can't make ends meet are not exempt from the GST.
Corporations now pay less tax than ever.
This is a tax that makes the poorest people in society, who can least afford it, pay the most tax, while filthy rich owners of huge corporations pay almost nothing. The tax system is littered with loopholes, like trusts, negative gearing and fringe benefits, which benefit the rich.
In 1999 Kerry Packer avoided paying $260 million in tax and only a few months ago, won a court ruling, which enabled him to avoid paying $100 million in tax. Howard uses GST revenue to fund tax cuts to the rich. Since the GST was introduced, corporate tax has been cut to 30% from 36% (in 1983 it was 46%). This means that corporations can now pay tax at the same rate as ordinary wage earners.
Capital gains tax has also been reduced to 30%, which means that the wealthy enjoy further benefits. People who can't invest receive no benefit from these cuts whatsoever.
If the top income and corporate tax rates were the same as they were in 1983, $30 billion could be raised each year. This is enough money to reverse all the cuts, pay for free education and more.
To make matters worse, despite the extra $25 billion the government has made out of the GST, the Howard government continues to slash funding to important services like education, health, and welfare, and has increased spending on defence and programs which benefit the wealthy, such as the 30% Private Healthcare Rebate and funding to private schools. Socialist Alliance will fight the GST!