Carlo Sands
"The federal Treasurer's tax review will support the case for cutting the top tax rate as a way of discouraging tax avoidance", reported the March 8 Sydney Morning Herald.
Reading that I did a double take. The solution to tax "avoidance" by the rich that is seriously being presented is to reward them with a tax cut! How do these people keep a straight face?
While this is merely a recommendation to the treasurer, Ross Gittens, writing on big business and the corporate media's push for cutting the top personal income tax rate of 48.5% in the SMH on March 1, points out that Costello "would never commission a report so close to the budget in May without a clear idea of what it was going to say".
"Ostensibly", Gittens writes, "the review's being done by one big businessman, Dick Warburton, and one business lobbyist, Peter Hendy ... neither is a tax expert, and they've got just a month to complete it ... Enter the review's ever-helpful secretariat, staffed by eight Treasury officers. Oh."
It should surprise no-one that Coalition MPs are keen to assist their rich mates by cutting the top personal tax rate. This is a government that slashed the corporate tax rate from 36% to 30%, simultaneously shifting the tax burden onto working people via the goods and services tax.
What is stunning is the logic employed to justify the latest proposed handout. The SMH article states: "Sources close to the review argue that while the top personal rate of 48.5 per cent is not high by world standards, the gap between it and the 30 per cent corporate rate is unusually wide. And this invites the rich to re-arrange their affairs to ensure income is not classed as personal."
No doubt having a 30% corporate tax rate does encourage a "re-arrangement" of affairs by the less than 3% of the population that the treasurer expects to be paying the top personal rate by July. The SMH, however, fails to point out that the corporate tax rate used to be as high as the top personal tax rate, at 49%, and that under pressure from big business, the previous Labor government slashed it to 36%, then the Coalition reduced it further, to just 30%.
So, the gap was deliberately manufactured, then, ignoring as unthinkable the possibility of re-raising the corporate rate to 49%, we are presented with a "solution" that will give more money to the richest 3% via an income tax cut to go with the corporate tax cut.
Especially galling is the government and corporate media's double standard when it comes to ripping off the taxpayer.
"Tax avoidance" is a polite euphemism for tax cheating, even if the rich people's accountants ensure that it is technically legal. The proposed solution to tax cheating by the rich is to remove their "need" to cheat (a bit like handing potential bank robbers the key to the vaults to reduce the number of hold-ups).
Yet this same government has "reformed" the social security system to make it as difficult as possible for anyone to receive payments, and it has been backed by a permanent mass media vendetta against "welfare cheats". The government's explicit aim is to drive hundreds of thousands of people off benefits and introduce much harsher penalties for those who breach the increasingly tough regulations.
I experienced firsthand the "tough cop" approach to social security when Centrelink prosecuted me for receiving the wrong payment. It was not even a case of receiving money I wouldn't have been entitled to anyway, just that the type of payment was wrong.
The amount in question was less than $7000, but I was sentenced to do 80 hours of "community service" — lugging furniture and packing shelves.
You might say, "That's fair enough. If you were in the wrong, you can't complain." That may be true, but it would be a lot easier to swallow if the law applied equally to all.
Indeed, it occurs to me that I have been stupid. If only I had rorted $7 million, I would not be breaking my back pushing a piano up stairs but would instead be drinking champagne to celebrate the extra cash I'd probably have after the May budget, cash that might otherwise have ended up funding more public services.
From Green Left Weekly, March 22, 2006.
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