Australian Politics Forum - ATO wants you to not pay tradies cash

Grappler Truth Teller Feller

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Re: ATO wants you to not pay tradies cash
Reply #60 - Dec 14^th, 2017 at 11:50pm

Setanta wrote on Dec 14^th, 2017 at 11:36pm:

crocodile wrote on Dec 13^th, 2017 at 10:17am:

Grappler Truth Teller Feller wrote on Dec 13^th, 2017 at 9:43am:

miketrees wrote on Dec 12^th, 2017 at 7:37pm:

I dont think its a matter of taxing profits that the numbnuts are whinging about, they are whinging about not taxing earnings before costs.

Joe Bloggs pays tax on gross income................... if Joe could write off all his living costs to get to work he'd be in clover ..... company tax is out of step.... always has been.....

Horseshit. Joe Bloggs pays tax on net income. Living and travel expenses are private expenses. Companies don't have living expenses.

For a wage earner, gross income is the amount of salary or wages paid to the individual by an employer, before any deductions are taken, yeah? Travelling to work using two tanks of fuel at $160 dollars a week is an expense the worker incurs in favour of the business the wage earner is working for, that the business does not pay for. For the business owner driving to work it's a business expense and a tax deduction. The car the wage earner drives to work in is something he has to pay for with no tax write-off, the business owner's/management's car is a tax write-off.

This is what I'm sure Grap was trying to point out. Sure a limited number of employees have ways to minimise tax through things like salary sacrifice, but not all, probably invented for the public service, colour me a little suspicious as to why it was invented.

And on the thing of not taxing what a business can reinvest, "future productivity", tax must come from somewhere. If company taxes fall, income and other taxes must rise, someone must pay for the infrastructure and services govt provides. Where do you draw the line? If the workers can not bear the tax burden and therefore do not buy, where does that leave the companies? Over the last 50 years the tax burden has fallen more and more on the worker and less on the company, I don't like where that is heading in haves and have nots.

You mean companies don't have offices and an electricity bill and all that, and don't need cars and such to get to and from work, and the bastards don't even provide a coffee machine for their CEO and travel allowances for their board along with caviar and champers?

Well.... Bug Army! Cheap bastards those companies...... Grin

The head office is the home....... where is the difference from Joe Bloggs' villa with 2.4 bedrooms in real terms of earning income? A company has to squat somewhere....... why are its squat bills deductible while Joe's are not? A company blatantly provides for .... subsidiaries etc ... how come any expenditure to a subsidiary is a deduction, while Joe foots the bill for his kids? Does Joe get a deduction for putting petrol in his wife Jo's car so she can go to work? If he borrows money from Grampa and Gramma to hold him over a time of low cash flow... does he get that as a deduction?

Do Joe and Jo get a deduction on their mortgage to pay for their Head Office?

Do Joe and Jo get a deduction for housing their children while they go to uni to better Bloggs Inc?

Does Joe or Jo get a deduction for R & D when seeking an upgraded position from which to earn?

If Joe has a time of unemployment.... are his losses from normal income carried forward into future years as deductions?

Hmmmmmm..... ummm...... NO........ none of these apply and company tax has not kept pace with anything beyond the way it was set up three hundred years ago to suit the rich in England....

30% is a steal on net income.......

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TheFunPolice Gold Member Offline Australian Politics Posts: 9009 waggawagga Gender:	Re: ATO wants you to not pay tradies cash Reply #61 - Dec 14^th, 2017 at 11:55pm Go Ye grappler
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crocodile

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Re: ATO wants you to not pay tradies cash
Reply #62 - Dec 15^th, 2017 at 12:21pm

Setanta wrote on Dec 14^th, 2017 at 11:36pm:

crocodile wrote on Dec 13^th, 2017 at 10:17am:

Grappler Truth Teller Feller wrote on Dec 13^th, 2017 at 9:43am:

miketrees wrote on Dec 12^th, 2017 at 7:37pm:

I dont think its a matter of taxing profits that the numbnuts are whinging about, they are whinging about not taxing earnings before costs.

Joe Bloggs pays tax on gross income................... if Joe could write off all his living costs to get to work he'd be in clover ..... company tax is out of step.... always has been.....

Horseshit. Joe Bloggs pays tax on net income. Living and travel expenses are private expenses. Companies don't have living expenses.

For a wage earner, gross income is the amount of salary or wages paid to the individual by an employer, before any deductions are taken, yeah? Travelling to work using two tanks of fuel at $160 dollars a week is an expense the worker incurs in favour of the business the wage earner is working for, that the business does not pay for. For the business owner driving to work it's a business expense and a tax deduction. The car the wage earner drives to work in is something he has to pay for with no tax write-off, the business owner's/management's car is a tax write-off.

There are significant errors in your assumptions.

1. The business owner, CEO or anybody else does not get a tax free ride to work. There is no deductability just because one is the owner.

2. The owner's / management's car is only a tax write off for the portion relating to business use. There is no tax deduction for the private component. Users of company vehicles are required to use log books and make up the difference themselves.

3. The company can choose to pay all of the expenses as part of a salary package but this is then subject to fringe benefits tax.

https://www.ato.gov.au/General/Gen/FBT-fact-sheet/

https://www.ato.gov.au/Individuals/Tax-Return/2017/Tax-return/Deduction-question...

This is what I'm sure Grap was trying to point out. Sure a limited number of employees have ways to minimise tax through things like salary sacrifice, but not all, probably invented for the public service, colour me a little suspicious as to why it was invented.

I know what Grapples is pointing out. His errors have also been pointed out to him numerous times but he still doesn't understand. Unusual for a guy that claims to be in the top 2% of IQ. If that is the case, heaven help the bottom 98%.

4. Individuals salary sacrifice simply because their marginal tax rate is lower than the fringe benefit tax rate.

And on the thing of not taxing what a business can reinvest, "future productivity", tax must come from somewhere. If company taxes fall, income and other taxes must rise, someone must pay for the infrastructure and services govt provides. Where do you draw the line? If the workers can not bear the tax burden and therefore do not buy, where does that leave the companies? Over the last 50 years the tax burden has fallen more and more on the worker and less on the company, I don't like where that is heading in haves and have nots.

This has been explained on this board numerous times. To begin to understand you need to first understand just where the burden of company taxes actually lies and whom it mostly falls upon. The effects have been studied for decades with the overiding conclusion that the burden of the tax falls most heavily on the employees.

Even our own treasury have done an enormous amount of work in this area.

https://static.treasury.gov.au/uploads/sites/1/2017/06/03_Incidence_of_company_t...

The deadweight losses of corporate taxation run into around 40c for each dollar taxed. That is an apalling payback in terms of GDP growth. By denying the results of countless research, poor ol' Grapples is really just shooting himself in the foot. It is the worker who ends up paying for it.

https://static.treasury.gov.au/uploads/sites/1/2017/06/TWP2015-01.pdf

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Very funny Scotty, now beam down my clothes.

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crocodile

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Re: ATO wants you to not pay tradies cash
Reply #63 - Dec 15^th, 2017 at 12:29pm

Grappler Truth Teller Feller wrote on Dec 14^th, 2017 at 11:50pm:

Setanta wrote on Dec 14^th, 2017 at 11:36pm:

crocodile wrote on Dec 13^th, 2017 at 10:17am:

Grappler Truth Teller Feller wrote on Dec 13^th, 2017 at 9:43am:

miketrees wrote on Dec 12^th, 2017 at 7:37pm:

I dont think its a matter of taxing profits that the numbnuts are whinging about, they are whinging about not taxing earnings before costs.

Joe Bloggs pays tax on gross income................... if Joe could write off all his living costs to get to work he'd be in clover ..... company tax is out of step.... always has been.....

Horseshit. Joe Bloggs pays tax on net income. Living and travel expenses are private expenses. Companies don't have living expenses.

For a wage earner, gross income is the amount of salary or wages paid to the individual by an employer, before any deductions are taken, yeah? Travelling to work using two tanks of fuel at $160 dollars a week is an expense the worker incurs in favour of the business the wage earner is working for, that the business does not pay for. For the business owner driving to work it's a business expense and a tax deduction. The car the wage earner drives to work in is something he has to pay for with no tax write-off, the business owner's/management's car is a tax write-off.

This is what I'm sure Grap was trying to point out. Sure a limited number of employees have ways to minimise tax through things like salary sacrifice, but not all, probably invented for the public service, colour me a little suspicious as to why it was invented.

And on the thing of not taxing what a business can reinvest, "future productivity", tax must come from somewhere. If company taxes fall, income and other taxes must rise, someone must pay for the infrastructure and services govt provides. Where do you draw the line? If the workers can not bear the tax burden and therefore do not buy, where does that leave the companies? Over the last 50 years the tax burden has fallen more and more on the worker and less on the company, I don't like where that is heading in haves and have nots.

You mean companies don't have offices and an electricity bill and all that, and don't need cars and such to get to and from work, and the bastards don't even provide a coffee machine for their CEO and travel allowances for their board along with caviar and champers?

Caviar and Champers, free cars etc are subject to FBT

Well.... Bug Army! Cheap bastards those companies...... Grin

The head office is the home....... where is the difference from Joe Bloggs' villa with 2.4 bedrooms in real terms of earning income? A company has to squat somewhere....... why are its squat bills deductible while Joe's are not? A company blatantly provides for .... subsidiaries etc ... how come any expenditure to a subsidiary is a deduction, while Joe foots the bill for his kids? Does Joe get a deduction for putting petrol in his wife Jo's car so she can go to work? If he borrows money from Grampa and Gramma to hold him over a time of low cash flow... does he get that as a deduction?

Do Joe and Jo get a deduction on their mortgage to pay for their Head Office?

No. Why should the tax payer pay for their mortgage. Let's just pay for each others'. That'll work well.

Do Joe and Jo get a deduction for housing their children while they go to uni to better Bloggs Inc?

These are not work related expenses. The whole point about working is to earn money to pay for these things. Now you want them for free.

Does Joe or Jo get a deduction for R & D when seeking an upgraded position from which to earn?

In general, re-educating is tax deductable

If Joe has a time of unemployment.... are his losses from normal income carried forward into future years as deductions?

Are you saying that the tax office should cover the private expenses of the individual.

Hmmmmmm..... ummm...... NO........ none of these apply and company tax has not kept pace with anything beyond the way it was set up three hundred years ago to suit the rich in England....

30% is a steal on net income.......

It's stealing it straight from your pocket. Once again, work out where the burden of the taxation lies.

No tax free threshold either.

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Very funny Scotty, now beam down my clothes.

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Gnads

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Re: ATO wants you to not pay tradies cash
Reply #64 - Dec 16^th, 2017 at 10:40pm

aquascoot wrote on Dec 11^th, 2017 at 9:56am:

if big companies dont pay tax, this is a good thing.

they will invest the money and create jobs or return it to YOU as a shareholder.

thus, the money is used wisely.

if they are foolish enough to pay tax, it will be spent on plebosites, public servants who stand around the water bubbler gossiping or french submarines.

thus, it is a moral imperative for all businesses to pay zero tax.

this should help people wean themselves off the government teat.

as the government milk supply dries up, people will be aided to cease being toddlers and actually take some responsibility for their own lives. they might even find this "rewarding"

Bullshyte .... they reduce jobs with automation ... so there are less people working or they downsize work forces ... make those left work longer hours for less pay.

The multi nationals take their profits offshore .... ask Turdbull ... he's a dab hand at it as well.

Skilled workers are becoming a rarity .....

that's why idiots get promoted into management jobs.

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Gnads

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Re: ATO wants you to not pay tradies cash
Reply #65 - Dec 16^th, 2017 at 10:43pm

crocodile wrote on Dec 12^th, 2017 at 7:02am:

Poor ol' Gnads. Like your mate Dna, doesn't appear to understand that companies pay tax on profit, not revenue. There is a bit of a difference.

It makes no difference ... if the sums in the example I quoted are gross turnover .....

they have still paid zero tax on whatever the profit margin ................

that was the whole point.

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"When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid." ~ Ricky Gervais

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Gnads Gold Member Offline Australian Politics Posts: 28107 Gender:	Re: ATO wants you to not pay tradies cash Reply #66 - Dec 16^th, 2017 at 10:45pm miketrees wrote on Dec 12^th, 2017 at 7:37pm: I dont think its a matter of taxing profits that the numbnuts are whinging about, they are whinging about not taxing earnings before costs. Fancy you calling anyone "numbnuts". You should stay out of strong winds ... it'll blow the tickets off you.
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Gnads

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Re: ATO wants you to not pay tradies cash
Reply #67 - Dec 16^th, 2017 at 10:55pm

crocodile wrote on Dec 12^th, 2017 at 9:04pm:

miketrees wrote on Dec 12^th, 2017 at 7:37pm:

I dont think its a matter of taxing profits that the numbnuts are whinging about, they are whinging about not taxing earnings before costs.

That would be rather dumb. The real silly part is that only the retained earnings end up being taxed at the corporate rate. All of the CEOs' wages, shareholder distributions and employees are taxed at their applicable marginal rate.

Those retained earnings are the ones that drive productivity. Taxing future productivity is really, really stupid. The deadweight losses are enormous. Little wonder there are noises around to reduce it. The old argument that it is a free kick for the rich is simply untrue.

And how long have tradies & small business people been paying increases in provisional tax based on what their business making more in the following year?

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Re: ATO wants you to not pay tradies cash
Reply #68 - Dec 17^th, 2017 at 7:48am

Quote:

For a wage earner, gross income is the amount of salary or wages paid to the individual by an employer, before any deductions are taken, yeah? Travelling to work using two tanks of fuel at $160 dollars a week is an expense the worker incurs in favour of the business the wage earner is working for, that the business does not pay for.

No, it is entirely a function of the lifestyle choices of the employee. How far from work they live. What sort of vehicle they drive. Whether they use public transport. Much better to pay them a wage and let them figure it out for themselves. Otherwise everone would be living on acreage and driving tanks. People tend to make far smarter decisions if they have to pay for them.

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Gnads

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Re: ATO wants you to not pay tradies cash
Reply #69 - Dec 17^th, 2017 at 10:13am

freediver wrote on Dec 17^th, 2017 at 7:48am:

Quote:

For a wage earner, gross income is the amount of salary or wages paid to the individual by an employer, before any deductions are taken, yeah? Travelling to work using two tanks of fuel at $160 dollars a week is an expense the worker incurs in favour of the business the wage earner is working for, that the business does not pay for.

No, it is entirely a function of the lifestyle choices of the employee. How far from work they live. What sort of vehicle they drive. Whether they use public transport. Much better to pay them a wage and let them figure it out for themselves. Otherwise everone would be living on acreage and driving tanks. People tend to make far smarter decisions if they have to pay for them.

With the population growth making smart decisions about how close you live to where you work or using public transport can be out of your control.

You may have to live a long way out from your workplace because of housing affordability.

The closer to the city the more expensive real estate/housing.

Many outer lying areas are not serviced by rail so you may have to drive as well even if you do use public transport.

And these days being in one job for long periods is becoming rarer & rarer ......

so you place of employment could be located at many differing distances & locations in your working life.

And people who live in regional areas have no choice but to drive.

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"When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid." ~ Ricky Gervais

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freediver Gold Member Offline www.ozpolitic.com Posts: 47480 At my desk.	Re: ATO wants you to not pay tradies cash Reply #70 - Dec 17^th, 2017 at 9:24pm Quote: With the population growth making smart decisions about how close you live to where you work or using public transport can be out of your control. You always have a choice. You should not be shielded from it by some idiotic communist manifesto.
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crocodile

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Re: ATO wants you to not pay tradies cash
Reply #71 - Dec 17^th, 2017 at 10:30pm

Gnads wrote on Dec 16^th, 2017 at 10:40pm:

aquascoot wrote on Dec 11^th, 2017 at 9:56am:

if big companies dont pay tax, this is a good thing.

they will invest the money and create jobs or return it to YOU as a shareholder.

thus, the money is used wisely.

if they are foolish enough to pay tax, it will be spent on plebosites, public servants who stand around the water bubbler gossiping or french submarines.

thus, it is a moral imperative for all businesses to pay zero tax.

this should help people wean themselves off the government teat.

as the government milk supply dries up, people will be aided to cease being toddlers and actually take some responsibility for their own lives. they might even find this "rewarding"

Bullshyte .... they reduce jobs with automation ... so there are less people working or they downsize work forces ... make those left work longer hours for less pay.

The multi nationals take their profits offshore .... ask Turdbull ... he's a dab hand at it as well.

Skilled workers are becoming a rarity .....

that's why idiots get promoted into management jobs.

Gnads, if corporations are not reinvesting how do you explain the unrelenting growth in labour productivity over the decades ?

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Very funny Scotty, now beam down my clothes.

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crocodile

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Re: ATO wants you to not pay tradies cash
Reply #72 - Dec 17^th, 2017 at 10:33pm

Gnads wrote on Dec 16^th, 2017 at 10:43pm:

crocodile wrote on Dec 12^th, 2017 at 7:02am:

Poor ol' Gnads. Like your mate Dna, doesn't appear to understand that companies pay tax on profit, not revenue. There is a bit of a difference.

It makes no difference ... if the sums in the example I quoted are gross turnover .....

they have still paid zero tax on whatever the profit margin ................

that was the whole point.

It actually makes a huge difference. Corporate losses are carried forward into the following tax year. This will be the primary reason that some paid no tax in the indicated year.

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Very funny Scotty, now beam down my clothes.

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crocodile

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Re: ATO wants you to not pay tradies cash
Reply #73 - Dec 17^th, 2017 at 10:36pm

Gnads wrote on Dec 16^th, 2017 at 10:55pm:

crocodile wrote on Dec 12^th, 2017 at 9:04pm:

miketrees wrote on Dec 12^th, 2017 at 7:37pm:

I dont think its a matter of taxing profits that the numbnuts are whinging about, they are whinging about not taxing earnings before costs.

That would be rather dumb. The real silly part is that only the retained earnings end up being taxed at the corporate rate. All of the CEOs' wages, shareholder distributions and employees are taxed at their applicable marginal rate.

Those retained earnings are the ones that drive productivity. Taxing future productivity is really, really stupid. The deadweight losses are enormous. Little wonder there are noises around to reduce it. The old argument that it is a free kick for the rich is simply untrue.

And how long have tradies & small business people been paying increases in provisional tax based on what their business making more in the following year?

Provisional tax has been largely replaced by PAYG. Provisional becomes due if the tax payer did not make sufficient deductions in the previous tax year. Corporations pay provisional as well under the same circumstances.

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Very funny Scotty, now beam down my clothes.

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crocodile

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Re: ATO wants you to not pay tradies cash
Reply #74 - Dec 17^th, 2017 at 10:40pm

freediver wrote on Dec 17^th, 2017 at 7:48am:

Quote:

For a wage earner, gross income is the amount of salary or wages paid to the individual by an employer, before any deductions are taken, yeah? Travelling to work using two tanks of fuel at $160 dollars a week is an expense the worker incurs in favour of the business the wage earner is working for, that the business does not pay for.

No, it is entirely a function of the lifestyle choices of the employee. How far from work they live. What sort of vehicle they drive. Whether they use public transport. Much better to pay them a wage and let them figure it out for themselves. Otherwise everone would be living on acreage and driving tanks. People tend to make far smarter decisions if they have to pay for them.

Is the commenter suggesting that the tax payers fund each others travelling expenses. You pay mine and I'll pay yours. That should make a huge difference.

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Very funny Scotty, now beam down my clothes.

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