Packer's taxes and ours
Was anyone really surprised by the October 13 Federal Court ruling which rejected attempts by the Australian Tax Office to make Kerry Packer (through the companies he owns) pay taxes on some $500 million of income?
The money had been shuffled through various companies around the world precisely in order to escape Australian taxes. It was all very legal, as Packer's lawyers no doubt assured him and the Federal Court ruled, because the tax laws are so complicated and obscure in their language.
Packer is well known for two pithy comments on tax matters which he made to a parliamentary inquiry in 1991: "Anybody in this country who does not minimise his tax wants his head read", and "I pay whatever tax I am required to pay under the law — not a penny more, not a penny less".
Those remarks display the cynicism and contempt for working people that characterise the very rich, who are the only people with the opportunity to minimise their taxes. Of course Packer obeys the tax laws: why not when it's his mates — in both parties — who write those laws, and the laws are written in such a way as to legitimise tax avoidance by the very rich?
Predictably enough, the big business media are trying to turn even this embarrassment to their own advantage. The Sydney Morning Herald, for example, claimed in an October 16 editorial that Packer's tax-free half-billion was "one of the strongest arguments for the GST" because that tax "is not easily avoided".
Not easily avoided by working people — yes. But by the rich? Don't kid yourself — or let the SMH kid you.
The GST will be drafted by the very same politicians and legislative experts who drafted the obscurities in the income tax laws which mean that very rich people don't have to pay income tax. It would be insulting — probably defamatory — to suggest that they can't put similar complexities and obscurities into the GST legislation.
The GST is the most gigantic tax con. Businesses won't have to pay a GST, while individuals with no, or abysmally low, incomes will have to pay. Companies will be refunded for any GST they pay in the course of business.
The introduction of the GST and the withdrawal of the wholesale sales tax will give businesses an automatic tax reduction of $10 billion.
Among other things, the GST is intended to pay for a big reduction in company tax, so on this level, too, it represents a transfer of the tax burden from business to working people.
Ending tax avoidance by the very rich won't be achieved by imposing a consumption tax on the rest of us, who already pay too big a share of taxes. But it could be done very simply by any government that was serious about it: writing a law without loopholes isn't really a task beyond human intelligence. (For a start, what about making businesses, like the rest of us, pay as they go, and then apply for a refund if they think they've paid too much?)
Unfortunately, we don't have, and haven't had, a government that's serious about taxing the rich. In the short term, we can't change that. But we don't have to quietly go along with the plans to make the rest of us, through the GST, pay their share for them.