Here is an article by Phil Johns the COSBOA Treasurer and the CEO of the National Credit Providers Association – this is not a COSBOA policy but one day it might be.
Let’s take advantage of the Velocity of Money
by Phil Johns #Philstaxreform
I recently took a short break, a cruise through the South Pacific, a place I thought would be far removed from tax issues in Australia but strangely, dinner talk at various tables over the cruise focused on of all things tax.
The theme was based around comments like “how dare the politicians talk about spending cuts to health and education or increases in GST for the ‘common person, when so many large companies are not paying their fair share of tax, if any”. This issue seemed to be eating away at the regular Aussies on the cruise ship. My clear impression from the conversations with people whose average age would have been mid-fifties, is that enough is enough, the current tax system (both state and commonwealth) is complicated beyond sanity.
Only when governments create a fair and equitable tax system, with no exemptions for large corporates, do they then have the credibility to approach the average Aussie regarding tax reform.
I then saw on the Monday night after I returned from the cruise just how big tax avoidance is through off-shore tax-havens.
Clearly the system is broken at the top-end of town.
One thought I’ve had for years it to remove every form of complex taxes at both the State and Commonwealth level. I mean everything; GST, personal, company, land, payroll, fuel taxes – the lot (there must be thousands of taxes that could be removed). Remove all personal and company tax returns as we know it. Completely change the tax office as we know it. One thing that is also obvious is that money moves very quickly around the economy, very quickly indeed.
My idea, let me call it ‘Phil’s Tax Reform’, is based on the Velocity of Money. Money moves from one person to another and from institution to institution very quickly and quite often these days; can we use this to simplify systems?
It is a Master Plan that goes like this:
1. Stop printing currency (which the criminal element and black markets rely upon.)
2. Invest in systems for a cashless society – some countries are nearly there now.
3. Implement a transaction tax on every single electronic transaction. This includes financial services, loan repayments, wages, super payments, fuels of all sorts, home purchases, food, cards – everything with no exceptions whatsoever. This should be simple to understand and near impossible to ‘manipulate’ the system.
4. Instead of GST returns, the financial institution involved in the transaction simply deducts the transaction tax then automatically and immediately sends the funds to the Government. NO tax returns.
5. Have significant general ‘anti-avoidance’ legislation with stupidly highly penalties. Case in point, speeding fines are revenue raising at their current monetary level. If your first speeding fine was $5000, and $10,000 for your second, and loss of car and license for life for your 3rd speeding offence – that type of penalty structure would change driver behaviour. Similar concept can be applied to #PhilsTaxReform.
6. If you are corporation and want to transfer the funds overseas, then you pay a once off 20% tax fee for the funds to leave Australia
Tax system fixed.