Big business tax cuts put on ice

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Big business tax cuts put on ice

Postby Lefty » 29 Mar 2018, 06:56

Turdfull ultimately lacked all the numbers in the senate to give free goodies to multinationals when senator Tim Storer declined to vote in favour. Good - now they just need to consign the idea to the bonfire of shit ideas needing to be incinerated for ever.

The tax cuts were a pointless idea, supportable only if you truly believe in the effectiveness of trickle-down economics. Even then, the benefits would have flowed mostly to foreign shareholders.

Established companies in general do not employ more workers, raise wages or invest in more plant, equipment and physical resources simply because of a windfall gain. They invest in those in response to or anticipation of increasing sales. Simply giving them a tax cut may add some more to their bottom line but if that extra did not come from sales then it will most likely be simply pocketed.

There is no point in adding more workers and productive capital if you don't expect to be able to sell the extra output that would be produced. So from the company's point of view, there are much more logical things to do with the gain, none of which would broadly benefit your average Aussie workers or overall economy.

A leaked Business Council of Australia member survey as to what it's members would do with any such tax cut demonstrates the point (from the Australian Financial Review of all publications):

Fewer than one in five of Australia's leading chief executives say they will use the Turnbull government's proposed company tax cut to directly increase wages or employ more staff, according to a secret survey conducted by the Business Council of Australia.

More than 80 per cent said they would either use the proceeds to boost returns to shareholders or invest in the company.



But The Australian Financial Review has learned that the BCA directly surveyed the chief executives of its 130-plus members about a company tax cut this year, in the wake of the company tax rate cut in the United States.

The chief executives were asked which of four options they would nominate as their preferred response to the company tax cut in Australia.

These were: returning funds to shareholders; more investment; increasing the wages of their existing workforce; or increasing employment.

More than 80 per cent nominated one of the first two options while only 16 per cent to 17 per cent nominated higher wages or employment.



http://www.afr.com/news/secret-bca-survey-does-not-back-tax-cuts-going-to-jobs-wage-rises-20180326-h0xzm7

Perfectly logical really - giving more money to those at the top is not likely to result in anything positive in and of itself for the rest of us. Given how few nominated more employing more workers to produce more stuff, in this case I will assume that investment does not mean investing in more things to churn out more product but rather things such as share buybacks and the like, which can also be considered investment but do fukkall overall.

Trickle-down economics is a blatant lie, fuck it off forever.
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Re: Big business tax cuts put on ice

Postby johnsmith » 29 Mar 2018, 08:28

now turdball wants to use it as an election issue.

Cause he wasn't lagging far enough behind in the polls already :giggle :giggle :giggle
FD.
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Re: Big business tax cuts put on ice

Postby Lefty » 30 Mar 2018, 06:26

johnsmith wrote:now turdball wants to use it as an election issue.

Cause he wasn't lagging far enough behind in the polls already :giggle :giggle :giggle


Yeah, I can't understand that one, he must really think that he can convince the public that giving a windfall gain to a handful at the top - many of whom are foreigners anyway - will magically benefit them all.
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Re: Big business tax cuts put on ice

Postby HBS Guy » 30 Mar 2018, 08:50

Some R&D accelerated write off would be better as would boosting funding to CSIRO and there is a shitload of infrastructure to invest in.
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Re: Big business tax cuts put on ice

Postby johnsmith » 30 Mar 2018, 09:14

Lefty wrote:
johnsmith wrote:now turdball wants to use it as an election issue.

Cause he wasn't lagging far enough behind in the polls already :giggle :giggle :giggle


Yeah, I can't understand that one, he must really think that he can convince the public that giving a windfall gain to a handful at the top - many of whom are foreigners anyway - will magically benefit them all.



the general public already has the perception, rightly or wrongly, that big business doesn't pay enough tax. For turnbull to think they'll vote for him because he wants them to pay less tax is ridiculous.

I suspect for most people the company tax issue is a non issue.
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Re: Big business tax cuts put on ice

Postby Dax » 30 Mar 2018, 11:45

Wonder how many people realise that big companies pay less tax than their workers, whilst getting lots of subsidies and handouts by all governments, irrelevant to which party is in power.

The best approach, would be to increase taxes on all earning over $100000 a year and remove their perks and deductions.
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Re: Big business tax cuts put on ice

Postby Lefty » 31 Mar 2018, 07:33

Dax wrote:Wonder how many people realise that big companies pay less tax than their workers, whilst getting lots of subsidies and handouts by all governments, irrelevant to which party is in power.

The best approach, would be to increase taxes on all earning over $100000 a year and remove their perks and deductions.


Yep.

In order to take this issue to an election I think it would have to be heavily couched in the (ficticious) message that cutting company taxes will first increase the average persons wage/salary and second, that it will create more employment.

It generally does neither of itself and I recall seeing survey results that showed a high level of scepticism among voters - I think the electorate will need convincing that John and Jane Average will see much if any benefit.

In fact, should growth fail to improve afterward I suspect that not only will the public see no benefit, they will likely be harmed as government will probably prune back social spending further in order to "fund" the tax cuts. They could deliver the tax cut without having to offset it with reductions but that is beside the point, it's not a case of what they do or do not have to do when it comes to monetary operations but rather what they likely will do to satisfy political and ideological objectives.

In a nutshell, if business are to employ more people they need to see rising demand for whatever goods and/or services they peddle. Just like everybody else the wealthy have only one <insert preferred male/female organs here> and only one stomach and there's only so much they can do for them. Does Bill Gates buy a million pairs of shoes just because he can? Not only will much of the money go to a minority at the top, much of it will leak out to foreigners as well.

Trickle-down fantasy-nomics pumps money in at the wrong end. If you want companies to invest in more productive capital and employ more workers then you need to bolster the spending power of the average person - it is they who consume most of what companies produce (unless they are an exporter).
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