Taxing the rich....

more and more sounds like a good idea doesn't it? Let the rich "help the poor because they can afford it". It is a real "Robin Hood-ish" sort of idea. It would be easy money for the government. Nobody else will argue against the idea of "the rich" paying more in taxes. Yes, we have heard it all before.

But I wonder if it works that way? I was talking to a retired accountant this morning. He had knocked on the door looking for the person who lived here previously and somehow we had a bit of a chat. He worked as what I suppose would be called a "forensic" accountant and he seemed to know a thing or two about how the genuinely wealthy handle their money. 

"The media loves to tell us these people are not paying enough tax," he told me, "But in reality they are paying a lot of tax other people are not aware of and one of those biggies is payroll tax and another is the superannuation guarantee. Those things are part of the cost of employing people and that is a form of tax. It allows the government to tax the people we think of as ordinary workers."

Yes, that makes sense to me.

There was something else he said too, "If tax goes over and above what employers think is reasonable then they will take business elsewhere. They will take their money out of the country."

Downunder has one of the most complex tax systems in the world. We are said to be "the fourth highest taxing country in the developed world" - after Denmark, Belgium and Iceland. We also get less for our taxation dollar than those three countries. 

The reasons for all that are complex too. We have local (council or shire) tax, state tax and federal tax. We have a "GST" - goods and services tax - and then all sorts of other charges which are effectively taxes. We also live on a very large land mass but we only have a small population, most of whom live around the coastline. It makes services more difficult and expensive to deliver.

Taxing the rich more would seem to be an easy way out. Even economists will sometimes argue it is would be a good move but it is unlikely they believe that. They will say that overseas entities should pay more tax here even when they know that they will simply move their business to a lower taxing country or fail to do business with us at all.

We really need to review our tax system. There needs to be one tax system for the entire country. The Tax Act needs to be rewritten. 

I wonder why "the man from the Taxation Office" (who had official ID I have seen before) wanted the previous tenant? I have no idea where he went. He was renting but that is all I know. Does he owe the ATO money? It would have to be a large sum before someone came knocking on the door. Perhaps it is just as well I could not tell this officer anything.