All taxpayers are equal, but some
are more equal than others – even when they’re in the same tax bracket.
And our Treasurer seems quite happy with that. Dollar Sweetie turned up
on Mike Carlton on Friday. He was in a jolly mood:
CARLTON: Alright, how about a tax cut? What about a tax cut? You can announce one now.
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But some of his comments were no joke:
CARLTON: The critical question that people are focussing on
though is the big difference now between the top marginal rate at 47
per cent and the corporate rate which is a hell of a lot lower – 30 per
cent – and the difference leads to tax evasion, everyone says that. And
Turnbull’s argument and I think Labor was saying yesterday, you have
got to close that gap.
TREASURER: Look, if you can keep taxes low as I said you ought to and I am…
CARLTON: But you have got the money to do it, you have got $13.5 billion sitting there.
…but sometimes you can overstate this difference. The truth of the
matter is if a company has income it pays tax of 30 cents. When it
distributes that dividend, if your marginal tax rate is higher you pay
the difference, if your marginal tax rate is lower, you claim back the
difference. That is the way the system works…
CARLTON: Yes, but…
…the system is a company tax – without going into all of the technical
details – is really withholding tax, they just take out 30 cents and
then you make it up on the personal return.
CARLTON: …oh yeah, rhubarb, rhubarb, rhubarb.
TREASURER: With ice cream.
…with ice cream. The argument is that if the top rate is high, 47 per
cent, it leads to a lot of tax evasion, people become companies and
they don’t pay the taxes they should be. Now, wouldn’t it be smarter…
There is nothing wrong with becoming a company. This idea that if you
become a company that is tax evasion, that is wrong. There is nothing
wrong with becoming a company.
CARLTON: …it is tax avoidance but you could cut…
TREASURER: No it is not even tax avoidance.
if you’re in a high tax bracket and can turn yourself into a company,
that’s fine. If you can’t, Dollar Sweetie has a message for you.
The sooner this gutless policy void and pathetic
political pretender gets out of his job and goes back to play acting
all the time as a barrister, the better.