Simran simple 5% gross revenue tax will kill all industries with more or less complex supply chain and with low/moderate margin.
We in IT have a bit skewed view on economy. Too see how many parties involved in manufacturing have a look for example into this video about pencil production - https://www.youtube.com/watch?v=IYO3tOqDISE Think about what happens if at any part of the process extra 5% added. Guys who invented VAT/GST allow credits for a reason. Simple 5% may be not a bad idea, but as an option for small/medium business. It actually exists in this way in some countries. Regards Alex On Friday, November 13, 2015 at 5:37:07 PM UTC+11, simran wrote: > > i was suggesting 5 percent on gross revenue, period. No other taxes > whatsoever :) > > gst is a stupid tax anyway, it's a pass around tax that businesses don't > pay for, only the end consumer user does. the government actually gives > you *cash back* if your business pays more gst than you receive. > > > -- > sent from my phone > On 13 Nov 2015 4:11 pm, "Elias Bizannes" <elias.b...@gmail.com > <javascript:>> wrote: > >> Simran are you suggesting 5% on top of the existing 10% GST sales tax?! >> Do you realise this cost will just get passed onto consumers like the GST? >> >> I used to think company profits should be higher…until I started my own, >> made profits, and realised how stupid this concept was. >> When a company has a “profit”, what you don’t realise is that two things >> can happen: a distribution to share holders (who have to pay income tax on >> the dividend) or it sits in the bank (in other words is working capital >> that the company can then use to revinvest in operations. Hence why tax on >> profit is an expense you want to avoid, especially outside of Australia >> where imputation credits don’t apply and you’re taxed at the company level >> and individual level. >> >> So it’s a win-win for an economy to not tax the profits directly: taxes >> at the individual level still apply or investment that leads to more >> hiring, capital expenditure and ultimately a multiplier effect on the >> economy. Adding any tax on profits removes incentives. >> >> As we argued in this submission (lifeguard paper >> <http://www.siliconbeachaustralia.org/lifeguard/>), I stand by my words >> that tax matters for incentives — and given Turnbull’s whatever his name >> (Wyatt?) wants to target the “5000 Aussie mafia” (more like 200 founders) >> in Silicon Valley to come back I’ll give you my short list of why I would >> move back to Australia: >> >> - The workforce is not as fickle as San Francisco who change jobs >> every 6-8 months but just as educated and now more experienced in >> startups. >> (But talent is an issue in Australia, so some type of lax visa system to >> bring people over for a few years like how Pamela Fox of Google who I >> think >> in her few years in Sydney had a big impact.) >> - Cost of living in lower so wages aren’t as stupid to recruit and >> retain talent >> - The R&D tax credit — which a lot of the entrepreneurs I know that >> now get covered in the press have told me this is the single most >> important >> thing that kept them alive — is a *huge* incentive as this means cutting >> your main upfront investment costs by nearly half >> - I’m hearing rumors that a third $200m fund will be announced soon. >> Personally, I think Australia can’t sustain one let alone three $200m >> funds >> — but as an entrepreneur, this is great as they need quality deal flow. >> >> >> So those are good motivators but to be honest not enough. But tax could >> transform Australia. >> *1) Remove tax on capital gains/investments in small businesses.* In the >> US, you can roll over your gain in something to a startup and avoid tax >> which incentivises angel investing. A good friend of mine in banking and my >> brother who’s an private driver — very different scales of income —both >> offered recently to invest in me if i ever do something tech related in >> future with one of them mis-hearing a tax benefit when I explained >> Australia’s r&d tax credit as something that would apply to an investor >> like them and got me thinking on this point. >> *2) Remove taxes on profits. *As I explained above, this hurts >> incentives not government budgets >> *3) Remove payroll tax. *It drives me up the wall paying this in San >> Francisco and I know it does the same thing to business owners in NSW. >> >> Implement the above and Australia will beat NYC, London and Berlin who >> already are skipping ahead of Sydney/Melbourne with buzz on startups where >> all these cities are remaking their economies as tech centric at the core >> like financial services used to be. >> >> And just to complete the loop, I also think income tax — which was >> implemented as a temporary way to fund world war 1 — are bad. And that a >> broad based consumption tax is a step forward like the GST which is helping >> remove the even more stupid other taxes and tied to the actual economy >> —but I think a tool no one talks about is the tax free thresholds for >> individuals: increase it to something like 50k is tax free which means low >> income earners benefit and fixes the regressive affect of a broad based >> consumption tax. >> >> Elias Bizannes >> http://eliasbizannes.com >> >> On Fri, Nov 13, 2015 at 2:50 PM, simran <sim...@dn.gs <javascript:>> >> wrote: >> >>> I hear you Patrick. >>> >>> Although i believe we are trying to get the same goal ("a prosperous >>> country; with a good standard of living and freedoms") - altbeit via >>> different paths. >>> >>> With lower tax rate, i don't believe that would work at all, it would >>> attract the companies that will stay till the tax rate is lower, the move >>> as soon as they have a better opportunity - they will come not because they >>> value the people, the culture, the community as part of the value, they >>> (those copmanies looking for tax havens) value only money and international >>> arbritage will create a race to the bottom! >>> >>> Ideally (talking about ideals :) i think this would be a good system: >>> >>> * ZERO individual tax rate >>> * 5% gross revenue is taxed for any and every business >>> * Money is taxed at point of *origin* (aka, where the customer is paying) >>> >>> The richer you are, the less tax you pay anyway (because you know how to >>> work the system) - i feel the above is harder to rort, and if people cannot >>> add at least 5% value in a value chain, they should not exist a a business. >>> Yes, coles, woolworths, etc would all have to evolve their business models >>> (and probably start providing real value). >>> >>> Not only will you get the "cream of the crop" - the business that have >>> the larger margins and better offering will flock to such a system, the >>> ones that really don't do much will go to other systems where tax is >>> "profit based" so "making a loss" is encouraged! (i only say that as that >>> is what every accountant tries to do for a company... minimise profits! >>> diametrically opposite to what the real objective of the company actually >>> is!). >>> >>> The funny part is, taxing 5% gross revenue is probably going to net way >>> more tax than taxing profit does... so that 5% can probably even be >>> lower... and it's a much cleaner system :) but i'll obviously think that :) >>> >>> simran. >>> >>> >>> >>> On Fri, Nov 13, 2015 at 8:32 AM, Patrick Collins <pcol...@gmail.com >>> <javascript:>> wrote: >>> >>>> Simran, >>>> >>>> Look this is one of those ideological things that I’m not going to >>>> convince you on. But let me try to counter-balance your viewpoint about >>>> taxing the hell out of multinationals and tech companies. >>>> >>>> A company (like an economy) must raise revenue (tax) from the profits >>>> of its clients (taxpayers). But, if the cost gets too high, the clients >>>> (taxpayers) leave to a competitor. It really is that simple. Many of the >>>> multinationals are helping to create a thriving tech economy. Solid >>>> positive externalities. Are you sure it is wise to toy with a tax regime >>>> that would drive them away? Are you sure the externalities from what >>>> you’re >>>> proposing are not far worse? >>>> >>>> Mike and the Atlasssian guys are one of the few proud Aussie companies >>>> that would probably tolerate such an increase in the tax. But the rest >>>> wouldn’t. >>>> >>>> Our best bet is to create a thriving tech economy and grow the pie, not >>>> necessarily tax the shit out of what little exists. >>>> >>>> In fact, I’d say REDUCE taxes for technology companies even further. >>>> Encourage them to come! >>>> >>>> Here is what Mike Cannon Brookes said to this in his recent Reddit AMA: >>>> >>>> Q. If we only had ONE thing that the Federal Government could deliver >>>> on, what would you want it to be? >>>> A. One thing? I'll give you two depending on whether I need to have a >>>> realistic, compliant answer. >>>> Realistic? Put innovation to the top of the national conversation. >>>> Create and pursue the vision of a smart, technologically competitive >>>> nation. Scare the shit out of all of us that if we don't get there, we >>>> will >>>> be disrupted as a country, our standard of living will slip relative to >>>> other nations. We must get to that point - and we have all the smarts, >>>> research, invention culture and people to get there. >>>> Unrealistic? Here's a crazy idea (that is in no way costed). >>>> Experienced people is our biggest problem. If we have a truckload, all >>>> manner of amazing things would happen. Think about the instant change of >>>> conversation when you step off the plane in SFO. How do we attack that in >>>> a >>>> crazy ambitious way, as a startup would attack it's most difficult >>>> problem? >>>> Turn the dial to 11. >>>> Set a goal of importing 250,000 STEM graduates of top 100 universities >>>> in the world to Australia (who have at least two years work experience) in >>>> the next 5 years. Yup - that fast. >>>> The more work experience they have, the more incentive they get. For >>>> example, if you have 10 years experience working in STEM fields at good >>>> companies, you get a huge tax deduction in Australia for 10 years - and a >>>> permanent residency path etc. If you have 2 years experience, maybe you >>>> get >>>> the benefits that LAFHA used to have and put you on a path to getting to >>>> PR. >>>> (These folks are likely young, will contribute to the economy by >>>> staying + paying tax for many years, by helping build an industry of the >>>> future which itself will support our country, and sharing their experience >>>> and history with the 2 in 5 other Australian workers who will have STEM >>>> related jobs by 2030) >>>> (And yes - this is why I wouldn't make a good politician. Such plans >>>> would be shot down I imagine by so many special interest groups as to >>>> never >>>> happen - despite the fact I think the outcomes for the nation as a whole >>>> would be incredible). >>>> >>>> >>>> Patrick Collins >>>> pcol...@gmail.com <javascript:> >>>> >>>> > On Nov 11, 2015, at 11:14 PM, simran <sim...@dn.gs <javascript:>> >>>> wrote: >>>> > >>>> > >>>> > >>>> > Elias Bizannes wrote: >>>> > [... Besides tax is the biggest unnecessary expense so minimizing it >>>> is good business. ..]] >>>> > >>>> > * We have a good education system >>>> > * We have a good health system >>>> > * We have good public transport, roads >>>> > * Some order in society (with relatively good freedoms) >>>> > * Relatively uncorrupted politicians (it's all relative, but i don't >>>> know the last time an aussie pollie decided to take bribes in the >>>> "billions >>>> of dollars"!!! and shortsell assets by $40billion dollars in a single >>>> transaction alone!) >>>> > >>>> > I for one think business does not pay enough tax... personally i feel >>>> they should *have to pay* X% of revenue and not profit... if they can't >>>> add >>>> value in the chain to be able to pay a %age of revenue, they should not be >>>> in the value chain as they are not providing any of the "value" part :) >>>> > >>>> > Paying tax to benefit from the very system you are using to profit >>>> from, should be considered a privilege. >>>> > >>>> > -- >>>> > do something truly disruptive, pay your taxes willingly in >>>> appreciation that the return they give are what we often depend on! :) >>>> > >>>> - >>>> not-every-glass-is-half-empty-and-not-every-thing-is-broken >>>> > >>>> > >>>> > -- >>>> > -- >>>> > You received this message because you are subscribed to the Silicon >>>> Beach Australia mailing list. 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Vist http://siliconbeachaustralia.org for more >> >> Forum rules >> 1) No lurkers! It is expected that you introduce yourself. >> 2) No jobs postings. You can use http://siliconbeachaustralia.org/jobs >> >> >> To post to this group, send email to >> silicon-bea...@googlegroups.com <javascript:> >> To unsubscribe from this group, send email to >> silicon-beach-australia+unsubscr...@googlegroups.com <javascript:> >> For more options, visit this group at >> http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en >> >> --- >> You received this message because you are subscribed to the Google Groups >> "Silicon Beach Australia" group. >> To unsubscribe from this group and stop receiving emails from it, send an >> email to silicon-beach-australia+unsubscr...@googlegroups.com >> <javascript:>. >> For more options, visit https://groups.google.com/d/optout. >> > -- -- You received this message because you are subscribed to the Silicon Beach Australia mailing list. 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