Bill Shorten’s war against ‘accountant tax rorts’ and real estate industry is really a war against business generally
He's in a war on the costs of doing business. He wants to treat costs as profit. First it was "excessive" mortgage interest payments, which will be disallowed under the attack on "negative gearing"; now it is the cost of having accountants do your tax return and also now the cost of paying commissions to real estate agents.
A lot of business activity will wind down at that rate and take lots of jobs with it. Levying tax on costs is insane. Everywhere else in the world, they only tax profits, as far as I am aware
The only consolation is that such an extreme change will probably need new legislation and the change is so mad that any such legislation is unlikely to get through the Senate. And if the change is via regulation, the High Court could knock it back on various grounds -- not the least of which is denial of natural justice
It seems to be Shorten's modus operandi to promise things that he most probably will not be able to enact. His threat to raise the minimum wage is also a con. All he can do is make submissions to the Fair Work Commission and they are perfectly capable of denying him what he asks in either whole or in part, most likely in part.
But his big talk will look good to some unwary voters. So he gains credit for intentions only. He will not have to deliver anything
Bill Shorten has doubled down on his plan to stop wealthy people claiming high accountants’ fees on tax and has taken a swipe at real estate agents.
In a sign of a fierce “class warfare” campaign ahead, the Opposition Leader today said he was sticking with a cap of $3000 on exempting accountancy fees despite scepticism his plan will raise the $1.8bn he predicts it will.
“I’m 100 per cent confident that Labor is right, to stop allowing people deduct hundreds of thousands of dollars off their tax for what they pay their accountant,” he said in the Liberal electorate of Bennelong.
“I’m 100 per cent confident that what we can do is make sure that this is a fairer system.
“Why should someone who pays $1 million to their accountant to minimise their tax for millions more, why should we pay for the double dip?
“I mean, it’s a sweet deal. It’s not illegal, but enough’s enough.”
Last month, Tax Commissioner Chris Jordan said he was sceptical the savings claimed from Labor’s policy were all sourced from managing tax affairs instead of other exemptions.
“When people see a quick headline, ‘millionaires paying millions not to pay tax’, there might well be some other reason entirely, like GIC (general interest charges) and I think we’re trying to break that box down now,” he told the Tax Institute in March.
“If you’ve got all that GIC and you’ve paid an enormous settlement, you can claim the GIC as a tax deduction so yes you might have millions of dollars of income but I can’t see any rational or even irrational person, spending over a million to not pay tax on a million.”
Mr Shorten refused to answer questions on whether the difference pointed out by Mr Jordan would affect the revenue raised by his policy.
But he did hit back at a national campaign led by real estate agents against his negative gearing policies. “Well, the real estate agents, it’s obviously in their financial interest to keep taxpayer money flowing to their business model?” he said.
“You’ve gotta ask yourself, why are they campaigning? They’re campaigning because they like to have people bidding for houses who are getting a taxpayer subsidy. “Because the more people they have bidding for houses, the more they can charge their percentage on the sale.”
The Real Estate Institute of Australia, which represents about 95 per cent of the 36,000 businesses that employ about 120,000 people, is leading the push to coincide with the election campaign.
The industry-backed campaign will harness social media platforms including Facebook, Instagram and Twitter to promote key attack lines against the Labor policy, arguing that it will reduce property prices in a cooling market, fail to raise the forecast revenue and pose a danger to the Australian economy.