From: yar@cs.su.oz.au (Ray Loyzaga)
Subject: Re: GST - Bloody Stupid
Reply-To: yar@cluster.cs.su.oz (Ray Loyzaga)
Organization: Basser Dept of Computer Science, University of Sydney, Australia
Date: Mon, 28 Sep 1992 06:25:04 GMT

In article <chris.717651403@suite.sw.oz.au> chris@suite.sw.oz.au (Chris Maltby) writes:
>In <1992Sep27.081215.15398@newshost.anu.edu.au> ajg620@huxley.anu.edu.au (Andrew J Greinke) writes:
>
>>Do you realise that already many goods on supermarket shelves are taxed at
>>15%, some at 20% or 30%.  Many of these "hidden" sales taxes will be removed
>>and replaced by a GST.  One advantage which I think will result is that by
>>bringing taxes out into the open, it will be substantially more difficult
>>for any government to raise them without good reason.
>
>Yes, there are many goods which attract "hidden" sales taxes - but this
>list does not include most basic food and clothing items. (For the
>obligatory pedants, yes when you add the influence of tariffs, then
>clothing has hidden taxes as well.) So the effect of GST will be to
>maintain or reduce to prices of "luxury" goods and increase the price
>of "essential" goods. Now it's easy to work out how evenly its burden
>will fall.

Well, actually the reduction in the tax level across the "luxury" items will
yield reductions in the costs of production of some items, these luxurys
include all the luxury transport vehicles that are used to truck the
food items to the cities, the luxury fuel used in same, the luxury work
clothes, the luxury plates used to dispense the food, etc. The current tax
definition of what a luxury item is (and therefore a 20-30% sales tax)
was co-authored by Pol Pot.

>
>>Under current arrangements, toilet paper is treated as a LUXURY item and
>>taxed at the highest sales tax rate.
>
>But toilet paper _is_ a luxury item. It costs us millions of hectares of
>old-growth native forest to avoid irritation to our collective anal
>sphincters. You can't get more luxurious than that. Why not try old
>newspapers and avoid the tax, or stop griping about luxury?

Yeah I agree, that is why a vote for Labor is a vote for destroying old
growth forests. Who was it that single handedly destroyed the Australian
Plantation Forest industry?? Yup, tax-man Keating, bet the greenies didn't
even raise a wimper when he changed the tax treatment of plantation
timbers ~5 years ago, 'course not, after all they were going to
get a much nicer govt. handout from Labor.

>>By applying a single rate, GST will also simplify disputes over
>>classification of goods:  is an iced vo-vo a food or a confection?
>>Note the current fiasco with the recent amendments to the Sales Tax
>>legislation, and the fundamental drafting errors discovered in the Senate.
>
>GST is also a way to get ordinary people to do the work of public servants
>for nothing. Each small business (take the place you buy your lunch from)

You mean they don't currently have to account for sales and profit?
I though only large companies were able to rip the tax man off like this?

>will now have to do an extra hour (or so) of unpaid work each day to
>calculate the amount of tax they now owe, and will have to deal with the
>tax office bureaucracy on a regular basis to sort it out. Is this what is

This is a Labor Party furphy, the way GST will be collected is that
a vendor will need to send in a statement of turnover, for which they
will need to pay 15% to the tax office. They will need to keep account
of the items sold if they want to (and they bloody well should!) claim
the 15% back on the cost of the items they have sold. (i.e. they
only pay 15% for the value added.)

>called "improvements to productivity"?

Have you looked at the current sales tax collection method? The new changes
that allow businesses to save nearly $100 a year if they can muddle their
way through a whole host of jumps and hoops?

>
>Then there is the impact GST will have on service businesses. It amounts
>to a new turnover tax on those sorts of operations. How is a turnover tax
>any better than a payroll tax? Consider the contract cleaner who cleans
>your office at the moment - they will be obliged to charge 15% GST,

Simple, it is a tax on turnover, if turnover does not increase but you
really want to hire someone new, then you do not pay more tax, with payroll
tax, it is the act of hiring somebody that incurrs the tax, not an increase
in turnover.

>whereas a staff cleaner would not attract any tax at all. Can you say
>that the burden falls evenly on small and large organisations?
>
If a company can afford an in house cleaner, it becomes cheaper to do
so in the proposed GST system, your example seems to be concentrating
on a very small number of companies, the payroll tax benefits apply
to all companies. (Many of the larger companies won't bother with
an internal cleaner as it probably doesn't fit in with their main business).

>Now consider private schools. The school fees paid by the struggling
>battlers who send their tykes to these slave camps will be zero-rated.
>It seems that luxury services like these are not like other services
>provided to the public. I guess there is a very good reason why you

All education is 0 rated, including the "free" education that Uni's provide.
This is exactly as it is now.

>can still call the GST "fair and equitable" in spite of this wee
>anomaly. (Over to you David?)

Seems that if the GST zero rating for education and medical services is
not fair and equitable by your definition, and since it is exactly
as it is now (minus the savings from reduction in indirect taxes under
Fightback that these organisations will have), then the current situation
is not fair and equitable???
>
>My point (as usual :-) in all this is to point out that it's wise to
>avoid all the religious posturing and snake-oil claims about any
>policy; GST, free-trade, whatever, and consider the outcomes a little

to that I would add "welfare state, wealth redistribution, free anything"

>more closely. After all, there are other ways to redistribute the wealth
>of our nation...

Or maybe you should answer the real question, "what is the aim of
wealth distribution, what are the hoped for benefits, is it self
sustaining?"

Maybe after you have answered this question, gotten general agreement
that your answer is right, you might want to try for changes which
might be needed for "wealth redistribution", of course this seems too
much like hard work, and it doesn't sound as feel good and lefty
as screams of "wealth redistribution" do now, but maybe it might be
more helpful.....
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