HDTenEightyP/NetNews huggingface dataset:
From: johnr@bohra.cpg.oz.au (John Reid)
Subject: Re: GST - double tax?
Keywords: GST
Organization: Computer Power Software
Distribution: aus
Date: Wed, 18 Nov 1992 05:03:02 GMT

dyfl@mullian.ee.mu.OZ.AU (Daniel Y Lam) writes:

>rakesh@mame.mu.OZ.AU (Rakesh DESAI) writes:
>>Something about GST which is not clear to me, can somebody explain?

>>IF a particular item from raw material stage to final stage (when it
>>reaches consumer) may pass through 3 - 4 stage of manufacturing level.
>>If 15 % GST is charged on each level of sale, will that not increase
>>price of the manufactured goods?

>>e.g.  If a ballpen worth a dollar requires 4 stages of manufacture and
>>each stage you charge 15 % tax, will not ballpen cost 
>>1.15 * 1.15 * 1.15 * 1.15 = 1.75$?

>No. The GST is levied on the value added at each stage, not on the
>total value.  So the whole thing is taxes at a rate of 15%, no matter
>how many stages it goes through.  At least that's the theory.

>--
>	Daniel Lam
>	Melbourne, Australia

This is not quite right. What happens is that the tax is levied at each
stage at the relevant rate (ie 15%), but those registered for the tax can
claim back GST paid on their inputs. The tax is always calculated on the
tax-free sale value.

So, stage 1 is sold by its producer for $1.15
	stage 2 producer can treat this as really bought for $1, since the
	remainder can be recouped later. If he then does 50 cents worth of work
	in further processing it he sells it for $1.73 (ie 1.5*1.15).

It is my undertstanding that the Liberal's proposals will allow each
registered company to remit the net amount of GST to the Tax Office (ie,
the stage 2 processor will be able to deduct the 15 cents per article he
paid out from the 23 cents per article he collected from his customers. This
is what happens in the UK and also in New Zealand.

He will also get the cash flow benefit of holding this money for some time
(and thus be able to earn interest on it, for example). He will need to
maintain fairly sophisticated accounts to keep track of all the money,
which is the down side. A GST/VAT environment really requires computerized
accounts to be viable.
-- 

_____________________________________________________________________________

John Reid
From: hoconnel@iti.org (Heath O'Connell)
Newsgroups: aus.politics
Subject: Re: GST - double tax?
Date: 18 Nov 1992 00:59:27 GMT
Organization: The University of Adelaide
Distribution: aus
NNTP-Posting-Host: adelphi.itd.adelaide.edu.au
Keywords: GST

rakesh@mame.mu.OZ.AU (Rakesh DESAI) writes:

>govt?  My personal experience is that, in India (from where I have
>migrated) Sales Tax (similar to GST) of 4 to 12% is charged on
>commodities (depending on the category).  This is there in Indian system
>for past 40 years (Dr. Hewson made it sound GST as brand new idea).

	I don't know when he said this. The Coalition is usually at pains to
stress that some sort of consumption tax operates in most major economies.
Usual examples are Canada and New Zealand.


>ps I am liberal supporter but Kennet and Hewson are making me really
>think whether they are worth getting elected!

	If Labor did win, would this be a case of
		'The Government didn't win,
		 the Opposition lost.'

	An interesting turn around.


--
		hoconnel@adelphi.physics.adelaide.edu.au
Newsgroups: aus.politics
From: c.oneill@trl.oz.au (Chris O'Neill)
Subject: Re: Negative Gearing
Organization: Telecom Australia Research Laboratories
Date: Fri, 20 Nov 1992 06:47:35 GMT

In article <1992Nov19.071027.16215@cs.su.oz.au> yar@cs.su.oz.au (Ray Loyzaga)
writes:
>In article <1992Nov19.034509.11169@trl.oz.au> c.oneill@trl.oz.au (Chris
O'Neill) writes:
>>In response to a suggestion that I provide an example of how the tax office
can
>>usually be expected to make a loss because of negative gearing, I have worked
>>out the following.  The suggestion was in response to the comment I made in
the
>>article <1992Nov18.005443.8650@trl.oz.au>:
>>
>>> See if you can make a
>>>realistic example that includes interest on the tax office losses.
>>
>>Suppose we have 8% inflation, 18% (nominal) interest rate, 6% rate of return
on
>>investment, 48.25% tax rate and an interest only loan.  Under these
conditions
>>the proportion of negative gearing decreases as time goes by and eventually
the
>>return exceeds the interest.  For the sake of clarity suppose the original
>>amount borrowed and invested is $100,000.  Interest is fixed at $18,000 per
>>year.  Rental return is $6,000 the first year and increases with inflation
>>after that so we have:
>>
>>year  rent       loss or gain  loss or gain absorbed   present value of A
>>                                   by tax office(A)
>>1     $6000      $12000          $5790                 $5790
>>2     $6480      $11520          $5558.40              $4710.51
>>3     $6998.40   $11001.60       $5308.27              $3812.32
>>4     $7558.27   $10441.73       $5038.13              $3066.36
>>
>>16   $19033.01    $1033.01(gain)  $498.43(gain)          $41.63(gain)
>
>If you are trying to make it realistic, maybe you should assume that
>the bank would expect you to pay back some of the principal each year,
>this would accellerate the movement to positive gearing. There are
>very few interest only loans out there.

Allright, here it is.  Suppose the loan has to be paid back over 25 years with
annual repayments of $18291.89.  This brings the investment into positve
gearing in year 14 instead of year 16 above.  (Wow, what an acceleration.)  The
total present value loss (or subsidy or whatever you want to call it) is now
$19253.10 instead of $22774 with an interest only loan.  Gee, big difference.

In case you want to call it a subsidy, what benefit has the tax office achieved
for its contribution of $19252.10?  As far as the tax office is concerned (and
every other taxpayer) it would have been better off by $19252.10 if you had
never undertaken this investment at all.  It is really an exploitative tax
avoidance scheme, perhaps not in the same league as Bottom of the Harbour, but
exploitative nevertheless.

Chris O'Neill
Telecom Research
From: salter_duke@darwin.ntu.edu.au
Newsgroups: aus.politics
Subject: Re: Inoculation aggro
Date: 20 Nov 92 13:14:58 +0900


In article <BxsyqL.I81@bunyip.cc.uq.oz.au>, kerry@citr.uq.oz.au (Kerry Raymond) writes:
> salter_duke@darwin.ntu.edu.au writes:
> 
>>However, this campaign is being attacked by a local loony


> 
>>Any other advice to pass on to my friend?
> 
> Respect the rights of other people to have a different point of
> view, perhaps?
> 


I do respect the rights of other people to have a different point of
view.  If this guy was trying to convince everyone that the moon
was made of green cheese I wouldn't have a word to say against him, 
and I might even contribute to his defence fund.

But he is not a gentle eccentric: he is trying to stop people 
immunizing themselves and their children against rubella, and 
he is using distortions, dodgy arguments, and spurious statistics 
to do so (I can give you the details if you want).

I called him a loony.  What's your word for someone who is doing their
best to stop people protecting themselves against a clear danger?

Linden
-- 
Linden Salter-Duke		email: SALTER_DUKE@DARWIN.NTU.EDU.AU
Northern Territory University
Darwin, Australia		Snail: Box 40146, Casuarina, NT 0811
Newsgroups: aus.politics
From: miw@cc.uq.oz.au (Mark I. Williams)
Subject: Re: GST - double tax?
Keywords: GST
Organization: Prentice Centre, University of Queensland
Distribution: aus
Date: Thu, 19 Nov 1992 03:30:42 GMT

bigm@cs.uq.oz.au (Michael Pilling (Big M is watching you)) writes:

>What they do not point out is that most OECD countries
>have a consumption tax because most OECD countries are a
>member of the EEC. One of the tenants of the EEC was to
>move towards one market, to make things comparable they
>had to have a standardised tax system. Hence
>implementing a consumption tax is a condition of joining
>the EEC. 

It isn't. EC countries are perfectly free not to have a VAT. The
problem, if you have a free market and you don't have a VAT, you have to
tax things in other ways. The good thing about a VAT for competitivity
is that it can be selectively waived for export items, whereas things
like payroll tax, income tax, excise, etc. can't. This means countries
can have a relatively high rate of taxation but not make their industry
uncompetitive. Denmark, for example, has a VAT of 30+%, while Germany's
was 17% last I looked. Denmark wouldn't be able to sell anything abroad
if its industry had to foot the higher taxation rate, and Denmark would
be bankrupt, because they have such a small home market they can't
survive without exporting.

In other words, the VAT has the benefit of allowing governments to
decouple domestic fiscal policy somewhat from their competitiveness or
not on international markets.

Believe it or not, Australia is becoming dependant on non-commodity
exports (e.g. manufactured goods), which means that to be competitive,
taxes like wholesale sales tax and payroll tax have to go. Keating said
it in 1985, and Hewson is saying it now. I imagine that people who have
to run this country will be saying it until one is finally implemented.

cheers,


--
Mark Williams         The University of Queensland       miw@cc.uq.edu.au
+61 7 36 54012   (w)  Prentice Centre
+61 7 36 54477  (fax) Qld 4072  Australia
Nullum magnum ingenium sine mixtura dementiae fuit.  -- Seneca
Newsgroups: aus.politics
From: pol253b@monu1.cc.monash.edu.au (Ms D Alexander)
Subject: Re: Jeff Kennett: good for workers ?
Organization: Monash University, Australia.
Distribution: aus
Date: Mon, 16 Nov 1992 11:25:10 GMT

In article <1992Nov11.131555.90569@vaxc.cc.monash.edu.au> phs265y@vaxc.cc.monash.edu.au writes:

Re: Figures published in The Age which shows the ALP ahead of LIBS Federally.

>> Although it is doubtful that Jeff Kennett is good for much, I think he
>> deserves the credit for this one. 
>
>      You're being unfair on poor old Jeff. When he gets sacked as Premier he
>can always take up a job as recruiting officer for Trades Hall Council. Since
>Kennett has taken office, thousands of Victorian workers have joined unions
>EACH DAY!
>
>      Kennett can also take credit for yesterdays march in Melbourne yesterday.
>It was the largest in Australia's history. More than 150,000 marched (figures
>from SBS World News). Some reports have the figure at close to 200,000.

And Tony, I'm afraid I have to take the credit for pinching one of your (ISO,
that is) posters (the one where Jeff's a turkey) a few days back.  I just had
to have one to grace the walls of my loo.

Dey.

Newsgroups: aus.politics
From: suter@fawlty8.eng.monash.edu.au (Mr D. Suter)
Subject: Re: GST - double tax?
Keywords: GST
Organization: Monash University
Distribution: aus
Date: Tue, 17 Nov 1992 06:09:08 GMT

In article <9232215.8916@mulga.cs.mu.OZ.AU> rakesh@ecr.mu.oz.au (Rakesh DESAI) writes:
>In article <dyfl.721973757@munagin>, dyfl@mullian.ee.mu.OZ.AU (Daniel Y Lam) writes:
>> rakesh@mame.mu.OZ.AU (Rakesh DESAI) writes:
>> 
>> >e.g.  If a ballpen worth a dollar requires 4 stages of manufacture and
>> >each stage you charge 15 % tax, will not ballpen cost 
>> >1.15 * 1.15 * 1.15 * 1.15 = 1.75$?
>> 
>> No. The GST is levied on the value added at each stage, not on the
>> total value.  So the whole thing is taxes at a rate of 15%, no matter
>> how many stages it goes through.  At least that's the theory.
>
>In this case also it will  be higher tax.  I will expand on my above
>example of a ballpen worth a dollar.  Suppose 4 stages of value addition
>hypothetically has value addition of 50c, 20c, 20c and 10c.  If each
>stages are taxed it will work out as follows
>50c * 1.15 = 57.5c
>57.5 +20c = 77.5 * 1.15 = 89.125c

Only the 20c is taxed - i.e. the value *added* (c.f. VAT in Britain -
specifically Value Added Tax) The fact that the final (overall tax)
rate is still 15% is no more than the simple distributive law of multiplication
over addition.

>89.125c + 20c = 109.125 * 1.15 = 125.49375c
>125.49375 + 10c = 135.49375 * 1.15 = 155.8178c
>
>i.e. slightly better than 1.75$ but a single ballpen worth a dollar will
>actually cost 1.56$.  By any other permutation it will cost less I guess
>depending upon the value additions, which I agree.  But it will be far
>far more than a simple figure which Dr. Hewson said about 15 % tax.  It
>might be that I got it wrong or Dr Hewson hasn't done his homework.  

Rest assured, it's the former. At least on this score.

d.s.
-- 
David Suter - Dept. of Electrical and
Computer Systems Engineering, Monash University,
Clayton, Vic. 3168, Australia
ph 565 5682 Fax 565 3454
Newsgroups: aus.politics
From: chris@suite.sw.oz.au (Chris Maltby)
Subject: Re: Negative Gearing
Organization: Softway Pty Ltd
Date: 20 Nov 92 05:11:31 GMT

In <1992Nov19.070558.20320@trl.oz.au> c.oneill@trl.oz.au (Chris O'Neill) writes:
>
>Suppose you borrow $100,000 and invest it all under the conditions of the above
>example (18% interest, 8% inflation, 6% rate of return on investment, 48.25%
>tax rate).  Suppose you sell if after 1 year for $108,000, i.e. you get a
>capital gain equal to inflation.  Now the rental return was $6,000, the
>interest was $18,000, so the tax deductable loss was $12,000.  The reduction in
>tax reduces this loss to $12,000 (1-0.4825) = $6210.  The net gain is the
>capital gain minus the loss resulting from rent, interest, and tax reduction,
>i.e. $8000 - $6210 = $1790.
>
>So, you make $1790 and the tax office loses $5790.

But the bank who lent you the money has earned $18,000 interest on which it
pays tax at 39%. It may have had to offer 12% interest to borrow the money
which it lent you, and that will be taxed at someone's marginal rate - for
simplicity also 39%. That's $7020 in tax collected. The tax man has also
made a net gain of $1230. That is principally at the expense of the nitwits
who save their money in banks which pay negative real-after-tax rates of
interest.

Negative gearing is a transfer of wealth from savers to speculators.
When the merry-go-round stops it's the savers who are worse off.
And society as a whole loses.
-- 
Chris Maltby - Softway Pty Ltd		Internet: chris@softway.sw.oz.au

PHONE:	+61-2-698-2322	"I'm waiting for X-Windows to become just that;
FAX:	+61-2-699-9174	 Ex-Windows" - A McGrath.
From: bigm@cs.uq.oz.au (Michael Pilling (Big M is watching you))
Newsgroups: aus.politics
Subject: Re: GST - double tax?
Keywords: GST
Date: 18 Nov 92 10:51:36 GMT
Reply-To: bigm@cs.uq.oz.au
Distribution: aus

In <1ec4hfINNqgg@huon.itd.adelaide.edu.au> hoconnel@iti.org (Heath O'Connell) writes:

>	I don't know when he said this. The Coalition is usually at pains to
>stress that some sort of consumption tax operates in most major economies.
>Usual examples are Canada and New Zealand.

What they do not point out is that most OECD countries
have a consumption tax because most OECD countries are a
member of the EEC. One of the tenants of the EEC was to
move towards one market, to make things comparable they
had to have a standardised tax system. Hence
implementing a consumption tax is a condition of joining
the EEC. 

Michael
--
 _--_|\  Michael John Pilling,		 Phone: +61 7 365 2445
/      \ Computer Science Department,    She was pregnant and, unfortunately,
\_.--._/ University of Queensland,	 the serious bruise to her back
      v  Queensland, 4072 Australia.     prompted her to abort.[Daily Sun]
Newsgroups: aus.politics
From: c.oneill@trl.oz.au (Chris O'Neill)
Subject: Re: Dividend imputation Re: Australia's Debt : IBIS view
Organization: Telecom Australia Research Laboratories
Date: Wed, 18 Nov 1992 07:03:55 GMT

In article <1992Nov16.225005.2878@trl.oz.au> andrew@medici.trl.OZ.AU (Andrew
Jennings) writes:
>> 
>>I find it somewhat worrying that someone who is supposed to be in the
business
>> of providing business information and who gets quoted by a newspaper doesn't
>> seem to understand the benefit of dividend imputation.  
>> 
>
>Perhaps he was misquoted, since it seems that the forms of saving he is
>advocating are precisely those which dividend imputation favours. 
>
>There is the question here also of personal savings. Its not just the balance
>of trade, its having a pool of savings to draw on for creating new companies.

Yes, as I said in my other reply, savings and the balance of trade are closely
related.  Mr. Ruthven might have been slightly off-line when he said:

>The federal government's insistence that the balance of payments
>problem could be solved by increasing exports was "propaganda" and
>Australia was heading for disaster.

Assuming that the federal government meant that increasing exports led to an
increased trade surplus, then what they said is correct, the balance of
payments problem could be solved.

Mr. Ruthven would have been clearer if he had said that a sufficient trade
surplus probably would not occur unless there was more saving.

Chris O'Neill
Telecom Research
Newsgroups: aus.politics
From: c.oneill@trl.oz.au (Chris O'Neill)
Subject: Re: Negative Gearing
Organization: Telecom Australia Research Laboratories
Date: Mon, 23 Nov 1992 01:38:02 GMT

In article <chris.722236291@suite.sw.oz.au> chris@suite.sw.oz.au (Chris Maltby)
writes:
>In <1992Nov19.070558.20320@trl.oz.au> c.oneill@trl.oz.au (Chris O'Neill)
writes:
>>
>>Suppose you borrow $100,000 and invest it all under the conditions of the
above
>>example (18% interest, 8% inflation, 6% rate of return on investment, 48.25%
>>tax rate).  Suppose you sell if after 1 year for $108,000, i.e. you get a
>>capital gain equal to inflation.  Now the rental return was $6,000, the
>>interest was $18,000, so the tax deductable loss was $12,000.  The reduction
in
>>tax reduces this loss to $12,000 (1-0.4825) = $6210.  The net gain is the
>>capital gain minus the loss resulting from rent, interest, and tax reduction,
>>i.e. $8000 - $6210 = $1790.
>>
>>So, you make $1790 and the tax office loses $5790.
>
>But the bank who lent you the money has earned $18,000 interest on which it
>pays tax at 39%. It may have had to offer 12% interest to borrow the money
>which it lent you, and that will be taxed at someone's marginal rate - for
>simplicity also 39%. That's $7020 in tax collected. The tax man has also
>made a net gain of $1230. 

I wonder what the average tax rate paid on received interest is?  In the case
of a superannuation fund, isn't it 15%?  In that case the above situation would
mean the bank pays tax of $6000 x 0.39 = $2340 and the super fund pays tax of
$12000 x 0.15 = $1800, a total of $4140.  The tax man makes a net loss of
$1650.  The super fund proceeds may pay further tax way into the future, but
present value discounting of this would make its present value pretty small.

>That is principally at the expense of the nitwits
>who save their money in banks which pay negative real-after-tax rates of
>interest.
>
>Negative gearing is a transfer of wealth from savers to speculators.
>When the merry-go-round stops it's the savers who are worse off.
>And society as a whole loses.
>-- 
>Chris Maltby - Softway Pty Ltd          Internet: chris@softway.sw.oz.au
>
>PHONE:  +61-2-698-2322  "I'm waiting for X-Windows to become just that;
>FAX:    +61-2-699-9174   Ex-Windows" - A McGrath.

Chris O'Neill
Telecom Research
From: dave@eram.esi.COM.AU (Dave Horsfall)
Newsgroups: aus.politics
Subject: Re: 11-11-92
Date: 21 Nov 92 07:28:59 GMT
Distribution: aus
Organization: Pacific ESI, Sydney, AUSTRALIA

In article <1992Nov21.051803.10033@physiol.su.OZ.AU>,
    john@physiol.su.OZ.AU (John Mackin) writes:

| Well may we say `God save the Queen'...

Because NOTHING will save the Governor-General...

-- 
Dave Horsfall (VK2KFU)         VK2KFU @ VK2RWI.NSW.AUS.OC
dave@esi.COM.AU                ...munnari!esi.COM.AU!dave
           Disclaimer: "Me, speak for us?"
Newsgroups: aus.politics
From: kerry@citr.uq.oz.au (Kerry Raymond)
Subject: Re: Taxation distorting investment
Organization: Prentice Centre, University of Queensland
Date: Mon, 16 Nov 1992 10:04:01 GMT

c.oneill@trl.oz.au (Chris O'Neill) writes:

>The overall effect is that (during times of sufficient inflation) there were
>massive amounts of investments that were making a real loss that was paid for
>by the tax office (or more precisely, genuine taxpayers such as PAYE
>taxpayers).

Speaking as a genuine PAYE taxpayer and negative gearer, I'd like to
point out that negative gearing is not in itself a terrible thing.
When deciding to borrow for any purpose, one has to weigh up the costs
of borrowing (the interest etc) against the benefits (having the thing
now, deriving income, obtaining capital growth). For example, most people
borrow to buy their first home because their capacity to save up the
entire purchase price is less than their capacity to pay off a mortgage
which dwindles in proportion to the value of the house due to capital
growth.

In short, you only gear (borrow) whether positively or negatively because
you expect to make money from the investment at some time, through
regular income and/or capital growth. Both of these forms of income
can be taxed when they occur in the lifetime of the investment.
The tax deductions on the interest repayments don't exceed the
interest payments so therefore the investment must be intended to
make money eventually or there is no point in doing it.

The well-publicized losses in the 80s have (IMHO) two causes.

Firstly, the loans were out of proportion to the real value of the asset.
Businesses (e.g. Channel 9) were bought at an artificially high price and
thus there wasn't the asset base to generate the income/growth that was
needed to sustain the payments on the loans. The banks and financiers
have to accept a share of the blame for permitting such high levels
of borrowing.

Secondly, some of the loans were done purely for tax reasons because
it was believed that the income or growth of the investment would not
be subject to taxation because of various shady dealings (involving
South Pacific islands) and tax loopholes. Not surprising that these
arrangements went bust when the taxman caught onto them.

In conclusion, negative gearing itself isn't bad but, like cars and any
other tool, it can be misused.

Newsgroups: aus.politics
From: horst@techfak.uni-bielefeld.de (Horst Hogenkamp)
Subject: Re: Barcodes and 666
Date: Mon, 16 Nov 1992 10:56:53 GMT
Distribution: aus
Organization: Universitaet Bielefeld, Technische Fakultaet.


Rev 13:18 says: "... compute the number of the beast..."

With barcodes there is nothing to COMPUTE.
You can only READ the numbers.


To compute IMHO means something like in the well known "VICARIVS FILII DEI"
example or some greek words like "LATEINOS", "TEITAN" or "OIKOUMENA".  They
all add up to 666, but this does not nessisarily mean that the the beast will
come from Rome (one of the next popes?) with an ecumenical movement.  It is
not excluded either.


Horst
.