Debits Tax

( In the 80’s a bank debits tax was put forward to Australian Government )
Extract from “Your Future in Your Hands” by John McRobert Total tax reform :                The Easytax way to prosperity and job creation
Available from the Australian Parliament House Library Date: 01/01/1998 – Collection: Library – ID: library/lcatalog/10142409

In brief, the proposed Debits Tax involves the elimination of all other taxes and funding government solely through a computerised charge of 0.3% on all bank withdrawals. The tax department would be abolished and it would all be totally painless as the proposed charge is so low. It is well intentioned, and would remove much of the wasted effort currently expended on compliance.

However there are major problems with this proposal.
- It is not immediately visible. We grumble about bank charges but are impotent to do anything about them when we finally get around to checking the bank statement.
- Government has a cost, and the taxpaying public should be constantly reminded of this cost in order to keep it in check.
- Any attempt to increase the tax to meet any government expediency, would not be immediately resisted by 13 million taxpayer/voters. Individuals may not be sufficiently affected to care and the general public may not be motivated to protest until too late.
- It depends on an alliance between two big organisations each beyond the ken of the common taxpayer-Government & Banks.
- The implementation phase would result in increased consumer spending and force prices up due to demand. It is therefore inflationary.
- This reform does nothing to undo the damage caused by generations of accumulated taxes built into the cost of employment. Employers must have their employment costs reduced by extracting those taxes from the cost of employment to dramatically increase the number of jobs offered, to reduce prices, to increase real purchasing power, and increase overseas competitiveness.
- It gives the Government no information with which to manage the economy. Extra cost and complexity would still be required to collect this other important data.
- It doesn’t encourage businesses to manage using sound accounting and cash flow management. Bank records are a vital part of this, barter and cash transactions with low accountability would be used extensively.
- It does nothing to assist detection of criminal activities.
- It does nothing to reduce the cost of government other than in the cost of tax collection.
- What is definition of a bank or a bank withdrawal ? Is this easily circumvented with another lending facility ? Does this include inter-bank transfers ? What happens when dealing with offshore banks ? How do credit cards fit in ?
- It totally exempts the black economy from tax.
- It taxes transfers of funds and the mobility of capital.
- High rollers who should pay their share can evade / avoid tax by making other arrangements. Legislation cannot stop this occurring.
- It encourages a cash economy and tendency to keep money under the mattress with the associated private security risks.

None of these disadvantages apply to the 2% Easytax, but many have confused these two quite different tax reform proposals.

A report by the Department f the Parliamentary Library Information and Research Services describes the shortcomings of a Debits tax in detail together with case histories – the government has been well advised in their rejection of this proposal.

Carbon Tax

Extract from “Your Future in Your Hands” by John McRobert
Total tax reform : The Easytax way to prosperity and job creation

Available from the Australian Parliament House Library
Date: 01/01/1998 – Collection: Library – ID: library/lcatalog/10142409

Before environmentalists become too carried away with the foolish notion of a carbon tax, the article ‘Waiting for the big volcano’ in the August 1997 edition of Geographical places this concept in reasonable perspective. Pinatubo in 1991 caused global cooling of up to 1 degrees Celsius. Eruptions 100 times more powerful than Mt. Pinatubo are possible to lower temperatures up to 15 degrees Celsius. When the big one goes up, our silos must be full, and our technology must be better than today to minimise the proverbial fallout. Another tax on technology is the last thing we need. While the proposed carbon tax collectors harass industry with puny emission sniff meters, they could pause to reflect on the march of mankind towards a better and safer world in spite of stupid albeit well meaning tax laws.

The first blast furnaces used as much as 8 tons of coal or coke to make one ton of pig iron. In 1828, a Scot (who else) developed a system which economised on fuel—5 tons per ton of iron. Today’s usage is closer to half a ton of coke to 1 ton of iron. All done without a carbon tax. When hay burners once used for transport were replaced by gas guzzlers, solid dropping pollutants were replaced by low density pollution in a gaseous form—and always the latest models emitted cleaner exhaust and gave more kilometers per litre. More new cars would be on the roads to replace obsolete versions if sales taxes and tariffs weren’t so high. The cars of tomorrow will be fuelled by hydrogen, and the ash of hydrogen is H2O. The exhaust will be water vapour, but that’s another greenhouse gas. Will they tax that too?

If those who really care about the environment applied their minds, they would realise that fewer taxes, not more, are the answer. A tax system based on ‘profit’, and which allows large write-offs on obsolete equipment, which taxes to its knees investment in high-technology low-polluting equipment, which limits the availability of venture capital with the stifling capital gains tax, is the source of much of the unsightly and unnecessary pollution in the world today. A non-punitive tax system could clean up our act in more ways than one.

When unleaded petrol was introduced, the writer observed a well intentioned fellow pour it into an old car designed for leaded petrol and roar off down the road pouring smoke from his exhaust, happy in the knowledge it was lead free. Carbon tax is the smoke screen of today, and its proponents indicate the same blinkered vision as the happy chappie with lead in his foot and his head in the clouds.