Fools at the helm? Taxing downloads

[Leiothrix]

I don't understand what people's problem is with this.

They're wanting to tax businesses that have a presence in Australia and do business in Australia.

The online part is irrelevant.

The hate against negative gearing is also kinda silly.  Most countries have negative gearing, they just don't have a special word for it.

Getting rid of it won't change house prices, because people will still "positive gear".   

[VK3DRB]

I don't understand what people's problem is with this.

They're wanting to tax businesses that have a presence in Australia and do business in Australia.

The online part is irrelevant.

The hate against negative gearing is also kinda silly.  Most countries have negative gearing, they just don't have a special word for it.

Getting rid of it won't change house prices, because people will still "positive gear".

If there is no effect on the market by getting rid of negative gearing, why don't they get rid of it then? More than half housing purchases are made by investors who use it to avoid paying income tax and for profiteering.

[Leiothrix]

If there is no effect on the market by getting rid of negative gearing, why don't they get rid of it then?

What makes property so different that it should be treated differently to any other asset class?

All it is is offsetting your losses against your gains.  In the case of property it is interest and operating expenses versus rental income.

What's the difference between residential property, commercial property, shares, bonds, or a business?

Remember if you're "negative gearing" you're losing money.  The ATO is just being nice in not taxing you on your loss.

[iampoor]

Maybe they should tax the mega-churches that offer "wealth and prosperity" if the followers "plant a seed" (Give 100-1000$) 

Some mega-churches are very dodgy. In the US, many of the big name televangelists or faith healers who preach the prosperity religion behind them are modern day charlatans, gouging money out of poor people to feed their lavish lifestyles. If churches won't disclose their auditable finances to members, it is a cause for alarm. Simply put: Disclosing finances publicly should be a requirement to classed as tax exempt by the government.

However the vast majority of church ministers are good, faithful and honest people. They work long hours on effectively a low hourly rate and pay their taxes like anyone else. Most parishioners work hard too for the communities they serve, without financial reward or recognition. Many of the churches are struggling financially for one reason or another. It would be unjust to tax churches in general and on the whole, society would suffer for it. Another point is that if churches were taxed, then those placing money as donations in the offering plate could claim the money as tax deductions and the net benefit to the government could be negligible and it would be an administrative nightmare.

Even the Roman Catholic Church should not be taxed. Instead, governments around the world should fine the Church some serious money and give that money to the victims and their families whose lives have been destroyed by the paedophiles, rapists and those who conspired to cover it up. If the Church has to sell just a small percentage of their real estate, funding would be plentiful. But it is quite unfair that the offering plate is used to pay compensation, because the parishioners and most of the clergy are clearly not to blame and are decent people.

Back on the subject... tonight the government announced the "digital download tax"in the Australian Budget. It won't work! They are fools to believe it will.

I totally agree. I have served in many smaller churches and found exactly what you said to be the case. Its unfortunate that some very big organizations have spoiled the reputation of so many smaller churches in many peoples eyes!

[Delta]

I totally agree. I have served in many smaller churches and found exactly what you said to be the case. Its unfortunate that some very big organizations have spoiled the reputation of so many smaller churches in many peoples eyes!

I can't think of a single religious organisation that has a good reputation...

[iampoor]

I totally agree. I have served in many smaller churches and found exactly what you said to be the case. Its unfortunate that some very big organizations have spoiled the reputation of so many smaller churches in many peoples eyes!

I can't think of a single religious organisation that has a good reputation...

I think a lot of that depends on how involved you are. I have had the opportunity to be "on the inside" of some smaller groups, and they were outstanding.

On a global level, yeah, I think engineering types don't really care of what they know about most. 

[VK3DRB]

If there is no effect on the market by getting rid of negative gearing, why don't they get rid of it then?

What makes property so different that it should be treated differently to any other asset class?

All it is is offsetting your losses against your gains.  In the case of property it is interest and operating expenses versus rental income.

What's the difference between residential property, commercial property, shares, bonds, or a business?

Remember if you're "negative gearing" you're losing money.  The ATO is just being nice in not taxing you on your loss.

You seem to miss the point. Why do we demonise football ticket scalpers and yet admire greedy house scalpers? The difference is football is a want, but having a roof over your head is a need. In both cases the scalpers are exploiting consumers due to limited supply and strong demand.

Consider this:

Young man studies to become an electronic engineer.

4 years income plus a $50K loan for study.
Car and incidentals loan $30K.
Has to save for a deposit and borrow $700K for a meagre home reasonably near work.
Has to pay $30K stamp duty.
Gets married, wife gets pregnant. 3 kids.
He earns $70K per annum - and hopes like hell he doesn't get retrenched.

So he has debts of over $800K. Interest rate is 5%. That is $40K in annual interest AFTER tax. He cannot service the principle on the loan. No bank will lend him the money for the house because he simply cannot afford it. But if he did get a loan, his wife is forced to work to make ends meet. Kids suffer as a result. If interest rates rise and house prices plummet, he and his family will be out on the streets or even declared bankrupt. Now imagine if he were a clerk on $35K per annum... he cannot even afford to have kids let alone ever hope to buy a home.

So there is a BIG difference between the asset classes you mention and getting a roof over your head.

[Leiothrix]

If you want property near the middle of a city, it will be expensive.  Both to buy or to rent.

I'm really not sure what you're suggesting.  Your example is of someone who has no concept of living within their means, nor realistic expectations of what they can afford, nor a sense of personal responsibility for their own situation.

Perhaps you're suggesting we should just give people houses?

And why shouldn't the wife be working?  This isn't the '50s.

[Ecklar]

Apparently Australia will be the first country in the world to try this tax, and other governments will be looking on its outcome with keen interest.

This is what I think might happen:

1. People will see a way around it, either legally or illegally. The government will lose, and like the mining tax, be turned into a laughing stock.

2. In this country, we pay a premium on software and music by price gouging by companies like Apple and Microsoft. The tax will just make piracy more attractive.

3. The cost of enforcing it will be excessive, both in dollar terms and politically. Our government's CB radio licensing scheme in the late 70's and early 80's was canned only because the knew they were not profiting from the scheme. This may well happen with their tax on software.

4. The system will leak like a sieve, allowing plenty of creative tax dodging opportunities to spring up. Third party providers in zero software tax countries will act as intermediaries.

5. Software will be offered on line through eBay, and the vendor won't have to pay the tax. They buy the legal software, music or video, and resell it - tax free.

6. Very few, in any, politicians would have even heard of proxy servers, let alone know what they do. Proxy servers are used by 200,000 Aussies already to get the US Netflix rather than the second-class offerings from Australia. Smart people will just use proxies more to dodgy the tax. Maybe even proxy bank accounts.

7. The government might try to circumvent people avoiding the tax by hacking into bank accounts or getting transaction details on software from transaction houses like eBay. If you think this is crazy, consider this... http://www.smh.com.au/national/canberra-reaps-360m-from-inactive-bank-accounts-20140609-39t8p.html. It is true. The government can steal money from your bank account and leave you to fight to get it back.

What the government should be doing to forgetting the end-user's tax on software, but instead forcing bad corporate citizens like like Microsoft, Apple and Google to pay their fair share of COMPANY TAX, rather than openly ripping us all off by funnelling money through Ireland, Singapore or Bermuda. The tax on "digital downloads" will be only 10%, but they will reap a lot more by forcing these these rogue companies to pay their 30% company tax rate like every other law abiding and decent company does.

You might laugh at first, but, if they are intent on taxing downloads they will get better at collecting, better at enforcing and ultimately better at punishing anyone who thinks they can circumvent authority.  There is no government in history that has ever taxed a society to wealth.  But there are countless examples of societies that have been competitively hobbled or destroyed by his bloat.

[VK3DRB]

If you want property near the middle of a city, it will be expensive.  Both to buy or to rent.

Try middle to out suburbia here. Go to www.realestate.com.au and check it out for yourself. Just pick a suburb. Even in poorer outer suburbs far far away from employment you are looking at $500K for a basic house, and $400K for a flat. Then you have to fight traffic for 3 or more hours per day. A better idea would be to close the immigration doors, cancel negative gearing and ban foreigners (ie: those who don't live here but a hiding money) buying our homes.

I'm really not sure what you're suggesting.  Your example is of someone who has no concept of living within their means, nor realistic expectations of what they can afford, nor a sense of personal responsibility for their own situation.

OK, he could go without the education, the wife and kids, or the car or the house and live on the streets as a homeless person.

And why shouldn't the wife be working?  This isn't the '50s.

Too bad it isn't the 50's and 60's. People were a lot happier, less stressed, less greedy and there were no foreigners to contend with. Jobs for everyone. And a single income family could survive quite well. As loyal servants to the god of stuff, we have brought this mess of having to have dual incomes just to survive on ourselves.

[Leiothrix]

A better idea would be to close the immigration doors, cancel negative gearing and ban foreigners

Member of One Nation?  How many immigrants do we get a year, and how much is their average salary?  How much of that actually affects housing prices?  And in which direction?  Think a bit instead of just watching ACA.

Housing prices in the city are expensive because they are desirable and they are set at what the market will bear.  Same as the suburbs, same as rural towns.  An inner city apartment isn't going to magically be "affordable" just because you remove a tax incentive.  Or immigrants.

Too bad it isn't the 50's and 60's. People were a lot happier, less stressed, less greedy and there were no foreigners to contend with. Jobs for everyone. And a single income family could survive quite well. As loyal servants to the god of stuff, we have brought this mess of having to have dual incomes just to survive on ourselves.

That's a whole optometrist shop's worth of rose coloured glasses right there, and in no way in touch with reality at all.  We've got it better now than anyone else in any point in history.  People were always greedy, it's just human nature.

And really?  Are you saying women shouldn't be allowed to work?  The reason houses cost two people's worth of wages is because on average, when buying a house you have two people's worth of wages.  To bring the prices down, you need to bring down the money available.  Which, in context, means kicking women back out of the workforce.

[VK3DRB]

Member of One Nation?  How many immigrants do we get a year, and how much is their average salary?  How much of that actually affects housing prices?  And in which direction?  Think a bit instead of just watching ACA.

190,000 per annum, the highest number on record and growing. The government shares Rudd's "Big Australia" dream that the population do not want. I have nothing against most immigrants at all. Foreigners are not immigrants. Foreigners are those who don't live here buy our houses (demolishing them and building new ones) and locking them up to hide their cash. Net effect... less land available. In excess of 64,000 houses and flats are left empty in Melbourne and yet there are not enough rental properties available. Some foreign property developers build illegal dog boxes in the city of Melbourne (living area much smaller than the minimum allowed) but the city council and state government turn a blind eye to it for some strange reason.

Remember, the average politician owns 2.5 properties. They don't want to stop the "boom times" rolling and quite frankly, they don't give a rats arse about making housing affordable to young first home buyers, as is evident by them avoiding the topic or skirting around it. Abbott is clear that he supports foreign property investment here. Maybe one solution to this is to make investment home ownership a conflict of interest for politicians in government but they will find a way around it legally. They make the laws and as we know they make them so they don't lose.

ACA? I  have not viewed any commercial TV for about 30 years. I have never seen ACA. Only ABC TV.

Too bad it isn't the 50's and 60's. People were a lot happier, less stressed, less greedy and there were no foreigners to contend with. Jobs for everyone. And a single income family could survive quite well. As loyal servants to the god of stuff, we have brought this mess of having to have dual incomes just to survive on ourselves.

That's a whole optometrist shop's worth of rose coloured glasses right there, and in no way in touch with reality at all.  We've got it better now than anyone else in any point in history.  People were always greedy, it's just human nature.

And really?  Are you saying women shouldn't be allowed to work?  The reason houses cost two people's worth of wages is because on average, when buying a house you have two people's worth of wages.  To bring the prices down, you need to bring down the money available.  Which, in context, means kicking women back out of the workforce.

We have it better than anyone else? In some cases yes, but not because of the reckless decisions by dodgy politicians. Speak to a commuter who spends 3 to 4 hours a day in a car and see what he says.

Salaries of electronics engineers have barely moved in the last 15 years, but in our area prices of houses have quadrulpled. We are a lot worse off for housing affordability now than 15 years ago. And much worse off than we were since 1960 - when there was typically only one income per household.

Nothing wrong with women working by the way. They have no other choice.

[Tac Eht Xilef]

Member of One Nation?  How many immigrants do we get a year, and how much is their average salary?  How much of that actually affects housing prices?  And in which direction?  Think a bit instead of just watching ACA.

190,000 per annum, the highest number on record and growing.

No, that's the number of annual places allocated in the Migration Planning Programme - not all are filled. The actual number of immigrants from in 2012-13 (the most recent official figures available) is 152414, with a net permanant migration (i.e. immigrants - emigrants) of 60653.

The highest number of immigrants in recent years? 185099. Guess when that was?

(Hint: you can't blame Abbott, Rudd, Gillard, Rudd, Howard, Keating, Hawke, Fraser, Whitlam, or McMahon for it...)

[zapta]

Member of One Nation?

Is this an Australian code name for something evil?

[VK3DRB]

Member of One Nation?

Is this an Australian code name for something evil?

Sort of. A defunct political party that was a bit of a joke. The leader, an uneducated fish and chip shop owner said the way to solve economic slumps was to print more money. Simple solution from a simple mind. They were anti-Asian too, which I am not. I'll leave the printing more money arguments to the experts at the US Federal Reserve. One way to solve economic slumps is to tax the filthy rich (including bad corporate citizens like Apple, Google and Microsoft) a lot more and tax the middle classes less. People will then spend a lot more, keeping the employment wheels in motion. It is a bit simplistic though because anyone who does increase taxes for the filthy rich (in the USA), will be thrown out of office.