With the Canberra and state pollies strutting around the lawns this week trying to look intellectual about new tax ideas , why not talk about the merits of the “Transaction Tax”.
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The idea of a tax on all goods transacted is over 20 years old, butthe people who introduced it have just as much enthusiasm now as when it was introduced.
The system goes like this.
Each computer, linked into the financial systems of the oil industry,the shipping terminals, the commerce section – in fact the complete, financial world of Australia at a minute to midnight would stop andcalculate the daily transactions.
At a minute past midnight, the computers would begin calculating thenext day’s takings and so on for 24 hours times, forever.
The calculations would be calculated at say 1 per cent, which at the present estimates would generate more revenue than our tax system generates now.
The obious benefits are no more income tax. No more GST. No more tax departments. No more calculations for BAS returns.
Accountants would be swamped with work doing what they were trained to do and that isbusiness planning.
At present more than half their work is legal tax avoidance.
The 20,000 or so tax officers could go and get a real job,but I am not too sure of what we could do with the buildings.
Yes, and the only harsh criticism I have heard is: “it couldn’t work, it’s too simple”.
In reality it means you pay the tax when you purchase goods.
A $500 washing machine, whether secondhand or new, will cost you $500 plus 1 per cent.
Whether we like it or not, we live in a computer age and the taxing system we have is still in the horse and buggy world.
The benefits of the automatic 1 per cent “Transaction Tax” seems to me the wayto go in this 21st century.