The collapse of tax


A story on an Australian new site about Google grabbed my eye as I flicked through, mainly because it mentioned tax, something that I am dealing with at the moment for my business, something I am am obligated to pay in order to keep operating.

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Google settled their 10-year (2008 to 2018) debt with the Australian Tax Office by paying a 481.5 million dollar lump sum. Sounds like a lot doesn't it? Last year Australians handed over 4 billion dollars to Google and for reference, with a population of 25 million, that averages that every man, woman and child spent 160 dollars at Google. While the 480 million payment to cover ten years is great, the problem is that the corporate tax rate in Australia is 30% , meaning that for 2018 alone the tax liability in Australia should be 1.2 billion. Hmm.

Google and every other corporation on earth limits the tax liabilities through creative accounting, and in thee case of Google, they send their finance off-shore to Singapore where the rate is 17% instead. And, they don't pay anywhere near that there either.

As I have mentioned earlier, this is one of the core problems with government economics as they are only able to control what they have within their reach. Now, I am not going to get into the discussion of "tax is theft" here, just look at the issues with being able to move money across borders in order to avoid taxes.

The economic systems that governments use are Keynesian in nature and designed around one hundred years ago. The problem with the system is that they were built for a different time, a time where no one could imagine (let alone factor) companies that generate trillions in revenue, have very little tangible product and can shift their wealth across borders easily and instantly to find the best tax deals. This means that the available financial resources for the governments are limited to what stays in the country, and that means the largest earners who can creatively account their business can avoid their grasp. However, we as citizens can't.

For a little perspective, the average salary in Australia is 80,000 dollars a year (It used to be 36,000 when I was there in 2003) and that means in order to generate the same tax liability as Google did in 2018, there would need to be 50,000 average worker salaries. Again for reference, that is about 0.5% of the entire working population in Australia. Google employees 1500 people or so in Australia. Do you see the issue?

Those 50,000 employees can do very little to reduce their tax exposure, but on the same 4 billion, Google paid just 26.5 million, or the equivalent tax of 1090 average Australian worker salaries. This means that instead of having the tax availability of 1.2B from the 50,000 workers plus the 1.2B from Google for 2018 making 2.4B, the Australian government has 1.2265B. Not much difference. This means that all of the government (often useless I know) actions need to be covered by the people themselves, not the corporations that bleed the people dry.

This isn't the only problem of course though is it? Because while the tax is not available to the government, it isn't available in Australia either, as it goes off shore. That means that pretty much all of the 160 dollars for every Australian that was earned in Australia, went overseas - 4 billion extracted in a year - by one company. And they all do it. And then on top of this, the governments have to take loans from the various banks that are invested into and profiting from the same companies that are extracting the tax amounts. The system is pretty broken is't it?

It is likely working perfectly for those who designed it.

While I do not think that this is going to happen any time soon or likely ever, I wonder what would happen if governments demanded (it would have to come from citizens demanding first) that all corporate finances had to be blockchained and all rules would be applied by the codes as required automatically? Again, there is so much corruption surrounding this that it won't happen (at the corporate or government level), but I wonder how much would be able to be uncovered and, I wonder if all the corporations of the world paid their full tax liability, would the citizens need to pay anywhere near as much?

Regardless of this blockchained scenario, what is obvious is that the economic systems of a country are highly inadequate to deal with the global corporations and conglomerates that can shift their wealth and shop for better deals, essentially laundering their tax liability to then reinvest into themselves and other companies that are going to increasingly do the same thing. Collapse has to happen, it is inevitable.

Where will people turn?

Taraz
[ a Steem original ]

Onboarding

Comments 20


I agree those who should always find a way not to pay taxes. We call it "creative bookkeeping".

I wonder what the hive-... tag stands for.

Posted using Partiko Android

19.12.2019 13:41
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I wonder what the hive-... tag stands for.

Not sure, I didn't add it. I posted through Steemleo though, so I am guessing the front end has one it adds.

19.12.2019 13:56
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@tarazkp Thanks for answering. I read the !BEER community started a?? and they gave me a tag like that. I will figure it out sooner or later. Merry days..💕Posted with ![](https://cdn.steemitimages.com/DQmbroYujK9LNd2s8zDKPUCADmseyJDuNbhwBPrrF7xM8FL/logo-comment.png)

20.12.2019 05:53
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20.12.2019 10:24
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@tarazkp I could not before because it was out of the air. Yesterdayfor the first time Ihad a look but my connection was not able to post. Posted with ![](https://cdn.steemitimages.com/DQmbroYujK9LNd2s8zDKPUCADmseyJDuNbhwBPrrF7xM8FL/logo-comment.png)

22.12.2019 06:18
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View or trade BEER.

Hey @tarazkp, here is a little bit of BEER from @wakeupkitty for you. Enjoy it!

20.12.2019 05:53
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It really is a whole another game for large international corporations.

This is one of the reasons why I consider the likes of Amazon, Google, Facebook or whatnot to be so harmful. I just talked to an acquaintance of mine I tried to get interested in Steem back in 2017 about the evils of centralized social media the other day. He said he didn't mind in the slightest that someone made billions from content created by him for free. I replied that he wasn't able to ruin the environment by littering by himself but that if everyone together could.

It is incredibly harmful to donate content to the likes of Facebook day in day out. The tax dodging by Facebook is a massive insult to injury.

Recently, I've begun very slowly to get people to understand the harm in their Facebook habit. Some of those people are demonstrably MUCH more intelligent than myself. It's unbelievable how slow on the uptake very smart people can be. It shows that open mindedness and commitment to rationality are character traits that can sometimes easily trump raw brainpower.

19.12.2019 14:05
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It really is a whole another game for large international corporations.

Wouldn't it be interesting if the same code applied to all?

This is one of the reasons why I consider the likes of Amazon, Google, Facebook or whatnot to be so harmful.

Just after the sale of A-Katsastus to private, it had a 120 million taxable income and paid 200,000€ in Finland. If I remember correctly, it pays its tax in Lichtenstein.

It is incredibly harmful to donate content to the likes of Facebook day in day out. The tax dodging by Facebook is a massive insult to injury.

Most people have o idea why though.

Recently, I've begun very slowly to get people to understand the harm in their Facebook habit.

It takes time to unlearn after so long being programmed to accept the system.

19.12.2019 15:26
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Just after the sale of A-Katsastus to private, it had a 120 million taxable income and paid 200,000€ in Finland. If I remember correctly, it pays its tax in Lichtenstein.

Whoever promises to end the corporate tax dodging gets my vote.

It takes time to unlearn after so long being programmed to accept the system.

It takes time and patience but there is no shortcut.

19.12.2019 20:23
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No shortcuts and it looks like there is going to have to be a great amount of suffering before the majority move.

19.12.2019 22:39
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It is likely working perfectly for those who designed it.

I’ve yet to see any proof that banksters and our corporate overlords aren’t lizard people.

19.12.2019 14:19
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they put the V in inVest.

19.12.2019 15:27
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Hey @apshamilton just want to make sure you've seen this!

19.12.2019 14:42
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They'll always find new ways to spend it. I applaud any company which can limit its tax liability down to nothing.

Be thankful we're not getting all the government we're paying for

Will Rogers.

19.12.2019 17:34
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While of the same sentiment, the problem is going to be an increasing pressure on those who can't do much (yet) about it. Perhaps it will lead to the rock bottom required, but by that time there is only scraps of the world left while the corporations control everything of value.

This piece is more for the consideration for people to start forcing accounting transparency though blockchain, of the government as well. Never gonna happen perhaps.

19.12.2019 17:50
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Yeah, it'll never happen. As you mentioned; its not broken.
Its massive corporations which actually run the world. They externalise their monopoly enforcement costs onto their customer base via taxation, laundered and legitimised through the political process.
Try and start your own bank or insurance company and the first people through the door will be armed. You're not a member of the group you belong to.

19.12.2019 17:57
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Yep, the only real hope is to undermine it completely by removing the value we add and connecting it to an asset class like crypto.

19.12.2019 18:06
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Apple got fined 14 billion over here for tax issues a year ago. With a population of 5 million people, that's a fair chunk to give to our government who are actually appealing having to take the money.

19.12.2019 19:55
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Keep an eye on where that 14b goes.

19.12.2019 19:56
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20.12.2019 05:19
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