Myths and Facts About Corporate Tax

A recent report made the Australian Tax Office disclosed the companies that did not pay tax in the 2013 - 2014 financial year.

Now of course, various left wing journalists, unions and advocacy groups seized on this information and made largely misleading claims about this.

Whether they are deliberately or accidentally distorting economic data, someone has to explain how corporate tax rates actually work.

Companies are taxed according to their profit. The higher the profit, the higher the tax. If the company makes a loss for the year, they are exempt from paying tax. This means that although companies like QANTAS and Lend Lease have a high revenue, they should not pay taxes this year because they haven't made a profit. If a company were taxed solely from its revenue, this would completely their ignore their expenses and most likely put them in bankruptcy.

There is an old saying that "every time taxation is compared to revenue, an accountant kills a kitten." Imagine then, how many kittens have died since GetUp blatantly distorted economic data to make it seem like companies aren't paying their taxes. They have deliberately spread misinformation to show companies as powerful, money -making tax - dodging structures when a closer analysis shows the very opposite.

Unless these advocacy groups adhere to basic economic principles, they are not doing any Australians any favours, not are they restoring "tax transparency."

If we were to take GetUp and CFMEU at their word, we should start by taxing their revenue. As an NGO, GetUp pays no taxes and neither do the colossal array of unions who are set on increasing taxes for the rest of us. Let's see how long they can survive if the government paid no attention to every one of their expenses. It's time they practice what they preached.

 

 

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