Posted by John, May 23rd, 2010 - under Mining, Resource Super Profits tax, Tax.



Guess how much income tax BHP and Rio Tinto pay as a percentage of their accounting profit. 13 percent according to Treasurer Wayne Swan.

Workers on the average wage pay 30 percent tax on their earnings over $34,000. For workers earning more than $80,000 it is 40 percent on that extra income.

It’s not as if BHP and Rio Tinto are alone. According to Wayne Swan, the Treasurer, citing independent analysis for the Henry Tax Review, other miners, like Fortescue and Newcrest, pay only 17 percent.

This is because business get a huge number of tax concessions. The finance industry pays for example only 20 percent. Miners get even more concessions than the other tax rent seekers.

It’s time the Rudd Labor Government forced big business (40 percent of whom pay no income tax) to really begin contributing to society.

A super profits tax is a start; inadequate (as you would expect from a Labor Party ruling for the rich), but a start nevertheless.

What could Labor do?

Tax all monopoly profits (the big 4 banks come to mind).

Impose a minimum company tax regime so that companies pay some tax even in artificial loss situations.

Soak the rich through a progressive tax system.

Attack tax expenditures (disguised grants) which cost $100 billion a year and mainly benefit business and the rich.

Imposing death and gift duties on the bourgeoisie and their middle class apparatchiks.

Tax the houses of the filthy rich.

Beef up the Tax Office to attack the rich avoiders and evaders.

Remove the handcuffs that business has imposed on the ATO.

These are just some of the issues that would be on the agenda of any left wing Government. A carbon tax on the big polluters with the money collected returned to workers and price control on energy prices would be an option.

Of course Rudd Labor is not left wing. Its resource super profits tax for example is about redistributing monopoly profits (out of value workers create) to those sectors of the economy open to more competition, including other big businesses and small business.

Rudd Labor rejected increasing the tax free threshold. This would have benefited workers (and could have been structured to phase out so the rich don’t benefit.)

Labor rejected slight modifications to negative gearing. It rejected abolishing the capital gains tax concessions which benefit the very well off disproportionately. It rejected a bequest tax.

Tax policy in Australia is a debate among the capitalist class about what is best for it and for individual sectors within it. The rent seekers have taken over tax policy and Ken Henry’s Tax Review was an attempt in small part to rein them in for the benefit of the class and the capital accumulation process as a whole.

The fact that Labor has rejected many of the Henry Tax Review’s recommendations and put others in the too hard basket shows that, apart from the Resource Super Profits Tax, it is a slave of the tax rent seekers and the particular narrow ruling class interests they represent.

A socialist program would tax the bourgeoisie and their accumulation process. Even then other policies would need to be in place to address the captial strike the bourgeoisie would undertake and to control the prices of their goods and services.

None this will happen in times of social peace. It would be a consequence of the developing revolutionary situation and the democratic revolutionary transfer of power from the minority class to the majority class.

Until then the left can continue to push a simple revenue message. Tax the rich.