SACRED COW TO BE SLAUGHTERED?

lindsay david

 

Lindsay David: Bad news upcoming for negative gearers.

 

 

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NEGATIVE GEARING OF REAL ESTATE: GET RID OF IT

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FOOL’S PARADISE?

fool

 

 

http://blog.australiaboomtobust.com/2015/05/the-fools-of-fools-paradise-getting-more-foolish/

 

 

 

 

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TRANSURBAN TRANSGRESSES

EastWest_WesternDistributorApr2015

Victorian Premier Daniel Andrews is considering a second connection between the West Gate Freeway (near Francis Street) and CityLink to the east, via a tunnel and an elevated roadway. Offering an alternative to the West Gate Bridge, it’s not a bad plan at all. It would reduce traffic and cost some $5.5 billion.

The main problem is that the plan has been proposed by Transurban, the tollway king which has already privatised eleven Australian roads – and existing CityLink tolls will need to be extended until 2050.

The Premier is impressed because a tollway won’t cost the State budget anything at all. But it will cost Victorians heaps!

This is a wrong-headed application of the ‘user-pays’ principle. For the sake of getting the costs off the back of the State government, those who use the new tollway will have to pay heavily for the privilege over next thirty-five years, and Transurban will reap massive rewards over the period.

“What’s wrong with that?” do I hear those at the Institute for Public Affairs cry?

Well it’s this.

First and foremost, what has become of the ancient right of all to the freedom of the highways and byways? Tollroads are progress? Isn’t it rent-seeking that has delivered the world into the current depression? Rent-seeking has come at a terrible cost to our productivity, yet Transurban’s rent-seeking in Victorian roads is to continue apace!

There are other ways to consider whether a capital works project is a goer, but the best way  is to see how it affects land values. If it lowers them or raises them only marginally, you kill a proposal off. You can bet that this new access would generate an uplift in land values of billions of dollars, not just in Melbourne’s west, but also to its north and east. There would be a massive aggregate increase in property values across Melbourne, and beyond.

So the real beneficiaries are not only those who would use the new connection, but all Victorians who would benefit from the efficiencies, savings and superior traffic flows the project would deliver. These benefits, spillovers or externalities are clearly reflected in the varied rates of increase in property values, mainly across Melbourne, and should be captured back via a charge on land values. This would be over a much shorter term, and at far lesser cost to motorists and Victorians, than using Transurban.

The only stumbling block to taking the correct action is that we have an antiquated land tax system in Victoria that urgently needs to be reformed to include all Victorian properties.

To continue paying rent-seekers in economies that are crumbling due to excessive rent-seeking in our natural resources is simply to continue the madness.

The time for reform is now. We don’t need new tollways.

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WORTH WATCHING THROUGH

INET – Institute for New Economic Thinking

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PITY ABOUT THE YELLOW-HIGHLIGHTED NONSENSE

Marginal Excess Tax Burdens_Page_1
Marginal Excess Tax Burdens_Page_2

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BHP (AND OTHERS) FLOUT OZ TAX LAWS VIA SINGAPORE

THE AGE

BHP Billiton has revealed the true extent of its sweetheart deal with tax authorities in Singapore.

The miner is paying an incredibly low effective tax rate of just 0.002% – or effectively nothing – on the billions of dollars in sales that it directs through its “marketing hub” in the low-tax nation.

Between 2006 and 2014 the company booked profits of $US5.7 billion in Singapore, it said in a statement to the Senate inquiry into corporate tax avoidance.

It paid just $US121,000 in tax in Singapore – or $US15,000 a year – it said in its answers to questions on notice to the committee.

BHP was heavily criticised for ducking questions at the public hearings of the Senate committee when it appeared alongside fellow mining heavyweight, Rio Tinto.

Both companies have cut special tax deals with Singapore government to set up in the trade-friendly nation but BHP Billiton’s answers suggest it got the more favourable treatment.

Through their marketing hubs, both companies “buy” Australia resources from their Australian arm and re-sell at a higher price to China and other Asian nations. Profits booked in Singapore are then virtually tax free for BHP.

Rio Tinto’s Australia chief executive Phil Edmands told the committee that Rio’s Singapore marketing hub earned $US719 million last year and paid $US44 million in tax.

“The Singapore government has granted BHP Billiton Marketing AG [Singpaore] a tax incentive for its marketing activities. BHP Billiton Marketing AG was awarded this incentive for its contributions to the development of Singapore’s commodities sector,” BHP Billiton said in its statement to the committee.

“The tax incentive applies to the vast majority of BHP Billiton Marketing AG’s income in Singapore. Accordingly, BHP Billiton Marketing AG has paid approximately US$121,000 of income tax in Singapore since 2006.”

But BHP insisted that the Australian Tax Office still received revenue as a result of its Singapore operations. It said that $A945 million had flowed to the ATO in the same period of 2006 to 2014.

“It is important to note that 58 per cent of the profit which BHP Billiton Marketing AG earns in Singapore from the on-sale of commodities acquired from Australian entities controlled by BHP Billiton Limited is subject to tax in Australia at the company tax rate of 30 per cent,” it said.

In response to questions from Greens leader Christine Milne, BHP said that it is currently under audit by the ATO in relation to transfer pricing and the so-called “top up tax” under Australia’s Controlled Foreign Company rules.

Since establishing in Singapore, BHP owes the ATO an additional $522 million as a result of tax assessments.

That consists of $301 million in additional tax, interest of $145 million and penalties of $76 million.

“BHP Billiton has objected to these assessments,” the company said.

BHP said it employs 400 people in Singapore.

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FORBES: A TAX ON LAND VALUES WILL DO THE TRICK

LVT

 

 

Forbes magazine –> http://www.forbes.com/sites/timworstall/2015/03/27/contra-piketty-its-not-a-wealth-tax-we-need-but-a-land-value-tax/

 

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ANZACS – FROM PROGRESSIVE ERA TO RENT-SEEKING ERA

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LET’S REMEMBER THEM, BUT THERE’S NO GLORY IN AN OBSCENITY

remembering war

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