Monday, May 18, 2009

0905183230 Tax Time

The Rudd Government announced an important new measure to ensure that workers who earn income overseas do not have an unfair advantage over workers who earn income and pay tax in Australia.

This latest change to the tax system only effects the relatively few Australians that have decided to live overseas, but it does make me think about what will really happen to the planned gain of 675 million dollars.

The United States has a similar system where all citizens must pay taxes for the upkeep of their country while they live elsewhere. It seems only fair given that overseas citizens are still entitled to the same rights. Expatriates have access to consulates and legal representation, they still want their nation to be protected by a fully funded and happy police force. Teachers, doctors, politicians and public servants all need to be maintained in perfect working order just in case an expatriate decides to use that freedom to return to their homeland.

There was a story a few years ago about how the Victorian government tried to raise money by increasing the tax on diesel fuel. They researched the sales figures for diesel fuel sales and figured that they would raise ( I forget the number ) an extra couple of million dollars. What they did not take into account was the fact that the interstate truck drivers stopped buying the more expensive diesel in Victoria. So instead of raising more money, the government actually lost money by changing the way truck drivers managed their fuel. - they bought the cheaper fuel in New South Wales. So the real world effect was that the state of Victoria lost money while its northern neighbor pocketed the money that Victoria so carefully planned on getting in its collective grimy little mits.

The bit that really fired me up was the unfounded allegation that overseas residents have some kind of perceived "advantage". What is the advantage? Everyone has strengths and weaknesses that amount to some kind of "unfair advantage". The Prime Minister has an unfair advantage because he can ask the air force to take him on overseas business trips - has he done anything to balance the "unfair advantage" by offering free air force flights to business travelers? Politicians can have their retirement benefits paid in full when they leave office - other people must wait until they are at least 65 years old before they can "derive any benefit" from their own hard earned personal superannuation funds. Is there legislation to redress this gross indecency?

If my argument is to be transparent and non-discriminatory then it could be said that just as everyone in Australia is free to choose to live overseas and, simply by co-incidence, pay less taxes then I must also have the freedom to choose to become a prime minister and have free business travel.


note: use of capital letters:
a prime minister - a description of the office
the Prime Minister - the title replaces the proper noun of The Honorable Mr. Kevin Rudd MP Prime Minister of Australia.