Henry Tax Revue (3 Viewers)

[withoutaface]

Rudd's definition of "super profits" is ROI in excess of long term bond rate (~5.5%) + ~5%

This means that the required returns on these "cancelled" projects, would have been 10.5%+... in fact likely much more if the 40% supertax would have had such a big impact on profits (they would have to be 13%+ for the Gov to even take 1%)

Now if a project is unfeasible at 13%+, the level of risk associated with that kind of return stipulates that the project would have likely failed anyway

1 in 8 of these projects might fail, that doesn't matter if they're diversified. If the government moves the breakeven point there will be marginal investments and there will be a negative effect upon investment.

Secondly, a lack of new projects will mean the resources will remain underground. Sure, no SR benefits, but eventually mining companies will have no other option but to come back and retrieve them in the LR - paying the supertax. We have enough projects at the moment (e.g. China coal contract) to sustain this mining boom for a while yet, and slightly slowing down the pace of exploration is not necessarily a bad thing.

Political climates change. Abbott's already pledged to oppose the supertax, who's to say he wouldn't remove it if elected? Any government would need only to remove the tax to stimulate a return to older mining levels. Unless of course the infrastructure is worn and fucked because it's not been used.

 

[aussie-boy]

Political climates change. Abbott's already pledged to oppose the supertax, who's to say he wouldn't remove it if elected? Any government would need only to remove the tax to stimulate a return to older mining levels. Unless of course the infrastructure is worn and fucked because it's not been used.

Ok I'll put it this way:

Financial benefit from the 40% tax (some $9bn p.a. by 2012-13) to the Government > Loss of tax rev/investment from "1 in 8" marginal, high risk, projects

Our ports + rail lines are already at capacity at current production levels; I don't think that particular concern is warranted.

Also, the tax will not need to be removed... demand for our resources is inelastic as it is, and elasticity will only decrease as they become rarer. There will eventually be a point where commodity price increases completely offset the 40% tax burden and the r(E) will once again > the r(d)

There's no way Abbott would remove a tax; $9bn is a shitload of money - would completely pay for a Syd-Melb HSR line or NBN within 5yrs

 

[withoutaface]

Ok I'll put it this way:

Financial benefit from the 40% tax (some $9bn p.a. by 2012-13) to the Government > Loss of tax rev/investment from "1 in 8" marginal, high risk, projects

Our ports + rail lines are already at capacity at current production levels; I don't think that particular concern is warranted.

Also, the tax will not need to be removed... demand for our resources is inelastic as it is, and elasticity will only decrease as they become rarer. There will eventually be a point where commodity price increases completely offset the 40% tax burden and the r(E) will once again > the r(d)

There's no way Abbott would remove a tax; $9bn is a shitload of money - would completely pay for a Syd-Melb HSR line or NBN within 5yrs

Financial benefit to the Government who have already charged through the nose for mineral rights. It's not the government's prerogative to take taxpayers and shareholders who have invested in good faith in the Australian mining industry and suck them dry. They've wiped $19bn (read: more than double the expected revenue) off these companies' values already.

Oh and this bring's BHP's local tax rate in most places to 57%. More than half their profits do not belong to the government, that's ridiculous.

 

[Riet]

If they invested the fucking money in new ports, railways and smelters I'd have no problem with it.

 

[jennyfromdabloc]

My younger brother is an Economics genius.... 99.45 ATAR last year with something like 3rd in the state for Economics (with a shit teach might I add)...

He said he'd read both of those... and that yes Friedman is a nutcase... but he also described Murray Rothbard's principles as economically unsound and slightly on the side of economic theory not practically... and by slightly he meant a lot... mainly in that he believes that Rothbard has no clue what it is to live like in a poorer situation...

And while I do actually believe you know something about what you're talking about man, my brother is a genius when it comes to this stuff (for his graduation present my parentals organised a meet with the Governer of the Reserve Bank and he held his own and from what I understand he convinced him of a new school viewpoint that he was skeptical about... so I'm going to go with his word on this

and there are people out there just as educated or more educated and intelligent than your brother who hold completely opposite view points.

Think for yourself and judge ideas on their merit, not based on the credentials of who is advocating them.

 

[withoutaface]

If they invested the fucking money in new ports, railways and smelters I'd have no problem with it.

But that's what cunto should have already been investing it in.

 

[Riet]

Yes was just about to edit, that's what we should have built instead of new school halls.

Ports being at capacity is a problem not a justification for slowing down mining exploration

 

[withoutaface]

Give industry axxess to the ports and let them build their own infrastructure.

 

[Riet]

indeed.

 

[aussie-boy]

Financial benefit to the Government who have already charged through the nose for mineral rights. It's not the government's prerogative to take taxpayers and shareholders who have invested in good faith in the Australian mining industry and suck them dry. They've wiped $19bn (read: more than double the expected revenue) off these companies' values already.

Oh and this bring's BHP's local tax rate in most places to 57%. More than half their profits do not belong to the government, that's ridiculous.

*This is just a standard income transfer - from high profit industry to low profit industry. Think of it in terms of our progressive tax system... Is our 45% top bracket "suck[ing] them dry?" Any company with minimum returns of 10.5% is not "dry" by any definition.

*This is replacing mineral rights/royalties, which will be refunded. The people of Australia certainly do deserve signficant cash flows from our natural resources.

 

[Riet]

you're assuming we agree with a graduated tax system when I think all of us will concur that a flat rate with less loopholes would be better.

Edit: and yes, 45% on the dollar is fucking robbery.

 

[withoutaface]

*This is just a standard income transfer - from high profit industry to low profit industry. Think of it in terms of our progressive tax system... Is our 45% top bracket "suck[ing] them dry?" Any company with minimum returns of 10.5% is not "dry" by any definition.

*This is replacing mineral rights/royalties, which will be refunded. The people of Australia certainly do deserve significant cash flows from our natural resources.

Oh they do, do they? Did the people of Australia put them there?

EDIT: Your argument suffers from selection bias. There are plenty of companies who set out to find resources which never become profitable, and so aren't included in popular debate about 'super profits'.

 

[aussie-boy]

you're assuming we agree with a graduated tax system when I think all of us will concur that a flat rate with less loopholes would be better.

Edit: and yes, 45% on the dollar is fucking robbery.

Yet insufficient to provide sufficient disincentives to top level workers. Robbery or not, it works economically.

Oh they do, do they? Did the people of Australia put them there?

Seriously?

 

[scuba_steve2121]

Yet insufficient to provide sufficient disincentives to top level workers. Robbery or not, it works economically.



Seriously?

did he just say tax works economically? Face palm*

 

[withoutaface]

Yet insufficient to provide sufficient disincentives to top level workers. Robbery or not, it works economically.

If top level workers were being taxed 40% in one industry and 28% in another it would.

Seriously?

Yes seriously. What, by virtue of the fact that your parents own or rent a property in the vicinity of Sydney, entitles you to minerals somebody else found 4,000km away?

 

[withoutaface]

Further, why are you entitled to more of a share of that than any other industry happening within our borders? I mean farmers only make money by virtue of using OUR AUSSIE LAND M8 IT BELONGS TO US

 

[aussie-boy]

If top level workers were being taxed 40% in one industry and 28% in another it would.

Further, why are you entitled to more of a share of that than any other industry happening within our borders? I mean farmers only make money by virtue of using OUR AUSSIE LAND M8 IT BELONGS TO US

Taking companies as 'workers,' top level in one industry =/= top level in another. A top waiter will be in a different tax bracket to a top lawyer.

What other industry is earning ROIs in excess of 11% as standard???

If another industry was to achieve this, I'd completely support the super profits tax there as well.

There's no distinction between worthiness of companies; it's a progressive thing. I.e. once profits > 12%, move into next tax bracket of 40%

Yes seriously. What, by virtue of the fact that your parents own or rent a property in the vicinity of Sydney, entitles you to minerals somebody else found 4,000km away?

If you can convince people of this, you win. This is a basic fundamental assumption of arguments supporting my view.

 

[Teclis]

First thing I'd be doing is cutting off tax exemptions for religious organisations.

Let's tax them first. At least the miners actually have a product they sell.

HILLSONG I'm looking at you!

mega Churches like Hillsong who own Franchises, yes...

The average Jo Anglican church no... The Church I grew up in in Nowra ran quite a few ministries to benefit the community... one of which being Free ESL classes, and most importantly an aid service that gave emergency assistance to disadvantaged people (like vouchers for utilities bills, food hampers etc) and also gave advice counselling to help them get back on their feet.

I don't see anyone else offering a similar service in the area with the same comprehensive nature.

Taxing the Church would make that an unviable service... as well as the 40 other odd projects that Church has been running for 20 year without charge.

and there are people out there just as educated or more educated and intelligent than your brother who hold completely opposite view points.

Think for yourself and judge ideas on their merit, not based on the credentials of who is advocating them.

Like I said... I have done my own research... and at first I came to a different conclusion... and then he presented me with a brute force attack of evidence from both sides including mutltiple cases, statistics... and from my point of view the logical step to take was his viewpoint...

One of 'neoclassical synthesis' which makes logical lense, makes practical sense and has proven to work....


Oh and Scuba Steve... you still haven't replied to my question bitch!

 

[Riet]

If the church isn't making money and is giving back to the community they wouldn't pay any tax anyway.

 

[scuba_steve2121]

One of 'neoclassical synthesis' which makes logical lense, makes practical sense and has proven to work....


Oh and Scuba Steve... you still haven't replied to my question bitch!

i did i said read rothbards work and you seem to be on the up up with it so what he says is my answer

also unfortunately i actually had to look up neoclassical syntheses which contains strong elements of Keynesian in them, which as you know i am very much against simply because it doesn't work and is illogical. so i don't know why you said practical and logical in your above sentence.