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Paradise Papers - What to do about tax avoidance?

Paradise Papers - What to do about tax avoidance?

What to do about tax avoidance

They say in life "nothing is certain but death and taxes"...

But it seems the rich and powerful are certainly managing to cheat their way out of paying taxes, as revealed in the Paradise Papers.

Like most Australian's you probably pay your fair share of tax. You pay fuel taxes, land rates and GST - and you probably pay tax on your income too. You may not always like paying tax, but you pay anyway because you know we are ALL better off when you do.

You know that paying your taxes keeps your local hospital open, helps make sure kids have access to quality education, and provides for upkeep of the roads and other public services on which we all rely. 

Unfortunately not everyone feels the same way.

Some, like the current Prime Minister Malcolm Turnbull, seem more interested in using tax-havens to game the system and avoid paying their fair share of tax. (SMH)

In fact 48 of Australia's highest earners, each earning over $1,000,000 per year (before deductions), paid ZERO dollars of tax in 2014-15.

Compare this to the 'median' Australian worker, who pays about $9,442 tax on an income of a less than $55,000 per year, or about one in every six dollars they earn. (ABS)

These 'legal' forms of tax avoidance are costs Australian taxpayers about $2.5 billion dollars - enough to build over 100 brand new schools - every single year.

And what's worse is that more than one in three big companies paid zero corporate tax in 2014-15.

That is simply not good enough.

Hard working Australian's pay our fair share to keep this country running, and it's time for corporations and the big end of town to do so too.

Local baker and former United Voice delegate, Michael, couldn't agree more.

"I'm retired now, but until recently I worked at a popular local bakery for the last 20 years. All the bakers worked hard, and we worked long and unsocial hours starting early in the mornings and late at night. 

Most of us earned between $50-60,000 per year, well at least until they started cutting our wages and laying off staff, but we all paid our fair share of tax.

I paid around $8000 per year, sometimes a little more. But the huge multi-million dollar, international corporation who owned the bakery???

They paid ZERO dollars of tax in 2014-15. I paid nearly $10,000 that year.

I can't believe that I paid more tax than the multi-million dollar corporation I worked for. It's appalling and disappointing and I wish I'd known at the time.

It's not fair, they're a huge organisation and should pay tax like everyone else" said Michael. 

SO, what can be done to fix the problem?

There are a lot of different ways we can take action to stop tax avoidance, and it starts with transparency of information. 

In 2014 countries who form the "G20" agreed in-principle to establish a global "Register of Beneficial Ownership", a publicly accessible record which would show who the 'beneficial owners' and 'controllers' of registered companies really are. 

This would mean companies can't easily get away with hiding their income overseas, and would allow investors and consumers to make better informed decisions about where to put their money.

Australia has also outlined it's own 'Beneficial ownership transparency' plans which you can read more about here

Other potential parts of the solution to this issue include implementing HUGE penalties for anyone caught averting tax - the 'three times the gain' rule, and potentially blacklisting companies who are registered in tax havens from operating in Australia at all.

What ever you think the best answer is, one thing is clear - we are going to need to stand together and take collective action to change these rules.

Here's some steps you can take to help make that happen:

Step one - join your union:

Step two - sign up to help "Change The Rules".