Feeling Taxed By Payroll Tax?
For every rant there should be a solution offered, so here we go. The rant this time is about Payroll Tax. Many of you may not even know what Payroll Tax is so I’ll tell you. If you own a business and pay over a certain amount in wages or commissions (the threshold is around $800,000 a year) then you have to pay 5.5% tax on every dollar that you spend on wages over that. That’s encouraging isn’t it? Who on earth dreamed up this little number? And, how absurd is taxing someone for providing employment? And, why have we sat back and let it happen? Now, it’s one thing being taxed on your income and lets see how many of these we have to put up with – there’s GST, there’s PAYG, there’s Company Tax, Fringe Benefit Tax, Provisional Tax and if you manage to get through that lot we are then asked to pay tax on our outgoings. So, basically people who provide employment to others get punished for doing so. This may not affect small business as such, but medium business and big business are totally discouraged from providing jobs because of it. It is really bad business to do this and running a country is no different to running a business when it comes to balancing the books and not going broke – something we should all learn from Greece.
“I say we totally ban Payroll Tax as it is not only unfair but bad for any economy.”
I also believe that whoever runs this, or any country, should be a top executive with a proven track record of running successful businesses, be paid a top Executive Salary and be given Carte Blanche in making the tough decisions. Almost a benign dictatorship if you like, because we all know that design by committee completely depletes the result because there are always the knockers of everything in a society who only look at how decisions are going to affect them in the short term, without realizing that sometimes you might need a little bit of pain to attain the gain in the long run.
Okay, so now the solution. I say we totally ban Payroll Tax as it is not only unfair but bad for any economy. Then we look at how we can replace this tax with something else. I propose a ‘Vacant Commercial Property Tax’. With so many retail and commercial outlets sitting empty and unused, this will surely stimulate a move to reduce the rent to make it viable for a business to profit and grow. Too many owners of retail properties make it impossible for anyone to carry on a profitable business by demanding high rents but still refuse to drop them when demand falls. This is because they can skilfully balance profits from their other properties into a neutrally geared situation so it’s really ‘no skin off their nose’ to sit with empty properties. This is not a good look for any suburb – just look at Subiaco and Claremont as a couple of local examples and see how these vacant shops are affecting the other business in the area. If the owners won’t drop their rents to get things moving in an upward direction, then slap them with a tax for owning a vacant property and let’s see what happens then.
I would welcome your comment and opinions on these points. Feel free to email me at email@example.com