Monday, September 5, 2011

International banks and EU be damned!

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What to hear about a government that has a very sound approach to the financial crisis; which acts in the interests of its people, and not in the interests of international banks. Read this story - you will not hear about it from your local media conglomerate, and you ought to wonder why.
Iceland was in a financial crisis. Initially the ECB negotiated with the new government of Iceland for Icelanders to pay back their nation's debts. The problem of course is that the Icelandic people realised that it was ridiculous for them to be carrying the burdens of the state, and most particularly, the debts of privately-owned banks. So they lobbied the government to change their policy. Iceland has since snubbed the global financial community, and is looking at financing its own activities. Sounds like a good model. I hope Greece and the other 'weak states' of EU follow suit.

Taxation: Why not leave your kids a legacy

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This is just another reason to abstain from paying taxes. Wondering who the babes in the woods are?
The obedient, compliant majority. I however don't think for a moment that they deserve this oppressive system; given that its a very difficult task to understand the complexities of the system....and more difficult still to develop a strategy for dealing with the contemporary political paradigm. Certainly I don't think parents should be jeopardising their children's future to fight the government. I do however think that salary-men have the greatest incentive to government, most particularly those who have purchased a house in the last 3 years, or who find that proposition way impossible. If I was these people; I would be in the streets.
Its just just a case of 'ability to pay'; its a question of risk, the enormous opportunity costs entailed in this bad system, and most particularly, your requirement to sanction an immoral system.

Friday, September 2, 2011

Doctors wronged by Internal Revenue NZ

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A NZ couple - both doctors - have been found by the NZ Supreme Court to have engaged in tax avoidance. Their crime was diverting income away from their personal identities with the intent of reducing tax. There are several problems I have with this:
1. They have caused no injury to anyone
2. We have an incredibly unfair, immoral, unprincipled tax system
3. Unlike the government - this couple did not extort the money from others - they worked for it, and as doctors, they saved lives.
4. The government, which has the capacity to change the law, lobby the community for principles, spend money wisely, and withdrawal from its extortive practices, fails to do so.

So I ask you, who would you prefer to have the money, earned by the doctors, and extorted by the Internal Revenue Dept? I personal would love to see government funded, but not on the current terms. Given the huge public deficit, they cannot even do that. Not just NZ either. There are 9 of the 24 OECD countries around the world which have unacceptable deficits, and consider this as well:
1. There has been no substantive (debt crippling) war in 65 years
2. Add a 10th country, as Australia was until the unprecedented 'China-inspired' commodities boom a 'banana republic'.

This pair of doctors ought to be national heroes. As heroines, should we not expect them to fight for their cause - for a fair tax system? Perhaps, but I suspect they never had the moral or intellectual ammunition to defend their beliefs. Is that their responsibility? I say that its the governments. After all, our politicians are the custodians of the 'moral forces', namely the military, the police, and quarantine. Ought we not expect justice and principles from them. Where is the moral framework. I can't even see any mention of moral principles or human rights on the National Party website. What I do see is that the National Party philosophy is 'pragmatism', i.e. a philosophy of non-principle, and the National Party president Peter Goodfellow is the nation's 16th wealthiest men. Might we expect that, since the nation's governing party is also presided over by 'big business', and small business is getting such tax rorts, that it is the NZ salary earner, which includes doctors, who are getting such a bad deal. This couple is being persecuted for being doctors; for not having the time to attend to the government's complicated tax system, to create the same 'avoidance structures' as the wealthiest in the country. I personally can't be bothered to invest in such dishonest structures. I have neither the time for such 'low productivity', wealth-destruction measures, that I simply don't do it.

Sunday, July 10, 2011

Australia: The restricted carbon tax is just the start

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Some advice on Julia Gillard's carbon tax. Nothing is as it may appear. The Labor government does not play in the realm of facts; only perceptions. The poor for have the perception that this tax will apply to a few rich countries. This is where you need to think anticipate the future; to see around corners.

This strategy of targeting specific 'wealthy' industries (or the richiest people) is how they introduced broad-based income tax. It was a tax on the rich, but then it became a retrogressive tax on the poor 'salaryman' after the corporations got tax concessions, i.e. deductions. In this case subsidies. Oh, and the poor liked income tax because it fell on the rich. Having approved of the tax on the rich, it was hard for them to ultimate oppose a broader-based tax.
This is how governments are able to increase tax.

Wednesday, June 22, 2011

The government's days are numbered

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Are you inclined to accept the government's claims that they are effective providers of justice...think again....its all a grand effort to manage perceptions. Our precious state has failed.. It is on its last legs. Expect civil unrest in the next few years. The government is falling apart. Not just in the Middle East, but it will spread to the West. No one is paying tax....and rightly so...and government is woefully inefficient.
Of course no one wants civil unrest...after all people have avoided it for 200 years. But when your house goes into foreclosure, when your savings are pilferred by some corporate fraud, you take to the streets, like the people in the Middle Easy, who have nothing to lose.

Tuesday, June 21, 2011

Lawyers profit at taxpayers expense

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There is something very wrong about the world when financial institutions are suing each other for negligence or incompetence, when those financial institutions are both government-owned and by implication, exposing taxpayers to law suits. If one looks back, it was the governments of the Western world which precipitated the crisis by:
1. Not properly regulating financial markets
2. By aggressively stimulating or distorting markets with various incentives like First Home Buyers grants, relaxed bank regulations and ultra-low interest rates.

The culmination of the crisis was that banking executives were able to leverage their exposure to profits by profiting hugely from their options incentive schemes, leaving shareholders and taxpayers with the losses as they walked away with their bonuses. They then benefited from a stimulus-induced recovery in the market, only for taxpayers to experience a succession of law suits. Yes, government officers are using taxpayer funds (in the interests of taxpayers) to engage in high-cost law suits against other governments. This of course can only result in lawyers getting their share from taxpayers. If you are severely repressed, then this will be of no concern to you. If you are angry, then there is only one thing to do - direct your energy - your minds - towards making those perpetrators accountable. The reality however is - the perpetrator - is probably yourself - for not thinking...for surrendering your personal sovereignty to government; for allowing them to freely tax you. You can sanctioned the actions of government. Yes, all you practical people in the world who thought if you just worked and saved, there would be plenty to go around...that you would be ok. Nothing is assured if you surrender the realm of ideas to the collectivists, whether they occupy seats in government or lead lobbyists in your state capital.

Wednesday, June 1, 2011

Australian Tax Office engaging in psychological welfare

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We are approaching the end of the financial year again; and once again, the tax office is working in concert with the media to extort wealth from you. The psychological manipulation is 'in play' once again. Governments are increasingly using fear or 'shock and awe' techniques to extort wealth from you. Consider these media headlines:
1. "Eight ways to beat the taxman" in the Sydney Morning Herald, as if you are under some obligation or compulsion to have a relationship with them, or comply with their demands.
2. The pursuit of high profile 'tax evaders' by the tax office to impress upon you the unlimited resources (i.e. your money) that the government can use to pursue you. Refer to my posts on Wesley Snipes and Paul Hogan.
3. Often there are argues of the nature 'The tax office is targeting deductions, or 'fringe benefits', etc. Every year there is a different psychological threat made upon you.

The tax offices pursuits of course rely on your acceptance or ambivalence about whether you actually are obliged to pay tax. This of course relies upon your ability to argue in a court of law that you ought not to, and that you have a right to legal aid. Most of course don't have the skills to argue these they live in fear of the tax office. The reality is that there are ways of protecting yourself from government that few people appreciate.

In conclusion, the tax office likes to smear or discredit people as 'tax evaders', but as far as I'm concerned, these people are righteously acting in their self-interest, and that is an entirely reasonable thing to do given that:
1. The state does not deserve an effectively 'unconditional' or arbitrary sanction to tax
2. The state is not acting as it was intended, i.e. as an agency for the extortion of wealth for the sake of its own self-serving ends. i.e. Acting on the basis of perceptions rather than facts, or demonstrating that it acts without regard for rights, or gives no regard to your interests are all evidence of its failure to comply with its constitutional requirement of 'good governance'. So our government is in breach of the 'spirit of the law'.
3. The ability of the tax office to use its 'unlimited' taxpayer funds to persecute you...keeping you in court for a lifetime under the threat of pernicious 'arbitrary' statutory law.
4. The government is entirely inefficient and unfair in its collection and expenditure of public funds. It is not a moral custodian, and it can be reasonably argued that it is not acting within the spirit of the constitution. Anyone with a solid grasp of the philosophy of law will realise this.

So I say to you....if you pay your fair share of tax; take every measure you can to reduce your burden. I personally would celebrate any effort which repudiate the govts right to impose arbitrary imposts upon you, fair or unfair. There is no question of fairness when it comes to extortion. You are not morally obliged to suffer because others are subject to extortion. You are not a slave to other taxpayers; just as you ought not be a slave to the tax office.

Tuesday, May 31, 2011

Cate Blanchett driving taxpayers to the grave

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In recent times we have supported so-called 'tax evaders' like Paul Hogan and Wesley Snipes for their efforts to deny the extortionist governments that enslave them. We now turn our attention to those political apologists for slavery like Cate Blanchett. So how is Blanchett a "slave driver". Well, she isn't. She is the apologist, the appeaser, the moral sanctioner who gets on her high horse and breaches:
1. The virtues of helping the poor - with others money
2. The virtues of saving the environment - even though she has no insight of merit. She has not studied climate. She probably barely even reads newspapers given the demands of being overpaid to create stories which allow people to snub their minds and engage in mindless escapism at the movies. Then she has the balls to enter the real world and make her fictional values 'contemporary'.
Interestingly she sights her 'vested interests' as a mother. I wonder whether she is sabotaging the development of her children by spoiling them with everything they need. The moral principle surely has not dawned on her because she stands her advocating, not just ignorance of climatology as her moral credentials, but also for welfare. Most people would not sanction spoiling children, and for the same reason they should not sanction unconditional or coerced wealth redistribution. Why? Because its not earned. Its guilt-induced; it makes people feel like they are the centre of others survival. Very narcissistic of Blanchett, but entirely not insightful or helpful. It is actually destructive to human character.

Wednesday, May 25, 2011

Freedom of information or enslaved by it?

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Read this article. This will give you a sense of the extent to which understanding the Australian Tax Code has extended beyond the laymen notion of commonsense. The price of not knowing the meaning of significance of this information is probably:
1. Several thousand dollars in punitive fines a year
2. About $2ooo in company accounts, requiring an accountant - minimum!
3. Requiring a specialist accountant - depending on your activities you could spend $10,000 a year on 'statutory commonsense'
4. You could find yourself our of pocket to the tune of millions if you seek a ruling from the tax office......which will take months, and you might be none the wiser because they did not understand the implications of their own system, and they can't let you get away with the implications. If there are less than 20,000 taxpayers effected, you are toast.
5. You can spend up to a week of your life, i.e. 2% of your time doing your tax, collecting receipts, typing them up, photocopying them, mailing them to your accountant, having tax planning meetings with him, subjecting yourself to an audit. I don't participate in this crap any more. I am on strike. I'm not alone. There are many of you doing the same thing; just in different ways. The ones with money use accountants in Bermuda. Well, I guess that is a 'tax holiday'. Some go live in the Philippines or Thailand; some drop out of the workforce, and go live on a isolated farm. Some of you become homeless, and wonder the streets 'tax free'.

Read this article and just note the concepts used. There are concepts like "GDP adjustment factors" or 'dividend imputation". I just don't consider slavery an option. I am not prepared to spend a minute on my life living for the government. Jumping its hurdles. There are perfectly good moral principles of common law which apply in any particular context. I don't need a 4000-page tax code to understand these laws...they are perfectly intelligible to all people. They prevent least from other people. But statutory law allows the government to engage in extortion...its called the Tax Code. I no longer participate in this racket, but I know many of you do. All I can say is 'Good luck with that'. The salary men among you are the greatest suckers in that 'unfair' tax system. But even for those among you who think you are free of will eventually find a way to capture the information from those Bermuda banks which so treasure their secrecy.

Sunday, May 8, 2011

Trusts another false economy thanks to government

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Its an election year in NZ, and the NZ Herald is drawing attention to a tremendous false economy. The resources that people sink into setting and administering trusts. The problem of course is that this piece of statutory folly is destined to change because its senseless policy. Yes, you might decide to set one up, then the rules arbitrarily change. It effectively turns you into a slave to the tax code. Citizens of other countries beware! This is what arbitrary government can do to you.
We need to get rid of trusts. Get rid of deductions! Get rid of subsidies! Get rid of tax! Bring the country back to its essential services. Strip out the minimum wage and watch the price of labour fall. Strip out all forms of private and public extortion and watch costs fall, and see people resume spending. No one but the super-rich can afford to build in NZ at the moment given:
1. The high cost of building approvals by local govt
2. The extortionate regime for land ownership (i.e. zoning) - worse in Australia because it actually has a growing population. You can still but cheap in NZ where the population growth rate is negative....if you can get a job.
3. The extortionate mark-ups by builders to buyers, whom are effectively using the market power given them by their customers to run a cozy deal with the hardwares. Tradesmen need then only work for 3 days. If they were aspirational, they'd just go to Australia for a 50% higher wage.

Trusts are a form of unfair tax persecution that hurt the poor more than anyone else. They are a productivity nightmare. It is not just the professionals you need to pay, its what its doing to people's judgement. People's capacity to think conceptually is impaired when their lives are governed by arbitrary ideas - as opposed to the logical, long range ideas that they would live by if the market actually followed principles, and not arbitrary statutes. If you want to succeed as an investor in this market, you need to sleep with Ben Bernacke, not study economics. Yep, if you are a seductive prostitute, you might just be over-qualified in the modern era.
Read more about the trusts industry in NZ.

Tax collection - its all in the interpretation

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Do you happen to think the tax office has too much power? Well, you would be right for a number of reasons:
1. Legal extortion: The tax office actually has the 'near' unlimited resources to spend on tax policy or 'precedent', whilst you, as a taxpayer are constrained (in most cases) with minimal resources, and a desire to seek redress for just your case. Doesn't it seem like an unlevel playing field? Well, you ought to be more anxious than you know. The implication is that for a minor expense of say $5000, you might need to fight your case to the High Court, which might cost you $500,000. Oh, and tax payers will probably pay $5mil. The bureaucracy are happy, because they just made the state $300mil a year (my guesstimate) in additional revenue.
2. Arbitrary powers: The power for the tax office to extort more money from business and individuals is a very arbitrary matter. The reason is that many moons ago, common law was supplanted by statutory law. Now, common law is rather commonsensical, whereas statutory law is 'ok' on a good day (when its enacted), but it quickly turns to quicksand in the interpretation. The reason is that, unlike common law, which actually has a context established by its framework tied to fact, statutory law has no framework, so policies are only inclined to ensure its correspondence to their existing policy. i.e. Rationalism. The implication is that one bad law begets another bad law, after business finds loopholes, or the judiciary is forced to interpret bad law.

Here we have an example of the arbitrary powers of NZ Internal Revenue. It was probably asked by the government to find more revenue. The reason is that the NZ govt is between a rock and a hard place. Its an election year, and the government has a non-performing treasury dept. It needs money and it is reluctant to cut spending, even if the polls suggest its ok. Well, of course they will do that after the election. In the meantime, the tax office is after cash.

Here we have NZ Internal Revenue arguing that you cannot claim deductions for software development which is unsuccessful; the argument being being that unsuccessful development does not lead to revenue. This is silly policy because:
1. The development is undertaken with the intent of making a profit. If this principle is not retained, then capital losses would seek to be deductions, as well as a great many other expenses and losses.
2. The policy is not consistent with other laws, or even other countries.

Frankly, I think the tax office cannot reasonably expect such an interpretation to stick. The business community will lobby against it. Why would the tax office do this then? I would suggest the NZ government is engaging in some creative accounting of its own. With an election in one year, a budget due before then, the NZ government will use the law as the basis for its budget, and then after it has benefited from it, it will reverse the decision. Its the public sector equivalent of a corporation making a provision for some contingent liability....except its contemptibly dishonest. Sounds like government, our moral authorities, doesn't it? They are fictitiously creating revenue that they have no desire to collect, lest they upset their constituency.

Tuesday, January 18, 2011

WikiLeaks engaging in persecution

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Julian Assange is making a grave moral error by publishing the private client details of Swiss bank customers. This was always going to be the folly of a man who lacks coherent moral principles. He does not realise that not all secrets are bad. If a man points a gun at your head and demands 'your money or your life', are you going to avail his offer because you don't want to keep secrets. This is the same reasoning that people hide money from the government, and the same reason they evade tax. This moral relativism has the potential to impose immoral persecution upon 'morally' innocent people. Switzerland is a state that has a lower level of coercion than other countries. It is not morally coherent, its just better by a relativist standard..or a matter of degree. Democracy is extortion and Switzerland is a democracy.
The good news is that WikiLeaks need not exist. I would not be surprised to see it disappear, nor would I miss it. The good news is that it will in all likelihood be the precursor to a group with a sounder philosophical base than it. It can be expected to spark a plethora of 'copycat' organisations. The problem of course is that governments around the world will conspire to end such 'leaks'. They will adopt computer systems to stop people copying data; they will globally adopt laws to stop such action. But Assange does at least show that 'where there is a technical capacity, there is a way. But can we also count upon tech geeks to be a great leader AND philosophically correct? It cuts down the odds significantly.

With this latest action, WikiLeaks is helping global governments to persecute private persons. It will want to be very sure of its principles. These people have a legitimate moral right to their wealth....even if those rights are not acknowledge in flawed, contradictory law. Even though statutory law contradicts the spirit or 'principle' of common law.

Friday, January 7, 2011

Gerry Harvey's new tax plan is very stealthy indeed

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My latest thoughts on Gerry Harvey's tax plan to hide behind the skirts of small retailers. Where might I ask will they be hiding.

Thursday, January 6, 2011

Customers give Harvey Norman the stick

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Gerry Harvey's demise will ultimately be tied to his ego; or should I say his pretense of one, which compels him to be self-righteous. He will show that 'perceptions are more important than ever'. A web poll by the Sydney Morning Herald shows as much. The reality is that he has highlighted to non-discerning customers how irrelevant traditional selling is. I personally walk through his stores all the time; but I never buy. I have this curiosity about going into stores, just looking. I would never think to buy from such stores. I do the same from Dick Smith. They are all over-priced. They will all suffer. It might actually be the 'spoke in the wheel' which causes the big shift to online commerce in Australia. What a paradox.
This story suggests Harvey was always very negative on online commerce. I am not a retail analyst, so its interesting to observe that all these retailers (e.g. Fosters, David Jones) failed with their acquisition of online businesses. I think their attempts to buy competitors was always a very defensive and deluded strategy. Akin to plugging up holds in a dam wall. Know doubt the equity markets at the time probably loved the strategy, thinking these companies were trying to remain relevant.
The suggestion that the distances in Australia are a setback is false. A great many shippers have stock, and if there are low margins delivering in Australia, they can always drop-ship from the supplier. It is argued that 'many people are still wary about buying online', but Harvey has given them reason to take a second look. Indeed, buyers should know that they can always charge back any goods which are not delivered within 30-60 days with Paypal. Of course the seller ought to have the first opportunity to correct the problem, whether its a faulty product, etc. If consumers knew that they might just be more willing to take the plunge.
I think this commentator is on the mark:
"Harvey Norman's problem isn't 10% worth of tax, it's that his customer base are people too stupid to shop around" and I would argue too gullible to test his bluff on matching 'his price guarantee". The guarantee probably comes with so many pre-qualifications that is not even a real or effective guarantee.
Another commentator confirms my suspicions. The damned fine print. The secret to the modern businessman's success. Bury the customer in paperwork and loopholes.
"Dick Smith Electronics' excuse [is that] they will only price match if the competition is within 100km radius".
Thank you Gerry Harvey for showing that even idiots can succeed. You are the best evidence for capitalism and the utter uselessness of the welfare state.

Gerry Harvey remains defiantly self-righteous...big mistake!

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That was our shortest protest action against tax charges. Harvey Norman has backed down from proposed tax lobbying for a GST on imported goods. He said he is hurt by the criticism. Well, I wonder if that was his pride. He says his message was 'poorly communicated' fact it was 'poorly conceived'. He showed himself to be a shallow, pragmatic thinker. He of course does not have a monopoly on this. Sadly, most business people these days are shallow, pragmatic thinkers. No doubt he will console himself with some takeover, and ever reflect on why he stuffed up with his lobbying scheme. He argues that the campaign was 'bad timing'. No Gerry, there is no good timing for a bad idea. But such is the philosophy of pragmatism that an exponent of some idea would argue that a good idea tomorrow is not a good idea today. I don't preclude that timing can be a factor (i.e. pertinent context), but exactly what have made his timing better. It was a matter of diminished intellect. He ought to have argued against taxation, and focused upon the unfairness of ALL as much as it is all imposed, its all extortion, and it serves no one...not the poor, not politicians. Its an entirely false economy perpetuated by shallow-minded people.
By all means, prove me wrong. Harvey did not take the criticism well. He said in the SMH:
'The rise of social media had made people like him more prone to personal abuse. ''You might have got a nasty phone call or a letter back in the old days but now anything slightly controversial, these people, whoever they might be, they go for you zealously and with hatred all over Twitter,'' he said. ''If you are a CEO of a company and you speak out and then the board gets involved … it is suicidal'.
The fact is that politics impacts people's life. This is personal. Taxation is coercion, so anyone who lobbies for change risks changing a balance. There is only one justifiable change - the repel of tax, not its 'adjustment' or 'addition'. If his ego is hurt, tough, he should understand that he has the greater power to hurt people's lives. A responsibility such as his demands a higher level of thinking. His subordinates and his own judgement have failed him here. There is no hatred on my part for his efforts. On some level I respect business people to the extent that they exude a sense of purpose, conceptual skills, respect the rights of others (i.e. empathy), exhibit an efficacy in business, and develop effective business systems.
The extent to which they court government favours, lobby for tax 'adjustments' rather than repels, and do not display the conviction to support freedom, but rather to befriend extortionate government ministers, is the extent to which I think them 'shallow' people who lack depth and humanity. On that basis I say to Gerry Harvey 'Get a real education', we have had a practical product (Industrial) revolution, join the 'revolution of ideas' which will eventually sweep away current contemporary values.
''Because of my profile, I then get all these threats and people home in on me. It becomes me, Gerry Harvey and Solomon Lew - billionaires, greedy, ugly, old, out-of-date, c---s, and the people writing this seem to think we have been ripping them off for years and that we deserve this,'' he said. ''I think to myself, 'you don't want to get up every day and live this life'.
I would never criticise a person for being greedy...socialist nonsense. He did however fail to adapt to the current market trends, as he is holding onto high cost showrooms which will quickly lose market share because its high margin shopping compared to low-margin, online shopping. So he can play the victim, but really he should have seen this happen. We don't have to worry about him growing broken though, he can convert his stores into apartments I guess. I trust he owns the stores. Poor guy if not....he is about to lose a lot of money. Hope he escapes with spare change. Insofar as he is accused of ripping people off, the reality is that his stores were always advertising and 'product variety' driven. I think he probably was never very effective in business because he probably always struggled with high staff turnover and low efficiency. Hence, the high margins. I always respects the far better prices I got from Bing Lee for white goods. The reality is that product pricing comparisons with overseas show a huge discrepancy, so let him account for that. He has not. He just laments the criticism of him. The reality is people expect competitive pricing, and they feel they are extortionists because in some sense, they know and understand there is an absence of competition in Australia and NZ.
''When people criticise you like that, it makes you think, 'do I really want to do this? No, I don't'. I have got so much heat that I think I have to sit back now".
Nonsense. This is a time for him to reflect on the more reasonable criticism of him. Not to do a dummy spit and evade the issue. Learn!
Mr Harvey said the gripe of the retailing coalition was not about ''online retail versus bricks and mortar'' but rather about closing a tax loophole that did not support Australian jobs or the local economy. ''What we are talking about is someone buying a guitar in New York, for instance, and having it sent over here 30 per cent cheaper. It is giving that overseas retailer the advantage. It makes you think, 'I am paying all the bills, creating jobs, and this guy is getting the sale and doesn't contribute anything to our society'.''
He argues pragmatically that it is about a tax loophole. The problem with this is that his campaign merely closes one loophole so the government can open another. He needs to appreciate why there are loopholes, and lobby to change the system. The way he structured the issue - it is an issue of online vs 'the majors' because he sponsored the issue. It is not about jobs. If Australia has to lose some jobs, so be it. They were marginal, low value jobs which should have disappeared years ago if he was smarter. The economy will always create more jobs. The unemployment rate is not exactly high. He rationalises that this guy offshore does not create jobs for Australia. Who cares if he creates jobs or not. Employment is not the customers responsibility...and its only his because he is over-exposed to the high-margin, traditional, model of retailing. They are cheaper, not by the 10% GST, not by 30% as he suggests, but more like 70-80% because he is not competitive in his warehousing, distribution, retailing operations.
He agrees it was "poor judgment to launch the campaign in the post-Christmas sales period".
I disagree with this. It was poor judgement in any seasonal context. The issue is tax imposition, though certainly recession and Xmas might elevate sensitivities. But that was not the basis for criticism, so let's not build straw men.
"Mr Harvey said the launch of his own online store in the 1990s had been another example of bad timing. ''When I opened my site, I was doing $30,000 a week turnover, so I closed it and I opened it up again … I got the same turnover so I closed it again. Now I am opening another one as we speak because in this business it is as much about timing as anything else".
What nonsense. Plenty of others opened online stores and have done very well in the 1990s and 2000s. The problem was not his timing, it was his business model. He wanted to retain his high profit margins, so he was not relevant commercially when he opened, so he was forced to close. If he cut margins online, people would just buy online. Clearly he needed to offer some justification for people to buy in-store, and he can't at his profit margins. The reality is that it might have been difficult to integrate online and showroom based stores. The reality is that his high-margin model is not sustainable. He will be left selling to the elderly who cannot use a computer, and need the unit installed.
One of the commentators on this story made the point:
"The missing link in this argument is suppliers of branded goods. They are just as responsible for setting the prices we pay in Australia. Why are brands like Bose so much more expensive in Australia than anywhere else? Because the suppliers charge cost prices that are more expensive than retail prices overseas! Where the public wants the brand (eg Apple, Bose) the retailers either have to pay the cost or the supplier won't sell to them!!"
I actually agree that this was a factor in the old days when Sony were supplying product from Japan, and they marked up the price margin on new products because Australia was not a strategic market, and given their limited supply capacity. These companies wanted to be leaders in the USA and Japan, as they were the leading markets. That is no longer true. Today, the Chinese just indiscriminately dump product on the market, and this has allowed middlemen to cut into Gerry's margins. The implication was that Gerry was a lazy retailer, living off the easy sales. This is why I say he did not understand the market changed. In a few foul swoops, he has desecrated his repudiation. His first mistake was his comment that poor people never learn; that they are defined by their early years. i.e. Once a bum, always a bum. A lot of people will never forget that. He seems to think he is a revolutionary. He sells products for Christs sake, and employs idiots to do his planning, now to his detriment. I personally have little interest in selling stuff. I do it because I have to live. But its so incidental. This guy has no respect for ideas. Well, he will be defeated by his ignorance and self-righteousness.

It is amazing that the salesman who one market share with his 'in-your-face' promotions will go down in flames because of poor publicity. I guess salespeople are famous for having a pretense of an ego. His role as a CEO has allowed him to lose his old touch. He might not have made that mistake years ago....he was probably closer to the customer. He is out of touch, and selling by an old paradigm....failing in the new.

Wednesday, January 5, 2011

Retailers don't get it - dumb nuts

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The retail association in Australia claims that some Australians are 'not getting it'. The reality is that they don't get it.
Myer head Bernie Brookes argues: 'I get quite upset when I read some of the disparaging comments about Gerry Harvey and Solomon Lew because, whatever you think of them personally, they started with nothing and have become successful.''
What has that got to do with it? We are not here to give Harvey or Lew a medal. This issue is a point of law. The public is arguing that these companies are not competitive, but they feel compelled (before the advent) of the internet to pay high prices.
Mr Harvey was not surprised by the backlash ''because people are not quite getting it''. He said the group was not arguing against online shopping; it just wanted a level playing field. ''You've got a retail store offshore that doesn't pay duty or GST competing with an Australian store that does,'' he said.
The reality is - he does not get it. There might be a level playing field, but your lobbying point is not the way to resolve the issue. The solution is not a new tax, it's fixing the basis of the tax system. i.e. A user pays system rather than an 'extortion racket' which these guys passively accept since they are morally indifferent. They want to function as 'middlemen' and not concern themselves with the dirty aspects of tax. He does not realise that we are not so approving of paying tax....we don't have all the deductions which a growing business like Myer does, and I personally don't even want to deal with such a complex system. In contrast, he has an army of people who can help him evade taxes. I personally don't want to engage in such a false economy where I have to collect receipts. Life is too short to spend it summing receipts and reading through 200-page tax packs to account for any arbitrary changes in taxation legislation, because there is always some new exemption or revision to account for some new 'corporate' rout, i.e. a loop hole.

Hogan claims to have paid 'enough tax'

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Sadly, I don’t think Hogan is a proud ‘tax evader’. I think he would have us believe that he pays all his dues. The question of what constitutes ‘enough tax’ as he calls it; the reality is that the government has no moral right to expropriate, coerce or deceptively extort money or assets from anyone. That is the principle that has to be upheld. In all honesty, I don’t think Paul Hogan has the convictions to defend that principle. I think it’s simply about the money. Is it any wonder that the wealthy continue to see their wealth pilfered and the poor justifying their claims to it....not to mention the middlemen in the tax office.
There is no such notion as ‘enough tax’. Firstly, tax is not paid on a ‘user pays’ basis as it should be, so what is enough. The basis upon which tax levels are imposed is nothing but extort. There is no rational basis for it; its totally arbitrary. Society’s whole notion of taxation is morally bankrupt. i.e. We celebrate the provisioning for the poor in terms of ‘spending increases’ with no consideration for the utility of that spending.
Some would argue that it’s hard to test the efficiency of such spending. It actually is very easy. The reason that it isn't done is because collectivists in the community don’t care, and certainly the government doesn't. Rather than advance a moral principle, Hogan has resorted to moral relativism, arguing:
'I have come to this great tax haven, the USA, where the IRS (Internal Revenue Service) are gentlemen compared to our lot’.
Really, he is setting himself up for failure there because he might find the IRS is the next agency to pursue him. More importantly, ask most Americans, and you will find that the Australian government is second only to the USA in terms of pernicious tax policy. The US like Australia is very aggressive in pursuing offshore income.
When Hogan arrived in Australia last year, the ATO issued a Departure Prohibition Order against him, which prevented him leaving the country until the alleged tax debt was paid or settled. Hogan argued:
“The only reason he was allowed to leave Australia was due to the publicity to his case by the international media. 'Guilty until proven innocent?’”.
This is precisely the point. You only get (slim) justice if you are a high profile personality. The law is arbitrarily applied. It shows just how weak legal protections are. There is consequently little justice for anyone because we are forced into a tyrannical compliance.
I frankly would be pleased if Hogan disclosed that he is a ‘tax evader’ and proud of it. But instead we have wealthy, high profile people defending or seemingly complying with an illegitimate system. This is how bad systems prevail because ‘good people do nothing’. Moral cowardice all round.
When will high profile people like actors, business people stand up and attack the legal system. The problem of course is that these so-called 'practical people' are so intellectually mal-formed that they don't see the distortion that government has on society at all levels. Government is 30% of GDP, which is probably worth 30c in the dollar, but add to that all the distortion to justice, pernicious laws, obstacles to investment, the protection of criminals, corruption, and malfunctioning of laws, and corruption of personal values...there is a lot of damage. Let us consider for a moment....a comparison....between China and Western countries. People think that China GDP grows at 10% per annum because of cheap labour. The reality is actually that its because its unencumbered by least effectively so. There is some level of 'structural' impact, but that is no different than the structural benefit realised by Australia's mining industry, and the state of WA in particular. The government actually hobbles our performance, it diminishes your moral character, it turns you into an utter moral sceptic, so you repudiate ideas cynically, because you wouldn't know a good idea if it struck you in the face. It leads people into psychological repression, which is ultimately why people just turn their backs on logic. That is a summary of the moral cowardice involved at all levels of society.

Tuesday, January 4, 2011

GST on foreign imports on tax efficient

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According to the SMH, the federal government's peak tax advisory body, the Board of Taxation, says the cost of collecting the extra GST would be likely to outweigh any benefit. The problem is, nothing about government is efficient. That is not to say that certain courses of action are more efficient than others, merely that a false economy is acceptable if it serves the governments interests; never mind what it does to people's lives.
I am a case in point. I will spend a lifetime repudiating an unjust system of governance when I could be engaging in more productive activities, if the 'problem of governance' had already been resolved. Sadly, people are permitted under democracy to preserve any subjective indulgence they please, and any standards are deemed to be 'dictatorial', as opposed to being merely subjective impositions. By this subjective notion, it is an imposition to allow people to fend for themselves. And yet these people don't seem to repudiate the indulgent parent who 'spoils their child' with kindness; nor the government with constrained resources, who 'spoils welfare recipients' with unaccountable, 'unconditional love', and in the process makes them unfit for living any form of meaningful life....if one cares to define terms and seek meaning beyond the intrinsic notion of 'value in itself', as opposed to functional realism. i.e. Good for objective reasons. so much for science.
The good news is that "the Board of Taxation recommended last February that the figure not be changed". The bad news is that this is just one case of taxation creep, and having being complicit in a global financial system meltdown, the government is going to be looking to raise more taxes.

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Australian retailers extorting wealth from consumers

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According to this latest article in the SMH, it is now the large retailers in Australia who are now trying to extort wealth from consumers in Australia. I find it bizarre that it is a business group that is not just looking for tax concessions, but is prepared to advocate additional tax. We so detest these efforts, we have dedicated a new blog to exposing the unethical conduct of Harvey Norman and these other retail extortionists who are seeking market concessions.

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