The Australian Tax Office persecutes another innocent Australian

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The Australian Tax Office (ATO) has claimed another ‘scalp’ under its ‘Shock & Awe’ psychological tracking down of people evading tax. Its an interesting issue because:
1. We elect governments to enforce legitimate law
2. We expect government to act as custodians of people
So what of Jane and Ron Sakovits? They are a couple of small business people convicted of tax evasion. The problem with tax collection is that its ‘unjustified expropriation’. The reason that its justified is because:
1. Its involuntary or coerced
2. It’s unethical
Now, the tax office is acting under an entirely different ethical framework of course. But don’t let that full you, they are acting under the premise of illegitimate gain. So how do they get away with it? Well, they rely on several points:
1. The broader electorate feeling disempowered or unempathetic
2. The broader electorate feeling there is value in the expropriation – never mind that the quality of services under the Gillard government has been shockingly bad
3. The lack of recourse, the disparity in resources available to fight a case
4. The moral ambivalence of the counterparty
5. The conflict of interest of the presiding judges, i.e. getting paid by the govt; retaining the same ‘bureaucratic mindset of the judge’.
6. The belief that compliance is the basis of stability and peace
The reality is that you have what you have come to believe are political rights because the government no longer needs to politically persecute you as long as it has ‘economic claims’ over you in the form of taxation. Now, most of you don’t really believe in this system; you simply feel powerless to overturn it, and you are frankly scared to confront the government, with its unlimited resources provided by you. What you are of course lacking is:
1. A strategy to mobilise in defence of rights
2. A moral conviction – your source of courage
3. An issue – empathy for those persecuted by this system

Now, the Australian Tax Office is picking off individuals because they like to make ‘examples’ out of people. They particularly like to make examples out of high-profile, flamboyant people like Rene Rivkin (Australian stockbroker) and Kim Dotcom (NZ-based German). In NZ, the NZ authorities have been shown to act with contempt for ‘due process’. The authorities got it wrong; no one went to prison, and PM John Key said 'sorry'. Does that not strike you as a total anomaly. Not to mention the fact that theft is ok under statutory law, but illegal under common law? Remarkable.

The reality is that there is nothing to say this process is actually fair; simply its been sanctioned by a disinterested electorate. The reality is that you’d need a lawyer to understand the tax code, and you need an accountant to pay. Its rediculius…and you all know it because you all:
1. Reduce tax by overstating deductibles
2. Accept cash as income
3. Over-use public services and burden people with your excessive use.
It’s human nature to do it. These people don’t need to feel guilty for evading tax; they are heroes in my mind, because they acted on their own personal convictions; and didn’t sacrifice their judgement for the ‘whims’ or practical extortion imposed by others. They defined a mob of thieves, and if people had any empathy, they would rise in protest at their incarceration.

Justice Peter Hall said the offenders had engaged in "deliberate, systematic and repeated acts of evasion" between April 2001 and June 2006. 

By what moral code have they acted illegitimately. The reason they went to such efforts is because they care about their money…so much so that they used their own money to pay for accounting and ‘evasion’ services. Whose money did the tax office use to hunt them down and to prosecute them? The taxpayers. The ATO is using taxpayers money to persecute taxpayers.

Justice Peter Hall: “The tax system relies heavily on the honesty and integrity of those who participate in it...This was a breach of the community's trust . . . The sentences are intended to show that all community members must contribute to the tax system according to their means”.

No, the tax office does not rely on ‘trust’, it relies on fear of prosecution. So long as people remain fearful they will be stuck with tax liabilities. The reality is that the tax office cannot afford to place people in prison, nor to administer a ‘heavy’ bureaucracy. Instead they rely on ‘shock and awe’ tactics of high profile ‘lynchings’. But the problem with ‘high profile’ lynchings is that low profile people think they can get away with it, so you have to make advertised campaigns to say you are going after certain sectors. These judges and ATO officials have no integrity. They can no more identify a coherent theory of values from our legal tradition than you can. In fact, taxation is legal only as ‘statute law’. Extortion and theft are of course criminal offences under common law; which is a far more logical framework. In fact, the statutory legal system is actually for the most part a breach of the spirit of the law. How can you expect law to be ‘just’ if it entails mob imposition on minorities? It gives no objective mode of defence to people who object to taxation. If it did, then these people would use it.

We let off people who protest whale hunting more leniently than the tax office; and these people earnt this money. The tax office didn't. It is persecuting these people to 'make an example of them'.


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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Australian tax office pursues Google and Apple

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The Australian government intends to amend the 31-yo transfer pricing provisions of the tax legislation to collect more tax from internet portals like Google and Apple who collect a high volume of sales online. This revision to the tax code is just one of a litany of measures which purportedly closes another ‘loophole’. Australia is not the only country seeking to close such loopholes - Britain and China are also targeting the likes of Amazon, Apple and Google.

Treasurer David Bradbury has asked Treasury’s head of revenue, Rob Heferen, to develop a brief on possible measures it can take, before being presented to an advisory group comprised of representatives from business, tax agents, academics and the broader community. 

Treasurer David Bradbury: “It is not my usual practice to mention companies by name or to publicly canvass the tax position of particular taxpayers.  Nor is it my normal practice to publicly discuss strategies employed to minimise corporate tax.  However, I will be departing from my usual practice today as I believe there is a strong public interest in drawing attention to practices that have the potential to undermine the future sustainability of Australia’s corporate tax base”. 

Why would any member of the public have any specific interest in how much tax a company pays unless (i) they are parasites sanctioning extortion, (ii) corporations living in fear or disdain of a system that extortions. There is limited public interest in this issue; and those effected are easily consulted through their industry associations. The Treasurer’s sole interest is scoring political points. 

Treasurer David Bradbury said that increasingly, governments were discovering the lack of effectiveness in the digital age of international tax concepts created for the industrial age. “This has been highlighted by the compelling evidence revealed by the UK Public Accounts Committee examination of the Taxation of Multinational Corporations”. 

Did it occur to him that the extortion of funds from companies is also a legacy of the pre-Industrial era, and that such extortion of wealth was customary in the Middle Ages, and persists only today at a much larger scale because governments distort the economy to such an extort that they precipitate boom-busts that offer a defence for the welfare system…and other elements for tragic liberals. 

“Cranking up the scrutiny on big companies is a vote winner, particularly when it is aimed at companies that pay minimal tax or whinge about the tax they are paying, such as multinationals engaging in elaborate transfer pricing rackets”.  

I am at a loss to hear of occasions when Google has complained about its tax rate. I suspect there will be no complaint….and it is perfectly within their right to complain….is it not…or should they be guilted into compliance. But note how the government lumps all multi-nations in the same bag. The mining multinationals were pays 37% tax before the government raised it over 50% because it was so impressed with their earnings power. The government had no qualms undermining the interest of shareholders. The minerals boom was 2 decades in the making – why could it not act before miners were so profitable, that it had to extort wealth without notice from shareholders, and in the process undermine the sovereign credit rating and perceptions of Australia. Because fascist governments are:

1. Centralised and slow

2. Non-empathetic with the people’s interests they presume to protect

This all goes to advance the argument that representative democracy is a framework for extorting wealth. There are legitimate justifications for having a resource rent; but the time to apply it is not at the peak of the boom; it’s when earnings are modest (for income tax), or when titles are issued (for indirect taxes/charges).  

“Treasurer David Bradbury cited media reports that Amazon paid no tax in the UK yet made more than £3 billion in sales. It did this through an elaborate “routing” of transactions through Luxembourg, where it faced an effective tax rate of 2.5 per cent”.  

We might welcome competition between governments in the realm of administration and taxation…after all is that not the best means of achieving efficient government…if we must have it. The problem is that we have unprincipled governments ‘ring-fencing’ earnings in order to collect taxes which result in businesses having to play circus in order to minimise taxation. It’s a false economy. Why not just adopt ‘user-pay’ charges? The reason is because:

1. Politicians have demonstrated that they are of no ‘use’

2. Politicians cannot enslave people for dubious ends if they cannot extort a surplus they cannot earn

Treasurer David Bradbury would have you believe that these companies have acted against the law. This underwrites his justification to apply the tax revision retrospectively from 2004. 

“It is a complex web but governments in need of revenue will pull out all stops to get back what rightfully belongs to the country”.  

The problem is – it’s not rightfully the governments. It’s not even the people’s. The role of government is to protect people; not to extort wealth from them, and use some notion of ‘mandate’ or majoritivism to achieve it. That is ‘mob rule’, and is akin to the type of politicking we expect from unions, not governments. This is why Labor in government is dangerous. The bulk of Labor Party supporters come from the union movement; and they enjoy the support of many in the media. So in what sense has Google and others acted contrary to the law. If they broke the law, why does the law need to change? If the government was ‘rightful’, why did they lose a litany of court cases?

Treasurer David Bradbury: “Many in business reject the notion that paying a fair share of tax forms part of a broader social compact, instead believing that it is just another cost of doing business. On this point, I vehemently disagree”. 

Business leaders are goal-orientated. They are good in business because they just get in and do it. It is fair to say that they would be far less functional if they concerned themselves with ‘taxation issues’ or politics over which they know they have little control, because they are a minority. For this reason, business plays just one card – the ‘pragmatic, nation’s interests’ card, and it’s played against ‘common good’ proclamations by organised unions. It’s a shame, because there are compelling moral arguments to be heard in defence of capitalism, and they are not made because you have business and union-liberal interests attempting to extort influence over an unthinking electorate whose framework for engagement is anything but rational. Given that this extortion system creates the sanction for legislation, you have judicial officers interpreting laws which are anything but rational. This juxtaposes two forms of law in conflict:

1. The principled, common law applied to specific contextual issues, i.e. This gives rise to the ‘spirit of the law’

2. The unprincipled statutory law which is arbitrary, and not able to apply to any context which is not defined. i.e. this demands a ‘letter of the law’ interpretation that gives rise to a constant stream of amendments to prevent loopholes, which create more loopholes. 

3. The unprincipled or pragmatic teleological ‘intent of the law’; which is another foundation for context-dropping.

Treasurer David Bradbury: “These businesses benefit from operating in an economy built on social and economic institutions — our markets and regulators, the rule of law and our judicial system — not to mention physical infrastructure and human capital that is funded or supported by the taxes paid by others”. 

No they don’t; they are greatly penalised by the institutions which tax and regulate them. If the Treasurer is so convinced that government is so good for corporations; why does he not give them the discretion to pay for the services which companies use or sanction? The reason is because our tax and regulatory system is not a system of justice, but a system to extort and to justify the existence of politicians. The government is functioning on the premise that:

1. Government is a value – irrespective of whether its constituted to protect or to extort. 

2. Government services to the extent that Google and others use them; are paid for. i.e. Google, if it goes to the High Court, to challenge a tax, will pay fees for such services. 

3. Government has a legitimate position to interfere in the voluntary trade between a counterparty and these companies. Google has offered a service to these counterparts, and voluntarily received payment from them. The same cannot be said of government. No one asked for the government to act; it just assumed that role because:

a. It is embarrassed by the unfairness of its ‘unprincipled’ tax system

b. It needs the money to ‘pragmatically’ fill a hole in its budget…because it cannot meet a ‘promise’ to its union thug-members. 

Now, if you are not convinced that our politicians and tax collectors are a pack of thieves….read this:

“Where some multinational businesses enjoy the benefits of these public goods but refuse to pay their fair share, they are free riding on efforts of others”.  

How possibly can a politician or tax bureaucrat who depends on the ‘extorted wealth’ of companies complain about companies, who engage in voluntarily relationships with their counterparts. Well, I’m aghast. Knowing that the tax commissioner is not an extortionist, but a man of principle, I shall duly ask him to reflect on his position if I ever meet him in the High Court. Rest assured that the government does not have the courage to confront me in court. If they did; rest assured that they would persecute my by using your hard-earned taxpayer funds to keep me in court for a decade…until my hair falls out…or goes grey like other ‘defendants’…like Julian Assange. Institutions for protection or preservation of illegitimate, unprincipled, self-interest….you decide. 

No this government and the media will not allow principled people like me to vent our opinions because we are an embarrassment to them. We challenge people to think. They need people’s mindless acquiescence; so they will use any trick in the book to keep people like me ‘off radar’. In the old days they would just persecute or imprison non-compliants; today, they just simply stop you have any effective voice. Your ‘right to associate’ or ‘freedom of speech’ means nothing if you have an ‘arrangement’ with media to preserve their market dominance. 

What is wrong with this framework? Well, I would suggest that there are several problems with this regime:

1. The tax office’s advisory group comprises ‘yes groups’, i.e. Business passes through its costs to consumers, and gets generous tax concessions on the way through. The complaint is that these internet companies are getting it ‘too good’. And yes, that is probably the case at 2.5%, but there is no such thing as a ‘good slave’. So the ‘solution’ of the tax office is entirely untenable if good slavery means taxing Google et al like other slaves at 16-30%. The solution is to end slavery and give people to pay for the services they use; and having an objective framework for determining those rates, and an ‘objective judicial’ process for assessing their rates if they want to challenge the rates applying to them as a ‘trader’. 

2. The efficiency of the tax system given that it has been 31 years since the government sought to amend it. Yes, government is so efficient that it takes 3 decades to arrive at solutions. Consider that gambling laws in Australia took 3-4 decades; and NZ is still waiting for legislation to regulate offshore shipping after its ‘letter-of-the-law’ framework failed to hold the owners of HMAS Rena accountable for damages. 

3. The spectre of a court which functions as the lap-dog of the legislature. I ask you whether it sounds like justice when you have a government enduring ‘a string of losses in the courts’ prompting a ‘unpopular government’ to revise the law. In what moral context did the courts reject it; and upon what moral premises will they be obliged to accept the revisions in future. The basis is political extortion.

Source of quotes: “Knives sharpened to cut Google's sandwich” by Adele Ferguson, SMH Online, website, November 22, 2012.

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

ATO "shock and awe" with non-bureaucrat appointee

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An interesting development has occurred in Australia of late. The Gillard government has appointed a former advisor to ex-PM John Howard to be the new Australian Tax Commissioner. More interesting still is the fact that Chris Jordan is a former policeman. This decision is VERY INTERESTING for several reasons:

1. Its Labor appointing a 'Liberal man' - that is one way to avoid controversy - keep it bipartisan

2. Its Labor reaching out to the community with a non-bureaucrat, i.e. a candidate who is purportedly 'of the people'. We'll see if that's the case when his remuneration package kicks in, and when he comes to face some pretty compelling ethical conflicts raised by taxation. Its like appointing one of us. Well, one of you, because I don't sanction extortion. I don't vote for these idiots in power. I will not give people my 'power of attorney'....not anyone, and most particularly I don't give it to strangers. You never renounce your personal judgement...you never accept without understanding...you never disempower yourself. This is what this succession of governments ask of you...just as they sent thousands of Australians to Gallipoli to die for some cause they did not understand. Nope, you people are slaves and they will work you to your last breathe. They did not give women the vote to give them 'rights'; they wanted to give them 'responsibilities', so they could enter the tax system. You might wonder why Australian productivity did not rise with increased women in the workforce; its because there was a corresponding inefficiency with endlessly growing government and tax receipts. 

3. Its Labor appointing a former 'police officer' to head a pretty dirty business. Yes, basically the tax office is an agency with a legal sanction to extort wealth. Now, this is important because this policeman was previously working in a role where his job was to arrest extortionists. Now his job description is be the "chief extorter", as head of the tax office. This is no paradox; this was a political decision. We are in the midst of a financial crisis, and the government is attempting to bring as much credibility into tax collections as possible...by their thinking, there is no better way that appointing a former policeman.

Of course, it should make no difference to us; just as we have soldiers who don't understand justice; who rap women on the front line, so we have policemen who are corrupt, who just have no moral conviction. This candidate says he comes into the job with no preconceptions; but he will enter the field with some moral reference. Maybe its biblical, maybe its pragmatic, but rest assured that he is not there for his conviction to wind back or abolish the tax system. He will be a man with a great deal of moral ambivalence; and he will get away with it because such is the nature of our unethical, unaccountable tax system. His job is secure, as most extortionists are, because they have the assurity and security of an intimidating force behind him. In his case, its the pretensions of justice that come with legal justifcations, the threat of force (from police, military and legislature). The pack of them have no backbone....but what as they evade that knowledge with appeals to 'social values', 'stability', 'the common good', the value of public resources. I'm not impressed by any of these arguments because they are used as a basis for forced compliance, systematic ineptitude, and cause far worse consequences than they would ever admit. 

Stop slavery and repudiate their claim to your sovereign right to exist - for your own sake - not for theirs. That does not have to mean your existence is a claim on others; it means that 'dog-eat-dog' is their philosophy, despite the rhetoric of 'common good'. They exist for their own sakes; and rejection of their 'sanction' and the recognition of a principled existence is a framework for entering my kingdom - the realm of a human being with self-respect. A human being who does not make arbitrary or incoherent claims upon others lives, and who does not allow others to make such claims upon him. 

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Gerry Harvey critical of Australian GST tax structure

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Gerry Harvey and his partner have come out criticising the goods & services tax that they are obliged to pay. Their criticism against their detractors is based on the following arguments, which I have taken the time to correct.

1. They will be forced to shift to HK and give up Australian jobs. This is not a bad thing. The Australian labour market is not short on job opportunities. We have a high standard of living because these jobs are best performed in Asia where labour is cheap. So sack the staff; this might just compel them to get a more rewarding job. We don't need to be subsidising low-quality jobs.

2. Katie Page saids detractors are focused on the short term. Actually, she is not intellectually developed to know better. The issue is not job losses. All markets give up jobs in order to develop the skills for jobs which offer greater rewards. Sales people are no longer needed because there are online specs; warehousing staff are no longer required because these low-skill jobs are more easily handled in Asia, and orders 'drop shipped' to customers using mechanised Australia Post conveyor systems. In fact, its Gerry Harvey who has thought short term. He invested in all this store space and now he can find no use for it; and he wants the Australian taxpayer to subsidise his industry. He says its about 'protecting jobs', but he has scarcely commented on the tax system in the past, because he really is only interested in himself. He uses his public profile when it suits him; not because it helps Australians. This is disingenuous.

3. Gerry Harvey is hit by an unfair tax. Yes, it is true that Harvey Norman are unfairly hurt by the Australian tax system. That is correct. So he should fight to change the tax system, not to impose more tax. He should seek a fair tax, not simply one favourable to him. He should use his resources to challenge the deductions scheme which is really just a tax evasion system. There should be no deductions for 'deductibles', particularly in the modern era when they are so easily claimed for many expenses, when almost anything could be considered a deductible. Salary earners are the hardest impacted. Their PAYE payments are very high and unfair. Corporates get away with murder....not to say that they don't have a legitimate defence. The problem is the politicians who care little how they get it; and the system which allows them to place arbitrary impositions upon anyone...including Gerry. 

4. Appeals to 'un-Australian' are about as tiresome as 'white Australia' campaigns.

5. Page argues that we have to pay for the health/education system. No we don't. Not everyone. Not everyone is using these services...so why should they pay for them. Why can't the people who use them pay for them. No objection? Good. Its not like recipients are complaining...its the people who curtail their extravagant lives to save, who don't want their lot eroded by unfair taxes.

The state governments can be expected to support 'the Harvey tax increase' because its in their interests. You can be sure that the government will adopt the tax. 

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

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 conceptually...to 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.

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

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.

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

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.

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

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 government....at 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.

Sources: Daily Mail UK, IMDB.com and Tax Abuse.

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Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

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.

Japan Foreclosed Guide Mining Fundamentals eBook Resource Rent Tax Australia

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

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.

Japan Foreclosed Guide Mining Fundamentals eBook Resource Rent Tax Australia

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

The legal standing of the US tax code

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Are you wondering how honest and compliant the US government is with the US constitution - listen to the following extract from the movie by Aaron Russo. In this movie, Russo exposes the extortion perpetrated by the Internal Revenue Service (IRS). Recognise that the US government is probably moving to 'voluntary compliance' because it knows that - on the basis of its own laws - it is acting unlawfully in several respects:

1. They are acting in contravention of the US Constitution

2. They are coercing the US people into paying taxes

3. They are incarcerating people for not paying tax - when they are not legally required

This movie highlights the incoherence of the IRS tax code, as well as the disingenuous character of the IRS, however what is not explored in this video is the moral indecency of taxation. Any force of coercion INITIATED against others is an abomination. I encourage you to view the whole movie by Aaron Russo called 'Freedom to Fascism'.

Japan Foreclosed Guide Mining Fundamentals eBook Resource Rent Tax Australia

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Thieving ATO targets Paul Hogan

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The Australian Tax Office has scaled up its extortion racket by extracting accusations by a tax advisor to Paul Hogan and John Cornell. Why do I say this? It has long been the practice of the ATO to target high-profile, wealthy Australians who clearly don't believe in paying excessive taxes to support regimes they don't believe in. One cannot say what justification Hogan & Cornell had for minimising taxation. I can only say that any law based on extortion, unconditional and 'initiated' coercion, whether it is the arbitrary law of a 'representative' government or some mob, is still theft. There is no moral legitimacy behind the law, and the fact that it is a 'tyranny of the majority' who condemn these men because of their own cynical acceptance of slavery, in no way admonishes them. Slavery is bad for everyone. Unconditionally funding government results in the worst form of public administration.

Send a message to the ATO that you do not support persecution of wealthy Australians for the sake of its self-serving power plays. Does anyone remember the efforts the government went in pursuit of Rene Rivkin. In the meantime, you can't even get the govt to look at disclosure issues. This is where it should be focused. Fraud and disclosure - to protect the legitimate interests of Australians...not stealing money from those who have 'made it'....why? Because they have more than you.

Japan Foreclosed Guide Mining Fundamentals eBook Resource Rent Tax Australia

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Labor making policy on the road

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What can you expect from trailer trash. The Gillard government has been caught out making policy on the 'campaign road'. According to the latest news from SMH, Gillard's people did not adequately understand the policy which they had committed themselves to in the wake of the election. This has culminated in another huge glitch by this government. Might we see the Independents abondon these sorry group of MPs? Full story here. The result is a conflict between the state and federal government over the sharing of mineral royalties. There will now be a competition to find out who can extort more. Back in the old days, competition was synonymous with freedom. i.e. Choice. But in this case, miners don't even get to choose the government who will lynch them...nor shareholders for that matter.

Japan Foreclosed Guide Mining Fundamentals eBook Resource Rent Tax Australia

Author Andrew Sheldon| Applied Critical Thinking | www.SheldonThinks.com

Kloppers carbon tax - is it a dodgy boardroom deal?

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Isn't it highly suspicious that a lone mining CEO (i.e. BHP's Marius Kloppers) would suggest a need for a carbon tax just after his company (BHP), Rio Tinto and Fortescue Metal Corp won a huge tax concession over Resource Rent Tax. Maybe he is just a 'born again' liberal, or is there some sinister backyard deal here for Labor to get traction with this ugly tax. Science is not a popularity context. Business CEOs ought not be accepting "popular" scientific opinions.

I don't think this ought to strike anyone as a surprise given that Labor did exactly the same thing before the election. It shored up support with just 3 miners in order to imply that 'reasonable' miners can accept a Resource Rent Tax. It appears to be doing the same here with the Carbon Tax, with another dirty boardroom deal. You cannot trust politicians or CEOs. Its all about their political survival or financial interests. Maybe Gillard even has a Swiss bank account like Graham Richardson. It is not even necessary. It does not have to involve money to be corrupt. Gillard might actually just be a 'socialist', with nothing but contempt for money. But that is hard to fathom when you need it so much in politics. But one can draw a line between ones personal politics and personal lives....compartmentalisation comes easy to people with no principles.

What a shame we abandoned moral philosophy in the late 1890s...we could use it right now. You don't have to worry about corruption when reason is the standard of value. It only takes one right person to set the debate right.

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Author

Andrew Sheldon

Resource Rent Tax Australia

Applied Critical Thinking | www.SheldonThinks.com

BHP chief executive 'selling out' Australia and the facts

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BHP Chief Executive Marius Kloppers has come out in support of a carbon tax. He thinks Australia should take the initiative because he thinks its inevitable. Really?

This is a very suspicious thing for him to say. It stands out in stark opposition to the interests of BHP shareholders....or does it. The only reason that would not be the case would be:

1. If there was some strategic benefit in BHP paying tax before Australia's international competitors. This is unlikely because it would result in a stronger AUD and a higher tax obligation by BHP.

2. If BHP is supporting the carbon tax in a 'secret deal'. It strikes me as rather coincidental that Kloppers would be supporting a carbon tax just after his company (BHP) and Rio Rinto won a huge tax concession over the Resource Rent Tax.

There is however the possibility that Kloppers is an idiot, or more specifically a 'liberal idiot', and that cannot be ruled out. There is no reason to think that bureaucratic enterprises like BHP are well-managed by critical thinkers. It would not surprise me if they accept the climate science of academics from the majority at face value, when they should be critically engaged in assessing it. Science is not a popularity contest. I have seen no evidence to suggest that critical arguments are being given the attention they deserve. Its all about having the 'popular' or political numbers.

It does not concern me that Rio Tinto is not supporting a carbon tax, because they would not have been privy to any 'possible deal'. The integrity of the BHP CEO is in question. We might ask if there is any strategic advantage for BHP in taking over a fertiliser enterprise like Potash Corp. There might be some more significant strategic game play here than I think. I can't see such a link though....so might be reading too much into it. Maybe its just another bulk commodities business it can dominate.

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Author

Andrew Sheldon

Resource Rent Tax Australia

Applied Critical Thinking | www.SheldonThinks.com

Impact of the Australian resource rent tax

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Some mining CEOs commenting on the Resource Rent Tax

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Author
Andrew Sheldon

Resource Rent Tax Australia

Applied Critical Thinking | www.SheldonThinks.com

Labor makes false claims about resource rent tax

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Some actual mistakes here:

1. Public information package: That must be a euphemism for propaganda. The government is justified in spending $38 million on TV advertising. That is $2 per person. Why doesn't the government spend half as much sending out detailed material along with the mining industry. Would that not be a fair way to go. Reason as the standard of value, and save tax payers $17 million. Australia Post could even make a profit.

2. The Australian people own mineral resources so they are entitled to a share of the profit from those resources. They already get a 'risk-free' share from those resources through income tax, mineral royalties, state taxes, infrastructure, social spending,

In addition, these resources have 'in effect' been sub-leased to the mining industry. i.e. The government is bringing into question the viability and undermining the wealth of Australians by taking a 'second take' at an opportune time, when prices are high. Those prices will not always be high. It is not as simple as Australians owning these resources.

3. Labour suggests that the mining industries advertising is unfair, and yet it is using taxpayers money to achieve the same. They have previously attacked such use of taxpayers funds.

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Author

Andrew Sheldon

Resource Rent Tax Australia

Applied Critical Thinking | www.SheldonThinks.com

Misconceptions about the resource rent tax

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Quote from Royd Bogan:

"The fairness thing eludes me. A tax is a tax, it's not an issue of morality. The rate of the tax is an economic and political matter, using "fairness" on either side simply distorts the discussion".

Oh, a pragmatist. Well you know we are close to fascism when the popular consensus is that 'morality is not an issue', that a 'tax is a tax'. Great logic. Bogan has descended to the cognitive level of a common house pet. Oh, hang on, he is talking economics. Hell, he has gone off the monitor..warning! Warning! Back to pragmatism. Well, you know economics actually acknowledges moral issues. i.e. It is based on the concept of 'rational man'. It assumes in fact that we are all rational. Which means...if you introduce some psychology, we like to be appreciated or validated for good, not punished for it with high taxes, or worse resented/hated. Hating millionaires might become popular next. Vulgar materialism anyone? It also means we like to avoid sovereign risks, so with little property rights in Australia, we might be better off investing in Ethiopia, where they have greater respect for wealth creation because they have none. The next thing is industry moves offshore, Australia is no longer a centre of mining industry, so we all live in South Africa or Brunei instead. Brain drain 20 years off. Is that enough economics for you; even tossed in some psychology and tourism for dessert.

Quoted from Adultmale

"I forgot to say that the mining companies already pay the same tax as all other companies (as well as royalties). You have to ask yourself why Kev and Julia aren't putting a 'super profits' tax on banks. They post obscene profits every year while they are actively reducing their work force and closing branches". Source: Political Forum.com

The reason is simply that the banks and media always support the government, and the govt always support them. The banks and media are bipartisan supporters of govt, and the feeling is mutual. Look at how the govt obstructed the IMF, which is suing the banks to get them to repay their unfair fees. How long did it take the govt to reduce interest rates on credit cards.

Apart from these vested interest groups, there are also partisan groups like the unions (Labor) and business (Liberals). The banks and media are the 'untouchables'. Google is also untouchable for strategic reasons....it only pays 0.5% tax on its Australian income. Lucky guys!

Quote from Royd Bogan:

"As for the economic benefit of mining, yes it's there but it's sad to have to acknowledge that we don't have the wherewithal to actually produce something from the minerals we dig up and export. That's the bloody annoying part, the cargo cult mentality of the Howard government has apparently been continued by Labor. If we actually used the stuff ourselves we'd have a stronger economy, but it's easier to dig it up and sell it to China then buy back the goods. Some things never change". Source: Political Forum.com.

More commentary by people who don't understand commerce or economics. The reason why we don't process iron ore is because we cannot compete with China. Now, if you think about it, the reason is that we have minimum wages in part (because of Socialist Labor), geopolitical and geographic issues, and also because we can get greater productivity from placing our labour elsewhere. i.e. IT sector.

The reason we don't use iron ore is because we consume very little. Few countries can compete with China on processing costs. That will be true for another 2 decades, then Vietnam and India will be cheapest, then probably Africa I guess. Iron ore needs deep water ports.

We used a great deal of coal....but I guess many of you are not too happy about that. I love the mentality though...love what you do for the country...but do you mind if we screw the industry and investors. Why would you want to invest in mines or downstream industry if you as an investor are treated this way. Have some empathy or proclaim your parasitic souls.

Quote from Royd Bogan

"The miners can stop work on a site if the price of metals beomes unprofitable. They sack the workforce, install a maintenance and security workforce at lesser cost and mothball everything until the price goes up". Source: Political Forum.com

You mean investors should take a loss (as opposed to making a profit) in order to support those parasites whom think the world owes them a living.

Let me understand this, you want the cash, but not to support stable jobs? Clearly you are advocating shutting mines. So I guess you are just a cynical leach, as opposed to an idealistic one.

Rest assured there will be millions of you trying to grab a buck from the miners. Rest assured exploration spending will evaporate in new projects. It will continue in developmental projects for 6-10 years, but that will be the end of the mining industry. Maybe the Chinese will not even fund developments, opting for safer West African countries like 'Angola' instead. Hard to believe we could 'out' Angola in the sovereign risk stakes, but clearly that is what the standards of parliamentary conduct have descended to....and I don't like the Liberals either. I suggest not voting or voting for a minority like the Liberal Democratic Party. They don't have much on policy or principles, but I think that's because they have no money. Mind you, when they do, they will probably become liberals. Ok, so I'm all you've got, and I'm not running or even voting...so there you go. Go buy a house or drown your repressed memories of this conversation.

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Author

Andrew Sheldon

Resource Rent Tax Australia

Applied Critical Thinking | www.SheldonThinks.com

Market risk of Resource Rent Tax

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The coal market consultants Wood Mackenzie have come out in defense of the mining industry over the resource rent tax. From the outset one must consider that Wood Mackenzie is a consultant to government and the mining industry, though most of their business is with the private sector, so some bias is possible. But I actually agree with them for reasons I will add. Appreciate that coal and iron ore are low value, high volume businesses requiring a great deal of investment (i.e. capital intensive).

As a prior coal analyst with Barlow Jonker (which was years later taken over by Wood Mackenzie), I can say there is a tendency for people to reflect only on the short term market for commodities. The reality is that commodity prices went very high in the 2000s, but we must remember they went so high because of the under-investment in the 1980s-90s. Higher prices have sparked a rash of new, small projects, so its possible that prices could stay low. This government intervention strikes me as a govt-orchestrated attempt to curtail the development of new capacity in order to keep prices high. Good for Australia it could be argued, but at whose expense? Certainly to the benefit of Fortescue, BHP and Rio Tinto.

In the long term the market could go either way. Coal and iron ore are common commodities. We must also remember that China has a great deal of it as well. We must also acknowledge that the global seaborne coal and iron ore supply curve tends to get flatter as the market expands. That makes competitition very intense. We can also expect that the last commodities boom will result in a lot of new players, who will keep prices down.

I recall studying the Carbocol SA Cerrejon de Norte coal mine in Colombia when I was an analyst. At the time, everyone thought that coal prices were going to $100/tonne in the 1980s. Instead they went closer to $25/tonne, and resulted in mines going broke. Carbocol was nationalised by the Colombian govt, much like the Australian govt plans to expropriate the profits from Australian miners. The legacy was that Colombia lost investment credibility, and the mine was loss-making for a decade. It never recovered its capital. The same risk exists if the Australian govt takes on a commercial risk in order to profit from mining. It might even become a mining industry rort like the tax credits for the wine and timber industry. Of course a strong China and India augers well for prices, though who knows what could happen in the next 10 years. Do we want the government accepting that commercial risk? Its your money, their lack of accountability.

The very idea of government basing its budgetary spending on voltatile commodity prices is grounds for concern, though in fairness, we tend to see commodity prices offset by a weaker $A....so on that basis the government is pretty safe, so commodity price changes will be ameliorated by balancing exchange rate movements; particularly as high household debts will pin interest rates at a low level.

It is clearly suspicious that the Gillard government is unwilling to disclose its commodity price-forex assumptions underpinning the claim that the tax will pull in $10.5 billion in its first two years.

According to the SMH, the head of coal supply research at Wood Mackenzie, Gero Farruggio, said that as the MRRT was a profit-based tax, government revenue would become more sensitive to price fluctuations. ''A return to the low prices of just a few years ago will see no additional government revenue flowing from MRRT, with some companies benefiting from a reduction in the corporate tax rate from 30 per cent to 29 per cent,'' he said.

Really though he is ignoring the exchange rate impact, and I suspect the exchange rate will offset it. Pragmatic arguments like these ought not however be the basis for moral-political decisions. Otherwise lets just kill all politicians and retarded kids, and we will add $2000 per capita to GDP in the first year and heaps more when we finally eradicate the oppressive arbitrary laws of political middlemen who create no value.

Gero Farruggio also said ''Indonesia dominates the ranking tables, with the largest thermal coal production and lowest average cash cost - in contrast to Australia. It has moved to reduce the level of government take from coal production".

We must remember however that Indonesian export coal will principally find local markets in future, so that is a domestic cost. Export sales could be expected to become less significant, and maybe for the government, security of supply considerations might justify a higher tax. Not legitimately, but that is what governments do....justify expropriation. Stuff those who are impacted.

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Author

Andrew Sheldon

Resource Rent Tax Australia

Applied Critical Thinking | www.SheldonThinks.com

Gillard driving Australia to economic distortion

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Australia’s PM says ‘Australia won't be able to meet its targets for reducing carbon gas emissions without charging polluters’. Actually that is not true. She could if she wanted to simply legislate to prohibit or phase out those technologies and industries which cause pollution. After all, if the government really believes there is a dire catastrophe around the corner from climate change, it ought to take that action. The reality is that the government is using ‘fake science’ to lobby for more tax, knowing full well it will not reduce carbon emissions. In fact it will have the opposite effect; as all government ‘ideas’ tend to have. Let me give you some examples:

1. Governments in Australia, NZ, Germany, Denmark, etc had the great idea of offering free insulation to the poor, and to those homes which are reluctant to invest in such schemes. Far from resulting in subsidies, it saw installers mark up their prices, so there was in fact no benefit for home owners. It gets worse. All those installers took on more staff who incorrectly installed the product resulting in legal action, and in some cases the product integrity (i.e. the water-repellant character of the product) has been questioned, i.e. AirFoam in NZ. It gets worse. Far from helping people to save energy, it actually gave homeowners an incentives to shift from insulating their bodies with clothes to using 'inefficiently' heating their entire homes with wood fires. So some 800,000 homes in NZ alone could end up consuming more energy than they would otherwise have used...because consuming it before would have been a waste of money.

2. Governments argue too that penalizing polluters will cut pollution; but in fact it will push industry offshore to China, or other third world countries where standards are more lax, and these companies will have to ship products around, so transport costs will be higher. It can only result in a sub-optimal response. Of course business wants a carbon trading scheme so it can simply pass on the cost to customers. Of course it does not care as long as the world follows the same stupidity. This is the stupid pragmatic or relativist philosophy which will drive the world towards fascism. It gets worse.

3. Governments will be far less efficient with the tax dollars collected than business, because governments don’t actually create wealth. You say governments are not supposed to create wealth..true, but they ought to facilitate wealth creation, not sabotage the process. We must remember we really can’t afford to obstruct wealth creation, lest we be underfunded or too poor when a real catastrophe arises. Its not just about the money either; its the technology that money allows us to fund. Technology which allows us to overcome such challenges. You will not hear about those products from government. Why? Because it is not responsible for them. They are only responsible for the real crises, like financial meltdown, caused by government intervention in financial markets.

For those who still believe there is a primarily human cause to climate change, let me raise the specter of solar flares and sun spots. Research since 2005 is showing that this is a far more plausible cause of recent climate fluctuations. The correlation is unmistakably good for the last few years of day. Al Gore swooned people with his ‘hockey stick’. It was a fabrication based on dubious extrapolation of data.

If there is an end for the world in sight, it is going to be precipitated by government, and its unthinking leaders like Julia Gillard. Taxing pollution will not cut pollution it will merely impose a cost on existing plants. It will speed up the replacement of old plants. The reality is that the government does not believe the science either. It just feels compelled to appease its unthinking electoral support base. Really Labor cannot think beyond that. It will do a fabulous backdown after the election. Should we be worried then? Well yes, because we will awaken the next day as a fascist regime where facts have been displaced by the arbitrary assertions of politicians. Liberals in the media will help us get there.

Want to know more about climate change - then listen to critical thinking scientists, not the academics detached from reality with a liberal agenda. You never here about them in the media.

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Author

Andrew Sheldon

Resource Rent Tax Australia

Applied Critical Thinking | www.SheldonThinks.com