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 points....so 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.

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

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.

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