Do firms that pay less company tax create more jobs?

[Snake_Baker]

Conclusion

Across a cross-section of profitable Australian firms, I find no evidence that those which pay a lower effective rate of tax create more jobs. In aggregate, the one-third of Australian companies whose effective corporate tax rate is below 25% shed jobs, while the two-thirds of firms with an effective corporate tax rate of 25% or above were net job creators. These results are robust to the inclusion of controls for firm size and industry fixed effects, as well as to expanding the sample to include unprofitable firms.

https://www.sciencedirect.com/science/article/pii/S0313592618300596

 

[madmug]

Listening to the monotone mantra from Cormann on AM was hard. He kept repeating the same dribble about lowtax, more jobs, more employment. Despite being told 4/5 businesses surveyed wouldn't employ more staff on the basis of tax cuts.

Business employ on the basis of need to produce.

This sort of tax change is simply an upward redistribution of wealth. Simple. Follow the Trump.

This considering the higher education funding cuts. Given the changes occuring to our employment profile, what the sense in making it harder to get the qualifications that will be needed in the future? What hope for the coming generation?

 

[Baltimore Jack]

http://www.afr.com/news/secret-bca-...cuts-going-to-jobs-wage-rises-20180326-h0xzm7

Fewer than one in five of Australia's leading chief executives say they will use the Turnbull government's proposed company tax cut to directly increase wages or employ more staff, according to a secret survey conducted by the Business Council of Australia.

More than 80 per cent said they would either use the proceeds to boost returns to shareholders or invest in the company.

The explosive revelation comes as the government is still struggling to secure the final two Senate votes needed to pass the remainder of the $65 billion package.

http://www.afr.com/news/secret-bca-...jobs-wage-rises-20180326-h0xzm7#ixzz5AtV6rexC

 

[Herne Hill Hammer]

http://www.afr.com/news/secret-bca-...cuts-going-to-jobs-wage-rises-20180326-h0xzm7

Fewer than one in five of Australia's leading chief executives say they will use the Turnbull government's proposed company tax cut to directly increase wages or employ more staff, according to a secret survey conducted by the Business Council of Australia.

More than 80 per cent said they would either use the proceeds to boost returns to shareholders or invest in the company.

The explosive revelation comes as the government is still struggling to secure the final two Senate votes needed to pass the remainder of the $65 billion package.

http://www.afr.com/news/secret-bca-...jobs-wage-rises-20180326-h0xzm7#ixzz5AtV6rexC

Dunno if I'd use the highlighted phrase. Anyone with half a brain would be able to figure out that the tax cuts wouldn't have businesses falling over themselves to employ more people.

If you have shareholders, you use it to pay higher dividends to those shareholders, if you invest it in the company, perhaps that investment is used for modernisation and is therefore costing people their jobs. Who knows on the 2nd point.

 

[madmug]

Dunno if I'd use the highlighted phrase. Anyone with half a brain would be able to figure out that the tax cuts wouldn't have businesses falling over themselves to employ more people.

If you have shareholders, you use it to pay higher dividends to those shareholders, if you invest it in the company, perhaps that investment is used for modernisation and is therefore costing people their jobs. Who knows on the 2nd point.

Businesses have to monitor costs. The future is about losing repetitive task jobs. We can't stop that. Thats the way of the new technologies. For staff & kids the future is all about upskilling & more higher education & adapting to whatever newer job types are created.

Just handing out $65bil to companies is stupid. Tax cuts for investment in plant & equipment & training, ie reward growing business. That makes sense.

The Cormann mantra is so dumb its not funny, even with his robocop voice. ( well it was amusing at least, he'd make a good dalek.!!!)

 

[GreatBradScott]

All those in opposition need to do is highlight the share buyback in the US after the round of corporate tax cuts there.

Loosened up revenue which created a false demand in purchasing back company shares, which then went up in value. With share prices often tied to CEO pay packets and bonuses, the boss gets a nice boost on top of the tax cut.

This behaviour should honestly be outlawed.

 

[Maggie5]

All those in opposition need to do is highlight the share buyback in the US after the round of corporate tax cuts there.

Loosened up revenue which created a false demand in purchasing back company shares, which then went up in value. With share prices often tied to CEO pay packets and bonuses, the boss gets a nice boost on top of the tax cut.

This behaviour should honestly be outlawed.

Kimberley Clark has done that at the same time closing manufacturing sites and laying off 5,500 employees. Cisco is spending $25B (B not M) on stock buyback just to name two companies.

 

[The Edukator]

can someone please, for the love of god, explain to me the rationale behind payroll tax? why are companies taxed more for employing more people?

 

[madmug]

can someone please, for the love of god, explain to me the rationale behind payroll tax? why are companies taxed more for employing more people?

Its like the old English window tax. It seemed like a good idea at the time.

Anyway its no sillier than getting taxes from pokie revenues. Talk about dead money that does SFA for the health of the economy or the community.

 

[owen87]

can someone please, for the love of god, explain to me the rationale behind payroll tax? why are companies taxed more for employing more people?

I'd be all for cutting nonsensical taxes.

Payroll Tax is just an additional whack for employing staff, surely you'd want to incentivise companies to employ more staff to reduce the burden on welfare.

 

[Fire]

can someone please, for the love of god, explain to me the rationale behind payroll tax? why are companies taxed more for employing more people?

There is none.

If they were serious about creatong jobs then they'd look into cutbacks like this to insectivise a change in operation that leads to employing people.

just giving them a handout for buisiness as usual incentivises nothing. It's pure corruption.

 

[Ok Boomer]

Firms will do what is best for them in terms of profitability, as they should. Why should they employ more staff when they don't need to, just because of a tax cut. Why should they increase the pay of employees when the market indicates that it isn't necessary to retain staff, and that competition in regards to wages is low/non existent?

This is why the Liberal argument for these tax cuts in terms of job creation and wage growth is deeply flawed.

Cutting payroll tax would be far more likely to achieve this, but of course, the Liberal party aren't really cutting business taxes for the benefit of the average worker.

 

[Bombermania]

The government narrative reveals a lack of understanding basic business budgeting, reducing corporate tax will improve a business's cash flow allowing them to achieve a higher rate of return and by extension be more profitable and potentially hire more people but the link with wages is weak as wages are related more to the ability to source suitable staff.

If the government was serious about helping make hiring more attractive then they would be abolishing payroll tax which as others have mentioned is a direct tax on employment.

 

[Baltimore Jack]

can someone please, for the love of god, explain to me the rationale behind payroll tax? why are companies taxed more for employing more people?

State Tax not Federal

 

[Gough]

Bill's been pulled again.

 

[Bombermania]

State Tax not Federal

It is but it should be abolished, the state's surely can find better forms of taxation than to tax employment.

 

[Frank Bunn]

Conclusion

Across a cross-section of profitable Australian firms, I find no evidence that those which pay a lower effective rate of tax create more jobs. In aggregate, the one-third of Australian companies whose effective corporate tax rate is below 25% shed jobs, while the two-thirds of firms with an effective corporate tax rate of 25% or above were net job creators. These results are robust to the inclusion of controls for firm size and industry fixed effects, as well as to expanding the sample to include unprofitable firms.

https://www.sciencedirect.com/science/article/pii/S0313592618300596

This is a second order issue.

Australian companies, with government complicity, are outsourcing jobs oversees then those low paid workers are being brought onshore using 457 visas, at the expense of Australian jobs.

 

[madmug]

This is a second order issue.

Australian companies, with government complicity, are outsourcing jobs oversees then those low paid workers are being brought onshore using 457 visas, at the expense of Australian jobs.

$65bil isn't 2nd order anything. But its important to pursue that that 457 disgraceful rort.

 

[Frank Bunn]

$65bil isn't 2nd order anything. But its important to pursue that that 457 disgraceful rort.

I've got mates who were made redundant from IT jobs a year ago who can't find anything, yet in my office I reckon 8 out of 10 employees are Indians on 457 visas. The government made a pretence of tightening the rules last year but was just PR.

 

[NSWCROW]

They're gonna need to bust out the " top shelf " gear to sway Derryn it seems

 

[madmug]

I've got mates who were made redundant from IT jobs a year ago who can't find anything, yet in my office I reckon 8 out of 10 employees are Indians on 457 visas. The government made a pretence of tightening the rules last year but was just PR.

Do you think Labor & Unions have made a big enough noise about this?

It seems Malcolm is more interested in looking after his corporate mates here & OS than in his own country.

 

[Maggie5]

Companies that don't pay tas at 30% are still not going topay tax on 25%. It is a shame as this penalises those that are doing the right thing and quite possibly would do all the things the BCA say if everyone paid their fair share. Here are some examples:

The usual culprits are at play. Zero tax on $2.9 billion in revenue from Rupert Murdoch’s News Australia Holdings – zero tax on $8.4 billion over three years – not a zack from Wall Street’s cuff-linked freebooters Goldman Sachs for the third year on the trot, same deal for brewing giant SAB Miller and a slew of other foreign multinationals.


Two Glencore companies managed to exterminate all profit and all tax on $22 billion in income. How do you not pay tax with almost $2 billion a month coming in the door?

...nothing from sugar giant Wilmar or JP Morgan, not a penny from American Express for nine years...
Shell Energy paid zero on $4.2 billion in revenue, Chevron nothing on $2.1 billion, Viva Energy (which bought the petrol stations from Shell) zero on $16.8 billion and ExxonMobil not a cent on $6.7 billion.

This latter accomplishment cannot be underestimated. Not only has Exxon completely sidestepped tax for three years while it made $25 billion in revenue from selling Australia’s natural resources, a large chunk of that revenue came from its oil and gas venture with BHP in the Bass Strait and the price of gas for domestic consumers has tripled.

News Corp is the only company ever outed in public as the nation’s number one “tax risk” by the Tax Office, and News may have lost that mantle to tax cheat Chevron which was flounced by the ATO in an epic court battle this year, but surely Exxon is now Australia’s numero uno tax villain.

Australia’s biggest bookie William Hill paid nothing, as did the airlines Qantas, Virgin, Tiger, Qatar Airways and Etihad – Qantas despite $15.7 billion in revenue and $52 million profit. While the banks, supermarkets, tobacco and many ASX-listed companies pulled their weight, Adani’s three entities racked up $722 million and paid no tax.

Likewise, PwC’s two corporate entities, big pharma tax cheats Pfizer and Sanofi, grog companies Pernod Ricard and Asahi, meat multinationals JBS and Teys, and energy groups EnergyAustralia, Origin, Santos, BG International.

Others who shift it straight offshore are not there either; eBay, Uber and Facebook for instance. Uber’s competitor Cabcharge paid $17 million while Uber was MIA. While local furniture group Nick Scali struck a profit of $39 million on revenues of $204 million and paid tax of $11.7 million, importer Ikea paid slightly less tax at $11.6 million despite revenues of $1 billion.


Drumroll - my favourite:

Rupert Murdoch’s Foxtel whose three entities on the ATO list recorded income of $3 billion and paid $20 million tax.
NOTE: Foxtel got a $30 million grant from the government this year.

 

[NSWCROW]

 

[NSWCROW]

Cue the murdoch hit job on Storer

 

[Hawk Dork]

Its amazing how the tax avoiding, Singapore sling, paying off the debt narrative has lost momentum.
There is no clear voice spelling out the damage this will cause to the fabric of our society.
Paying taxes is what separates the civilised societies from the uncivilised

Destyari could create a good show and championed this cause well they need to find another showman