Cash is king
A few days ago the budget was released. There will be higher taxes to pay for so-called high-income earners with households generating over $180,000 per annum. We will not retire until we are 70 years old. We will pay more to visit a doctor. There could be implications for long-term unemployment. And the list goes on.
Why does an ad guy even care?
Well I do care. Our lifeline relies on everyday Australian having more discretionary income to buy the things they want and need. The more tax average families pay the less they spend living life.
At the same time, there is a thriving cash-only culture, blatantly dodging the system. Am I the only one here that is noticing the elephant in the room?
Stressed Australians will now pay even more tax, while a whole sector of the community gets away with dealing in cash only.
The impact of small cash-only businesses
I think that’s where the hole is in the Australian economy. (I’m not suggesting that I’m pro tax either.) In fact, our agency has very good accountants that help us legimatly optimise our tax obligations. This is a normal part of business. But, small cash-only businesses are finally starting to impact this economy.
Ever gone out to purchase lunch at a restaurant where the owner has shoved an ATM in the corner of his store and tells you to use the machine and give them the cash instead?
Why? Well it’s simple. Small businesses that operate on a cash-only basis will tend to dodge the tax system and not pay their fair share of tax (if any at all) by not declaring their true income. The problem is that no one really knows how much of this is happening and where the cash is ?hiding?.
It’s happening all around us
My wife and I have an 18-month-old girl. We get very little time to ourselves these days. This Mother’s Day I decided to book us a meal at a good restaurant at the casino and then I treated her to a massage at crown towers, paid for with taxable income. While I was waiting for her in the lobby with the little one, I sat behind a couple that was really well dressed. It looked like they had just had a really nice time gambling. Yet, what I overheard shocked me.
The man was explaining to his wife why his parents come to the casino a lot. The parents own a cash-food business. With all the cash they collect from the store, their parents come to the casino to gamble a little and then bring back the money as legitimate winnings, which are tax-free!
So, here is how it works. Cash gets handed over the tables for chips. They gamble a little bit then take their chips and cash them in. A receipt is given. Cash goes in the bank as legitimate winning the very next day. Money is clean and tax-free.
The only problem I have with this is that there are everyday Aussies that are doing the right thing, whilst a significant portion of other Australians are not paying their way.
How big is this black hole?
Is the casino a glorified money-laundering hole for tax dodgers? This is only one example, but I’m sure there are many.
Australians, who avoid paying their fair share of taxes use the same roads, are entitled to the same schools and medical care as honest taxpayers. Why should hard-working Australians carry them? How is this any different to the robber that breaks into your house and steals your plasma?
The fact is it’s no different. They both steal from you.