I trust that this mornings post finds you well.
Yesterday the Victorian State Government announced that it will reduce the payroll tax levied on the wages paid by employers by 0.05 percentage points to 4.85 per cent from July 1, as part of its 2014/15 budget. The tax kicks in once an employer total remuneration costs exceed $550,000 per year.
While this is welcome news, let’s be totally frank about this.
Payroll tax is by far the stupidest tax known to man kind. Yes we are the first to say that taxes are important because they assist in creating a civil and fair society. But to punish employers for employing people is just down right dumb.
Employers take significant risk, with many putting their house and other personal assets on the line to get ahead. They employ people and through this help to build a better society for all and sundry. To then levy a tax cost simply because you are doing the right thing is not only totally unfair but more importantly it restricts growth and acts as a major disincentive for employers to expand further.
If government’s were serious about growing the pie, they would actually remove this impost and therefore encourage “Entrepreneur’s and businesses alike, the invest further and by investing further this would result in more income tax revenue and GST being collected because individuals would have more money available.
Yes we concede that our brief overview is somewhat simplistic in its view, but really taxing businesses because they employ people is highway robbery.
Have a great day