Cashless society

[JohnDe]

In my business 95% of payments is cashless, with only 5% being cash. The ATO knows all my business transaction and want a big slice of it every quarter, and a huge slice of my income as well.

As I said before, I don't mind paying tax to help the country and its people. But i am sick and tired of wasteful governments that have no care factor when it comes to wasting our tax dollars.

Take the Victorian government when under Dan Andrews, cancels a major infrastructure contract and has to pay $1 billion dollars for breaking the contract, same with the Commonwealth Games. That is taxpayer money wasted, and the coffers had to be replenished by increasing taxes. Look at the current Federal Government budget, they are going to hand over $2.4B of taxpayer funds to the Victorian government to help them finish a huge infrastructure project, because the Victorian state is broke.

My tax dollars are now propping up the Victorian government and I don't live in Victoria.

So good on you, I do not hold any grudge at you for not handing over all your hard earned to a government that wastes our money while their goons try to make us feel guilty by quipping about the sick and medicines.

Actually, my figures were slightly off, the cash side is only 2%. Only a small minority of my customers want to pay by cash because they have the same beliefs that we have here, that it is their money and they don't want governments or business knowing what they do with it, and they are trying to keep cash alive.

Then I have other customers that have an account with me and pay by direct debit, either weekly or monthly.

And then there are those that are trying to build up Points for flights, electronics, and whatever else the banks offer these days. Most of them don't realize that those points are costing them. Nothing is free. Businesses build in the cost, and banks increase the fee.

As all the data shows, card transactions cost more than cash.

 

[Value Collector]

@JohnDe I don’t agree that card transactions cost more than cash, it’s just card transactions have a fee that covers their costs that you can see.

where as all the costs of cash are dispersed, and some are subsidised by the government.

for example.

1. business owners don’t always count their time used for banking.

2. they don’t factor in the banking costs that are covered by indirect fees On the banking system.

3. they don’t factor in the tax payers funding of managing the supply and replacement of notes and coins as they wear out or are damaged.

cash handling is expensive, from operating ATM’s, Armed guards, counting cash, printing cash etc etc. but those costs aren’t all packaged up in one neat fee you see on your statements each month, so you think cash handling is free, but it’s not, it’s heavily subsidised, even us that don’t use Cash pay for the cash system to operate.

 

[TimeISmoney]

Or subsidise the medication for a cancer patient, or pay for a school teacher, or police officer, etc etc.

people that like to dodge tax are always quick to bring up dole bludgers, but never bring up all the good stuff our taxes pay for, or the fact that every dollar they dodge paying will result in more pressure being put on those of us who actually pay what we are asked to pay.

I've got a mate exactly like you, who always harps on about tax avoidance. He runs to his accountant as soon as he hears someone claiming something he doesn't to see if he can claim it too. If you want to pay more tax nobody is stopping you, the CGT discount is optional you know?

 

[Value Collector]

I've got a mate exactly like you, who always harps on about tax avoidance. He runs to his accountant as soon as he hears someone claiming something he doesn't to see if he can claim it too. If you want to pay more tax nobody is stopping you, the CGT discount is optional you know?

1. I have no problem with people making all the lawful deductions they can in the spirit of the law, following the rules.

2. I don’t even really have a problem with people putting $50 here and there in their pocket.

But, there is a big difference between that and just not reporting large swabs of income, for example putting a whole weeks work worth of pay in your pocket.

———————————

The capital gains discount etc exist for a valid reason, there is a huge difference between declaring the capital gain and paying the tax on the 50% that’s due, and just hiding income entirely.

As I said my issue with tax avoidance is that it just puts more pressure on the rest of us that do it properly. If you want to pay less tax use some of the ways that are available like adding money to your super etc.

 

[TimeISmoney]

1. I have no problem with people making all the lawful deductions they can in the spirit of the law, following the rules.

2. I don’t even really have a problem with people putting $50 here and there in their pocket.

But, there is a big difference between that and just not reporting large swabs of income, for example putting a whole weeks work worth of pay in your pocket.

———————————

The capital gains discount etc exist for a valid reason, there is a huge difference between declaring the capital gain and paying the tax on the 50% that’s due, and just hiding income entirely.

As I said my issue with tax avoidance is that it just puts more pressure on the rest of us that do it properly. If you want to pay less tax use some of the ways that are available like adding money to your super etc.

The Govt has factored cash in hand sales into the tax collection system, why do you think they brought out GST?

Many times cash in hand isn't even worth it because they can't claim their GST back. ATO has years of income data on everything, they know when people cheat the system in large amounts. Those people end up paying for the consequences of themselves and others that never got caught.

 

[JohnDe]

The Govt has factored cash in hand sales into the tax collection system, why do you think they brought out GST?

Many times cash in hand isn't even worth it because they can't claim their GST back. ATO has years of income data on everything, they know when people cheat the system in large amounts. Those people end up paying for the consequences of themselves and others that never got caught.

Exactly. The ATO has a formula created from years of stats, they know how much each business category should be banking, cash & digital.

The problem, as I see it, is that the average taxpayer has been brainwashed into thinking that governments spend wisely. These average taxpayers hand over their money without question.

Twenty plus years ago the taxpayers would have been angry and shouting about the wasted dollars and any increase in taxes would cause electoral fear.

Politicians almost don’t care about the spending recklessly, because of the majority of taxpayers are sheep.

 

[Value Collector]

1. The Govt has factored cash in hand sales into the tax collection system, why do you think they brought out GST?

2. Many times cash in hand isn't even worth it because they can't claim their GST back. ATO has years of income data on everything, they know when people cheat the system in large amounts. Those people end up paying for the consequences of themselves and others that never got caught.

1. That doesn’t even makes sense, because everyone pays gst not just the people dodging income tax, and people utilising cash often are dodging gst too, so when they spend their cash it’s more likely that business can dodge tax. So even if the gst does catch a little tax when the person ends up spending their cash, that doesn’t offset the loss from them avoiding their income tax, so doesn’t take any pressure off us that do the right thing.

2. If you pay a painter cash to paint your fence and he wants to pocket it, he won’t be sending any GST to the government, and the small amount of GST he pays on the paint he will just claim against other non cash jobs, the ATO system can’t pick up that because the ratio of prices charged to paint used would vary by huge amounts across the system.

trust me having delt with many tradies in the last few years renovating properties the number of people offering not to charge GST (which would save me 10%) if I just pay cash without a receipt was huge, of course I didn’t take them up on their offers, except for one tree looper that refused to accept an payment except cash, and only offered a dodgy hand written receipt.

 

[TimeISmoney]

1. That doesn’t even makes sense, because everyone pays gst not just the people dodging income tax, and people utilising cash often are dodging gst too, so when they spend their cash it’s more likely that business can dodge tax. So even if the gst does catch a little tax when the person ends up spending their cash, that doesn’t offset the loss from them avoiding their income tax, so doesn’t take any pressure off us that do the right thing.

2. If you pay a painter cash to paint your fence and he wants to pocket it, he won’t be sending any GST to the government, and the small amount of GST he pays on the paint he will just claim against other non cash jobs, the ATO system can’t pick up that because the ratio of prices charged to paint used would vary by huge amounts across the system.

trust me having delt with many tradies in the last few years renovating properties the number of people offering not to charge GST (which would save me 10%) if I just pay cash without a receipt was huge, of course I didn’t take them up on their offers, except for one tree looper that refused to accept an payment except cash, and only offered a dodgy hand written receipt.

If the painter has supplied paint he would have paid GST on it, that he can't claim back the GST content.

No one is dumb enough to run the paint used for cash jobs through the books because this is what the ATO checks when they audit you. If you claim it and can't prove where the paint went after the ATO do an inventory stock take, you get huge fines. Everything has to be accounted for even if it gets stolen or paint spills on the ground, you have keep an inventory of everything.

ATO has averages on everything, even fuel usage cars.

 

[farmerge]

Exactly. The ATO has a formula created from years of stats, they know how much each business category should be banking, cash & digital.

The problem, as I see it, is that the average taxpayer has been brainwashed into thinking that governments spend wisely. These average taxpayers hand over their money without question.

Twenty plus years ago the taxpayers would have been angry and shouting about the wasted dollars and any increase in taxes would cause electoral fear.

Politicians almost don’t care about the spending recklessly, because of the majority of taxpayers are sheep.

@JohnDe and apparently blind as bats.

 

[Value Collector]

1. If the painter has supplied paint he would have paid GST on it, that he can't claim back the GST content.

2. No one is dumb enough to run the paint used for cash jobs through the books because this is what the ATO checks when they audit you. If you claim it and can't prove where the paint went after the ATO do an inventory stock take, you get huge fines.

3. Everything has to be accounted for even if it gets stolen or paint spills on the ground, you have keep an inventory of everything.

ATO has averages on everything, even fuel usage cars.

1. Of course he can claim it back.

Let’s say he uses $110 of paint for your job and paid $10 GST he keeps that receipt, then he has to buy another $110 of paint to complete another job for some one else and he plans to declare the income on That second job, all he has to do is say he used all that $220 of paint on that second job and he gets to deduct both lots of gst he paid ($20) against the GST he collected on that one second job. Say he charged that second customer $100 GST, he only has to pay $80 because he deducts the full $20 already paid.

2. Sure they would, because there is no way of tracking how much ceiling white you used at this job vs that job, and did you do two coats or three coats etc, was it 50 square metres at job one or 75 square metres etc etc. All purchase receipts would just be bundled and go on the tax return as $X amount of goods used.

3. are you kidding, has you ever been in business? No one keeps accounts that strict. Averages are very, very wide. as I said there is no way of knowing how much ceiling white gets used in each job, or how often you changed paint brushes, the ATO is not going to go out to all your jobs and measure the square footage painted and confirm how many coats of paint used or how much paint was left over at the end of each job, they wouldn’t know if a painter put the cash from every 4th job in their pocket.

 

[Value Collector]

The thing is though @JohnDe a very high percentage of government spending is not wasted, sure a cynical mind will be able to find some examples of waste and use them to justify their bad behaviour, as the greedily avoid tax.

But, if you look at the government spending the vast majority goes to things like Health Care, Schools, pensions, Police, Military, Infrastructure etc etc.

These things do make Australia better, if you are avoiding tax because you believe the government wastes money, I do think that is very cynical and is just a personal justification that ignores the high percentage of good work.

it also ignores the fact that even if there is government waste, by avoiding tax all you are doing is placing the burden on your mates that are doing the right thing.

 

[wayneL]

The term "paying your fair share of taxe" has come up in this thread. Expects the question, exactly what is a fair share?

Is it what the government of the day unilaterally determines without reference to those actually having to pay it? That's an interesting concept considering we tax payers have absolutely no say in how our money is spent... And it is under threat of prosecution.

Why can't we prosecute the government for misspending our money?

This amounts to extortion and the fact that the government is responsible for this extortion is irrelevant, it's still extortion.

I fully accepted that in our modern society taxation is necessary, defence, police, public works etc, but things like 400 million dollars for the current w@4ker's vanity project which Blind Freddy realized was going to only serve to further divide our formerly great country, really gives me the farkin irrits.

... And I'm afraid that Joe does not have enough bandwidth on this site to list all the rest of the pork barreling, vanity projects, and absolute BS that has wasted billions and billions of dollars of our money over successive governments.

And then it would require a dissertation of phd thesis length to detail all of the other things that we have now say in many of which we have no idea it is being spent on.

So again I ask, what is a fair share? Because I can't see anything fair about the system at all.

 

[Dona Ferentes]

yeah, what's in it for me?

 

[wayneL]

yeah, what's in it for me?

<edited> not sure of your point here.

 

[Value Collector]

@wayneL In modern society I think “Your fair share” is generally considered to be what ever share of your income is legally required to be paid according to the tax bracket you are in, and the entity which your income was earned in.

I think you would agree that if you earned $100K and paid tax according to your tax bracket you are probably paying your fair share, where as if some one else also earned $100k but hid it, and paid no tax they are not paying their fair share.

 

[Value Collector]

yeah, what's in it for me?

Do you mean what in it for you if you pay tax?

Well, for the majority of people there is a lot in it, the Average person over their life draws out far more benefits from government services than they ever pay in taxes.

I laugh sometimes when I hear a working class person that pays $25k or so a year in taxes complain about the government spending “their tax dollars” when over their life they will consume government services far in excess of what they paid.

think about, by the time they Join the work force they have already consumed 100’s of $1000’s worth of services for healthcare, schooling, infrastructure, family payments etc etc used to support them before they start paying taxes.

then they might pay minimal taxes for 40 years, but much of that is spent on services they use in adulthood like health care, their share of police, military, infrastructure etc etc

then finally they quit paying taxes and go on the age pension for 30 years consuming far more than they ever paid in taxes.

 

[TimeISmoney]

1. Of course he can claim it back.

Let’s say he uses $110 of paint for your job and paid $10 GST he keeps that receipt, then he has to buy another $110 of paint to complete another job for some one else and he plans to declare the income on That second job, all he has to do is say he used all that $220 of paint on that second job and he gets to deduct both lots of gst he paid ($20) against the GST he collected on that one second job. Say he charged that second customer $100 GST, he only has to pay $80 because he deducts the full $20 already paid.

2. Sure they would, because there is no way of tracking how much ceiling white you used at this job vs that job, and did you do two coats or three coats etc, was it 50 square metres at job one or 75 square metres etc etc. All purchase receipts would just be bundled and go on the tax return as $X amount of goods used.

3. are you kidding, has you ever been in business? No one keeps accounts that strict. Averages are very, very wide. as I said there is no way of knowing how much ceiling white gets used in each job, or how often you changed paint brushes, the ATO is not going to go out to all your jobs and measure the square footage painted and confirm how many coats of paint used or how much paint was left over at the end of each job, they wouldn’t know if a painter put the cash from every 4th job in their pocket.

Fact below.
You're meant to itemise everything you put into a job on the invoice. I was in a mechanical workshop that got audited and ATO took the shop over, did a stocktake and confiscated all the books. Every item that wasn't on the shelf had to be accounted for, even things that were used on company cars like a $5 oil filter, and if you couldn't prove where it went you copped a fine. If you invoice multiple parts that didn't go into a job it's easy to check, a couple litres of paint is nothing but if you're 1000's over like on a commercial job it surely would be suspect.

You'll only get away with it on a small scale, but the ATO isn't as dumb as many think.

 

[Value Collector]

Fact below.
You're meant to itemise everything you put into a job on the invoice. I was in a mechanical workshop that got audited and ATO took the shop over, did a stocktake and confiscated all the books. Every item that wasn't on the shelf had to be accounted for, even things that were used on company cars like a $5 oil filter, and if you couldn't prove where it went you copped a fine. If you invoice multiple parts that didn't go into a job it's easy to check, a couple litres of paint is nothing but if you're 1000's over like on a commercial job it surely would be suspect.

You'll only get away with it on a small scale, but the ATO isn't as dumb as many think.

Absolutely none of the invoices I have received from painters on the multiple renovations I done itemise how much paint was used on each job.

And, as I said are the ATO going to come out to my house and check how many coats of paint the painters put on my ceiling and how many square foot was painted? It would be easy for a painter to merge the supplies from 4 jobs into 3 he claims.

it’s the same with most things, eg the ATO wouldnt know whether a baker got 80 loaves or 100 from a bag of flour, or whether he sold 60 or 90 and discarded 10 or 40.

Same with restaurants, eg how many meals got sold out of that 20 litres of butter chicken that got made? How many were sold at full price vs the $5 give away at the end of the day.

How many drinks at the pubs were sold during happy hour 2 for 1 vs full price ?

The ATO ratio‘s will only catch big differences, and their Audits will catch people that messed up their paper work. If some one is hiding like 25% of their business they won’t stand out.

 

[divs4ever]

ANZ finds savings and security benefits in technology estate simplification​

ANZ finds savings and security benefits in technology estate simplification

Also puts GenAI to work in Suncorp Bank buyout.

www.itnews.com.au

i hold SUN ( but have exposure to ANZ via LICs and ETFs )

this might seem to be off-topic until you get right near the bottom on the article

go cashless at your own peril

 

[TimeISmoney]

ANZ finds savings and security benefits in technology estate simplification​

ANZ finds savings and security benefits in technology estate simplification

Also puts GenAI to work in Suncorp Bank buyout.

www.itnews.com.au

i hold SUN ( but have exposure to ANZ via LICs and ETFs )

this might seem to be off-topic until you get right near the bottom on the article

go cashless at your own peril

Cut jobs to save money so that the CEO can get a million-dollar pay rise.