Sunday, January 31, 2010

Not every blogger would begin a history of the 2010s with a vignette in which the oldest house in King Street is peppered with stories from the dream team Peter, Linda and the richest man in the world. Big Night Out fireworks filled with an F- 18 flyover, a 100-gun salute, a new tax crackdown or gala ball?

2010 is not any old year. It marks the centenary year for the Australian Taxation Office, a silver anniversary of the introduction of capital gains tax and a ten anniversary of GST (31 January 2000 to be exact - according to Phil).
Australia Post will honour our centenary with a commemorative stamp that will be circulated among our public. It will be co-designed by tax office staff and launched before November 11, 2010.
The Royal Australian Mint will honour our centenary with a circulating 20 cent coin. It will be designed by tax office staff and released in 2010.

Indeed, GST has been with us for nearly 10 years. This time ten years ago, there was talk of riots in the streets and fears of a consumer strike as prices went up and the threat of price policeman Alan Fels waving his stick. But as it turns out that was the least of our worries. Dr Ken Henry - I like to pay taxes. With them I buy civilization

Recent Survey: Taxpayers giving the rich a cheap ride: survey - Most Australians believe high-income earners do not pay enough tax, and nearly all think low- and middle-income earners pay too much

Taxation is the price we pay for civilization. A Taxing Year to Remember
Michael D'Ascenzo who is widely recognised in Australia and globally for his expertise in taxation and superannuation. (Note - Michael D'Ascenzo is not related to a Canadian actor who is known as Rainbow "Rain" Papadakis in the children's television show Naturally, Sadie.)

Michael D’Ascenzo took up his role as antipodean Commissioner of Taxation on 1 January 2006. When Michael D’Ascenzo joined the Tax Office in 1977, during the bohemian Havel’s Charter 77, he was captured by the exciting work associated with challenging the tax avoidance schemes of the late 1970s and early 1980s, particularly trust stripping and ‘bottom of the harbour’ schemes.
"This tax haven project (Wickenby) is one of the big success stories of the G20," the OECD's head of tax policy, Jeffrey Owens said. "This is not a numbers game. We have seen a real change in attitudes towards compliance."

*The Canberra Times captured a few interesting snippets about the Commish - John Hatton, AO also likes the quote from the Amerikan Oliver Wendell Holmes:

Few children nurse a desire to become that legendary figure of hate, the tax man.
And when young lawyer Michael D'Ascenzo applied to join the public service more than three decades ago, he admits he had little wish to stay at the Australian Taxation Office he now leads.
"The ATO was the first to ring back. I came here with the intention of being here for a few months until I got a better job," he said.
Yet, Mr D'Ascenzo's passion for tax issues grew and he has now been Australia's Taxation Commissioner for more than four years.
The 56-year-old, whose expertise is sought-after worldwide, has been made an Officer of the Order of Australia for his service to public administration and the tax profession throughout his career.
He says his enthusiasm for his work springs from its crucial contribution to the community. During his 33 years with the agency, the Tax Office's work has grown beyond collecting public revenue to protecting workers' futures by administering sttperannttation law and helping cut red tape for businesses.
"I like the phrase that [American jurist] Oliver Wendell Holmes usually used, that `tax is the price we pay for a civilised society' ... You really are making a great contribution to the community and to Australia." He agrees the Tax Office will always need to battle to win the community's affection. That's the light at the top of the hill. It's the aspiration we go for ... If we can take a few steps forward, then that's progress," he said. "At the end of the day, you're trying to redress thousands of years of stereotyping. while people might not boast about it, deep down, most people appreciate the work we do on behalf of the community." He said the Australia Day honour was not his award alone, but one he would share with the Tax Office and its staff.
But today's achievement clearly means a lot to the Italian-born Mr D'Ascenzo, whose pride was clear when he reflected on how much the award would have meant to his recently deceased mother. "My only regret is that my mum's not here for this moment."

Minister Congratulates Tax Commissioner on Australia Day Award ; Italian-born Mr D'Ascenzo ; Our ABC [The Historian, Leigh Edmonds, is to capture the official history of the Tax Office recognising our past, present and future Tax Office Centenary significant memoir; Official history ; The Federal Court has dismissed an application by 3 taxpayers seeking an interlocutory injunction to restrain the Tax Office from carrying out an examination of the taxpayers under s 264 of the ITAA 1936. Daniels v Cranston [2009] FCA 1412, Federal Court, Lander J, 20 November 2009 From Bottom of the Harbour to Wickenby Tax Havens;]
• · Australia could have had a goods and services tax (GST) 20 years sooner, had John Howard had his way. GST on John Howard's agenda in 1979
10 years of GST - The trials and tribulations - Memories of Lara Dunston ; Treasury boss Ken Henry has set himself an ambitious goal: he wants to shake up how we all think about rivers and roads A New Tax System In 2009 Jeffery Owens, the head of the OECD’s Centre for Fiscal Affairs remarked, Who would have thought 25 years ago that the ATO would be so highly regarded internationally?; Praise for ATO war on offshore tax cheats
• · · A Flood of leaks from the government about its plans for superannuation and tax reform are causing distress and confusion in the business community and among pre-retirees trying to plan long-term savings and investments. Tax reform leaks are causing concern; Ken Henry report: Contact us before we contact you.
• · · · For weeks – no, months – I have suppressed the dark thoughts. As the new year dawned, the twinges of panic became more persistent, yet I remained paralysed by doubt and guilt. With each passing day, the pressure grows more unbearable… I really must find out where the money goes ... You can help by supporting a piece of US legislation called the Energy Security Through Transparency Act, which would require oil, gas, and mining companies to publicly disclose payments made to governments. Follow the money," which shows just what happens when you buy gas every day ; The macroeconomic arguments for the GST I think were, and remain, watertight. Remember, in the 1980s as Treasurer Keating was for it before he was agin’ it as PM in the 1990s?. The GST introduced a broad-based, growing revenue stream for government and ensured that the wealthy couldn’t avoid paying tax on their (large, and growing) expenditures, even if clever accountants meant they could largely avoid paying much on their income. A particular innovation of the Australian model was to reserve GST revenue to the States, ostensibly making it available for service delivery (schools, roads, hospitals) to the communities that had paid it. We can quibble over how much in % terms each state pays and gets, the competence of the state governments as service providers, and the difficulty businesses face in complying with their collections and remittance obligations — but still I think the macroeconomic argument has proven its validity ten years on. still I think the macroeconomic argument has proven its validity ten years on.; The excise legislation is more than 100 years old as excise has been levied on a number of commodities since 1901. 1901 - that means even older than the oldest Public Accounts Committee in Australia
• · · · · Over the past ninety years the High Court has been divided in its approach to the definition of 'duties of excise'. Initially such duties were confined to taxes on the production or manufacture of goods. This definition was gradually extended to include taxes on goods imposed at any point in the distribution process. Over time the Court came to accept that exceptions should be made for taxes on alcohol, tobacco and petrol, and hence the States have been permitted to tax these goods. The plaintiffs were charged under the Business Franchise Licences (Tobacco) Act 1987 (NSW) with selling tobacco in NSW without a licence. The Act provides for a licence fee, which includes a set amount, plus an amount calculated by reference to the value of tobacco sold during the 'relevant period'. The 'relevant period' is defined as 'the month commencing 2 months before the commencement of the month in which the licence expires'. The plaintiffs argued that the licence fee imposed by the Act was an excise and hence invalid due to section 90 of the Constitution. A majority of the High Court (Brennan CJ, McHugh, Gummow and Kirby JJ) agreed. - The case that made GST possible What is an excise duty? Ha and Hammond v NSW ; The states have been urged to undertake their own Henry-style reviews of their tax systems and act on the findings, rather than blame Canberra for their economic woes States urged to review tax
• · · · · · Accountability, flexibility and transparency have become, in recent decades, the mantras of management in Australia and New Zealand as the public sector attempts to become more like the private sector. Driven by economic rationalism, by managerialism, by the election of right-of-centre governments and the movement of left-of-centre governments to the right, and by a different expectation of what governments can and should do, public administration has morphed into new public management (NPM). Governing the Government: The Paradoxical Place of the Public Accounts Committee; Back in 2002 my old Public Accounts Committee celebrated centenary and its courageous chair Andrew Tink knew how to deliver a speech ... When Lieutenant James Cook arrived at Botany Bay at the end of April 1770, he brought with him two future Parliamentary Committee witnesses who would turn out to be crucial to the British Government’s decision to settle Australia. Those future witnesses spent their short time at Botany Bay examining everything in sight and making copious contemporaneous notes of whatever caught their eye. They were of course, Joseph Banks and James Mario Matra who along with Captain Cook himself wrote in their Journals about the sandy soil, strange vegetation and even stranger animals. The Role of Parliamentary Committee Witnesses in the Foundation of Australia, Mr Andrew Tink MP

CODA - STUART WASHINGTON - blast from parliamentary past writes well. It reads like an airport spy novel: an unsolved murder in a Tokyo red-light district, exotic tax havens around the world, and thousands of defrauded investors in Britain. Add to that some $118 million tipped in to Astarra Strategic Fund by Australian investors which, almost three months after authorities blew the whistle, is still not properly accounted for. The investigation by regulators is understood to include every possibility - from the $118 million being "misplaced" to misappropriation. "misplaced" to misappropriation. Authorities were alerted in September in a letter from the Bronte Capital blogger, John Hempton, about the improbably smooth returns achieved by Astarra Strategic, which advertised itself as an investor in hedge funds.

Monday, January 25, 2010

Economics Blogger and Blog Rankings by Scholarly Impact
Franklin G. Mixon Jr. (Mercer University, Department of Economics) & Kamal P. Upadhyaya (University of New Haven, Department of Economics and Finance) have published Blogometrics, Eastern Economic Journal (2010), vol. 36, pp. 1–10. Here is the abstract:
This study gathers information on a wide array of economics bloggers and blogs in order to develop a ranking of economics bloggers that is based on citations to their academic research. This ranking is used in an iterative process that next presents a ranking of economics blogs that is based on the ranking of economics bloggers, and finally a ranking of economics departments that is based on the ranking of economics blogs. The ranking of blogs included in this study is positively correlated with an external ranking based on their productivity (popularity), whereas the department ranking presented here comports quite well with department rankings in Coupé (2003) and Roessler (2004) that are developed with more traditional measures, such as the impact of the scholarship of an economics department's faculty.

Here are the Top 10 Economics Bloggers by Scholarly Impact:

1. Gary S. Becker (Chicago), Becker-Posner Blog

2. Gregory Mankiw (Harvard), Mankiw's Blog

3. Richard Posner (Chicago), Becker-Posner Blog

4. Nouriel Roubini (NYU), RGE Monitor

5. Paul A. Samuelson (MIT), Inside the Economist's Mind

6. Nicolai J. Foss (Copenhagen), Organizations & Markets

7. Justin Wolfers (Pennsylvania), Freakonomics

8. Daniel Hamermesh (Texas), Freakonomics

9. Richard B. Langlois (Connecticut), Organizations & Markets

10. Steven D. Levitt (Chicago), Freakonomics
Here are the Top 10 Economics Blogs by Scholarly

France is considering a tax on Google to support old media companiesAmazon, Google and taxes, oh my! from Don't Mess With Taxes

Will the rich flee the U.S. to fairer tax climes?

People in positions of power are more judgmental, but are guilty of "moral hypocrisy", according to scientists. "Moral hypocrisy has its greatest impact among people who are legitimately powerful.

"In contrast, a further experiment demonstrated that people who don't feel personally entitled to their power are actually harder on themselves than they are on others, which is a phenomenon we call 'hypercrisy'. Powerful people more guilty of 'moral hypocrisy', study finds

This isn't entirely a tax justice subject - it's much more generic than that - but if you can see past the stilted IMF-speak it's interesting anyway. This is another IMF working paper, entitled "A Fistful of Dollars: Lobbying and the Financial Crisis" whose introduction notes: lobbying is bad for you

"A Fistful of Dollars: Lobbying and the Financial Crisis report

As a first step, Congress may extend the estate tax. There are faster methods, too Four ways to tax Wall Street’s rich

Land of Bankers - who are now all coming to head banks in Western Australia Quality of life in the UK is lower than former communist states

"It is difficult to imagine the scale of the consequences for the economy and society if major banks had been allowed to collapse. The Treasury was justified in using taxpayers’ money to safeguard savings and stabilise and restore confidence in the financial system.

"But the big question is what all of this will eventually cost the taxpayer. This will take time to answer. What we do know is that how the eventual sale of RBS and Lloyds is managed will be crucial to protecting the public interest. The structure of the UK banking system has changed beyond recognition. When it comes to selling its stakes in the banks, the government has to be mindful of the proceeds for the taxpayer but also of the implications for competition in the UK market, so that customers get a fair deal.

"As the crisis begins to subside, lessons must start to be learned. The authorities need to put formal arrangements in place to evaluate the effectiveness of the support provided to banks in order to inform future policy makers."
- Amyas Morse, head of the National Audit Office, 4 December 2009

The National Audit Office has concluded that the public support provided to UK banks by the Treasury was justified, given the scale of the economic and social costs if one or more major banks had collapsed. In providing that support, moreover, the Treasury met two of the government’s principal objectives: protecting depositors’ money in banks and maintaining the stability of the financial system.

The final cost to the taxpayer will not, however, be known for a number of years.

Bankers 1

Bankers 2