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ยป Carbon Tax - a smokescreen to hide the truth
Date published: 17/07/2011
Carbon Tax: Is it a smokescreen to hide the truth from YOU?
My mother was always anti-risk and as a youngster I used to like climbing the fruit trees. She would tell me to stay close to the trunk and don’t go out on a limb; however, as any young boy knows, “out on a limb” is exactly where the delicious fruit grows. You will never see peaches and plums sprouting from the safety of the tree-trunk.
Contrarian in life and business as well as in investing, I prefer to NOT run with the sheep. How much more fun to be a hungry wolf, and when the sheep are running in one direction, just face the other way and open your mouth? Some of the best profits are made when the share market is falling, or when the property market seems to be heading south.
The so-called Carbon Tax has spooked investors somewhat recently. It may mean that manufacturers, miners, and other businesses have higher expenses than previously, and this will impact on the end-user (YOU) and the customer (YOU), as well as on the shareholders (perhaps you).
Aside from big manufacturers and miners, consider the local restaurant that has outdoor heaters to keep winter diners warm. Those things are around $100 from Bunnings and last for ages, but now the restaurant will have to pay $300 per year in carbon tax. The extra cost will have to be passed on by increasing menu prices to you. This new tax can possibly be stretched to hit every business and affect every consumer.
I am not suggesting that the government advisers are idiots, but perhaps they need to reconsider the impact. Taxing anything will raise some short-term capital, but also means that it punishes the general public, effectively training us against the activity and we tend to do it less. Taxes on cigarettes and alcohol do tend to reduce their use (a little), and that is a good outcome for personal health and the overburdened healthcare system. Reducing carbon dioxide will actually kill trees; does the government understand the implication of that?
It could be preferable to see the government being honest and saying, for example: Post-GFC, we need more money and then implementing an increase to the GST from 10% to 15%. At least would be more transparent. The carbon tax just smells like the government is jumping on the latest trendy climate change bandwagon without much study of its true repercussions.
If you have time and want to truly change the face of our economy and the world at large, google the Tobin Tax: find out how a broad-based consumption tax invented by a Nobel Prize-winning economist would mean that personal tax rates become closer to 10% rather than 30-40%.
The truly affluent (those with more than $50 Million) already enjoy paying taxes in the single digits (remember the year when the late billionaire Kerry Packer paid less than $30 in personal tax?). They do this because they can. If you only knew what the millionaires knew, then you could do what the millionaires do!
Ignore the smokescreen of the so-called Carbon tax and watch out for the government trying to distract you from the truth. The politicians use a lot of big words and fancy terms to put people on the wrong track.
Climate change? Global warming? I think that if the politicians were taxed for all of the hot air coming out of their mouth, it may reduce the length of their speeches. I’m calling it the jargon tax.
For more information, or to discuss your specific situation, please contact me directly.
Jeremy Britton
24HourWealthCoach
Jeremy Britton is an independent wealth coach and his views are his own. Learn how to a pay tax rate of 9% or less and grab a copy of the award-winning book Who’s Taking Your Money? (and how to get some of it back!) from www.24HourWealthCoach.com.
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