Super-rich pay little tax, build wall of trusts and firms; $357 m recovered

TAX RIP-OFF

Auditor asks why
rich get richer
and we pay more

MORE than 140 of Australia's richest people -- each a millionaire at least 30 times over -- pay less than $41,000 a year in tax.

  Auditor-General Pat Barrett said yesterday that the Australian Taxation Office should explain more consistently how they get away with it.

THE WEST AUSTRALIAN WEDNESDAY JUNE 14 2000      1
"Tax Rip-Off"
  CANBERRA
By Alan Thornhill

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  Mr Barrett was reporting on the impact of the tax office's crackdown on the tax avoidance techniques of more than 500 of Australia's richest people.

  The task force was set up in 1996 after the wealthy group was identified as costing other taxpayers $800 million a year.

  It has retrieved $357 million from the millionaires.

  Mr Barrett praised the task force but criticised the tax office for not doing enough to promote its success.

  He urged it to produce regular, consistent and standardised reports on ho much extra revenue the crackdown was producing.

  Mr Barrett's report said many of Australia's super-rich -- a club people need at least $30 million to join -- surrounded themselves with a wall of tax-avoidance techniques.

  The 236 people examined in depth by the task force were associated with a total of 7771 entities, including 2171 trusts.

  On average, each was associated with 22 companies, nine trusts and one partnership and paid just 20 per cent in tax.

  At the end of the 1997-98 tax year, they had reported a total of $2.7 billion in losses.

  The techniques used to generate the losses included:

  Mr Barrett said the activities of Australia's super-rich often straddled several industries.  It could be a mistake to focus too closely on particular industries when pursuing them.

  Tax Commissioner Michael Carmody said the auditor's report was strong endorsement of his team's work.

  "It is important for community confidence in the tax system that we continue our focus on dealing with the very complex tax planning arrangements used by some (wealthy people)," he said.

  Mr Carmody said his task force was improving all the time.

  "The task force has gained a far better understanding of the tax planning techniques adopted by some high-wealth individuals," he said

  It was demanding more detailed tax returns from some of them. -- © The West Australian, Wednesday June 14 2000, p 1

THE  END

  (On page 19, Alston's cartoon showed two people in opulent surroundings, listening to the government's television advertisement song's words "Unchain mah heart." One plutocrat says to the other "What's tax reform?" The reply is "That's when those of us with 30 million pay no tax at all!")
  The West Australian internet addresses are:  http://www.thewest.com.au  letters@wanews.com.au

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