Comments on: Alienation of personal services income: what the?

By: Denis of Perth

Denis of Perth — Fri, 06 Aug 2010 01:53:04 +0000

Control Freaks Must Employ Unions

By: Paul

Paul — Tue, 27 Jul 2010 01:32:37 +0000

Interesting this is back, it was a big thing back in 2000 after the GST came in. A bunch of fellow IT contractors I knew had to basically go find additional jobs to jump through the necessary hoops.
For most big companies, accessing the resources of skilled IT workers for long term projects is a must, and preferably engaged full time on the project.

I jump through the hoops because of the following reasons:
1) Generally IT job churn is 2-3 years anyway. The only reason I take a permie job occasionally is to make it easier to borrow money as banks hate to lend to the self-employed.
2) I earn much more as a contractor. Permie salaries are sticky and inelastic above a certain amount (due to management not wanting to pay more to plebes) whereas hourly and day rates for the same role as a contractor is much more in line with skill and experience.
3) If I can legitimately minimize my tax, then I rationally I should. Especially when the Govt blows money like a drunken sailor aka Kerry Packer defense.

Have Fun

By: Rococo Liberal

Rococo Liberal — Mon, 26 Jul 2010 12:14:02 +0000

Adrien

We agree again! Now if only you could lose those annoying full stops between paragraphs

By: daddy dave

daddy dave — Mon, 26 Jul 2010 11:54:10 +0000

I like the idea of every worker being a contractor. I guess this is what they want to stamp out. Better to have hordes of unionised payroll employees working under awards and paying lots of tax.

By: Adrien

Adrien — Mon, 26 Jul 2010 08:40:19 +0000

anyone who forms a company should get a tax break anyway, as they are becoming capitalists and we need to encourage people away from just being wage slaves.
.
That’s just it. But you get punished for doing it. If you’re going to use the difference to scam your way out of tax chances are you have the legal resources to do it. If you’re a genuine sole trader, and many of us have to work for one client only for a substantial period of time, you get punished. It’s crazy.

By: Rococo Liberal

Rococo Liberal — Mon, 26 Jul 2010 08:24:16 +0000

The Government could go some way to solving the problem by harmonising the coporate and individual tax rates. However, that would no abolish the income splitting benefits one gets from forming a company. But, double however, anyone who forms a company should get a tax break anyway, as they are becoming capitalists and we need to encourage people away from just being wage slaves.

By: Rococo Liberal

Rococo Liberal — Mon, 26 Jul 2010 08:20:28 +0000

As the resident Catallaxy tax lawyer, I agree with dorinny’s able summation.

By: JC

JC — Mon, 26 Jul 2010 08:17:38 +0000

The answer is not to introduce punitive and arbitrary regulations, it’s to harmonise tax rates.

There’s a nasty habit of harmonizing upward, Jacques. Don’t give these thieves any bright ideas.

I also think that harmonization still may not help because of the expenses that are allowable for different categories.

By: Jacques Chester

Jacques Chester — Mon, 26 Jul 2010 08:09:38 +0000

The guy in the USA who flew his plane into an IRS building was caught up in this.

Basically it’s a nightmare for any small contractor who relies on a handful of large clients.

The answer is not to introduce punitive and arbitrary regulations, it’s to harmonise tax rates.

By: Adrien

Adrien — Mon, 26 Jul 2010 08:07:10 +0000

freelance writers who submit to mainly one outlet (I’m sure they do not feel like employees

Yes. And you are not an employee. But the tax department will treat you like one. And treat your editor like an employer blah blah blah. If they just flattened the tax rate none of this bullshit would be necessary.