Home Forums Money matters Paying cash to not pay GST

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  • #999950
    Soccerooplugger
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    • Total posts: 32

    If you pay someone who does a job on your house cash, are you aiding the black economy?

    Always been curious about this. I’m sure a lot of people do it. We did it a while back for our kitchen and saved quite a bit. However, obviously the tradesmen or company doesn’t have to declare it. They could just store the cash somewhere or use it for a big spend. Society is becoming more and more cashless, which is a good thing. It takes away the risk of theft and losing money and there is always a trail of your payments.

    While it is good to pay less taxes, if you pay cash are you possibly aiding things like drug dealers, gun sales and other illegal operations? Is it better to just not pay cash?

    #1221988
    Rowan@quaotic
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    • Total posts: 712

    Although taxes are necessary to the welbeing of our country, I am fine with the black and grey economies considering how fine the government is with big multinational companies not paying their share. What you are talking about is the shadow (grey) economy which is not contributing to drugs and gun sales so don’t worry.
    Occasionally I will take a cash payment that doesn’t go on the books but it is not a regular thing and I am not ashamed about it.

    I don’t really agree that a cashless economy is a good thing because I know how fragile our power and internet systems are. If one or both go out for an extended period of a few days to a few weeks (which is going to happen) we are in the shit with no cash.

    #1221989
    bb1
    Participant
    • Total posts: 4,472
    Soccerooplugger, post: 268176, member: 100555 wrote:
    If you pay someone who does a job on your house cash, are you aiding the black economy?

    Simple answer is yes, no question really.

    Plus you are actually helping to rip of the honest tax payers.

    Plus in most instances, they say we will take the GST off, which sounds good, but the service provider, is in reallity saving even more then the GST, because they also don’t pay income tax on those dollars. Double dipping really.

    So next time you complain about the road having potholes in them or why isn’t there more spending on health by the government, you have just personally reduced the amount of taxes received to pay for these services.

    Soccerooplugger, post: 268176, member: 100555 wrote:
    Society is becoming more and more cashless, which is a good thing. It takes away the risk of theft and losing money and there is always a trail of your payments.

    Not sure it takes away the risk of theft, could I remind you of a recent royal commission, how much theft did that highlight in the banking industry alone, do we think that banks are the only ones stealing from us in a cashless society.

    Oh should also mention all the scammers, and people who steal bank details, etc, etc. Money is most likely safer under your mattress.

    Soccerooplugger, post: 268176, member: 100555 wrote:
    While it is good to pay less taxes, if you pay cash are you possibly aiding things like drug dealers, gun sales and other illegal operations? Is it better to just not pay cash?

    Yes, definitely yes, maybe not to the majority of service providers (note I refuse to say tradies, as I am sick of us being assumed to be on the black side of things, I could name a number of industries where cash is king and we know from media and police happenings that it is going to things which are definitely illegal.

    A footnote:-

    Just because someone takes cash in their business, it doesn’t mean they take ”cash” in the meaning of your question. I take some cash, not much because most of my clients are small business’s or body corporates, but when I take cash it all goes through the books, so yes I do take cash but I don’t take ”cash”

    #1221990
    JamesMillar
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    • Total posts: 1,675

    Agree with Bert. So many people heap on the government (all parties) for providing sub standard health care and sub standard school, roads etc. Well the money doesn’t grow on trees so if everyone dodges tax our economic capabilities will suffer.

    fortunately there is less and less of this and the new $10,000 cash payment limit will criminalise further.

    #1221991
    Rowan@quaotic
    Participant
    • Total posts: 712
    JamesMillar, post: 268191, member: 5318 wrote:
    Agree with Bert. So many people heap on the government (all parties) for providing sub standard health care and sub standard school, roads etc. Well the money doesn’t grow on trees so if everyone dodges tax our economic capabilities will suffer..

    Yeah, I used to be idealistic like that, until I settled into a small, retirement town full of elderly, sick people. We have a practically new hospital with no doctors so it is unused, you can rarely get an ambulance, which has to travel an hour to get here if you can get one to come (sometimes from another hospital two hours away, too bad if you are having a heart attack or stroke), ambulances won’t attend non immediately life threatening injuries out of hours so if someone breaks their leg on a Saturday afternoon and can’t find someone to drive them to hospital in a city with a hospital they have to wait till Monday and see if an ambulance is available.
    Emails and letters to the local member or the health or shadow health ministers are never replied to.

    This is just the health part of our services that our taxes are supposed to go to. Don’t get me started on other ‘services we pay for. Too bad we don’t live in a capital city where we might get the benefits.

    These elderly people have always paid their taxes all their lives both privately and through their businesses.

    I am not going to feel guilty for the maybe once a year or two I might take a tax free payment from a friend.

    #1221992
    JamesMillar
    Participant
    • Total posts: 1,675
    Rowan@quaotic, post: 268193, member: 28171 wrote:
    Yeah, I used to be idealistic like that, until I settled into a small, retirement town full of elderly, sick people. We have a practically new hospital with no doctors so it is unused, you can rarely get an ambulance, which has to travel an hour to get here if you can get one to come (sometimes from another hospital two hours away, too bad if you are having a heart attack or stroke), ambulances won’t attend non immediately life threatening injuries out of hours so if someone breaks their leg on a Saturday afternoon and can’t find someone to drive them to hospital in a city with a hospital they have to wait till Monday and see if an ambulance is available.
    Emails and letters to the local member or the health or shadow health ministers are never replied to.

    This is just the health part of our services that our taxes are supposed to go to. Don’t get me started on other ‘services we pay for. Too bad we don’t live in a capital city where we might get the benefits.

    These elderly people have always paid their taxes all their lives both privately and through their businesses.

    I am not going to feel guilty for the maybe once a year or two I might take a tax free payment from a friend.

    Fair enough – I have spent a lot of time in one particular country town in North East Vic and the local hospital does not have emergency facilities. Anyone that needs it has to travel about an hour or be airlifted (lots of motor bike accidents).

    The problem is that if everyone takes the approach of skimming then those services will only get worse – so where does that leave us? Everyone agrees that its hard to respect the law when it appears to fail us and when the lawmakers are regularly caught rorting our hard earned taxes. In an extreme case we could take the “every man for themselves” approach and end up closer to the USA model with no safety nets at all. Now thats fine for me because I would probably benefit greatly from lower taxes but there is a significant part of the community that would end up much much worse off. Then you end up with crime and 6x times the rate of incarceration because people will do anything when they are desperate with no home or little food.

    I don’t think you should feel guilty at all – the entire system needs a massive overhaul so that small business gets greater short term help. The amount of tax law and change that is spewed out each month is quite ridiculous and probably greater than anywhere else on the planet.

    #1221993
    zamerx
    Member
    • Total posts: 2

    Remember when John Howard introduced the GST, one (very) main reason was to get rid of the black economy, so much for that excuse ?!

    #1221994
    Rowan@quaotic
    Participant
    • Total posts: 712
    zamerx, post: 268217, member: 116744 wrote:
    Remember when John Howard introduced the GST, one (very) main reason was to get rid of the black economy, so much for that excuse ?!

    There is a difference between the black economy and the shadow economy. But yes, I know what you mean. The main problem is that most of the money going through the shadow economy is with the big companies, not the small businesses that the government likes to blame.

    #1221995
    Johny
    Member
    • Total posts: 840

    The amount of tax law and change that is spewed out each month is quite ridiculous and probably greater than anywhere else on the planet.

    This comment reminded me of this:-

    [MEDIA=youtube]EVIOmU3l0Zo[/MEDIA]

    Nor entirely about tax as such, but interesting and even entertaining I reckon.

    #1221996
    Johny
    Member
    • Total posts: 840

    Yeah, I used to be idealistic like that, until I settled into a small, retirement town full of elderly, sick people. We have a practically new hospital with no doctors so it is unused, you can rarely get an ambulance, which has to travel an hour to get here if you can get one to come (sometimes from another hospital two hours away, too bad if you are having a heart attack or stroke), ambulances won’t attend non immediately life threatening injuries out of hours so if someone breaks their leg on a Saturday afternoon and can’t find someone to drive them to hospital in a city with a hospital they have to wait till Monday and see if an ambulance is available.
    Emails and letters to the local member or the health or shadow health ministers are never replied to.

    Interestingly I had a discussion about this with my mother just recently. She used to be on the hospital board of the small hospital in the town where I grew up. Since admin was taken over by the state govt. the admin staff has grown considerably. Can’t even deliver babies there now and have to go to a bigger hospital 80kn away. Something wrong somewhere.

    Not sure I can use the argument that two wrongs make a right, in terms of not paying tax, but something has to change.

    #1221997
    JamesMillar
    Participant
    • Total posts: 1,675
    zamerx, post: 268217, member: 116744 wrote:
    Remember when John Howard introduced the GST, one (very) main reason was to get rid of the black economy, so much for that excuse ?!

    The GST introduced Australia’s first broad based consumption tax on both goods and services to bring us into line with our developed nations that all had one. It replaced the much narrower wholesale sales tax that applied to a subset of goods only (some here may remember that system and all its flaws). The reason economies move to indirect consumption taxes is to reduce pressure on income tax which is why we have much lower personal income tax rates than 20 years ago. The brackets are much higher.

    Our GST is not perfect but it’s helped our revenue base a lot. Otherwise people earning more than $80k per annum would be paying 49% personal tax.

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