Turnbull’s Budget Gives Nothing To Aussie Battlers But Gives Billions To The USA

Turnbull’s proposed company tax cut would see the Australian tax system delivering billions of dollars to the US Treasury according to research done by the Australia Institute.

Under the current Australia and the US have a foreign tax treaty US companies and their profits are not double taxed.

What this means is means that US companies in Australia must pay the IRS the difference between the two company tax rates. Currently the US rate is 35%, while Australia’s is 30%. With Turnbull’s cut to coporate tax the difference grows as a result of a lower Australian rate – in other words, the IRS collects more tax at the expense of the ATO.

The Australia Institue has said the cost of this to the Australian tax base will grow through the policy’s introduction phase, reaching and estimated $999 million per year when fully implemented in 2026-27. “In the first decade, once fully implemented the ATO’s gift to the IRS would be US$8.07 billion.” stated the Australia Institue.

Dear IRS, have a few billion. Love, ATO.
Morrison's gift to the US Treasury. Report: https://t.co/hyvFZIv53h #auspol pic.twitter.com/PIJKOD7FnY

— Australia Institute (@TheAusInstitute) May 16, 2016

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Executive Director of The Australia Institute, Ben Oquist said: “A key beneficiary of the proposed company tax cuts is the American tax office. Various American companies operating here will not benefit – they will simply pay the difference in the United States,”

“American firms operating in Australia will not invest more, employ more or be any more competitive after Australia cuts the company tax – they will simply pay less tax here and more tax in the US.