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How would this bill work in practice? People who use cash for tax dodging aren't reporting true values anyway. (have not read any of the documents) I guess in
by cstrat 7y ago
How would this bill work in practice? People who use cash for tax dodging aren't reporting true values anyway. (have not read any of the documents)
I guess in the past they could have had a job quoted at $500K. Paid "in cash" with $400K and reported only $200K to the tax office.
Those businesses could still just have $200K paid by electronic transfer (reported to ATO) and the rest in cash. It does mean the tax dodging responsibility is somewhat pushed to the other party too which might make some people/businesses uncomfortable and avoid it entirely.
I am all for more fairness and having people pay the right tax. Too many builders and tradies sort things out in cash. The unfairness then extends further where people then become eligible for government subsidies because on paper they earn less - but really have just reported less.
edit: reworded for clarity.
- matco11 7y agoThere are countries where this type of restrictions to using cash for large payments have been in place for many years. They help with: - mitigating money-laundering risk - more effective application of sales tax - more effective enforcement (in combination with other tools) against income tax evasion.
- ryacko 7y agoThere are several common types of money laundering today, exchanging deeds to offshore shell companies that own other shell companies that own real estate, private art auctions (where the bidder, seller, and artwork is private), etc. Those are all cashless.
- cknight 7y agoAs best I can tell, it adds risks which may or may not be a sufficient deterrent - depending on the business. Once $10k+ cash transactions are banned, questions will be raised over any cash withdrawals that a business makes that are near, at, or over that limit - and possibly over any regular ones that are below the limit but couldn't be easily explained away on other expenses. For a business to continue the practice you've mentioned, they would need to keep sufficient cash on hand for making such transactions as needed, at all times. So there are all the associated risks of having cash lying around, on top of the risks of being caught. It can be worked around, but for some businesses I can imagine that the additional loopholes will be considered onerous enough to stop bothering.
- frittig 7y agoThe issue is that there is no legal contract. If I pay someone $400k in cash for them to build a building, but they don't do it, I cannot sue them to get the money back since it was illegal to pay that way anyways. Alternatively, if the building was built first but they were never paid then the builders cannot demand payment through court.
- CPLX 7y agoThe way the bill would work in practice is that if the government found more than $10,000 in your possession they’d steal it. Seems pretty straightforward.