A small business or tradesman already pays a mountain of money. Any margin has 15% taken for gst, followed then by income tax for the operators, business tax for the profit margin, then a bunch of other stuff like acc etc. For every dollar earned, pretty much another dollar goes to the government. An extra levy would be a huge disincentive wouldn't it?
Official response from Gareth Morgan
There is no additional tax collected. Whether you are taxed too much compared to the taxpayer standing next to you who knows, I’m sure that’s a matter of personal opinion and not much else. There is certainly a lot of evidence that tradies do cashies to avoid tax altogether, that simply is fact. Expanding the tax base as proposed squeezes the ability to do that a bit but certainly doesn’t stop cheats totally. In the second phase of our tax reform - that will not see the light of day unless this does - we have that dealt to through a combination of single tax rate, tax deductibility of home repairs and far better reconciliation of GST receipts. But that’s for the future. I think the important point here is that loopholes and tax cheating simply puts the burden on someone else. By hitting those really hard society is way better off.
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