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The Sydney Morning Herald  published today an article titled “Debt push loyalty rewards programs to brink”.  It would seem the Australian rewards company Lifestyle Rewards and its owner Mr. Malkoun are both facing bankruptcy aided in no small measure by the Australian Taxation Office. The company owes half a million  and the owner 1.9 million.  Taxation Strikes Again.

Is Lifestyle Rewards a sound company or a bankrupt one? Nobody knows. However, what we do know for sure, is that thanks to the tireless efforts of the bureaucratic drones of the Australian Taxation  Office and the State Revenue Office, about 700.000 reward members will lose all their accumulated rewards.

Let us be clear. Bankruptcy procedures are pushed by the Australian government in order to cash in their taxes. These procedures are not pursued by customers. Maybe in the future they would have been, but not now.

However, there is one difference. If these procedures go ahead as planned, most of the money left in the company will go the Australian government and the rest to the employees and administrators. Members will get nothing. Zero. Nada. Nicht.

And for what? What will the Australian government do with the money? Probably pay all those lawyers required to pursue the matter through the courts. And the administrators necessary to liquidate the company. And the bureaucrats necessary to keep the documentation. What will the public, the taxpayers get? You guessed it: Nothing!

Yet another wonderful example of the Hood Robin principle, all governments operate under works: me first!

People (those taxpayers that pay all government salaries) only come into the picture at election time. We guess elections are not to be held any time soon. Reward members are screwed.

Would this have been different in an Absolute Austro-Libertarian system? Maybe, maybe not. It all depends of the terms and conditions between subscribing companies and Lifestyle Rewards and also between reward members and subscribing companies.

Maybe the contracts would have been air tight and reward members would not be entitled to anything should the company goes bankrupt. But then again, in an Absolute Austro-Libertarian people would have been much more aware of these terms simply because there is no government to “protect” them. In those circumstances, the program would have been far less successful and far less people would have been hurt.

Maybe the subscribing companies would have sweetened the deal in the event of a bankruptcy. Or maybe subscribing companies would have taken insurance against this eventuality. Who knows?

However, what we do know, is that it would have been much more balanced. There would not have been external factors pushing for penalties. There would not have been taxes, which may have even prevented the company from being in financial troubles in the first place!

What goes around comes around. Karma. No taxes would probably have meant a healthy company and members would benefit. Taxes imply a bankrupt company with all their members losing their benefits. Ironic?

No, it is lamentable. It is tragic. Far more than that, it is taxes.

Now you understand more and the more you understand the more dangerous you become. For them. Freer for yourself. Freedom is not easy, but it has its own rewards.

Be free or be taxed. Your choice.

Note: please see the Glossary if you are unfamiliar with certain words.

 

 

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