Tax Debate TV One Thursday
June 28th, 2005 at 12:44 pm by David FarrarJust had a call from TVNZ inviting me to take part in The Tax Debate on Thursday at 8.30 p.m.
It’s going to involve the Finance Spokespersons (or subs) from the parties, and a couple of dozen other people.
And best of all, they are going to arrange it so I can live-blog the debate, as well as take part in it. David Slack will also be there (a good excuse to meet up).
I better start thinking about what to say!
No tag for this post.
June 28th, 2005 at 1:20 pm
Don’t think before you say it, just say it
I wouldn’t mind a couple of stabs at NZ First BTW.
Vote:June 28th, 2005 at 1:25 pm
I have always thought that the govt is way to lenient on the black economy. Ask why they don’t have “sting” houses that need repairs and landscaping and do the people who offer under the table work.
Vote:June 28th, 2005 at 1:28 pm
Congratulations on the celeb status! Holmes, Frontseat, Tax Debate… what next for DPF Esq? Blogging on Celebrity Treasure Island?
Vote:June 28th, 2005 at 1:34 pm
how to pay for tax cuts at the top of an economic cycle will be a good place to start..
and if you have time you could then move to the vexed question of peters…:)
are we allowed to blog in/comment on your live blog..?..sort of a blogout at hign noon..?
phil(whoar.co.nz)
Vote:June 28th, 2005 at 1:35 pm
When you see David ask him how his tax calculator comes up with a cost of $3B for a flat rate of 20% up to $60k yet with an $8B surplus theres not enough for a tax cut
Vote:June 28th, 2005 at 1:38 pm
Since you have not thought yet of what to say try this from Keys own email to Matt Robson.
Hi Matt,
I am sure it wasn’t intentional but in your Press Release you talk about Nationals Tax cuts costing 4 billion. This number is in correct by a number of multiples, a more accurate number is 1 billion (max).
Regards
John
$1 Billion max ! . Repeat that a couple of times and it will just roll of your tongue at the appropriate time.
Vote:PS how many packest of chewing gum is that pro rata, for mainstream voters , since 24% of tax is paid by only 2% of taxpayers they will be getting the lions share.
June 28th, 2005 at 1:51 pm
Which left leaning tree hugging political journo is to be the Moderator?
Vote:June 28th, 2005 at 2:09 pm
Hopefully Russel Brown, it would be great to see you too (david & Russel) head to head….
Vote:June 28th, 2005 at 2:17 pm
Should not be too hard. the Government thinks it should keep all of the surplus because it thinks it can spend the money better. They have spent so much money that even a Labour Government cannot think of more places to waste it on. In other words government spending is so lavish that they are well into the zone when massive fraud, waste and abuse starts.
Vote:June 28th, 2005 at 2:19 pm
Cool… I shall endeavour to wrest control of the TV from whichever channel is screening CSI that night.
Vote:June 28th, 2005 at 2:19 pm
Simon Dallow is the moderator. He is (IMO) one of the best staff TVNZ has left.
If I could pick my reality TV show, in order they would be:
1) The Amazing Race
Vote:2) The (Political) Apprentice
3) Big Brother
June 28th, 2005 at 2:21 pm
David I see Capills admitted another 5 charges in Court today Oh I forgot We are not allowed to discuss this matter.
Vote:June 28th, 2005 at 2:23 pm
You will have to excuse my cynicism on this whole tax cut matter.
“PS how many packest of chewing gum is that pro rata, for mainstream voters , since 24% of tax is paid by only 2% of taxpayers they will be getting the lions share.
That is open to question. I would bet that the 2% in fact are able to employ very smart tax pawyers who reduce the tax due to “more reasonable” proportions – like the same as you and I… but that is another unsubstantiated statement.
I like the comment on the “black economy”. The very big problem is that most of it is represented by the drug trade – P and pot. There is a pune there somewhere but it eludes me for the moment.
But to return to my cynicism.
I recall promises like this, at a time when the tables were reversed.
We had had 12 years of National promising “trickle down” income increases and tax benefits. Remember that? Never happened. I was “not paying enough tax to warrant a tax cut”. That is a direct quote from my MP of the time… the NAT one prior to Maurice Williamson.
When, at the next election, the Labour party was elected I thought “Hurrah!!! Tax cut time”. But no. I was earning too much.
“Mainstream New Zealand”? More like “Up the creek, New Zealand”.
David, good luck. I might watch. It depends upon how depressed I feel. If you want to ask a question on my behalf, Try something along the lines of “Why should we believe you?” Ask all of them.
Vote:June 28th, 2005 at 2:25 pm
You will have to excuse my cynicism on this whole tax cut matter.
“PS how many packest of chewing gum is that pro rata, for mainstream voters , since 24% of tax is paid by only 2% of taxpayers they will be getting the lions share.
That is open to question. I would bet that the 2% in fact are able to employ very smart tax pawyers who reduce the tax due to “more reasonable” proportions – like the same as you and I… but that is another unsubstantiated statement.
I like the comment on the “black economy”. The very big problem is that most of it is represented by the drug trade – P and pot. There is a pune there somewhere but it eludes me for the moment.
But to return to my cynicism.
I recall promises like this, at a time when the tables were reversed.
We had had 12 years of National promising “trickle down” income increases and tax benefits. Remember that? Never happened. I was “not paying enough tax to warrant a tax cut”. That is a direct quote from my MP of the time… the NAT one prior to Maurice Williamson.
When, at the next election, the Labour party was elected I thought “Hurrah!!! Tax cut time”. But no. I was earning too much.
“Mainstream New Zealand”? More like “Up the creek, New Zealand”.
David, good luck. I might watch. It depends upon how depressed I feel. If you want to ask a question on my behalf, Try something along the lines of “Why should we believe you?” Ask all of them.
Vote:June 28th, 2005 at 2:27 pm
gd – you can now offically call capill a child rapist.
Anyone checked out the new gman post ??
Bit beyond me but sounds interesting.
Allah protect us.
Vote:June 28th, 2005 at 2:27 pm
The thing is with all of the extra money these socialist scum have stolen, there is no improvement in government services. Health waiting lists are basically the same length, the Police can’t answer 111 calls, the Justice system is stuffed, kids can’t spell, the roads are still clogged, etc etc etc..
The whole exercise illustrates so clearly the futility of socialism, where no matter how much money these thieving bastards vote themselves from your wallet, and of course even if they were taking every last cent they would want more, and things don’t get any better only worse, and more and more smart hard working people get the hell
out of this quagmire leaving a country of bozos stumbling around in the cold and dark with no real productivity and nothing really happening anywhere, and just like all such clapped out soviet backwaters, the government and their media acolytes still pumping out crap about how damn wonderful everything is under socialism..
Damn commie cornballs…
Hard working productive NZers, that ever shrinking group of exploited citizens, could take back 90% of the tax these blood sucking vampires steal and everything would probably work 100 times better..
Vote:June 28th, 2005 at 2:33 pm
You will have to excuse my cynicism on this whole tax cut matter.
“PS how many packest of chewing gum is that pro rata, for mainstream voters , since 24% of tax is paid by only 2% of taxpayers they will be getting the lions share.
That is open to question. I would bet that the 2% in fact are able to employ very smart tax pawyers who reduce the tax due to “more reasonable” proportions – like the same as you and I… but that is another unsubstantiated statement.
I like the comment on the “black economy”. The very big problem is that most of it is represented by the drug trade – P and pot. There is a pune there somewhere but it eludes me for the moment.
But to return to my cynicism.
I recall promises like this, at a time when the tables were reversed.
We had had 12 years of National promising “trickle down” income increases and tax benefits. Remember that? Never happened. I was “not paying enough tax to warrant a tax cut”. That is a direct quote from my MP of the time… the NAT one prior to Maurice Williamson.
When, at the next election, the Labour party was elected I thought “Hurrah!!! Tax cut time”. But no. I was earning too much.
“Mainstream New Zealand”? More like “Up the creek, New Zealand”.
David, good luck. I might watch. It depends upon how depressed I feel. If you want to ask a question on my behalf, Try something along the lines of “Why should we believe you?” Ask all of them.
Vote:June 28th, 2005 at 2:35 pm
Great stuff Dave, really good to see TVNZ are embracing bloggers.
Vote:June 28th, 2005 at 2:41 pm
Well, a good question about tax might be:
“So, John, what is National’s tax policy? There are lots of rumours and hype about lower taxes, but no details. Your last speech talked about lowering corporate tax rates below 33% – would that be your priority? Or would it be lowering taxes for those earning over $60K? Or lowering taxes for mainstream New Zealand? What exactly would National do if they were setting tax rates?”
Not that I expect him to answer.
Vote:June 28th, 2005 at 2:48 pm
Daid I know you have been defending yourself over your comments on Capill. It now appears he has pleaded guilty to some serious sex charges on young girls and will now be in prison for a long time.
Vote:June 28th, 2005 at 3:12 pm
Am looking forward to the (Political) Apprentice. Instead of “You’re fired”, the NZ version would have “You’ve been promoted to ambassador.”
Vote:June 28th, 2005 at 3:15 pm
Will – priceless!!!
Vote:June 28th, 2005 at 3:45 pm
TheProphet GMans post is very interesting Just posted a comment on Rodneys.I feel a Muldoon/1990 repeat if the Nats win Hope Im wrong
Vote:June 28th, 2005 at 5:12 pm
David …You might like to give this example! You’ve heard the cry from across Australia in the last couple of weeks: “It’s just a tax cut for the rich!” – and then it’s accepted as fact. But what does that statement really mean? The following explanation may help. Suppose that every night, ten men go out for dinner at La Porchetta’s. The bill for all ten comes to $100. They decide to pay their bill the way we pay our taxes, and it goes like this: o The first four men (the poorest) paid nothing o The fifth paid $1 o The sixth $3 o The seventh $7 o The eighth $12 o The ninth $18 o The tenth man (the richest) paid $59 All 10 are quite happy with the arrangement, until one day, the owner says: “Since you are all such good customers, I’m going to reduce the cost of your daily meal by $20.” So now their dinner for ten only costs $80. The group still decides to pay their bill the way we pay our taxes. The first four men are unaffected. They will still eat for free. But how should the other six, the paying customers, divvy up the $20 windfall so that everyone would get his “fair share”? They realise that $20 divided by six is $3.33. But if they subtract that from everybody’s share, then the fifth and sixth men would each end up being paid to eat. The restaurateur suggests reducing each man’s bill by roughly the same percentage, thus: o The fifth man pays nothing (like the first four) instead of $1 (100%saving) o The sixth pays $2 instead of $3 (33% saving) o The seventh pays $5 instead of $7 (28% saving) o The eighth pays $9 instead of $12 (25% saving) o The ninth pays $14 instead of $18 (22% saving) o The tenth pays $49 instead of $59 (16% saving) Each of the six are better off, and the first four continue to eat for free, as now does the fifth – but outside the restaurant, the men began to compare their savings. ” I only got a dollar out of the $20,” declared the sixth man. He pointed to the tenth man “but he got $10!” ” That’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more than me!” ” That’s true!” shouted the seventh man. “Why should he get $10 back when I got only $2? The wealthy get all the breaks!” ” Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!” The nine men then surrounded the tenth and beat him up. The next night the tenth man didn’t show up for dinner. The nine sat down and ate without him, but when they came to pay the bill, they discovered that they didn’t have enough money between all of them to meet even half of the bill! That, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore. There are lots of good restaurants in Monaco and the Caribbean.” David R. Kamerschen, Professor of Economics, University of NSW.
Vote:June 28th, 2005 at 6:48 pm
Icehawk –
Well, I’d the Cullinator to explain how pumping tens of billions into the economy through Working for Families isn’t inflationary, but giving the same people tax relief is.
I’d also like Cullen to explain whether most of his “surprise” roading windfall is under dispute – and which will have to be paid back (with interest) if the IRD loses its case. And if this happens, what gets cut to pay the tab?
Vote:June 28th, 2005 at 9:27 pm
Baxter that is a nice story but it forgets the politics of tax cuts and how to sell a tax reduction to as many people as possible. Lifting the threasholds is probably the easiest to sell for now and it is what the Australians did. For anyone who want to afford it I favour a system where they pay say $500,000 in income tax and they do not even have to declare anything.
Vote:June 28th, 2005 at 9:47 pm
David you might like to pick up on John Key’s remark that the “roading” windfall tax is actually money in dispute from the banks. Cullen is attempting to spend it before it is even in the bank so to speak. The NBR in their blog reference this.
Vote:June 28th, 2005 at 10:12 pm
And tax-wise indirectly of course, what our Kyoto ratification means to the average person in the street? The NSX stocks that are Kyoto-adverse and what that might pose in terms of the flight of capital?
Vote:June 28th, 2005 at 11:19 pm
I wish people and the media would realise that National will not release its tax policy until Helen Clark announces the election date. The media and several people posting comments seem to have forgotten that.
Vote:June 29th, 2005 at 12:41 am
Kyoto was great for the forestry industry. By simply felling more trees pumping out more smoke they were able to commit $500,000,000 a year of taxpayers money overseas. When it comes time to buy carbon credits the govt will be selling NZ$. In effect, it allows the forestry industry to fell as much timber as they like, as well as being able to force the dollar down at will.
Now that Brash is leaving open the option of getting out of Kyoto, it means HE has the power to dictate the exchange rate. Labour, however, is tied to Kyoto because they would need the greens to govern if they won.
Also, by keeping the level of tax cuts up his sleeve, Brash is able to dictate the direction of the stock market because firms time their dividends to be tax-effective and this is reflected in the prices of stocks. Cullen has nothing to offer, having virtually endorsed the status quo. The question now is how much tax cut can Brash sell?
Brash has so much influence over the market and he’s not even in power yet. National has siezed the intitiative and surely cannot lose now.
Vote:June 29th, 2005 at 9:59 am
The only issue now is, can Labour do a U turn and tax and if so how much? And when. They have moderated the farm access policy but that could be battered off because they have left themselves plenty of room to bring it back on hard if they are required to by the Greens. Hence if you do not want it DO NOT vote Labour.
Vote:June 29th, 2005 at 10:05 am
BJ, stick to the Sports page !
Kyoto wont be sending $500 million per year, its more like over 5 years.
By simply felling more trees pumping out more smoke ????
Those trees they are cutting down were planted 25 years ago so cant effect any Kyoto claculations.
pumping out more smoke ??. CO2 is colourless , oudourless and far from being a pollutant is essential for plant life . ( Its their O2).
Most CO2 is produced by transport, energy production and has nothing to do with cutting down trees ( in fact almost all forests are plantations so new trees are planted so balance the trees cut down – if they dont we will just bill the chinese and Koreans who take most of the logs)
This is all meaningless garbage …
it means HE has the power to dictate the exchange rate. Labour, however, is tied to Kyoto because they would need the greens to govern if they won.
…
The greens arent in a strong place in the polls, NZF is . The exchange rate issnt effected by the small amounts of Kyoto payments, the interest rates here , the current account deficit all are much larger than $100 million a year for Kyoto.
Surprised to think this has what ex social creditors now do, think the financial market can be manipulated at will as they used to think. . You really are totally barmy, in that Brash can do this ,do that ?
Vote:June 29th, 2005 at 11:43 am
baxter..embrace the paragraph..it is your friend..
phil(whoar.co.nz)
Vote:June 29th, 2005 at 11:58 am
Good one baxter When will some people wake up and realise that for the rich tax is optional not mandatory As one who has worked as a tax accountant here and overseas in the past it is a fact the only people who pay the posted rates for sure are wage and salary earners cause its taken off them (except where they are selfemployed in one way or other)thats why to have the top personal rate different from the corporate rate in an economy like ours is dumb real dumb.The rich have a tax threshold like they have a pain threshold Too high and they wont pay anything About right and they wont bother trying to avoid or evade.
Vote:June 29th, 2005 at 12:10 pm
Philu…I don’t know what you are getting at, though I realise it won’t be complimentary…One aspect of the tax argument that I would like to see raised is Cullen’s proposal to impose capital gains on Aussie Investments. I suggest this will be a fore-runner to a local capital gains tax. In any case it is going to adversely distort yields and values on the NZ market as the money flows back.
Vote:June 29th, 2005 at 12:16 pm
gd,
Yup. I agree. Which is why I the Nat finance spokesman’s comment unworkable. He says our corporate tax rate is “too high”.
If he’s seriously planning to cut that to below 33%, then either he’s going to make the problem you mention worse or he also intends to cut the top tax rate of 39%.
But if he’s cutting those two, there can’t be any money left for tax relief for the majority of tax-payers. Tax cuts *only* for the wealthy are a real vote-loser.
OTOH If the Nats reduce tax for corporates, and the lower-income tax brackets for ‘mainstream’ NZ (ie, most taxpayers) then they’ll be making our income tax system _more_ progressive (ie the rich would be paying a larger % of tax), not less. Hardly a winner amongst the conservatives who post here.
Which is why I’d like to see a real tax plan from the Nats. It’s hard to imagine one which is both true to their conservative ideals *and* a vote-winner amongst the voters from the political centre who will decide this election.
Vote:June 29th, 2005 at 12:46 pm
OTOH Icehawk if Keys does what you suggest my old mates in the tax planning industry will be rubbing their hands with glee More clients with more to gain Meanwhile the poor old salary and wage earner suckers will pay an even bigger share than they do now Letm eat cake
Vote:June 29th, 2005 at 8:28 pm
Auto, what I said was complete speculation, and I’m still waiting to see the numbers, but it makes sense on what I’ve been seeing from the markets.
Brash now has enormous leverage because we know he has the tax cut card, we just don’t know when and how much. That sort of thing attracts mega donations and it’s the same strategy bush used. If you can’t understand this then you don’t understand how the stock market prices in tax cuts.
If a tax cut is on, all the big items will come out of the woodwork, especially in commercial property, long term share holdings, plant and equipment etc. You know the kind of thing… plant and equipment that firms have written off for tax purposes but still has value. You will see a lot of abnormal items on P/L statements.
The market will price all this in. They got nothing from Cullen and it would take a major back-flip for labour to bring in tax cuts now, so how high the market goes goes depends on the word of one man: Brash.
With the NZ FOREX, even selling NZ$50,000,000 a year is a big hit to take, let alone $500,000,000. It establishes a downward trend and increases the risk of speculating on the upside. In short it is and will continue to scare foreign investors off:
http://www.nationalbank.co.nz/economics/outlook/050628/default.htm
As for ‘pumping smoke’, duh, allegory.
The forestry industry uses oodles of diesel and electricty in harvesting and processing, effectively increasing our CO2 emissions. If the govt. foots the bill through Kyoto and has to sell NZ$ to buy carbon credits then who does that benefit? The forestry industry. The lower the dollar goes, the more they get for their products and the less they pay staff.
Anyway, i’ll write a book on it one day. DPF should ask something like: wouldn’t it be better to reduce the company tax rate to the same level as Australia to stimulate growth? Australian rate is 30%:
Vote:http://www.ato.gov.au/businesses/content.asp?doc=/content/44266.htm&pc=001/003/019/001/006&mnu=865&mfp=001/003&st=&cy=1
This would make everyone better off like it has over there.