Will Dr Cullen increase taxes on some?
Vernon Small from the Dom Post blogs his speculation that Dr Cullen may do what he did in 1999, and bring in a new top tax rate, to help pay for tax cuts elsewhere.
How does he stop the highest paid getting the most? Well a threshold movement is better than a rate cut in that regard. Given that all those above any new threshold will get the maximum benefit, it is still limited. For example, if you lift the top threshold from $60,000 to $70,000 then everyone earning more than $70,000 gets 6c X $10,000 a year = $600. Between $60K and $70k they get lesser amounts. Compare that with a cut to the top rate of 39c where the more you earn the more you benefit.
If you want to cut the rates, then the only ways to limit that effect is to cut a rate further down the progressive scale – either the 33c rate that starts at $38,000 or the 21c (effective) rate below that threshold.
Or – and here’s a bit of speculation to send a chill through the blood of the very well paid. Remember that comment about redistribution and the imposition of the 39c rate in 1999?
What if he introduced a new top rate, to apply after the election of course, say 40c or 42c on income above a new threshold? A threshold of $150,000 might do it, and would annoy precious few voters. That would cap the benefit and even start to claw some tax revenue back. National could fulminate, but might look like protecting “its rich mates” – a trap Cullen is constantly baiting for John Key and Bill English.
There are those who would argue the top personal and company rates should be aligned, but with business tax at 30c and two personal rates higher than that now, the roof hasn’t fallen in. So “why not be hung for a sheep as a lamb?” as my mother would say.
This certainly can not be ruled out. Cullen hates rich pricks, and the thought of taxing them even more is not impossible. He did the same in 1999.
Cullen knows he will probably never get their votes, so you do some wedge politics and take more off the “rich pricks” so you can reduce tax for people who might still vote for you.
May 8th, 2008 at 4:35 pm
‘Rich’ are people over $150,000
While ‘pricks’ are those who indulge in personal attacks on women who are childless.
I dont know many who are both
May 8th, 2008 at 4:39 pm
One of the principles of democracy, as I always understood it, is that once you are elected you govern for all.
Any wedge politics as described above would further underline the fact that Cullen is unfit for leadership.
May 8th, 2008 at 4:40 pm
And if the nats win election 08 and really want to get the country moving then they should introduce a 30/30/30 regime with the income tax threshold set at $38k
Nil rate for the 1st $10K then 20% to $38K.
And index link the rates to prevent bracket creep.
But Heh What politcian or political party wants to see the country and its citizens prosper.
All they want to do is rape burn and pillage the citizens so they can act like the Fairy GodMother
May 8th, 2008 at 4:41 pm
Of course the really rich have all sorts of ways to lessen their taxable income. The poor old salary and wage earner really only has negatively geared rental property – and look where the massive increase in landlords since 1999 has got us!
May 8th, 2008 at 4:49 pm
I’ve consistently said to friends that I think Cullen will introduce tax cuts at the bottom of the scale but at the same time introduce a higher punitive tax on “rich pricks”. It’s not that I have any inside line or secret gossip that that’s going to happen, I just think it’s the (nasty/mean-spirited/partisan) character of the man.
But … I don’t think we’re ever going to see Mr Cullen’s tax cut programme, because he’ll be sitting on the other side of the House before they come into effect.
And yes, GD, aligning all of the tax rates at 30% would be the best possible option.
May 8th, 2008 at 4:51 pm
Ghost
“Rich’ are people over $150,000
While ‘pricks’ are those who indulge in personal attacks on women who are childless.”
While “maggot” might be a suitable name for a childless woman who has the bare faced cheek to tell me how to raise my family, the same term might be suitable for a childless woman who mounts an all out attack against the family unit in the name of 1960/70′s feminism.
Another point, a higher tax rate for those earning over 150k will not sit well with Labour party MP’s, being an MP is the highest paid job most will ever have, although I imagine the bastards will just vote themselves another pay rise to compensate.
May 8th, 2008 at 4:54 pm
NZ’s richest man has his own private Boeing 737 ( and a brand new one not an old tired one)
There should be limits on tax deductions for luxury items like planes , yachts and holiday homes
May 8th, 2008 at 4:54 pm
Wow, $150 000, oh the bastard super rich.
Lets give them a super rich house 4 bedroom, 2 bathroom in Tawa ($600, 000)
Take home post tax fortnightly income $3400.
Mortgage $2700 a fortnight.
$700 a week for food, power, clothes and the three kids.
Fuck me he can easily afford the boat, holiday home, private schools, superannuation.
That’s not rich……….thats middle class after nine years of Cullenomics.
Sorry but rich in NZ is $250 000 +………….yeah know about what Cullen earns!
May 8th, 2008 at 5:05 pm
“ghostwhowalks3 (197) –2 Says:
May 8th, 2008 at 4:54 pm
NZ’s richest man has his own private Boeing 737 ( and a brand new one not an old tired one)
There should be limits on tax deductions for luxury items like planes , yachts and holiday homes”
Looked in the mirror lately, there are little green eyes staring backup at you, your into the politics of envy, just admit it……….
May 8th, 2008 at 5:19 pm
Anthony is spot on.
In 1999 all Cullen’s tax increases for the rich achieved was a boost into the more tax efficient landlord market, helping to price a generation out of home ownership.
Some of us are awaiting prices to collapse so we can finally get on the housing ladder.
And Cullen calls himself a socialist!
Yet he is the landlord’s friend.
May 8th, 2008 at 5:19 pm
Limits on tax deductions for luxury items? Isn’t it the reverse – Fringe Benefits Tax is charged on the provision of luxury items like planes, company car, cheese and milk.
If you are going to tell me there is a loop hole for rich pricks, then can you please explain why Labour have had 9 years to close the loophole and have either chosen not to do so, or don’t understand their own tax laws sufficiently well to be able to do so?
May 8th, 2008 at 6:00 pm
GWW3 … I really don’t see what NZ richest man owning a new 737 has to do with Labours tax policy at all.
Are you alleging that he’s not paying his due taxes? Do you have any proof of that? Can you point to any issues with “tax deductions for luxury items”? Because as far as I know there aren’t any tax deductions for luxury items at all and your comment just suggests you don’t understand the tax system at all.
And … if he’s paid his full due amount of tax and he still has enough left over to buy a 737 then what’s the issue?
May 8th, 2008 at 6:13 pm
release our beautiful country my compatriots,
vote for a rational Government,
NZ NAT Government of NEW ZEALAND
May 8th, 2008 at 6:13 pm
“Rich” is anything you say, GWW, as in “that’s a bit rich”
“Prick” well, have a look in a mirror, you humpty.
May 8th, 2008 at 6:15 pm
Ghostwhowalks,
I’m usually pretty neutral in my political view but your kind of comment about 737s pushes me to the right.
No-one gets a tax break for a luxury item. Read the Income Tax Act. If a deduction is being claimed for it, it must be for a business purpose. Given that IRD can and does audit businesses down to the minutiae of log books, do you really think that someone who owns a 737 could claim it as a business expense or that if he owns a company that owns a 737, it would not attract FBT if used for personal purposes?
If you want to score points about rich people, please try to at least make them sensible. You do yourself and the left no credit by making spurious arguments.
May 8th, 2008 at 6:19 pm
release our beautiful country my compatriots,
vote for a rational Government,
NZ NAT Government of NEW ZEALAND
May 8th, 2008 at 6:38 pm
The 737 BBJ would only have to be available for ‘hire’ for anyone else and then it becomes a huge tax writeoff. The same is done with luxury yatchs and multi million dollar homes at Onetangi on Waiheke- I was involved with the finishing touches on one such place last week.
There should be a maximum tax writeoff say 2x that of any income, not the full costs. That way if its such a great business then it will not need the tax to make it work.
The Billionaire and his 737 BBJ , has done the same with his NZ estate , its for ´hire´ so instead of being a private cost, its a loss maker and is used to reduce the tax on dividend or capitals gains
May 8th, 2008 at 6:48 pm
virtualmark, regarding your comment about Cullen watching from the opposition benches. You’ve given him too much credit, he and most of those other cronnies won’t hang about to be questioned within parliament or suffer the embarrassment to their egos about being referred to “Former Minister x”. And after 9 years of where we are today, who thinks that they will add anything good anyway?
As an aside David, now that number of postings is displayed for the user, how hard would it to show the average karma for that poster across all their posts? It’d make a useful, hands off way of filtering the garbage, especially as we get near election time and removing thread jackers. Could set it to filter out only comments with an average of 1 karma or something. 737 anyone? what a pointless comment, with unsurprisingly no way to back it up.
[DPF: We did install a plugin which would do that but it crashed the blog too often so had to remove it]
May 8th, 2008 at 6:52 pm
“The same is done with luxury yatchs and multi million dollar homes at Onetangi on Waiheke- I was involved with the finishing touches on one such place last week.”
That explains it, jealousy get you a chip on your shoulder. As helen would say DIDDUMS
May 8th, 2008 at 6:54 pm
Where to start with this ghost rubbish.
What exactly does a “huge tax write off” mean to this halfwit?
Depreciation of a capital asset is a standard business expense and is deductible to the extent that the expenditure is incurred in an attempt to make a profit.
If the jet hire business our ghost envisions is a loss maker from day one it will be declared to be not a business for tax purposes….you idiot.
“maximum tax writeoff say 2x that of any income”….care to translate and maybe I can help you with the real tax position……. but I think I just covered that.
May 8th, 2008 at 7:01 pm
People like ghostwhowalks makes me sick.
He and his ilk thrive on envy. They have nothing to offer to New Zealand other than their hatred for success.
They are true losers in life and would like to extend their misery to the rest of us.
Get lost and out of my life you socialist scum!
May 8th, 2008 at 7:23 pm
To right Manolo. Just to keep the chost happy. Gross income over 400k this year. WFF benefits $14,000 this year, total tax provisional about $24,0000 this year. My advice to chost, vote socialist but get a rightwing accountant that detest people like yourself.
May 8th, 2008 at 7:25 pm
GWW – when you’re talking about luxury yachts, do you means ones like Owen Glen, Labour’s biggest ever single donor owns?
May 8th, 2008 at 7:28 pm
ssbob…..that’s an accountant to savour or your o’draft is a daunting thing.
May 8th, 2008 at 7:38 pm
Come on guys, go easy on Ghost, we all know he is one of the ruling elite, no doubt he is what Cullen would call a rich prick and we call a Chardonnay socialist.
We all know one or two of these wankers, they think it is so “terribly spiffing” to fight for the so called poor and are more than happy to be called a socialist as they have truck loads of money already, no doubt he attended University and did not have to bother with anything as tiresome as a student loan, daddy would have paid for the lot.
Each and every one of these wankers has a vested interest in seeing this govt continue, have you not noticed a distinct lack of real Labour party people on the blogs, when I say “real” I mean the good honest hard working bloke who is simply trying to give his kids a better life than he had, they are not the ones championing Clark and Cullen, those poor buggers are simply trying to get by and save a bit of money to go and live in Aussie, meanwhile wankers like ghost and the rest at the Standard are desperately trying to keep dear corrupt leader in power so they can keep their hand on the nations purse strings.
Don’t trust the pricks, they have no real concern for the average bloke, it is all about them and their lust for power, I only feel sorry for the fools who vote for them time after time in the belief that these idiots actually are going to do something for them.
May 8th, 2008 at 7:42 pm
GWW, has obviously never filed a tax return in his/her life!!!
Does that surprise anyone? oh the simplicity of sucking at the public teet.
May 8th, 2008 at 7:57 pm
He has however succeeded in making this thread all about him. Trolls thrive on attention. Ignore the ignoble fucktard and carry on with sensible discussions.
May 8th, 2008 at 8:31 pm
Big bruv is happy to use the word corrupt, but is a typical magoo who cant see the corruption around him on the right.
heard of Donna Awatere?
Heard of Nick Smith, 2 high court judges had plenty to say about him?
and the Auditor general had plenty to say about McCully when he had his time in the back seat of the limo. If the public servants didnt lick his boots , it was out with a golden handshake courtesy of the tax payer.
Bleat bleat. Your wonderful NP even voted to tell you how to raise your family ( of course your kids having less rights than a stray dog is you all over)
May 8th, 2008 at 8:52 pm
Don’t Feed the Troll
May 8th, 2008 at 8:57 pm
And who gave Donna A-H the money? I believe the Foundation was set up in 1999?
I think the A-G and other parties from the High Court down have had more to say about your lying stealing leech mates in Govt at present than about any National Party MP or Government, past or present. Sorry IV2, couldn’t help but point out factual inaccuracies and selective reasonings of that humpty housepainter.
May 8th, 2008 at 8:59 pm
Big Bruv
Look at 1999, the bastards voted themselves a massive tax increase then to compensate promptly got a circa 10% pay rise and have continued to do so every year since 1999.
Fair enough in the corporate world there was typically an instant pay rise to correct the loss of net pay, so perhaps MP’s should be treated the same? However it’s hard to see the Labour party as the party of the workers when it behaves like the rich pricks they love to denigrate. They take big pay rises year on year and refuses to allow pay rises of the same scale for their workers – doctors, teachers, police etc.
I think they will lift the ‘rich prick’ threshold and increase it to perhaps 42%. I’m pissed there won’t be a tax free lower threshold – still command and control socialists were never going to give that up.
May 8th, 2008 at 9:03 pm
And there I was thinking that there was no way to accelerate the exodus of NZ’s most valuable tax-payers, entrepreneurs and business owners. I was soooo wrong! A strategy of lifting the top tax rate should do it nicely.
May 8th, 2008 at 9:06 pm
I saw Cullen at Wellington airport yesterday. Christ he had a face like a cats behind. Could really need some “business time” (trendy FOTC reference), methinks!
I couldn’t care less if the vexatious prick put it up to 80%.
a) he wont be in power to implement it
b) even if he did, it would just increase tax avoidance (as already stated)
May 8th, 2008 at 9:07 pm
If Cullen does raise it, that’ll be it for me. I’m off. I’m sick of handing over 39% of my income and getting stuff all for it. I’m the classic middle class white male. Married, kids, mortgage, the lot. I’m only here for family and it’s been under duress, Australia despite some detractions offers so much more.
Raise the tax break and that’ll do it, I’m sick of it.
May 8th, 2008 at 9:09 pm
Yeah well I suppose going to aussie is the ultimate in tax avoidance!
May 8th, 2008 at 9:10 pm
(IM A PRICK) it seems GWW then women with a strange bend sexually, dont really want kids ie the ( sisterhood???) yuk kids
May 8th, 2008 at 9:11 pm
Yeti, get in the queue… nice and orderly now. The Departure lounge crowd control team are overworked and ready to break …
May 8th, 2008 at 9:14 pm
getstaffed
There is already a significant distortion around the $60K threshold. See the situation in 2004 here: Graphing “Ideological Burps”
Arguably lifting the $60K threshold to $150K would help retain a lot of workers particularly through till possibly $180K-$200K when the new bracket would be meet with higher taxes in Aussie.
Big earners are already taxed less in NZ than they are in Aussie, they do actually have a wealth tax and it has a good healthy threshold. Unlike our middle income gouging workers party betrayal of a tax policy.
May 8th, 2008 at 9:51 pm
Do you think a dyke like helen could handle being a labourer (SHE HAS NO REAL LIFE SKILLS),ggw, talks, the talk, but a chinacom lover really DOSNT cut the cheese , in our sweatshop country , and lets not mention rich prick red face cullen , theres heart attack country,if the arsehole had a heart , the dead walk in daylight.
[DPF: 20 demerits. Please do not call the PM a dyke]
May 8th, 2008 at 11:40 pm
“Christ he had a face like a cats behind.”
How much piss does TomatoFace drink? As the pressure intensifies he looks more and more like a bottle of cheap whiskey a day man! Meanwhile his governor looks paler by the hour.
May 9th, 2008 at 1:56 am
Ha ha “[DPF: 20 demerits. Please do not call the PM a dyke]”
Yeah JSF2008 – She is officially asexual.
May 9th, 2008 at 2:00 am
They (StalinistMike and BatsArseClark)must be shitting bricks after watching Labour get trounced in the UK in local body elections. Oh how I laughed and cracked open a cider to celebrate.
May 9th, 2008 at 3:24 am
Have you also had a low, sustained chuckle at how the Tories have had to reposition themselves well to the left it order to make themselves electable?? That’s what’s been tickling some of us.
May 9th, 2008 at 4:09 am
Talking of taxes, looks like Porsche will be able to stop its legal action against Red Ken now that Boris is mayor of London. The threat of a £25 congestion charge vanished along with Red Ken’s odious regime. Next step will be shrinking the congestion charge zone as the good citizens in the western extension zone vote to remove it.
Just imagine what it is going to be like in New Zealand come November when John Key and Co get to unpick Hels handy work of the last nine years.
May 9th, 2008 at 6:34 am
Alces, no overdraft, try hard never to go there but lets put it this way the bank manager is always rubbing his hands before he shakes mine, funny that.
May 9th, 2008 at 6:53 am
GWW “multi million dollar homes at Onetangi on Waiheke- I was involved with the finishing touches on one such place last week”
I take it your ‘involvement’ wasn’t just delivering the flowers – and you are perhaps involved in the building trade? –(Cant wait to watch more ‘Target’ hidden cameras)
But you go on to say:
“That way if its such a great business then it will not need the tax to make it work”
Do you think that would apply to the newly acquired Rail network?
May 9th, 2008 at 7:19 am
capills_enema (do you perform the function or just fantisize?)
You can hardly call Nu Laybore very left my lad, Arthur Scargill would retch in his Lancashire Hotpot at the visage of Tony Blair claiming the left bank of British politics. Lets be real, the only people who vote in numbers are the middle classes because they have the most to lose, the outlying toffs and chavs are always going to be either collateral damage or slightly advataged.
May 9th, 2008 at 10:57 am
OECD rank 22 kiwi
The worry is Key will not repeal anything meaningful of Her ugliness’s legislation – bring on binding referenda as the electors control lever and watch govt improve immeasurably as they receive the collective wisdom of the people.
May 9th, 2008 at 9:34 pm
oh dear. the uridashis have just cottoned on to our problems. here we go…hold on…
May 9th, 2008 at 10:07 pm
“capills_enema (do you perform the function or just fantisize?)”
Hey mate, I’m living the dream.
“You can hardly call Nu Laybore very left my lad”
Indeed. So I did not say that. I said that their capturing of the middle ground had made the Tories reposition themselves. Just as Labour itself moved more to towards the centre under Blair.
“Lets be real, the only people who vote in numbers are the middle classes because they have the most to lose”
Yep. Largely true.