Tax Avoidance

October 26th, 2009 at 2:00 pm by David Farrar

The SST reports:

Finance minister Bill English has signalled the government will next year get tough with -dodgers by closing loopholes that allow wage earners to avoid paying their share of .

The says the government is missing out on $300 million a year because of wage earners who squirrel away money into trust accounts to avoid paying the top income tax rate. More is lost because of earnings that are “sheltered” by a company created solely to avoid tax.

Not sure how you can legislate to fix that.

The IRD, in its latest submission to the Tax Working Group, says the problem is that New Zealand’s multitude of tax rates is encouraging bad behaviour.

Oh I am sure it is.

It said the trust account and company tax rates were too far out of line with income tax rates. Taxpayers were placing income in a trust account, paying 33 cents for every dollar earned, rather than the top rate of 38c. Another common ploy was for individual taxpayers to “shelter” their money by creating a company so that they paid 30 cents of every dollar earned in tax rather than the top rate.

The preferred solution is to lower the top tax rate – in fact that is the Govt’s official goal – to have a top tax rate of 30% for individuals, companies and trusts.

The IRD says that when the top income tax rate of 39 cents (now 38 cents) was applied to earnings of $60,000+ in 2000, a flood of taxpayers rearranged their finances to avoid the new regime.

I understand the number of people who declared they earned exactly $60,000 increased literally exponentially.

English said large-scale “legitimate avoidance behaviour” by higher-income earners undermined the goodwill of lower-income earners.

“It’s quite telling that there has been virtually no growth in the number of people paying tax on $1 million of annual income, since the 39 cent top personal tax rate was introduced 10 years ago.

So reduce the incentives for avoidance and cut the top tax rate. When Muldoon’s top tax rate of 66% was dropped to 33%, it killed off much of the avoidance industry. Cullen recreated it.

Also some of the reason for no growth in people paying tax on a million dollars of income, is they have gone overseas.

“As a country, we want families, businesses, accountants and lawyers looking at how to unlock greater income and productivity, not working out how to minimise their tax.

“We don’t want people spending their time and resources trying to avoid tax. We also don’t want IRD devoting all its time to chasing tax and compliance issues.”

Then again drop the top tax rate!

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41 Responses to “Tax Avoidance”

  1. wreck1080 (4,408 comments) says:

    Key couldn’t even pass tax cuts in the last budget, let alone down to 30%.

    Although, I suppose the budgeted tax cuts were made in isolation of other changes. This tax working group is looking at the entire tax framework.

    THis is what I would do…

    Ensure Tax changes fiscally neutral.

    Introduce Capital gains tax (on primary home too).
    Flat tax 25%.
    GST increased

    I’d also like to see kiwisaver dumped, and tax on capital income removed (ie, no tax on my savings account interest).

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  2. jackp (670 comments) says:

    I find this quite hypocritical coming from double dipping English. People are doing exactly what he is doing regarding being “legal”. A flat tax would be the best solution down to 20 and even lower for businesses. You would find people won’t hide their income.

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  3. davidp (3,658 comments) says:

    >I understand the number of people who declared they earned exactly $60,000 increased literally exponentially.

    Similarly, when I was contracting in the UK (years ago, before they changed the tax rules around self employment), increases in the minimum wage mostly effected IT contractors who had structured their affairs to minimise income and maximise dividends for tax purposes. Hardly anyone else was actually earning a real minimum wage.

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  4. Gooner (919 comments) says:

    There is a typo in the article.

    This is Michael Cullen talking, not Bill English.

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  5. stuarts-burgers (90 comments) says:

    Further to this we also need to look at Tax Avoidance by just not paying and then allowing the Company to be wound up. There is a piece in The Herald that looks at this and the Australian Tax Office Model,
    Everybody should pay their fair share of taxes but everybody should also be taxed fairly, if some are avoiding paying tax then the burden falls on the non avoiders if the tax system was fair with out the distortion we see today maybe even a flat 20 cents with adjustments in GST then would it be worth the effort to attempt to avoid tax. I understand the use of vehicles for asset protect etc but we should have a tax system that negates their need for tax avoidance

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  6. Rob Salmond (246 comments) says:


    The suggestion that the obvious and only good way to tackle tax avoidance is to align the top personal rates with the company rate has always puzzled me. Here are the corporate and top personal rates in the four countries we compare ourselves with most often:

    Australia (federal): 30% corporate; 45% personal.
    Canada (federal + Ontario): 33% corporate; 46.4% personal.
    USA (federal): 15% (if earnings under $50k) to 35% (if earnings over $18m) corporate; 35% personal, going up to 39% shortly.
    UK: 21% (if income under STG300k) to 28% (if earnings over STG300k) corporate; 40% personal.

    None of these places align the rates. None. Surely they have other methods for tackling tax avoidance, no?

    So why in NZ do we seem to entirely bypass the experience of these countries, and instead run straight for a fairly drastic solution that all of those countries have rejected? If they all rejected this policy for a reason, maybe we should look at that logic as well.

    (As an aside, you and Bill are clearly cherry picking the numbers to beat up the story here. The number of taxpayers declaring exactly $60k probably went up exponentially because it was almost zero before – it doesn’t necessarily signal a large scale problem. Similarly there was “virtually no growth” (note the subjective term) in the number of people declaring over a million in earnings because almost nobody in NZ actually earns $1 million, or even close. I bet there was absolutely no growth in the number of people declaring $100 million in earnings either, but I don’t think that says much about tax avoidance.)

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  7. nickb (3,725 comments) says:

    Some would say that avoiding a 38& rate is morally justifiable…

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  8. BlackMoss (61 comments) says:


    After lowering the tax rate to 20% and then lower again for business, would you then suggest subsequent lowering of the personal tax rate to match the business rate? It seems like a full-proof method to me:

    i) On even years corporate tax rates should be lower than personal tax rates: it is natural to have a lower company tax rate to encourage investment
    ii) On odd years, the personal tax rate should be brought in line with the corporate tax rate: this prevents people from avoiding paying the top personal rate by forming tax shelters.

    I still don’t know why people don’t propose 0% tax. That seem’s the way forward! (and then we can write anarchy on our schoolbags!!)

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  9. side show bob (3,410 comments) says:

    Dickheads, my kids could run a better tax system then the clowns that govern the IRD. Tax avoidance is a national pass time, who the hell in their right minds is silly enough to let the state screw them over. Two Steps. Make it simple and make it fair. Why should the government penalise hard work and drive, the pricks are arse about face. More money in the pockets of those that earn it doesn’t mean the coffers will dry up. Money is no use in the bank it’s made to go around. Any spare cash I have usually ends up back in the farm, thus many more jobs taken care of and many more employed and they will of course pass it on. The greatest problem we face is government, to fucking much of it. Our state is living way above it’s means slowly killing this country, continually throwing bucket loads of money at a multitude of problems, this is a bit like pouring petrol on a fire to put it out, ain’t going to happen. But then again 70% of the population already know this, the ones that don’t don’t pay tax or belong in lefty la la land.

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  10. redqueen (710 comments) says:

    While I agree with your point that the stats used are designed to justify a point, I don’t agree that because the listed countries don’t do something doesn’t mean we shouldn’t. Income tax rates in the US, UK, Canada, and Australia are all quite high and having a non-discriminatory income tax system (in the sense of one which doesn’t provide an incentive for people to move income between different classifications) would solve this problem. The real problem is that people object, quite rightly, to paying 38% of their income to the Government, especially when the tax system provides numerous benefits to people below the threshold which means many don’t pay tax at all after credits and reliefs. If we set a much lower rate, with far few credits, people wouldn’t have such an incentive to move their money around to achieve the lowest tax result.

    The point is that English’s objective is to reduce tax avoidance being something people think about, rather than something which we’re ‘dealing with’. It is a great waste of our time and the IRD’s time playing a game of cat and mouse. While socialists would argue that the solution is to pass ever more legislation trying to ‘stop’ avoidance, the idea of reducing and simplifying income tax simply tries to level the playing field so that people don’t see any benefit in what classification their income is. That I can have a trust which is only taxed at 33% compared with my personal income (I wish) of 38% means it’s something which people think about and spend time enacting and administering. If they spent that time doing anything else, it would be a benefit to New Zealand.

    So let’s hope Bill is actually planning to do something besides ‘cracking down’ like Cullen would do and did. Even if it just means dropping the top rate to 33% for the time being it would be a lot better than having a number of artificial trusts (although, to be honest, I’ve found most people organise their affairs into trusts not for tax reasons, but for personal management reasons). The other advantage, which we both agree on, is that it would make statistics much harder to pull out when needed, as if the rates were converged you wouldn’t be able to ‘show’ things. Wouldn’t you agree?

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  11. John Cawston (1,024 comments) says:

    Once again.. with feeling.

    We are paying 50% more for public expenditure (after inflation and natural growth) than we were ten years ago. Drop the tax rates and drop the additional costs we picked up under Labour and we are on our way back to a balanced budget.

    I dont mind this being staged in, ie, 10% pa for a couple of years and as we get well out of recession something steeper each year. I should imagine its already happening.. but it needs to be policy for ten years.

    Just to get it right viz other countries.. consider our tax as a percentage of GDP.. we are the highest in the English speaking world once we add in rates.. and there’s another elephant in the room.. rates have increased well above inflation as well. Theres $500 a household in savings if we get stuck into those quietly conniving buggers.


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  12. malcolm (1,967 comments) says:

    NZ is arguable in worse financial shape now relative to other countries than pretty much any of the last 100 years. We’ve slipped a long way behind.

    We need something more radical than lowering the top rate to 30%. A flat rate of 20% and a generous 0% tax band under that would be a good start. Company tax rate no more than 30%. Then let the government cut it’s cloth accordingly.

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  13. redqueen (710 comments) says:

    Rob –
    It’s entirely possible we disagree about overall government intervention (I tend towards the ACT position, although with a bit more moderation). My point was more that ‘creating’ jobs in the professions (I’m an accountant) isn’t beneficial to NZ and ultimately lowers our productivity as people and resources are diverted to fighting paper dragons rather than actually making companies more efficient and more accountable. I’m more in favour of consumption taxes, which we may agree or disagree upon, but I do agree that we are not a ‘high tax’ jurisdiction, particularly by European standards (including the UK). However, I’d prefer to see us working harder and producing more rather than diverting large amounts of my time to ‘mitigating tax issues’ (something which I’ve noticed does take up my time, both professionally and personally with friends asking me about different ‘regimes’ and ‘how do I…?’). My main thing is that I’d prefer a much more transparent tax system, which avoids the very complexity that causes tax avoidance, and then we can worry about the tax rates :)

    But in that light having converged tax rates would be a step in the right direction (from a reducing tax divergent advantages and incentives).

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  14. JeffW (341 comments) says:

    I can’t understand what is wrong with English/National. The solution is less tax/less government not more tax. What is his problem?

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  15. nickb (3,725 comments) says:

    Get rid of the millstone around the neci kof NZ’s prodctivity by scrapping WFF.

    Costly and inefficient way to give NZers their own money back, and costs hundreds of millions to administer. Don’t take it off them in the first place.

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  16. stephen (3,981 comments) says:

    First, your claim that “our tax as a percentage of GDP.. we are the highest in the English speaking world

    Why the hell is the language important?!

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  17. Rob Salmond (246 comments) says:

    redqueen – We agree on a lot (though not the optimal tax rate – I am of the Labour persuasion). On your point, I completely agree that the act of arguing over how to divide up existing resources (often the realm of accountants and lawyers) is not very productive and should be avoided if possible. I also agree that aligning the corporate and top personal tax rates offers **one** way to achieve that. But I have a niggling worry that there are direct costs and opportunity costs to this approach, especially in light of the fact that – at first glance at least – this method is not especially popular. There may be other ways to do it that we are not discussing. For example, can we simplify things and reduce transaction costs by being clearer and less ambiguous on what defines “corporate income” and “personal income?” Overall, I’m concerned that we are turning down the opportunity to learn from others’ experiences and mistakes, which would be a shame because learning from their errors is more fun than learning from our own.

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  18. labrator (1,865 comments) says:

    @stephen because they couldn’t read the reports from non-English speaking countries?

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  19. bchapman (649 comments) says:

    Nick and Redqueen- you are both on the money. A simpler system with less thresholds are what is needed. How about a 2% tax on all property.

    No matter what mechanism you use- people will always come up with ways to avoid paying. My other suggestion would be to tax the casino currency money that makes NZ the tenth most traded currency in the world. That is what Brazil has done. This depresses your currency and property market- but would that be a bad thing? It was real estate speculation that triggered the GFC. At least your exporters and tourism operators would then have chance. It would be good for home buyers though it may reduce the supply of capital for a short time (ie you would need to phase it in).

    Will the trust crackdown apply to ones owning family homes in Karori?

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  20. Inventory2 (10,071 comments) says:

    Strange that Phillip Ure hasn’t entered this debate to take a swipe at Bill English. Oh, that’s right; he’s not a taxpayer ….

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  21. Chris C (126 comments) says:

    Rob Salmond

    UK: 21% (if income under STG300k) to 28% (if earnings over STG300k) corporate; 40% personal.

    None of these places align the rates. None. Surely they have other methods for tackling tax avoidance, no?

    The UK has dependencies under it that constitute some of the worst offenders for offshore services. For example, through its subsiduaries in Jersey, the Isle of Man and the Cayman Islands, Barclays avoided tax worth around £1bn to the UK government in the past few years by working the funds through Crown dependencies. Around 40% of the world’s offshore companies are located in the British Virgin Islands and there are very few restrictions and lots of loopholes on personal earners.

    The method of tackling tax evasion in the UK is make up that side of the balance sheet with higher rates of taxation on lower earners (they recently eliminated the 10% tax rate but are introducing a 45% tax rate). Otherwise, if you have the money then you’re fine.

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  22. Simon (1,049 comments) says:

    “undermined the goodwill of lower-income earners.”

    Fuck them. In 2000 Clark increased the top rate to 39% because though it wouldn’t raise that much revenue Labor polling told them that their low earning voters resented those with higher incomes. Labor increased tax rates to keep their retard voters happy.

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  23. redqueen (710 comments) says:

    BChapman –
    The idea of a property tax has its merits, particularly from influencing the demand side of housing, but there are some notable downsides (such as farmers paying the brunt of the tax). So you need to strike a balance, but making income tax more transparent would be quite helpful first, as the main property tax benefit would be increasing land utilisation and the issue that English has raised is one of avoidance. Also, any form of property tax would require an overhaul of the rates system (which, again, I’m in favour of, but we’re now talking about a large endeavour, not just aligning some rates and removing some anti-avoidance provisions). So a property tax is something for another debate, I think.

    The idea of a kind of tobin tax on currency would be very problematic to implement and the cause of currency fluctuations is something which can be dealt with through other means (including non-interventionalism – that is we could stop intervening and let markets actually price our currency, rather than artificially trying to attract capital through high interest rates). If we simply say that trading in NZD incurs a tax you’d have ever poor sod and his dog relocating the business of trading our currency offshore, of which much is already done, and that would put it squarely outside of our tax net. The only truly effective way to achieve this would be to make the Kiwi non-convertable except in NZ and that would be something which I don’t think I could stomach (it would, if nothing else, put us back a while). So a currency tax, while attractive sounding at first, seems to be transferring responsibility away from investment, planning, and interest rate policies and putting in place another tax which would be a nightmare to administer.

    I think English is right to be addressing this issue, I’m just hoping that it means we start with alignment, rather than more ‘anti-avoidance’, or another ‘regime’, or we introduce an IRD ‘crackdown’. I’m just praying that this matter is resolved peacefully and with our long-term best interests in mind, rather than a reaction to a perceived ‘problem’ (as if not giving your money to the Crown were that).

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  24. Viking2 (12,649 comments) says:

    bchapman, Why a tax on property. Grossly unfair. Penalizes a small section of the community to subsidize the rest. Why not a tax on boats or roses or some other such nefarious asset. Maybe a penis and fanny tax. Now that would be fairer as almost everyone has one or other.
    I would also point out that property owners already pay for the privilege of supporting the rest of the bludgers in the community. Non property owners don’t pay rates, are allowed to vote the socialist pricks into council to spend the rates. Now why should that be so. Ratepayer (property owner) pays, socialists get to spend. Something wrong in that equation as far as I’m concerned.

    Every person should pay towards their community. Taxes and rates are a few paying for the many.

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  25. nickb (3,725 comments) says:

    I can’t help but think how much better of a position our country would be in now if we hadnt had the commies in for the last 9 years.

    No wasteful and inefficient WFF. No envy rate. Top personal rate under 30%, say 25%. No gargantuan explosions in welfare and student bribes, no Families, childrens, race commissions etc.

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  26. Anthony (798 comments) says:

    Ridiculous for Rob to say there was hardly anyone earning over 60k back in 1999 so we can’t look at the huge bulge in taxable income right at 60k and conclude there is a problem!

    Just because other countries are stupid enough to have high marginal tax rates that encourage avoidance doesn’t mean we should do the same.

    Of course people will always look for ways to avoid tax but if you equalise the rates and tax all sources of income equally then the problem is bound to be a lot less!

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  27. Sushi Goblin (419 comments) says:

    The obvious consequence to the tax rise in 1999/2000 by Labour was the property boom. As people sought ways to reduce their income, they ploughed their money into rental properties, using LAQCs to reduce their taxable income through claiming back on loss making properties plus depreciation and expenses.

    People on six figure incomes were looking like paupers on paper, though they were ploughing their surplus income into negatively geared properties. They would get a nice big refund at the end of the financial year, which co-incidentally would be sufficient for a deposit on a new property.

    Developers sprung to service this newfound demand for properties (like apartments), fueled by a tax system that penalised savers and rewarded property speculation.

    Reduce the tax rates, and its likely that developing will also drop to reflect the fact that fewer people will find it necessary to salt away income via negatively geared property. Developing will then match growth at a more sedate rate.

    It might do the sharemarket a world of good, plus other investments like corporate bond to reduce the top tax rate. People are unable to borrow for shares and bonds like they can for real estate investments, or depreciate for that matter. It might make investing a bit more rational (IE, focused on yield and growth, rather than doing it to shelter income from the IRD)

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  28. bchapman (649 comments) says:

    No matter what system of tax you choose- one group will feel they are paying disproportionately more than they should and that some other group is bludging off their hard work. Reasons why I feel a property tax would work well in NZ are
    1. Very easy to collect and difficult to avoid, would also allow you to collect from OS based owners of land. With the money obtained from this, you could lower personal and company rates to a flat simple structure, thereby avoiding many of the problems everyone has discussed above (ie tax avoidance and threshold anomalies). Wealthy people would benefit from the reduction of taxes, though would presumably pay more if they have high value properties- so it would likely be class neutral.
    2. Businesses (including farmers) could be made exempt or pay a reduced amount. This would encourage people to use land for productive export earning purposes not for speculative purposes which serves no useful purpose apart profiting the banks and sending our current account deficit higher. As property speculation will be somewhat curtailed (it will less attractive to incur debt to own land as an investment by itself), less money will be borrowed from offshore, our debts will be lower and our dollar lower.
    3.As Bill English is fond at pointing out- the last ten years economic growth (and increased government revenue) was based upon money borrowed from off-shore as a consequence of property and share value speculation. At the same time there has been very little productivity or export growth. As many economic commentators have noted- this is a problem he needs to do something about. Unless he does something about our unbelievably low income/house price ratio and the foreign speculative money our debt and productivity problems will continue, our dollar will veer in value wildly and our exporters will suffer. When the market have decided that our house prices and currency have peaked they will simply pull out and invest in the next country.

    Similar arguements apply to applying a tax on those using the NZ currency as a casino. Brazil has done it because the see the Real as being groslly overvalued which is killing their exporters- if japanese households want to use us a their bankers- as least we could get some benefit for it.

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  29. John Cawston (1,024 comments) says:


    You are talking Govt expenditure, I specified tax. Here’s the OECD table which makes my point, although this latest one shows the UK has now pipped us.


    I noted English speaking because the Anglosphere is a recognised entity with shared culture, ex colonies, more similar recent development histories and many other points of comparison.


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  30. redqueen (710 comments) says:

    SG –
    The trouble is that the evidence is circumstantial. While a compelling argument, other countries with lower tax rates also had bubbles (such as the US) and the blame appears to lie more with land restrictions and low interest rates (fuelling a willingness by banks to lend money at absurd risks). The tax argument for the property bubble seems to be used in NZ by both sides (it was because taxes were too high; it was because we lacked a capital gains tax). In either case, the treatment of property for tax purposes with deductable leverage costs makes sense from a business perspective, but I agree removing the benefit and lowering tax rates would probably increase the advantages of bonds and shares.

    The problems that aren’t addressed is that resource consent, particularly around freeing up sections of land, makes development a slow and costly business. I’ve recently been looking at buying a section around Wellington and both times the price tag (with GST) was around $250,000. That is absurd, in that a house going for $375,000 represents (even if the land is $215,000 without GST) a capital value of less than half the property. So 650 square metres of land is, apparently, to be valued at $385/m2. That is a far greater problem, from a development cost and housing cost perspective, than flats being sold to rental investors (there has been a political push towards flats too, again through resource consent and district planning).

    So I wouldn’t levy our problems solely, or even primarily, on tax. While flattening the tax system would certainly make shares and bonds more attractive (as the income would be taxed less), and a property tax might increase the disincentive to invest in land, it does not deal with the availability of credit or restrictive planning laws which caused the housing boom. If you look at th countries which have had the most aggressive property price rises you’ll notice that planning restrictions are in force in all such countries and always increase the user costs (whether through flats, which are more expensive to live in through service costs, or by requiring homes to be build on in marginal areas where resource consent has been granted over a lengthy application period). If you’re worried about property prices, and the debt it’s helped create, I’d look more to the RMA and our monetary policy (not to mention an ever expanding state which created over-employment and ever rising population numbers).

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  31. nickb (3,725 comments) says:

    I like that stat as a way of measuring govt interference John. I firmly belieeve that in the long run, a lower tax-to-GDP ratio is better for economic performance.

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  32. kiki (408 comments) says:

    zero income tax

    like ACT wanted before they lost their nerve and ran to the safe conservative middle ground.

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  33. Alistair Miller (554 comments) says:

    OK, a couple of points here:

    (1) I am one of the “legitemate avoiders” Bill hates so much. I’m very good at what I do, but I’m pretty hopeless with the tax forms & returns. SWMBO is is much better at the record-keeping and returning that the IRD love. She expects more than the occasional kiss on the cheek for her efforts so, naturally, she is a 50% partner in the business. Fair enough, says I. Tax avoidance, says Bill. Fuck Off, Bill, says I. The alternative is for me to work part-time, earn a boat-load less income and therefore pay a boat-load less tax. Does he want (up to) 33% on the $x,xxx I make now, or on half of the $x,xxx I might make to bring me under the 38 cent threshold?

    (2) If you want to increase the tax take, start collecting that which is due but not paid. GST is supposed to be collected and retained “on trust” for the IRD. A regime which provides the Commissioner with similar powers that exist in Australia would be a good start. Damien Grant got it in one in the Herald: You could even start by targetting the odious industry of property development. A corporate entity for each ghetto the scumbags build, swiftly wound up with assets transferred to the next corporate entity before the IRD gets its slice. The amount of unpaid tax owed by scumbag property developers is enough to make any tax collectors eyes water.

    So, Bill, until you’re prepared to reduce the top rate back down to 30 cents (as a minimum), until you’re prepared to give the Commissioner appropriate powers to pursue the real scumbags, and until you stop all the wealth redistribution bullshit your supposedly centre “right” government is engaging in, you can fuck right off.

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  34. Viking2 (12,649 comments) says:

    Well said Alister. Why at nearly retirement age would I bother to patent and build new inventions, sink all my capital and more into the process when I could go enjoy fishing, touring around the world and generally enjoying the time left on this mortal coil given the alternative of being slugged by the tax rules and having to spend a fortune to defend ourselves against them.
    Like the FTA’s being signed all round the place that will give us trade advantages we need a Tax deed between our Govt and business that operates by the same rules i.e. gives us advantages and gets easier and stops the rent seeking behavoir of Govt. (tariffs are essentially rent seeking and so is extortionate tax rates.)

    Unfortunately Govt. wont sign a binding Tax Deed with its citizens. Why Not?.

    I think I’m correct in saying that Hong Kong has one. Cactus may be able to tell us.

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  35. Brian Smaller (4,079 comments) says:

    I seriously doubt if Bill English or John Key have the courage to make meaningful changes to the SS New Zealand’s Titanic-like collision course with a big fiscal iceberg. We will carry on carrying on in same old fashion and eventaully sink. For those of the population who can get into the lifeboats they will be OK, the rest of us in steerage are popsicles.

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  36. menace (402 comments) says:

    Profit = busines

    so pay tax

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  37. Murray M (430 comments) says:

    More picking on the very people who voted them in. I’m starting to wonder if it is Key and English who are receiving text instructions from Clark, and not Goff.

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  38. jackp (670 comments) says:

    Blackmoss, I think it would be wise to lower the business tax rate to a flat 13 percent so they can reinvest. Also, employees would benefit. The personal rate should be around 20 and do not tax incomes less then 18000.00. This might get the beneficiaries out to the working force. There are only 4 million in New Zealand. There doesn’t have to be so many beneficiaries and bureaucrats. Hope this helps, don’t forget to vote for me in the next elections. I’ll give you a cigar.

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