Tax Options
November 26th, 2009 at 10:07 am by David FarrarColin Espiner writes:
Top personal tax rates could fall but homeowners may pay higher rates under the latest proposals from the Government’s advisory group on changes to the tax system.
In its final deliberations before reporting to the Government, the Tax Working Group says the current system is “not sustainable” and there are “major growth, fairness, and integrity issues”.
Good to hear strong language, as that makes it harder for the Government to do nothing.
TAXING TIMES: THE OPTIONS
* Cut top personal tax rate in line with corporate and trust tax rates
* Cut taxes on capital income and remove ability to offset wage and salary income
* Close tax shelter loopholes
* Raise property taxes and/or GST
* Adjust tax rates on interest payments for inflation
* Increase rates to push down property prices and ring-fence losses on rental properties
* Make income on capital investments tax-free until money is withdrawn
Also good to see this comment:
Labour’s finance spokesman, David Cunliffe, said Labour agreed the current tax system was unfair. The party was opposed to a capital gains tax on a first home but would enter in “good faith” discussions on any other proposals.
National and Labour may not be able to agree on what particular tax rates should be, but it would be good if they could agree on the basics such as better to tax immobile stuff such as land rather than labour and capital which is mobile and can move offshore.
Related posts:
- Treasury talks capital gains tax
- English on GST
- Is it bye bye to LAQCs?
- Tax Working Group Final Report
November 26th, 2009 at 10:19 am
what are the tax shelter loopholes?
Loop holes sound good to me, so long as they are legal.
Vote:November 26th, 2009 at 10:22 am
Tax cuts for the rich and whack everyone else on struggle street with higher consumption and property taxes.
That will go down well with middle New Zealand.
One. Term. Government.
Vote:November 26th, 2009 at 10:27 am
My guess if Bill English gets his way is that we will have a complex and ineffective capital gains tax, which will do nothing to stop runaway house prices. We will then have a rise in GST, hurting the poor and elderly the most. We will also have a token fiddling of other assorted rates, none of which will do anything to stop the extortion from the average kiwi’s pay packet, or the outrageous levels of government spending.
All of this will make the tax system even more complex and unaccessable to the average kiwi, or those wanting to start their own business.
Bring on a social welfare Working Group, headed my Michael Laws, Lindsay Mitchell, and big bruv
. At least then we might curb excessive government spending, and by extension the raping and pillaging of kiwi’s incomes by the spineless Nats.
Vote:November 26th, 2009 at 10:28 am
That’s right Tom.
After all, rich people never own land/houses, offset losses on rental property or use tax loopholes.
Huge. Poll. Lead.
Vote:November 26th, 2009 at 10:32 am
“Tax cuts for the rich”
Tom, you nicely demonstrate there that you don’t know what the fuck you are talking about.
Anyone with kinds earning under $50,000.00 or so pays virtually zero tax with all the assorted WFF, accomodation supplements etc available. In fact if you are earning $30,000.00 or under you are likely (if you have kids) to get more government subsidies than you pay in taxes, making you in fact a negative taxpayer.
If there were no “rich” (i.e people earning over $70k, being liable for the 38% ‘rich prick’ rate) then the cold facts of the matter is that there would be no cash to splash around on the legions of bludgers.
Read this:
http://www.american.com/archive/2007/november-december-magazine-contents/guess-who-really-pays-the-taxes
And specifically:
“The latest data show that a big portion of the federal income tax burden is shouldered by a small group of the very richest Americans. The wealthiest 1 percent of the population earn 19 percent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes. These are proportions of the income tax alone and don’t include payroll taxes for Social Security and Medicare”
So Tom, I realise this is a foreign concept to you, but can you please engage brain before mouth next time you speak.
Vote:November 26th, 2009 at 11:05 am
Yah, Nickb you are so right.
I am one of those who actually pays shit loads of tax, and get virtually nothing back. Even the doctors fees are creeping back to what they used to be before labour gave out subsidies.
At least in aussie, you may pay lots of tax on high incomes, but you get lots back too.
Vote:November 26th, 2009 at 11:20 am
National should seize the chance to bring in a capital gains tax. I am usually opposed to taxes (as most are) but this is about correcting a distortion. The FUD put out by the property lobby is that other countries with CGT still had a property bubble. That is true but misses the point. Other countries also had an equity investment boom. We didn’t. As Bernard Hickey says, NZ is a “housing market with a few other things tacked on”.
Vote:November 26th, 2009 at 11:55 am
If Labour agree to something it automatically means you’ve got something wrong.
The Government should be looking at finding ways of reducing taxes not shifting the deck chairs.
Vote:November 26th, 2009 at 12:00 pm
i like this : Make income on capital investments tax-free until money is withdrawn
Vote:November 26th, 2009 at 12:11 pm
In some ways I’m not surprised. Every major tax review comes out with the same themes. The optimal (economic) tax system, is one where taxes are low, flat and broadly based.
Flatter taxes will also be a way to escape some fiscal drag- people getting cost-of-living adjustments that take them into higher tax brackets.
Unfortunately we have inherited a tax system that was based on the premise of rewarding Labour’s clients and punishing their perceived enemies.
Vote:November 26th, 2009 at 12:28 pm
But it is unchanged since Labour had complete control of it for 9 years – this two party system of govt we have where party “A” set the rules and defend them while party “B” complains only to switch roles but change nothing might be serving the politicians – it ain’t serving us.
Vote:November 26th, 2009 at 12:29 pm
They have managed to stuff everything else they have touched in 12 months so they may as well just carry on. The quality of their ideas and research is less than the Labour trolls dished out.
Definitely a one term Govt. if this continues.
How many of you have quit their membership list Yet?
Tax cuts
Smacking
ETS
CGT
The list just gets worse.
13 minutes for the country to agree and discuss the ETS agreement, signed as the bill went to the house. Worse than Helen. Won’t be much longer and we will be all calling for Helen’s return. God Forbid.
Vote:November 26th, 2009 at 12:36 pm
Viking2
The funny side of this is; Muppets who defended Helen and her shocking abuse of process in the best interests of the Labour party now complain that National are not following process. Although more funny is people who attacked Labour for abuse of process are now defending National. Partisans have shit for brains – they really do.
Vote:November 26th, 2009 at 12:39 pm
Chthoniid
Absolutely correct. If Labour were in govt the capital gains tax would be called a “Tax Key” policy rather than a “Key Tax” policy and the policies of envy voters would lap it up happy that some rich prick is getting a bashing….
Vote:November 26th, 2009 at 12:45 pm
Dr’s Cullens position (or the one he borrowed becasue it was the only one he could understand) is not helping here. Taxation is the art of plucking the goose with the least amount of hissing…. such a sad way to go about it – people who don’t scream loudly can be hit harder and harder till they quietly get up and leave…. This kind of disregard for fairness and equity are to blame for a shit load of problems in our economy.
Vote:November 26th, 2009 at 12:53 pm
wreck1080
But that helps keep socialist govt’s in power and Labour showed us that keeping a socialist govt in power is the most important thing a socialist govt needs to manage.
So shut up and pay!
Vote:November 26th, 2009 at 1:09 pm
I’m hoping they listen to The Roger: http://www.rogerdouglas.org.nz/?p=425
Vote:November 26th, 2009 at 1:21 pm
I’m waiting to see how they distance themselves from the Brash taskforce when it suggests dropping the top tier to 30% increased GST and abolition of WFF.
Judging by John Whitehead’s response on the TV7 special I doubt much will change. A few less public servants perhaps but that won’t achieve much.
Vote:November 26th, 2009 at 2:19 pm
* Make income on capital investments tax-free until money is withdrawn.
I really like this idea because if it is worked properly, it can induce investors to make long term investments rather than short term speculation. An adjustment to this would be to have a tax rate that scales downward the longer that a particular investment (both property and shares) is not withdrawn. Starting at maybe 40-50% if withdrawn within 3 days, 39% if within a month, 33% if within 12 months, and so on. This could allow for businesses to gain access to long term investment in capital which could provide some security allowing them to focus on their operations that raise GDP. This would also work some way toward reducing the severity of bubble markets by penalising short term speculation.
* Increase rates to push down property prices and ring-fence losses on rental properties
Vote:This will hit too many families who only have the house that they live in. A better option would be to tax at an extremely high rate rental income above $1000 per week. This would lead to a reduction in housing demand as there would be no reason to buy more than 3 houses. This would push property prices down.
November 26th, 2009 at 2:26 pm
I hope this is not too long but I will explain why a capital gains tax will make us a nation of number crunchers.
Vote:Alan bought a vacant lot for $100,000 on borrowed money. He was hoping to sell it a profit. After four years he sold it for $160,000. The agents took 4% plus $500 plus GST. The average interest rate over the four years was 9%.; the rates were $1200 per year. The legal expenses in and out came to $4000. The legal expenses on the neighbour’s silly Resource Management Act proposal came to $3500, the purchase and sale involved travel of about 400 kilometres and the RMA bit involved travel of about 600 kilometres and other expenses of about $1000.
Alan bored everybody who would listen as he gloated about his $60,000 tax free capital gain, but when you look at all of the above there would not be any capital gain there.
My point is that to arrive at the correct amount of gain on that transaction a huge amount of time would be involved in keeping track of each and every expense and car journey related to that property over the five year period. I say five years because Alan would have spent a decent amount of time researching that place. All that bookkeeping time could have been spent on worthwhile activities.
November 26th, 2009 at 2:33 pm
“Good to hear strong language, as that makes it harder for the Government to do nothing.”
Optimism aside, the National government will do nothing at all.
They didn’t have the guts to go ahead with the promised tax cuts, and you believe they would heed the advice of the Tax Working Group?
I can almost see English and Key running out of excuses on why not to do it at this time. Both are gutless politicians.
Vote:November 26th, 2009 at 2:42 pm
I’m prepared to give National a chance, so far they have handled it reasonably well, reducing the proposed tax cuts while the economy was bad and setting up an advisory group. I think a lot of people expected a quick fix to everything as seems to be standard these days. But far more than the ETS, it is worth doing well and taking what time is necessary.
Next year is their chance to make a move, I’ll judge them on that.
Vote:November 26th, 2009 at 2:52 pm
Tauhei, other countries (with much higher productivity than NZ) manage just fine with CGT. The example you give is trivial – accountants & business folk deal with that sort of thing every day.
There are always inefficiencies when taxes are imposed. The best solution would be to abolish income tax, and have no CGT, but that aint going to happen any time soon around here, so the sensible step would be to correct the harmful distortion that currently exists towards unproductive investment.
Vote:November 26th, 2009 at 3:03 pm
@burt
I pay, but i don’t shut up
CGT would be great. It may have even helped to prevent NZ’s housing bubble.
Aligning top tax rates to 33% would help. We could even fire 1/4 of IRD too.
Vote:November 26th, 2009 at 3:25 pm
Strong language makes it harder for the Government to do nothing eh? …hahahahahaha!!
I am eagerly awaiting your blog on the day Mr Key ignores the Tax Working Party report because of the likely effect on his popularity.
What the NationalLabour coalition fail to realise is that unless rates are slashed things will not change for New Zealand. Simple as that. End of.
A company tax rate above 20% is a disincentive to invest productively here (there are a couple of dozen places in the World the average rich person would rather live than NZ, especially if they are going to be squeezed for taxes); personal tax rates above 20% the same.
As I have said many times before Mr Key fails to realise that rich and successful people will simply move abroad if they continue to be taxed so much and continue to receive harrassment from the IRD; this means that Key will be taxing a diminishing pie at 38%.
One good thing about moving abroad is the clean slate with tax authorities abroad – if you have $5 million and move to Australia you can easily put $4 million out of sight of the ATO and declare only $1 million as investment capital; you could then be earning vast profits from the $4 million and not declaring it (the ATO doesn’t know about it and the NZ IRD considers you non resident) and laughing all the way to the bank at the silly b*ggers continuing to live in NZ and be taken to the cleaners.
If you were in Government would you rather get 38% of $150 billion (falling to 38% of $120 billion when everyone moves abroad where they can cook the books easily enough) or 20% of $500 billion due to a substantial increase in investment and the size of the economy which would result?
http://www.nightcitytrader.blogspot.com
Vote:November 26th, 2009 at 4:04 pm
There was a bigger housing bubble in Australia and it has a capital gains tax. Explain.
Vote:November 26th, 2009 at 4:07 pm
Elijah – your scheme of ripping off the ATO is illegal in Australia, and the consequences are severe if you get caught. Note that the ATO has a close arrangement with the IRD regarding sharing of information.
Vote:November 26th, 2009 at 4:15 pm
Who says CGT is supposed to prevent a housing bubble? As I said, “The FUD put out by the property lobby is that other countries with CGT still had a property bubble. That is true but misses the point.”
A CGT will correct (or at least lessen) the harmful distortion that currently exists towards unproductive investment.
Vote:November 26th, 2009 at 4:20 pm
This is all hot air, the National socialists will give back $1.00 in one hand and take $5.00 with the other one. Doesn’t matter what sort of tax it is at the end of the day it all comes out of the same pocket, yours. And Shonkey wants to match it with Aussie, the mans in fairyland.
Vote:November 26th, 2009 at 4:25 pm
For emissions I think they should look at having a horn tax, a levy for each vehicle and double for each cow.
Vote:November 26th, 2009 at 4:31 pm
A more complicated tax system, even higher top marginal tax rates and lower interest rates.
Vote:November 26th, 2009 at 4:43 pm
So you want to make New Zealand’s tax laws more complicated by introducing another tax?
Vote:November 26th, 2009 at 5:09 pm
No, the simpler it is and the more you treat income-sources “the same”, the less incentive people have to seek out activities with lower tax burdens. If all income sources are taxed the same (low and flat), then you don’t push people away from productive activities (developing businesses) into unproductive (property speculation).
The previous Labour Government was warned that when they put the top marginal tax rate up to 39% (and maintained company tax at a lower level), that it would create both more opportunities for tax avoidance (trusts, property etc)- and reward people more for investing in property (low tax burden) instead of expanding businesses, product lines and markets (higher tax burden).
The idea of ‘low and flat’ is to get rid of those disincentives.
Vote:November 26th, 2009 at 5:21 pm
I agree with low and flat taxes. It makes a lot of sense. I don’t agree with new taxes like a CGT or land tax.
Vote:November 26th, 2009 at 5:23 pm
Be careful. Buildings and land may not be mobile but the people who occupy them are.
Vote:If taxes make our housing even less affordable than it is now then people will migrate to places where they can afford to buy their own home just as Californians are migrating to the US heartland.
Houston builds fringe housing (typical 2540 sq feet) for US$140,000 – $30,000 for the land, and 110,000 for the house. That begins to look pretty attractive.
Here I am in the tiny town of Kaiwaka in Northland trying to create a section to build a house on.
Before the council will give me title I have to pay a reserve contribution of say $10,000. Then I have to pay a roading development contribution of $9,500, and then because I am in a rural zone I have to build a street crossing big enough to handle an articulated stock truck even though the small lot is restricted to residential use only. Estimated cost $35,000 because it will be a double crossing.
The 92 year old living in small cottage next door had to pay $26,600 for her massive crossing. A soviet tank brigade could use it.
Then there are the consent fees of $2,500 (just gone up) and because of all the data they require my surveyors fee will be about $6,000.
Total compliance costs $63,000. And I don’t have to pay my own consulting fees.
So Kaiwaka $63,000 section compliance costs. Houston, Texas, $30,000 total section cost to buy.
That is a lot of air fares. So the land might be fixed but the potential buyer isn’t.
November 26th, 2009 at 5:39 pm
Aren’t family homes excluded from CGT proposals?
Vote:November 26th, 2009 at 6:26 pm
Here is why they want more tax, why they won’t change the system. Check the numbers in the last Paragraph. Then, consider what would have been if Helen and Cullen had not raised the tax rates and not indulged in wasteful expenditure.
Incidentially English has left of the welfare figures.
Finance Minister Bill English is warning more red ink will flow from next month’s opening of the Government’s books and many government departments are being warned that they will have to cover all cost increases from within existing budgets.
English has confirmed Treasury’s half-year fiscal update and the 2010 Budget Policy Statement will be released on December 15.
English said the books would highlight “the legacy of Labour’s relentless spending increases over recent years”.
He signaled the Government is preparing further cuts in current spending, saying if National could not fund new priorities without pushing debt to unsustainable levels “then finding savings in existing spending will be critical”.
English said recent large spending increases provided ample room for reprioritisation. “This will be a feature of Budget 2010 as the Government delivers its priorities within the $1.1 billion cap it has set out for new operating spending.”
English said baseline budget spending had increased by 45 percent since 2005 while the economy had grown by 15 percent. “This kind of rampant spending growth is unsustainable and cannot continue.”
“No business or household can continue operating this way – and nor can the Government. That’s why this Government is taking steps to slow future spending increases and get debt under control.”
English has also dropped hints about where the cuts may come, listing education, health, corrections, police, and housing as areas where baseline spending had blown out.
Education spending was up 39 percent in five years, while health spending had increased by 35 percent. Corrections spending had almost doubled, while police was up 48 percent and housing 234 percent, although from a much lower base.
Vote:November 26th, 2009 at 6:30 pm
Will Blenglish lower the tax grab. Doubt it, he’s as addicted to tax collection as any heroin junky is to heroin. in the 2010 buget of 1.1 billion.
He is trumpeting an increase of 1.1 billion in the 2010 budget. What the hell for?
Given the times he should be cuting 1.1 billion.
Vote:When one lives a life of plenty then one never learns to be frugal.
November 26th, 2009 at 6:45 pm
The group’s preferred options for reform would be finalised following the conference, the summary said.
“It agreed, however, that New Zealand’s current tax system is not sustainable as there are major growth, fairness and integrity issues.
Looks like another meeting of socialists. WTF has fairness and equity got to do with taxes unless of course we are talking about stealing from the rich to pay the poor, which is normal for all socialists.
Vote:Stop bloody stealing. Stop the waste. Stop expecting individuals and companies to supply a never ending fountain of money to be spent on their favourite things.
November 26th, 2009 at 7:33 pm
What would happen if all of a sudden, everyone stopped paying tax?
Vote:November 26th, 2009 at 7:51 pm
You’re spot on. The property lobby has repeatedly made the point that there was a bubble in other countries but i always reply, “so fucken what?” Because the problem is not the “bubble” per se, it’s the fact that the benefits of that bubble aren’t flowing into the tax system, which is creating a distortion. I don’t care if there’s a bubble as long as those who benefit from it pay their dues – and thereby spread the tax base and also give pause to people as to whether they’d rather invest in property (which does fuck all to grow the economic base) or invest in the business sector (which might just help us get out of the kak).
Vote:November 26th, 2009 at 8:08 pm
I suspect we won’t see anything substantive from National unless they win the 2011 election. Like the McLeod report this current round of ‘options’ will be too hard and too risky with an election looming. That is, too hard and too risky for National’s re-election chances, like the McLeod report I suspect the substance of the options will not be in the frame when considering the timing – just the major party norm of ‘election first – policy second’.
Vote:November 26th, 2009 at 8:28 pm
That bubble so called wasn’t a bubble at all. It was nature taking its course. A course driven by greed on the part of Helen Clark and the Labour Party. That greed that said we are taking from all you people who earn $60K plus, 39% if your earnings.
They were so subtle about it they even raised the wages of everyone employed in the Govt. and public services both national and local, everyone who partook in Govt. contracts so that they could rape their pay packets as well.
This then caused all the people who started paying 39% to go and learn how they could lower their tax to pay. Many schemes evolved one of which was buying a rental house. That legitimately became a business and therefore was treated as such by the accounting profession.
To make this equation worse the reckless disregard for prudent spending by those same wealth destroyers in Govt. raised interest rates thus exacerbating the losses involved.
Its therefore not rocket science to see that had Clark not been greedy and added all this to the housing equation along with the continuing demands of local govt. that housing values in NZ would have remained at a lower level. Remember this all happened at a time when Kiwi’s were leaving droves, (88000 in one year alone), and we were still building plenty of new houses. Interest rates hovered about their long term average. In theory houses should have slumped in value but couldn’t because the costs of replacements were rapidly rising.
We now go into a situation where we are building 50% of the number of new houses we need. The banks are tight on funding new houses and our population is increasing at a reasonable rate. Nothing has been done to lower the cost of production for new housing, the councils are burdened with the leaky home problem which is not going away and as time goes by will get greater as more and more houses become condemned.
And you want a CGT to attack the housing market. Clearly you simply don’t have any reasonable thinking capacity as to cause and effect.
Don Brash recently had a look at this bubble in housing and found that indeed it wasn’t. He found that in NZ, despite the rugged weather and earthquake conditions that prevail, NZer’s spent less then the average of the OECD.
Watch house prices go ever upwards as the supply tightens, cost to build continues to escalate and wages rise with employment and exports in the next few years. The market will decide the price and if you interfere with that market it will be at your peril. Watch for a change in attitude within the next 6 months as people start to yell and scream that they can’t afford to rent and that there are no houses to rent. Its all coming their way.
More importantly as the tax group have decided that taxes should have a fairness and equity component (their excuse for CGT, and not a good one at all), they need to tell us what they propose where the tax payer sustains a loss in capital value and when and how they propose that the property owner should be compensated. (Much like the Maori’s and their carbon tax rebates.)
CGT is counter productive, doesn’t establish any fairness at all when you can get tax breaks from investing in Pies and various other schemes.
Vote:The best fairness about tax is to minimize the need and thus reduce the stealing that is involved.
Flat taxes, all the same value, no taxation on incomes under $30k, allowing combining of incomes for those in long term committed relationships. Apart from a few most people will pay tax at a lower level, just not at high levels which has been the cause of all this.
November 26th, 2009 at 8:30 pm
Neil, the reason people invest in property in NZ is not that property is such a fabulous investment, or that it has fantastic tax advantages – it is simply that business gives such poor rates of return.
Instead of running around taxing everything else, the government should simply make a more business-friendly environment, then we will have a better local investment option than property.
(My investments include local property, and mainly foreign equities.)
Vote:November 26th, 2009 at 8:36 pm
I think we should see moderate changes started next year, with more put to the elctorate for the elction to get a mandate to do a decent job of reforming taxes and benefits.
Vote:November 26th, 2009 at 8:39 pm
How about reducing tax on other investment, instead of introducing a new one?
Vote:November 26th, 2009 at 9:06 pm
@Viking2: “And you want a CGT to attack the housing market.” Not really. I want it to correct the current distortion in favour of unproductive assets. Like in Australia, UK, US, Canada, Japan, etc.
Very simple (if you know anything about CGT or tax in general). Losses are carried forward, just like other tax losses. Some countries let you offset against income tax, others don’t.
Vote:November 26th, 2009 at 9:09 pm
Yep, this would be the best outcome.
Vote:November 26th, 2009 at 10:21 pm
Ever occurred that when discussing tax we’re looking at the wrong end? The object is to increase our wealth, n’est pas?
The key to becoming wealthy isn’t high net income it’s low expenditure relative to net income combined with wise investment of the surplus. Of course once you implement that formula and turn it into a permanent lifestyle then (but only then) you turn to the question of increasing your net income.
This country has an extremely high potential net wealth given our resources and low population. In other words, it’s very easy to increase our net income. Our problem is that excess consumption and low savings is engrained in our lifestyle.
We need therefore to reduce our low yield in that area and that’s what the tax group should be focusing on at this point in our journey. If you increased GST to 30% on luxury goods and dropped it to 5% on essentials, you’d be making a start. Of course, the bureaucrats say the key to GST is simplicity. So it was, in 1986. In 2009, we have IT solutions easily capable of handling the complexity of variable rates. Secondly you need to incentivise domestic savings so the banks are less dependent on the foreign markets for capital. Thirdly super should be made compulsory.
There are various other adjustments as well. I don’t disagree with CGT on property esp residential rentals because they’re unproductive. But that shouldn’t be the main story. The main story should be, how do we change our lifestyle to become more like the Asian savers?
Vote:November 26th, 2009 at 11:19 pm
reid
Multiple rates of GST would be a god send to the IT industry in NZ. Be like Y2K all over again. Tax attached to a product rather than one size fits all is entirely reasonable. I fear it would be to much of a departure from the status quo for a NZ govt. We would need a Labour party in 1984 mentality for that to happen and I don’t see that in National today. Reformers they are not.
Vote:November 26th, 2009 at 11:31 pm
I can’t believe some of the uninformed comment that’s been written in this thread:
I’d love to see some sort of link for this, because it goes against everything that i’ve read about the housing bubble (for that is exactly what it is) that’s occurred over the last decade. You might want to start with http://www.data.govt.nz and move on to http://www.demographia.com/dhi-ix2005q3.pdf. If Brash has said as you’re quoting then we’re in worse trouble than i previously thought.
You mean like Ryman Healthcare, who’s share price has risen 40% this year? Or Telecom, who keep pumping out 8% (after tax) year in year out? Not to mention the 25% gain in their share price. I’ll grant you, there are morons who are buying horrendously over-priced small businesses (cafes come to mind), but there’s no problem getting a decent rate of return even if you have the attention span of a jellyfish.
Mate, you obviously don’t own a business, or if you do, you have someone else do the GST for you. I use Banklink, Excel and online banking to do my GST calculations bi-monthly and it takes me about two hours. I estimate this would increase roughly five-fold if they implemented what you’re talking about. While it seems obvious on the surface, you still have to code entries, check your data and claims then lodge it with the IRD.
Vote:How do you propose that you’d put the claim in? Each purchase (and sale) would need to be accounted for, so you’d need separate workings for each item/rate combination. If you’ve ever seen the American tax tables (or even our own Customs book) you’d get an idea of what’s involved. It wouldn’t work, nor should an abomination like it ever see the light of day.
November 27th, 2009 at 10:40 am
burt, I agree. Wish they were, they’re not, and its disappointing me daily for reform is precisely what this country needs. Right now…
Neill, I’ve advocated the simplicity of a single GST rate for a very long time.
The reason I’ve changed my mind is that on balance, the additional difficulty of implementing variable rates is outweighed by the benefits gained from influencing consumption of “the wrong things.”
If we want to change our spending habits and frankly we have to, we’d be foolish to overlook our primary weapon.
Vote:November 27th, 2009 at 11:16 am
Well this year im on the tomatos, other take care of other vegatable and we all trade trade with each other. Vegeatable seeds are so cheap and done right through compost etc you almost never even need to by any feriliser.
Another one of us starting brewing there own alcohol too.
I’m good with minor mechanical jobs and take care of my own major jobs, another one of us generally takes care of everybodys major jobs though. We even trade veges with another mate from up north for wheat and flour.
Alsorts of good stuff happening, we don’t have to go out side of the circle too much.
Stick you taxs up your arses
Vote:November 27th, 2009 at 1:09 pm
I’m not philosophically opposed to taxes (I’m not a Lib!!). I do have a significant problem with the gummint taking more of my money than it needs through extortionately high taxes, then trying to buy my votes by giving some back (working for families).
My main concern with introducing new taxes is that it is difficult to introduce a new tax, but comparatively simple to fiddle with rates once the tax is introduced. Introducing, for example, a Land Tax at 2.5% will be difficult to accomplish unless income taxes are reduced in such a way that no taxpayer is worse off (which surely must be the goal). My problem is that once a 2.5% Land Tax (for example) is introduced, is it an easy step to increase it to 3%, or 3.5%. I simply do not trust the current government (much less the economic fuckwits and idiots on the other side of the house) to introduce a tax and then not use it to increase the overall tax take. Think the Rich Prick rate the treasonous Kullen introduced 5 minutes after taking office.
BTW, I’ve read Roger Douglas’ Alternative Approach paper, and all I can say is that I pray to God ACT get 10 or 11% in 2011, so they get a decent say in running New Zealand. Roger for Finance Minister?
Vote: