WFF and Tax
May 21st, 2010 at 11:00 am by David Farrar
I’ve done some calculations on what the tax cuts mean for working families who get WFF payments. The assumption is one parent working rather than two, which is the conservative scenario maximising tax paid.
The pink line is the standard average tax rate at each $10,000 band.
If you have even just one child you do not pay any income tax until you are earning $42,000! And you keep receiving WFF until you earn $74,000.
With two kids, then your family pays no income tax $50,000 of income. And you receive WFF until you earn $89,000.
If kid number three turns up, then you pay no tax until $56,000 and you receive WFF payments until you income exceeds $105,500.
And for the Catholics amongst us, kid number four means no net income tax until you reach $63,000. And you keep getting WFF until your combined earnings exceed $120,500.
Tags: tax, WFF
May 21st, 2010 at 11:05 am
Middle class vote buying, should never have been brought in; should have been abolished in national’s first budget.
But then again, I guess your post shows why National will never abolish it.
Vote:May 21st, 2010 at 11:10 am
So you would not have let out commie screams if National had abolished it?
You really are a hypocrite. Fuck off
Vote:May 21st, 2010 at 11:10 am
Speaking of catholics, my Brother in law has 7 kids. i hate to think how much they get from WFF and when their tax payment kicks in.
Vote:May 21st, 2010 at 11:10 am
A great graph of social engineering.
Vote:May 21st, 2010 at 11:11 am
Have a look at this scary chart:
The number of NZ workers per adult beneficiary, 2000 thru 2010.
It shows that today there are about 1.7 workers for every beneficiary (1.7:1). That figure was 2.6:1 in 2004, and you can see the very clear trend. The implication is that more and more of us depend on the state for some of our livelihood.
The trend is probably exacerbated by our aging population, but I wouldn’t mind betting that WFF and other middle-class welfare programs are a major contributor to this decline. I wonder if Greece’s chart looked similar?
Simply put we have to reverse this, and quite urgently. WFF has to go IMO. The slower we are to choose a reversal, the fewer NZers there will be with the will to make it happen electively. The alternative – having radical reform forced upon us externally – isn’t nice to contemplate.
Vote:May 21st, 2010 at 11:13 am
Oh, I wonder how low income workers trying to make ends meet feel about subsidising other peoples children, buying iPods and flat screens for middle income families because they fit Labour’s (and now National’s) “must buy the votes of” demographic.
Vote:May 21st, 2010 at 11:16 am
burt says:
“A great graph of social engineering.”
Correct. It also neatly graphs the roots you paid for but didn’t get.
Vote:May 21st, 2010 at 11:17 am
nickb, I opposed WFF right from the start. Unlike the right, I am consistent in my views, I don’t support something just because YOU think my team (whatever it is) supports it.
So fuck off yourself, pull your forskin over your ehad and whistle through the hole and lie down with the fleas, you may get up a dog.
[DPF: 20 demerits]
Vote:May 21st, 2010 at 11:19 am
oops – borker appears to have fallen off his pseudo-intellectual soapbox …
Vote:May 21st, 2010 at 11:29 am
Good to identify this. All these people not paying net tax shouldn’t be able to vote.
Vote:May 21st, 2010 at 11:30 am
Sorry off topic but just had to share this I stumbled across,
http://www.marketoracle.co.uk/Article19659.html
Deliciously insane.
Vote:May 21st, 2010 at 11:31 am
Are we talking about the same WFF the then Leader of the Opposition John Key labelled “communism by stealth” when Labour mooted its implementation?
Now in power, Neville appears to have conveniently forgotten the words he uttered. Supreme hypocrisy.
The same tax distortion which is simply welfare for mid-income families, in the assumption they will continue voting for the hand that feeds them, that is the politicians who decide to continue with this abomination.
Vote:May 21st, 2010 at 11:40 am
I am always confused about Working for families. When I had three kids and earnt $85 K salary I didn’t qualify for anything. I now have four kids but went contracting but have also gone contracting and earn more and still don’t think I qualify. I income split with my wife in our company and our combined salaried income is around $120 K. However we can earn more than this due to dividends and other payments. Does this mean we can access WFF if we want?
Vote:May 21st, 2010 at 11:41 am
Cactus Kate (243) Says:
May 21st, 2010 at 11:29 am
Good to identify this. All these people not paying net tax shouldn’t be able to vote.
What a great idea – make everyone except Kate’s buddies beneficiaries and rig the election. Fiji could learn from Kate.
Vote:May 21st, 2010 at 11:42 am
clunk
Vote:May 21st, 2010 at 11:42 am
Manolo (1408) Says:
May 21st, 2010 at 11:31 am
Are we talking about the same WFF the then Leader of the Opposition John Key labelled “communism by stealth” when Labour mooted its implementation?
Now in power, Neville appears to have conveniently forgotten the words he uttered. Supreme hypocrisy.
yes, we are, but then again, its the same John Key who promised not to increase GST
John “Non-core Promise” Key.
Vote:May 21st, 2010 at 11:52 am
Good old socilaist cullen. Tax people at 39% because they are rich pricks and then to the favoured few hand it back to the same rich pricks.
This really is middle class welfare. Hopefully National can focus on de-constructing this over the next 2-3 terms of their government.
Vote:May 21st, 2010 at 12:00 pm
NZ has one of the highest birth rates in the first world – I suspect WFF is one of the major reasons for this.
Vote:This is good, the babies I mean.
What the graphs show is that its good to have children., it pays.
Now you can see why there are so many children born to low-income households – children pay.
Remember the families with 10 or 17 children that were headlined in the newspapers recently ?
WFF helps make it happen. Not too good for the children though.
So although I personally dislike WFF as being a giant bribe to vote for Labour and I’d rather
have a tax cut, I do like the net effect of WFF – we need babies !
May 21st, 2010 at 12:05 pm
Monolo – Now in power, Neville appears to have conveniently forgotten the words he uttered. Supreme hypocrisy
He needs their votes. Nothing upsets a voter more than loosing their lollies. However he took the first move against it (didn’t you notice?) – they cannot use losses from rental houses to decrease their income to enable them to get WFF.
Vote:May 21st, 2010 at 12:35 pm
LRO: What a great idea – make everyone except Kate’s buddies beneficiaries and rig the election. Fiji could learn from Kate
In principle, do you support people who have no input into something given decision making powers that benefit them at the expense of others?
I don’t like the idea of removing the right to vote of the majority of NZ however. But, I do like the thought of everyone paying a flat tax rate with options to contribute more depending on their social conscience.
Like you, for example. I’m sure you contribute more than is required, right?
Vote:May 21st, 2010 at 12:46 pm
Why don’t you do a graph showing the negative tax rates? I.e. how people under the figures you show here get more money from WFF than they pay in tax?
Also, which WFF payments does your chart use? Once you include the accommodation supplement, some pay increases can actually put families backwards.
Vote:May 21st, 2010 at 12:48 pm
Personally I think the extent of the free loading going on among New Zealand “tax payers” is immoral. If we as voters decide that we want public provision of health, education etc then we all have an obligation to pay towards it.
How a family with 2 children (ie not a large family) can morally justify not paying any tax until they receive over $50,000pa of income is beyond me.
Vote:May 21st, 2010 at 12:49 pm
virtualmark
Just add that $50K to the price of their vote – small price for the country to pay to earn that precious third term Labour so desperately wanted for Helen.
Vote:May 21st, 2010 at 12:51 pm
I doubt if WWF will survive a second National Govt. term. I expect it to be replaced by a child benefit (as in the past) which is likely to be means tested rather than universal.
Vote:The remarkable feature of this budget is that after 10 years of Tax and Spend without any discernable progress the populus may have at last recognized that there is not such thing as a free lunch – that the Socialist handouts (free this, and free that) were a mirage, that it was giving with one hand and taking with another. The Nats will be delighted at the positive response from the pundits and will surely be emboldened to tidy up the welfare system. But do not expect real changes until after the next election.
May 21st, 2010 at 12:56 pm
trout
I agree with that especially the bit about; that the Socialist handouts (free this, and free that) were a mirage, that it was giving with one hand and taking with another
However I don’t think that lesson will be remembered and given the first chance to vote for a free lunch again the reef fish will jump at it lining us up for another Labour party inflicted recession and predicted deficits for 10 years, like 1990, like 2008 – all over again.
Vote:May 21st, 2010 at 12:57 pm
VM
In reality they aren’t any different to the silly magpie other than in one respect; at least they get off their arses to go to work. But its still a bludge.
Ditto plus to those that have restructured their affairs to get WFF. They probably rank even below the magpie. And then they criticise others for bludging …
Vote:May 21st, 2010 at 1:03 pm
Shit old Philly won’t take this well, not a lot will change in my circumstances. And no I don’t feel guilty about others subsidising my WFF because they ain’t. The money we receive from WFF does not totally cover the tax we pay anyway so any WFF payments to our family was our money to start with which when you think about it is fucking crazy. We didn’t have kids with any intentions of receiving a handout from the state but if the state wants to return some of my money who am I to argue. I sure that some progressives will continue to spit blood, so sad never fucking mind.
Vote:May 21st, 2010 at 1:04 pm
trout, I respectfully disagree and would reverse that sentiment. In a room with 100 ‘average’ people, 59 of them will be dependent on some form of state handout for their wellbeing today.
If there are any changes in the outlook it would more likely be some of the 41 deciding that it was time for their ‘entitlement’ to kick in and the ratio would worsen. This is already the established trend, and voters have shown a lamentable willingness to “vote themselves largess out of the public treasury” to paraphrase Alexander Tytler.
Vote:May 21st, 2010 at 1:09 pm
LRO: nickb, I opposed WFF right from the start.
Did you oppose them when you were posting as “My Name Is Jack”?
Vote:May 21st, 2010 at 1:59 pm
no.
Vote:I thought he was billy borker!
May 21st, 2010 at 2:02 pm
Check the demerits page, the demerits listed for ‘My Name is Jack’ and ‘Left Right Out’ are combined.
Vote:May 21st, 2010 at 2:02 pm
virtualmark (974) Says:
May 21st, 2010 at 12:48 pm
Personally I think the extent of the free loading going on among New Zealand “tax payers” is immoral.
I have pulled my hair out talking to educated people who have no problem with WFF and refuse to see it as a benefit but a tax refund. the sense of entitlement is so emotional as when I have said I think it should be scrapped they get viscious.
Labour understood this when they put it up and for that alone I think they should never be allowed into government again.
Vote:May 21st, 2010 at 2:05 pm
I am unsure about this concept of ‘entitlement’; people will take advantage of benefits because ‘they are there for the taking’ without necessarily feeling ‘entitled’. If you believe in ‘redistribution of income’ it is easy to take payouts but maybe there are enough voters who look beyond their own interests to the wider picture. I think that the oft repeated $250mill a week borrowing has sunk home, and the Greek example of the consequences of a featherbedded public service will not have gone unnoticed. Or is that too optomistic?
Vote:May 21st, 2010 at 2:09 pm
MikeNZ: I have pulled my hair out talking to educated people who have no problem with WFF and refuse to see it as a benefit but a tax refund. the sense of entitlement is so emotional as when I have said I think it should be scrapped they get viscious.
Should have asked him: If it is a tax refund, then how come some families are entitled to more in WFF payments than they actually pay in tax?
Vote:May 21st, 2010 at 2:54 pm
WFF was a stupid Labour rort that should have been thrown out by National. Flatten tax rates and leave money with the people that earn it so that they can make their own decisions about how they run their lives. Any tax refund by nature is going to degrade the revenue that was gathered in the first place, given the inefficiency of having to cyle it through a government department in the first instance.
Vote:May 21st, 2010 at 2:55 pm
ssbob
It isn’t the “state” that returns “your” tax to you. Its other taxpayers.
For example, other people who are the same age as you and your wife, but earn more than you or earn the same money, but are single and/or don’t have kids or have less of them.
So at the very least, acknowledge the fact and say thanks for the support.
Vote:May 21st, 2010 at 3:38 pm
thedaincimode , I have stated time after time I don’t write the rules. I would be happy if WFF was scraped tomorrow. Life’s not fair and nor is it my fault that others may earn more or less or others have none or less children. If it is any comfort to you the state “taxpayers” still get a higher return from my family then what we get back, so the book is still in the positive side of the ledger. Many like to claim that people like myself structured our business ( family trusts ) to claim WFF, in our case this is simply not so, we had formed a trust many years before WFF was ever dreamt up. As for other taxpayers returning our tax, oh please. Where were the other taxpayers returning my wife’s and myself’s taxes years past. I left school at sixteen and for at least 30 years have paid tax in NZ and in some cases very large amounts of tax. I have never being on welfare and the only period in my life that I haven’t paid tax was for the 5 years I lived overseas. I didn’t have children for the state (taxpayers) to support so I’m afraid you attempt to make me feel some sort gratitude is misplaced.
Vote:May 21st, 2010 at 3:50 pm
Maybe it could be called “Working for Other People’s Families” for those of us who don’t have kids?
Vote:May 21st, 2010 at 4:20 pm
CJD … outstanding
Vote:May 21st, 2010 at 4:20 pm
SSB
So you are an enemy of NZ – you must leave immediately, we simply don’t want people like you who work and pay tax; This is a welfare paradise and people like you just
Vote:pay forruin it.May 21st, 2010 at 4:21 pm
More like Working for getting the govt de-jour elected again.
Vote:May 21st, 2010 at 4:25 pm
I think that’s sadly too optimistic. For every Kiwi who has so much as a vague, passing interest in the Greek situation, there will be 1000 others who have an intimate understanding how lotto works.
Vote:May 21st, 2010 at 4:41 pm
“…so I’m afraid you attempt to make me feel some sort gratitude is misplaced…”
no ‘gratitude ‘ for the over a grand a month..you..a rich dairy farmer..(av. income..$650-700,000..?..)..manage to scam from the system..by your use of accountaant/trusts…
what was your arrogant/sneering quote again..?
that’s right..!
“my family dosen’t need working for families…i just use it to pay my taxes…’..
that was it..?..wasn’t it..?
phil(whoar.co.nz)
Vote:May 21st, 2010 at 5:08 pm
sorry bob – didn’t realise that they held a gun at your head and made you take WFF
Vote:May 21st, 2010 at 5:58 pm
So thedavincimode if our rolls were reversed you would gladly turn down WFF ( Tui ad), of course you would . But I maintain your anger? is misplaced. Don’t take it out on me I didn’t vote for the Socialists or the Nats. Also I’m sure if the taxpayers of whom you claim returned my tax had a choice I wouldn’t get a red cent so it’s a bit nefarious to claim the taxpayers returned my taxes. Save your anger? for those who continue to support middle class welfare.
And don’t listen to the rantings of old Philly he doesn’t have a any fucking idea of what he is talking about, he’s like a trained parrot that squawks the same shit day after day. Get over yourself Philly.
Vote:May 21st, 2010 at 6:37 pm
Correct. But I would take it if I needed it and be grateful and acknowledge that other taxpayers had helped me.
If you choose to construe that as a Tui billboard in the making then that’s over to you. But I’m the person that has to look me in the eye in the morning and be satisfied about whether I’ve done the right thing or whether I’m just engaging in a spot of self-justification.
It’s one thing to have a trust in place – there are lots of reasons to do that and despite popularist claims to the contrary, it isn’t just about tax But its something else to do that and then effectively double dipton with WFF when your trust has the capacity to support you or more particularly, help out with the kids costs – well I think so anyway. And its worse when others (not you) trumpet the fact that they’ve done it and then justify it on the basis that too much of their money is wasted in freeloaders. That kind of self-justification bears comparison with that of the stupid magpie.
Vote:May 21st, 2010 at 6:51 pm
Fine thedavincimode more then happy to look you in the eye, any day. But until that time comes around I guess we will have to struggle on, I wish you all the best and hope life works out well for you.
Vote:May 21st, 2010 at 8:02 pm
he then scuttled back into his hole….
..pretending not to be..
…but..shaken…not stirred…
phil(whoar.co.nz)
Vote:May 21st, 2010 at 9:33 pm
Those figures are horrendous!
With 8 kids from 3 to 16 (all still at home), if I was getting WFF assistance until I was earning upwards of $120K I’d be feeling so guilty. Surely $60K is the upper limit for anybody!! Having been a student for the last 3.5 years & never earning any more then $38K before that, now earning $33.5K it’s criminal that single child families are still drawing the WFF “dole” into the $74K bracket! Fuck, I have no doubts I could live more then well with all the kids hanging around on $50K without WFF!!
Who thought up this shit?
Vote:May 21st, 2010 at 10:45 pm
philu: he then scuttled back into his hole….
..pretending not to be..
…but..shaken…not stirred…
Maybe he has a life…. BTW, local library still open huh?
Vote: