Why it is important to align the personal and trust rates
John Hartevelt reports:
A $300 million tax dodge – by which half the country’s rich don’t pay the top tax rate – will be cracked by changes tipped for tomorrow’s Budget.
Prime Minister John Key said yesterday that tax-avoidance loopholes were being targeted.
The top income tax rate of 38 per cent has encouraged wealthy Kiwis to move their money into family trusts, which pay tax at 33 per cent, or into companies, which attract only 30 per cent tax.
An Inland Revenue sample of 100 of the wealthiest New Zealanders showed that only about half were paying the highest marginal tax rate on their income.
The Tax Working Group says sheltering of income in trusts cost the Government about $300m in tax revenue in 2007.
John Shewan, chairman of PricewaterhouseCoopers and a working group member, said trusts were “breeding like rabbits in the South Island”.
That is a key point to remember – many wealthy people are avoiding the 38% tax rate. And if they have rental property investments, they will probably end up paying more in overall taxation.
“And that’s what happens when you have silly tax rules that provide that incentive. The tax rules have driven people into using companies and trusts.
“People aren’t stupid. The shockingly poorly designed tax package of 2000 has caused all sorts of things to happen.”
Financial author Martin Hawes said he would be surprised if any of the richest Kiwis paid the top income tax rate and, if they did, it would be on only a tiny fraction of their worth.
The lower the tax rates are, the less people try to avoid them.
Mr Key said the Budget would include “a number of areas” in which tax liability was increased.
“You will see we’ve done quite a good job actually of closing down loopholes and making sure there is fairness in the system,” he said.
“We know that roughly half the people on the rich list actually didn’t pay the top personal rate last year, so [we're trying to] get some fairness into the system.”
Mr Shewan said “a great number of wealthy people” would end up paying more tax.
“There is political risk associated with increasing anybody’s tax and some people are not going to be happy with the statements that are going to be made on Budget night.”
Mr Hawes said business people and farmers were among the most common users of family trusts.
“On the tax side, the people who would be affected by any tax changes to trusts will be National Party voters.”
And again it is not about redistributing a small cake. It is about growing a larger cake. Less inventive to avoid tax through trusts and residential property investment. Greater incentive to earn more and save more and invest more in capital markets.
May 19th, 2010 at 10:46 am
‘Growing cakes’…so thats what this budget’s called ?
May 19th, 2010 at 10:47 am
I am pretty sure they are closing the “loophole” of using a trust to gain a 33% tax rate verse 38% tax rate by removing the 38% rate. I doubt very much this is going to adversely effect those who use a trust structure.
The above statements sound even more ridiculous, when you go the top half were not paying the top rate, so what we did is work out what they were paying, and change the top rate to be that, a stunning victory and all that. Sounds a little hollow.
Don’t get me wrong, in favour of the changes, but I fail to see how the changes will effect at all a trust tax structure, it just will mean they are no longer needed. However I have little doubt they will keep them due to the asset protection a trust structure also offers.
The thing is however the above could of been achieved by increasing the trustee rate to 38%, the problem would then be the company rate of 30%, but it is much harder to move income from the company to the individual without paying the top up amount at some point and time.
The changes however to property I am very curious about, tomorrow shall be interesting in that respect.
May 19th, 2010 at 10:48 am
DPF, I agree that it’s about growing the pie. However, it’ll be tough to try and convince some commenters that’s your argument’s just a ruse to, in their eyes, try and steal more of the pie for the rich. I think it likely such people are about to demonstrate so in their comments!
May 19th, 2010 at 10:48 am
“The lower the tax rates are, the less people try to avoid them.”
If so, why is National introducing a new tax under the ETS guise?
[DPF: To pay for its commitments under Kyoto, and any post Kyoto agreement]
May 19th, 2010 at 10:54 am
try and steal more of the pie for the rich.
How do you steal your own money?
May 19th, 2010 at 10:57 am
A lower, flatter, tax system is good for all the reasons given. However, where National is completely failing is in winding back the huge increases in spending brought about by Labour. National appears to be looking at more efficient ways of funding Labour’s spending. In fact, if we are to prosper economically and socially we need to reduce poor quality government spending.
Research shows that once government spending exceeds about 30% of GDP benefits to wellbeing plateau and then beyond 35% you start to go backwards. We are around 40% and Australia is a lot lower than that.
I see absolutely nothing that National is doing which is addressing that fundamental problem. It’s all window-dressing and being awfully careful not to alienate any beneficiaries of state largesse (beneficiaries in the broad sense).
The big ticket items which you would need to hit to address over-taxation and over-spending have all been declared off-limits by John Key so just 18 momths into his first term as PM it’s clear that his vision is no more than carefully managing Labour’s legacy so that in, say, 5 years time we will get Labour back into office and they can pick up where they left off.
Whoop-dee-do!!
May 19th, 2010 at 10:58 am
How do you steal your own money?
avoid paying tax
May 19th, 2010 at 11:00 am
John Shewan, chairman of PricewaterhouseCoopers and a working group member, said trusts were “breeding like rabbits in the South Island”.
Sometimes I wonder where these guys are coming from.
A trust has – in recent years – become the only way to beat the matrimonial property laws and the looseness of wills. True – they are not complete protection against the matrimonial laws, but they are much better than wills (that can be attacked and ripped apart). I have a trust for this reason, and Ill be gifting the kids inheritance trusts in due course. Otherwise youll never know what will be claimed by relationship breakups – as seems to be the norm these days.
May 19th, 2010 at 11:00 am
This makes sense to me. Just as it was a WWII POW’s responsibility to attempt to break out, so it is taxpayers responsibility to arrange their affairs to minimise the amount of tax they pay while staying within the law.
Removal of tax rate differentials is a good start. However wholesale simplification of the tax system would be better, as it has become a convoluted vehicle for implementing pork policy at the whim of successive governments.
May 19th, 2010 at 11:03 am
well said, freedom101.
May 19th, 2010 at 11:04 am
Totally agree KK.
It is totally legitimate and legal to arrange your own affairs to minimise tax.
And in fact if you were a millionarie and watching what the National government was spending your cash on,, you would be a moron not to use trusts.
Fancy this blog now being against rich pricks….
May 19th, 2010 at 11:30 am
The moral contract with tax breaks down when the Peters who are paying the Pauls start to see waste and unfairness. The vast majority of people are quite happy to pay tax for the greater good – so that people have access to medical care, are socially insured when things go wrong, etc.
Tax evasion will always exist, but it only balloons when the moral contract breaks down. When you have 10% of taxpayers paying over 80% of tax, and you have obvious rorts going on with ACC, welfare and useless government agencies and programmes, then people start to believe (rightly) that they should do whatever they can to avoid paying.
May 19th, 2010 at 11:33 am
Ruth Richardson used to travel with graphs showing how the tax TAKE increased when the tax RATE decreased ie for those on the left who don’t get it: tax rates and tax takes can move in different directions.
Increasing the top tax rate to 38% as labour did, provided work for lawyers and accountants who probably had companies and trusts so they didn’t have to pay the top rate.
People waste their time and energy structuring their affairs to reduce their tax liability when the benefit’s worth the effort. It won’t be if personal taxes are cut and aligned with company rates.
May 19th, 2010 at 11:36 am
Manolo (1400) Says:
May 19th, 2010 at 10:48 am
“The lower the tax rates are, the less people try to avoid them.”
If so, why is National introducing a new tax under the ETS guise?
@ Manolo.
How exactly is the ETS a guise for a tax?
I think if you checked your facts you would discover that the ETS is a redistributive system that actually costs the government.
May 19th, 2010 at 12:24 pm
How do you steal your own money?
avoid paying tax
And in the context of my post, you have missed the point by thaaaaat much.
May 19th, 2010 at 12:28 pm
Surely the message of this budget then is, “if you don’t like pay your taxes and avoid them we’ll just change your tax rate”..?
Great message to send to burglars…
May 19th, 2010 at 12:35 pm
YET AGAIN you prove yourself woefully out of touch with the common man through all this “incentive to earn more” bollocks.
Paying the bills and putting food on the table are my incentives to work.
May 19th, 2010 at 12:43 pm
RRM – rationalised incentives and actual behaviour often differ. If every unit of productive work you completed resulted in better food (or more leisure options, or more charity, or more …) you would probably work harder/more, whether or not you’d rationalise that outcome in advance.
May 19th, 2010 at 1:07 pm
“[DPF: To pay for its commitments under Kyoto, and any post Kyoto agreement]”
To pay whom? To subsidise Russia, China, India, the United States, and even Australia?
Just defending the indefensible while spinning at 1’000,000 rpm.
May 19th, 2010 at 1:19 pm
DPF: And again it is not about redistributing a small cake. It is about growing a larger cake.
Yep, that’s why we need an ETS, increased GST and more government spending.
May 19th, 2010 at 1:30 pm
RRM: YET AGAIN you prove yourself woefully out of touch with the common man through all this “incentive to earn more” bollocks.
Paying the bills and putting food on the table are my incentives to work.
Do you actually have any dreams and aspirations? Do you only ever want to live pay week to pay week? Dont you ever dream of being able to pay bills as the arrive, not when the final reminder comes? Ever wish you could get the car fixed now, instead of having to wait a few weeks and risk doing more damage?
If you want to remain on the lower rudder of the ladder and continue struggling, get the hell out of the way of the rest of us who want to try and climb a few rungs. Just because you dont want to improve your lot, does not mean you have the right to keep the rest of us down at your level.
I hope you arent (and I doubt you are) representative of the “common man”, if so this country is fucked!
May 19th, 2010 at 1:41 pm
“Do you actually have any dreams and aspirations?”
^^^Nah, of course I don’t. Dick.
“If you want to remain on the lower rudder of the ladder and continue struggling, get the hell out of the way of the rest of us who want to try and climb a few rungs”
^^^ROFL
“you dont want to improve your lot…”
^^^Fail
“does not mean you have the right to keep the rest of us down at your level.”
^^^WTF?
I can see I’m going to have to look at updating my RIP script, to make Bevan a feature of it…
May 19th, 2010 at 1:49 pm
And in storm the lefties telling us that it’s not enough that some people already pay 20x more tax than the average income worker because they have more left in their hand after that than a beneficiary gets……
Big tax payers get tax cuts which are bigger than the total tax some people pay – why is that so hard to understand ?
If you want a progressive system then you need to accept that when rates or thresholds are changed that the tax reduction is not uniform…. but hey if you lefties want to claim the progressive model is broken you will get plenty of support from the large tax payers you denigrate rather than appreciate.
May 19th, 2010 at 1:49 pm
“The lower the tax rates are, the less people try to avoid them.”
Dear rich people, if we lower your tax rate enough will you possibly agree not to dodge paying your share?
Thanks
The other 95% of the population
May 19th, 2010 at 1:51 pm
sonic
Dear 95% of population, please appreciate that 5% are already carrying you and they would like you to have a think about the possibility of being a bit more self reliant in years to come.
May 19th, 2010 at 1:55 pm
Sonic –
I consider myself a leftie and my whole problem with the graduated tax structure is that it’s hard to lecture those who contribute more than you on the importance of “doing their fair share” without experiencing strange feelings of hypocrisy.
May 19th, 2010 at 1:55 pm
Yes that’s right Burt, the top 5% are carrying the rest of us, after all they do all the work, make all the goods, work in all of the hospitals and schools.
Without the finance company chiefs, hedge fund managers and top business executives where would we be?
You know what I think, we should just turn the whole government over to the rich, after all they know best. Oh hold on, looks like we already have.
May 19th, 2010 at 1:57 pm
RRM
Well said, I’m also a lefty at heart but I can’t quite force myself to hate people who have more than me simply because they have more than me. I guess that is the key difference between myself and sonic.
May 19th, 2010 at 1:59 pm
“Hate” Burt?
Interesting adjective, care to tell me where it comes from?
(sad to see otherwise intelligent people reduced to just making stuff up isn’t it)
May 19th, 2010 at 2:02 pm
sonic
It’s blatently obvious you don’t understand progressive taxation OR you simply dislike (hate) people who earn more than you because they may get a bigger tax reduction than you; please explain which it is…
May 19th, 2010 at 2:05 pm
I do understand taxation and don’t particularly dislike, never mind hate anyone in particular.
Now that’s resolved care to engage in the actual debate rather than these rather pathetic little strawmen you keep tossing around?
Anyway I’m still chuckling at you describing yourself as a “lefty at heart” that’s a keeper.
xxx
May 19th, 2010 at 2:06 pm
I can see I’m going to have to look at updating my RIP script, to make Bevan a feature of it
Ah yes RRM, denigrate those that critique your posts. By all means set you stupid RIP script to ignore my posts, like I’d give a flying fuck whether you read my posts or not! You made a stupid statement, that reeked of the usual left wing nonsense of the “common man”, you sir are not the common man if all you dream about is being able to afford to put food on your table – dream to be supplying the fucken table!
May 19th, 2010 at 2:07 pm
sonic
Lefty at heart and Labour party supporter are not one in the same.
Now, can you explain why you support progressive taxation but don’t want to accept that high earners will get bigger tax cuts than lower earners when rates and thresholds are changed?
Do you also get upset when rates are increased because big earners get bigger tax increases than lower earners ?
Or are you just a “the rich must pay so I don’t need to” sort of person ?
May 19th, 2010 at 2:08 pm
sonic: Yes that’s right Burt, the top 5% are carrying the rest of us, after all they do all the work, make all the goods, work in all of the hospitals and schools.
Yes thats right sonic, hate the top 5%, who have paid more to FUND the schools and hospitals. How will you afford to run the schools and hospitals without the taxes from the rich?
May 19th, 2010 at 2:10 pm
Bevan
That’s easy; if we didn’t have the rich to pay then the gummit would pick up the tab… life is easy in a loopy-lefty world because there is always someone else picking up the tab.
May 19th, 2010 at 2:14 pm
@burt – “Socialism works until you run out of other people’s money” Thatcher.
(that’s for you too Sonic.. to remind you of the good old days)
May 19th, 2010 at 2:14 pm
Bevan;
when the critique is just plain stooopid, I’ll denigrate the critique.
My point was that the tax rate above me makes zero difference to how hard I work, I work because I want/need to, to support myself. So talking about “incentives to earn more” via taxation is meaningless spin.
And I find it faintly offensive, the suggestion that I would somehow get off my lazy arse and step up a gear, if only there were better tax rates to motivate me.
That shit you posted was just ridiculous, and way off the mark.
May 19th, 2010 at 2:24 pm
RRM – if you were offered overtime at a rate of 1.5x normal pay on Wednesdays evenings, but 2.0x on Thursday evenings which day, all other things being equal, would be more likely to choose? If you were offered overtime at just normal pay, would you be more or less inclined to take it up that at one of the higher rate offers?
Taxation incentives, like hourly rates , are not meaningless spin. Quite the opposite.
May 19th, 2010 at 2:25 pm
“..@burt – “Socialism works until you run out of other people’s money” Thatcher…”
surely that is the definition of naked capitalism..?
a system that relies on profiting from others/the environment..to exist..
….must eventually fall upon itself..
..how can that not be..?
phil(whoar.co.nz)
May 19th, 2010 at 2:36 pm
“…# Bevan (2263) Says:
May 19th, 2010 at 2:06 pm
I can see I’m going to have to look at updating my RIP script, to make Bevan a feature of it
Ah yes RRM, denigrate those that critique your posts. By all means set you stupid RIP script to ignore my posts, like I’d give a flying fuck whether you read my posts or not! You made a stupid statement, that reeked of the usual left wing nonsense of the “common man”, you sir are not the common man if all you dream about is being able to afford to put food on your table – dream to be supplying the fucken table!..’
some take being r.i.p’ed a bit ‘harder’ than others….eh..?
..i wonder who bevan r.i.p’s…”
moi..?..perchance..?
and here is another hypocrisy-howler from te bevan..
“..Ah yes… denigrate those that critique your posts..”
brilliant..!
phil(whoar.co.nz)
May 19th, 2010 at 2:41 pm
phil, You are a product of socialism. If everyone NZer choose a similarly paracitic lifestyle then your “….must eventually fall upon itself..” outcome wouldn’t be ‘eventual’… it would be immediate.
I’m always amused by the finite wealth dogma espoused by the left. It simply doesn’t pass the sniff test. If our system is to eventually fall on itself as a result of ‘profiting from other’, then we’ve been becoming more wealthy and more numerous for 100′s of thousands of years, yet this collapse still hasn’t happened. So why is this catastrophe imminent … other than to scare people into adopting an alternative, oppressive world view?
May 19th, 2010 at 2:46 pm
I can just imagine what phool’s son is thinking as the school bell approaches..
“oh fuck, it’s nearly time to go home to that useless old cunt, blathering about equality when he sits on his arse smoking pot all day. I really wish I’d dribbled down mum’s thigh instead I have to go home to a washed up ex junkie who can’t speak coherently enough to get a fuckin job.”
[DPF: 30 demerits]
May 19th, 2010 at 2:48 pm
The way to make a larger cake is to make the country as a whole earn more, not tinker with the tax system “to make no one worse off”.
Ask a worker if he would rather get a tax cut or a pay rise, I’m the vast majority would opt for a pay rise. People move to Australia to get more wages, not to pay less tax.
May 19th, 2010 at 2:52 pm
“..So why is this catastrophe imminent … other than to scare people into adopting an alternative, oppressive world view?..”
here ya go..!
(what makes this somewhat credible..is that the writer is one of the first to warn long and loud..(from early 2006)..about what happened in ’08..)
http://whoar.co.nz/2010/the-point-of-maximum-danger/
“…“…Debt woes in Greece have sent bond yields soaring … and increased the prospect of sovereign default.
A restructuring of Greek debt will deal a blow to lenders in Germany and France that are insufficiently capitalized to manage the losses.
Finance ministers, EU heads-of-state and the European Central Bank (ECB) have responded forcefully to try to avert another banking meltdown that could plunge the world back into recession.
They have created a nearly-$1 trillion European Stabilization Fund (ESF) to calm markets and ward-off speculators.
But the contagion has already spread beyond Greece to Spain, Portugal and Italy …
… where leaders have started to aggressively cut public spending … and initiate austerity programs.
Belt-tightening in the Eurozone will decrease aggregate demand … and threaten the fragile recovery.
We are at a critical inflection point.
From American Banker:
“Bank stocks plunged last week under the theory that banking companies will take large losses in Europe.
The theory is correct. Banks will get hurt,” Richard Bove of Rochdale Securities LLC wrote in a research note.
Bove wrote in a separate report last week that “big American banks have a bigger stake in this drama than thought.”
He estimates that JPMorgan Chase has $1.4 trillion of exposure across all of Europe alone, while Citigroup Inc. has $468.4 billion.
Analysts said large U.S. banks have opaque ties to the region through their overseas counterparts.
U.S. money-center banks trade derivatives, orchestrate currency swaps and handle other transactions with large European banks.
U.S. banks may not hold a lot sovereign debt in Europe … but those European institutions do.
If Greece defaults, that could create a crisis of confidence in the European banking market that would spread to large U.S. banks.
“Obviously, the European banks have exposure to Greece.
The U.S. banks have loans out to those banks,” said Keith Davis an analyst with Farr Miller & Washington.
“There are a number of different ways they can have exposure —
- it’s not hard to imagine how a wildfire can spread.”…”
phil(whoar.co.nz)
May 19th, 2010 at 3:17 pm
some take being r.i.p’ed a bit ‘harder’ than others….eh..?
..i wonder who bevan r.i.p’s…”
I don’t block anyone phil as I am not afraid of anyones opinion. I actually enjoy watching you and RRM making arse’s of yourselves.
May 19th, 2010 at 3:32 pm
RRM: Bevan;
when the critique is just plain stooopid, I’ll denigrate the critique.
Cut a bit too close to home did it? You adopted the same MO as others when they are unable to rebut.
RRM: My point was that the tax rate above me makes zero difference to how hard I work, I work because I want/need to, to support myself. So talking about “incentives to earn more” via taxation is meaningless spin.
You said that you are motivated by “providing food and paying bills”. That is such a low target to set IMO.
RRM: And I find it faintly offensive, the suggestion that I would somehow get off my lazy arse and step up a gear, if only there were better tax rates to motivate me.
Then you are right about one thing: you are a lazy arse. Most people would be more inclined to work additional hours if they knew they would keep more of it. Overtime rates taxed at 33% (although I’d prefer lower) means more in YOUR pocket for the hours worked than if it was taxed at 38%, that means more food for your family, more left over once the bills are paid!
RRM: That shit you posted was just ridiculous, and way off the mark.
Look in the mirror buddy.
May 19th, 2010 at 3:34 pm
philu: and here is another hypocrisy-howler from te bevan..
“..Ah yes… denigrate those that critique your posts..”
brilliant..!
Oh and phil, I try to go by the philosophy of not casting the first stone – I like to think that when I resort to denigrating posters it is in retaliation in kind.
But what you think is others denigrating you, is normally just contempt at your lifestyle.
May 19th, 2010 at 3:52 pm
“making arse’s of yourselves.”
^^^ Comment of the day right there.
“You said that you are motivated by “providing food and paying bills”. That is such a low target to set IMO. ”
^^^ ROFL at “target”. You really have no idea at all do you, silver spooner?
“Most people would be more inclined to work additional hours if they knew they would keep more of it.”
^^^Speak for yourself. I already hit any overtime that’s available. Of course lower tax will allow me to keep more of my income but AS I KEEP SAYING it is hardly the source of motivation. Getting ahead however I can is my motivation.
“Overtime rates taxed at 33% (although I’d prefer lower) means more in YOUR pocket for the hours worked than if it was taxed at 38%, that means more food for your family, more left over once the bills are paid! ”
^^^OH I GET IT NOW… you’re a financial genius!
May 19th, 2010 at 4:02 pm
All good points DPF.
As one of the 13130 households subject to envy tax and wankers who don’t pay any but expect us to fund them, the lower the tax rate is the better we say.
May 19th, 2010 at 5:07 pm
hate the top 5%, who have paid more to FUND the schools and hospitals. How will you afford to run the schools and hospitals without the taxes from the rich? – Bevan
So if we tax the top 5% less our schools and hospitals will suffer ?
Shot…so if we want better schools and hospitals we should tax the rich more ?
seems like a straight no brainer then, doesn’t it ?…Make it so captain, reverse impulse thrusters !!!
May 19th, 2010 at 5:39 pm
RRM, you just seem to be a complete utter loser. I’ll leave it up to others to judge.
ROFL at “target”. You really have no idea at all do you, silver spooner?
Typical – assume anyone successful has been born into it. Not that you’ll believe it, but I was born into an average Labour voting family which seemed contempt with working blue collar 40/wk jobs. I want something better for my family than that.
Getting ahead however I can is my motivation.
Yet you seem contempt to set your target as providing food and paying bills… how quaint.
RRM, again I’ll repeat – you are a looser, and if you represent the common man, then I feel sorry for the country.
Keep on aiming for mediocrity.
May 19th, 2010 at 5:49 pm
pollywog: Shot…so if we want better schools and hospitals we should tax the rich more ?
seems like a straight no brainer then, doesn’t it ?…Make it so captain, reverse impulse thrusters !!!
If you want the rich to then take measure’s to reduce their taxable income – or even leave the country, therefore the state gets less for schools and hospitals then yeah go for it.
Its only a no brainer to someone who doesnt have a brain.
May 19th, 2010 at 5:49 pm
seemed contempt
Thats meant to be content.
May 19th, 2010 at 6:04 pm
“Yet you seem contempt to set your target as providing food and paying bills… how quaint.”
^^^Since you seem to be retarded in some way, with reading comprehension some way behind what my 5yo is capable of, I will have one last go at explaining this to you.
Paying the bills is not my “target” that I “aspire” to. That currently IS the reality of what my labours pay for. The current DPF/ NACT spin that that lower tax will somehow motivate more hard work is nonsense [although there are so many other good reasons to lower tax.] I am currently working hard to stay afloat – now THAT is a motivator.
Make no mistake, the minute I can dream up a cleverer way of making more money, I’ll be doing it. And perhaps then, oh happy day, I won’t be such a loser in your eyes.
Pffft.
Begone, biartch.
Oh and google “contempt” … it does not mean what you think it means.
May 19th, 2010 at 6:19 pm
RRM: Make no mistake, the minute I can dream up a cleverer way of making more money, I’ll be doing it. And perhaps then, oh happy day, I won’t be such a loser in your eyes.
I highly doubt you have the intelligence, or drive neccesary to seize any opportunity presented to you.
RRM: Oh and google “contempt” … it does not mean what you think it means.
An error I acknowleded dipshit.
May 19th, 2010 at 7:03 pm
If you want the rich to then take measure’s to reduce their taxable income – or even leave the country, therefore the state gets less for schools and hospitals then yeah go for it.
but the rich have been taking measures to reduce their taxable income by hiding it in trusts/companies and our hospitals and schools seem sweet as…
So sure, they can leave the country and i wouldn’t give a shit, but they won’t. Its the quality of life and the easy going nature of NZers in general plus our relative safety and security that will keep the rich here, not the ‘incentive’ of lower taxes.
May 19th, 2010 at 8:12 pm
The above post by pollywog is utter shit for the following reasons:
“our hospitals and schools seem sweet as… ” and
“the quality of life and the easy going nature of NZers”
Although a kiwi I would rather end up in an aussie hospital, and I have met more easy going aussies than kiwis, and the quality of life in aussie is far superior to that in nz. Why else would so many kiwis go there. It’s only the losers and dropkicks that want to live on other peoples efforts that remain in nz. What a fucking gene pool to look forward to.
May 19th, 2010 at 8:26 pm
So…
Basicallly we are now attcking the rich
DFP and Double Dipton are Socialists
May 19th, 2010 at 8:32 pm
@pollywog – Complying with the law is not hiding money. No one, not even you is obliged to pay more tax than the minimum expected of you under the law.
If you want to give additional money away to worthy causes, then gift to schools, hospitals and the like. But take your envy, thinly disguised as faux outrage someplace else please.
The level of economic literacy you display is the reason NZ is slipping down the OECD rankings.
May 19th, 2010 at 8:48 pm
Philu, do you think old Shonkey will increase the WFF rates for us poor farmers?
May 19th, 2010 at 8:57 pm
Just refreshed my memory with the original post. Why is this National Government picking on the people who are already contributing. Shouldn’t they be going after the bludgers and troughers (with the exception of themselves of course).
May 19th, 2010 at 10:27 pm
I would rather you ended up in an ozzy hospital too muzza.
nah krazykiwi, i’m not envious…i admire honest self made people who prosper off their skills and talents. I just abhor greedy selfish pricks who prey on the weak and vulnerable to get ahead. FWIW OECD rankings don’t mean shit to me.
May 20th, 2010 at 8:54 am
pollywog
Not all the rich will leave but enough could. Plenty have already. Call Fay, Richwaite and Gibbs what you want but the IRD can no longer receive tax off their combined incomes of $500 million. That’s a $150 million loss to the revenue base from just THREE ‘rich pricks’ moving to Switzerland or England. You just dont get it do you. The rich can be tax domiciled out of NZ and come here for the three months or summer and enjoy the lifestyle and get to keep more of their money. The English and Swiss treasuries get to use their tax money. When the wealthiest 5% pay 50% of the tax if only 1% more of this income bracket decide to leave NZ then that’s 10% of the potential tax base gone. Where do you make that loss up from? Raising taxes on the middle class? Higher taxes on the 4% of ‘rich pricks’ left to accelerate their departure even more?
Study after study shows that tax increases = reduced revenue take due to tax avoidance and migration vs tax cuts leading to higher than expected revenue flows due to reducing the incentive to use avoidance structures and fewer wealthy citizens emigrating to lower tax juristictions. Its not rocket science.
May 20th, 2010 at 9:14 am
As do most NZers… the 99.9% who do no such preying. Unless you suggest that the one person who is successfully placed in a job is preying on the 9 others who missed out? Or the business that wins a contract is preying on the other bidders who missed out?
Personal experience here. I recently missed out on a job. Turns out I know the candidate who was successful, and I can say with some certainty that she has better, more relevant experience for the role in question that do I. She also knows the company CIO. It would be very easy for me to rant about this woman preying on the weak and vulnerable, using her personal contacts to get the job. But that would cast me as spiteful and ‘little’. No, she got the job I wanted because the business made a good call. She is getting ahead, and I’m still looking for the best role for me. This is happening 1000′s of time every day around NZ… and it’s not preying, it’s healthy competition.
May 20th, 2010 at 9:36 am
Stop it KK, you’re making far too much sense. Cliche little sound bytes, please.
Seriously, hear hear to the above 2 posts.
May 20th, 2010 at 11:23 am
yeah cheers for that Kiwi’s krazy and in america.
Nah you’re right i dont get it. So theres proof a 5% taxcut will keep more ‘rich pricks’ here or will entice fay, richwhite and gibbs to come back and be taxed less/contribute more or is that just wishful thinking ?