Tax Cuts
June 22nd, 2011 at 9:00 am by David Farrar
The way Labour go on, you would think the only people who got tax cuts in the last three years were the despised “rich pricks”. Now of course when you cut taxes, those who pay more tax get a larger tax cut. Just like how a bank which pays 5% interest on your investment pays mroe money to someone with $10,000 invested than $2,000 invested.
What I thought would be interesting is to look again at the percentage reduction in personal income tax from September 2008 to October 2010. These include the IETC for people not on WFF.
Anyway you can see how those earning up to $50,000 had had a massive 30% reduction in the income tax they pay thanks to Labour’s last minute grudging October 2008 tax cut and National’s 2009 and 2010 tax cuts.
And you’ll also see the filthy rich pricks earning over $100,000 have had percentage tax cuts of less than 20%.
Tags: tax cuts
June 22nd, 2011 at 9:11 am
It’s the old “bar stool economics” thing: http://www.kiwiblog.co.nz/2010/10/your_tax_cuts.html#comment-745832
That said, it might be smart politics for the Govt to consider a “super-rich-prick” tax of some sort, say for the top ~1% of taxpayers.
Vote:June 22nd, 2011 at 9:19 am
It is dishonest of Labour not to tell the full story. Labour are pandering to their low income supporters by appealing to envy. The incomes of top people are their money. They are as entitled to it as much as low income earners are to theirs.
Vote:June 22nd, 2011 at 9:19 am
Anyway you can see how those earning up to $50,000 had had a massive 30% reduction in the income tax they pay thanks to Labour’s last minute grudging October 2008 tax cut and National’s 2009 and 2010 tax cuts.
And looking at the IRD site where they list <a href="http://www.ird.govt.nz/technical-tax/legislation/2008/2008-36/2008-36-annual-itr-0809/">tax rates by year it is instantly apparent that almost all of the reduction for that income bracket came from Labour's 'last minute grudging October 2008 tax cut', so a post in which you congratulate the National Party for it is pretty poor.
Vote:June 22nd, 2011 at 9:30 am
Danyl your link is dead buddy.
Vote:June 22nd, 2011 at 9:34 am
While your point is valid, DPF, it would still be clear if you allowed the y-axis to go to zero. Not doing so in this case exaggerates the comparison unnecessarily, leaving you open for accusations of bias.
Vote:June 22nd, 2011 at 9:38 am
Danyl you’re such a useless idiot. Of course Labour’s tax cut makes up most of it, but since you yourself state “almost all” then logically some of it came from National. Contrast this with Labour’s Rich Prick tax and the conclusion has to be that National were fair to all and Labour were a bunch of a**lickers (and most of those a**lickers are still on the benches)
Vote:June 22nd, 2011 at 9:42 am
Yeah, Danyl. Compared to Hunting and Fishing NZ, 100% of those tax cuts came from National.
Vote:June 22nd, 2011 at 9:44 am
Danyl, bear in mind that WFF gave 100% tax cuts to some people, while fiscal drag increased tax rates for many others. So while we are on the subject of Labour and tax, bear in mind that they preach fairness, and practice discrimination.
Vote:June 22nd, 2011 at 9:51 am
And of course it would be nice to include the no of tax payers in each group with the graph.
Vote:The intersting comparison will be once the full extent of the look through being applied to trusts etc comes into play.
We may see a bigrisein the higher bracket of incomes.
June 22nd, 2011 at 9:53 am
Labour believe the rich are undertaxed, and the ‘poor’ overtaxed.
Therefore, any reduction in taxes for high earners is wrong and is effectively the rich stealing from the poor.
Vote:June 22nd, 2011 at 9:56 am
queenstfarmer says: “That said, it might be smart politics for the Govt to consider a “super-rich-prick” tax of some sort, say for the top ~1% of taxpayers.”
Why? (Apart from the reason that includes envy).
Vote:June 22nd, 2011 at 9:58 am
“Just like how a bank which pays 5% interest on your investment pays mroe money to someone with $10,000 invested than $2,000 invested.”
Interesting concept DPF. Maybe this could be a new Labour Party policy
Graduated interest payments. Pass a law to make banks pay more interest for lower deposit accounts than those rich pricks who have hundreds of thousands in their accounts.
Example
Person with under 2K in the bank earns 15% pa inerest on their sum.
Person with 100k in the earns 2% pa inerest on the deposit
If it is good enough for the tax system then why not the banking system?
Vote:God – This is brilliant
June 22nd, 2011 at 10:01 am
Well FWIW this leftie thought Key & English did a pretty good job of explaining their tax cuts when that budget came out.
And that when the usual suspects started talking about “it’s just National looking after their rich mates” it all sounded hollow and robotic and like a bunch of disaffected people just saying whatever it is they always say at budget time, regardless of what the facts may actually be.
Vote:Oh and they were clearly wrong but they said it anyway, and got airtime anyway.
It wasn’t a very impressive time for the political left in NZ. It still isn’t…
June 22nd, 2011 at 10:02 am
With a nice sense of timing there’s this quote today:
That’s President John F. Kennedy in 1962.
Yes. He was a Democrat.
Vote:June 22nd, 2011 at 10:07 am
If you raise taxes on high income earners sufficiently this will drive some of them to leave the country or to work less hard. This will increase equality in New Zealand leading to greater social harmony.
Vote:June 22nd, 2011 at 10:08 am
Danyl and leftyliberal made a couple of good points.
The graph is misleading and the post gives the impression that the ‘grudging’ Labour cuts contributed almost nothing.
There’s a bit more to consider about tax rates than just the extent of cuts. What contribution has the reduced income tax played in the increased government deficit, and how could that deficit be reduced by tax increases or expenditure decreases, or a combination of both?
Vote:June 22nd, 2011 at 10:13 am
That Kennedy quote was from the Powerline blog, but I thought the next quote from the author, Steven Hayward, is also appropriate in understanding what’s really driving the Left and Labour today. Traditional class warfare has been welded to something “new”:
Vote:June 22nd, 2011 at 10:26 am
I think National should put out a set of tables on how much taxes would rise if you elect a Labour Government. People on middle incomes would be hurt the most. Too often National does not get down and fight the Labour Party because it is beneath their dignity. But there is a good story to tell on taxes and National should sell it hard.
Vote:June 22nd, 2011 at 10:33 am
Elaycee
Sad really that you have nothing to contribute to a discussion.
Vote:June 22nd, 2011 at 10:35 am
the impression that the ‘grudging’ Labour cuts
There was a distinct and wide viewed perception that the Cullen cuts were grudging and forced by electorate pressure, afternearly a decade of gradually increasing effective tax rates for most taxpayers.
Putting on a “rich prick” tax on over $200k might make some people feel better but I think it’s effect would be minimal on tax take and maximal on arranging one’s financial affairs or departing for Australia.
Vote:June 22nd, 2011 at 10:41 am
You know what’s interesting?
There are two main attitudes towards a just distribution of wealth.
For one group of people, taxation is a necessary evil that taints the basic justice of an unequal distribution of wealth. For the other group, an unequal distribution of wealth is a necessary evil that taints the basic justice of redistribution of wealth via taxation.
Vote:June 22nd, 2011 at 10:44 am
Another way to think about the above graph, regardless of who implemented it was: Is what was done right? Should we be reducing the tax rate in this way? If so, why? If not, why not?
Both National and Labour consistently roll out the “tax cut” hook – they just target it at different groups. Over the years you get erosion of tax revenue that has to be compensated by increasing tax revenues in other ways, decreasing spending, or increasing debt.
Furthermore, each time you massage the method of taxation increases the complexity of the tax system, which can only reduce efficiency.
How about a graph showing the real effect of todays tax system (i.e. average tax paid across all tax groups by people in differing income brackets)?
Vote:June 22nd, 2011 at 10:47 am
Labours message is”aspire to mediocrity”
Vote:Success will be punished
June 22nd, 2011 at 10:50 am
milkmilo – another insightful comment from the full time moron.
The problem with socialists is that you totally rely on the ability of average people like me to get off my arse and earn a dollar, so my taxes can be used to bribe another bunch of welfare dependent socialists.
You should be very grateful that higher income earners / taxpayers don’t pack up and piss off overseas, because if this was the case, there would be no more handouts for the likes of you.
Vote:June 22nd, 2011 at 10:58 am
That tends to be something that happens in capitalist welfare systems, rather than socialist systems. Can anyone guess what happened to people who lazed about not pulling their weight in Soviet Russia?
Vote:June 22nd, 2011 at 11:02 am
Funny you should say that as I was just thinking about where the whole “equal distribution of wealth” goal leads you – to a Russian joke:
They pretend to pay us – and we pretend to work
Vote:June 22nd, 2011 at 11:22 am
“You should be very grateful that higher income earners / taxpayers don’t pack up and piss off overseas”
Of course, it’s much better that lower income earners / taxpayers are packing up and pissing off overseas in record numbers.
Vote:June 22nd, 2011 at 11:32 am
@Robboy – if the demographic heading overseas was dominated by career dependents, then I’d say it was bloody marvellous.
Vote:June 22nd, 2011 at 11:42 am
@Elaycee: Are you suggesting that the reason they’re going to Oz is so that they can stay a dependent?
Or perhaps they’re actually going because they feel they can earn enough that they no longer need to be dependent?
If the latter, it is indeed bloody marvellous for the individuals concerned.
Vote:June 22nd, 2011 at 11:54 am
@leftyliberal – “Are you suggesting that the reason they’re going to Oz is so that they can stay a dependent?”
Not what I said at all – please read Robboy’s comment and the subsequent exchange of posts between us to get it in context.
But for my money, NZ can’t afford to maintain the current number of people dependent on the State. The number has to be reduced – in addition to pruning back unnecessary Government costs. I think we’d all agree that we have to live within our means.
But rather than increase the taxes on those working, I’d prefer to see the focus on increasing the number of jobs that will in turn create more taxpayers. We need to get out of the ‘envy’ based policies and if someone has been able to create wealth by establishing and maintaining a profitable business, then they should be encouraged to create more and more jobs (that will increase the number of taxpayers).
My view anyway.
Vote:June 22nd, 2011 at 12:00 pm
Elaycee
I broadly agree with that, as possibly most people would, so it’s the specifics that become important. What mix of welfare areform, other expenditure reductions and tax changes gets us to a better state?
Vote:June 22nd, 2011 at 12:03 pm
On that point – is there any list of the employment or status of those emigrating? There must be something somewhere that shows the employment status of the departed.
Vote:June 22nd, 2011 at 12:06 pm
I would suggest that if we keep on the track we are then a ‘Greece’ beckons.
Something has to be done or do we just give up and become full-blown socialists. The Cuba/North Korea of the South Pacific.
Individuals and countries have one truth. You can’t borrow your way out of debt. It just catches up with a person much quicker than it does with a country.
Vote:June 22nd, 2011 at 12:11 pm
Christopher
Stats NZ provide monthly data on migration, but do not seem to collect much data on those leaving.
Vote:June 22nd, 2011 at 12:28 pm
Maybe we have to be radical in our tax approach.
1. Slash company tax to 15%。
Vote:2. New companies setting up in NZ go tax free for the first three years to give them time to get established and employ more people who will then also pay tax and be off welfare.
3. Have a capital gains tax excluding the home you reside in.
4. Have a luxuries sales tax of 25-30%. This should get more tax from expensive imported goods. The rich will still want them for status reasons.
5. The first $30,000 you earn in employment is tax free. This is to help reduce tax churn and bureaucracy.
6. Companies which employ more than 1000 full-time employees have their tax rates reduced to 12%.
7. Phase out WFF.
June 22nd, 2011 at 12:42 pm
@Elaycee
Cynical pragmatism. It would play well with a lot of the public. and take some wind out of Labour’s sails.
Vote:June 22nd, 2011 at 12:51 pm
@AlphaKiwi: Why slash the company tax rate? How does that ensure the creation of jobs? More money staying in the company does not imply more money spent on labour.
Vote:June 22nd, 2011 at 12:55 pm
AlphaKiwi
Generally good ideas. I’d be interested to know what revenue effect such a drastic cut in company tax would have, also the relationship between company tax rates and business/employment expansion.
Vote:June 22nd, 2011 at 1:06 pm
There certainly has been (they collect the info of course) – if you look hard enough you’ll find it on one of the news organisations sites from the last year or two. IIRC the people leaving comprised of a lot more of those in unskilled/semi-skilled positions than you’d think.
Vote:June 22nd, 2011 at 1:19 pm
@ leftyliberal
Some companies would take on more staff if they had more money to spend.
More importantly for growth of the economy, low company tax rates would make us more competitive than many other countries and encourage more businesses to set up business here, therefore employing more people who would then pay tax.
@milkenmild Me, too. I’m no expert. NZ is going down the gurgler, so I think the risk would be worth it anyway.
Vote:June 22nd, 2011 at 1:19 pm
Stephen, that would be my thinking too. Those with a job and a mortgage etc don’t fancy picking up and starting all over again. That’s my excuse anyway.
On the other hand my boy was a qualified builder but ran out of work in May last year and went to Perth. Now he’s earning A$1300 a week at a massive construction site up north with all expenses paid. So far he has paid of NZ20k of debt he left behind, taken holidays to Raro and China, has A23k in the bank and got engaged to his girlfriend with a $15k ring. Her story is about the same. She had qualified with all sorts of clothes design credentials. She had been stuck in a sales job wiht promises of management roles that never materialised. When she told them she was going it was “whatever it takes to keep you here”. They should have done that sooner. Now she is manager of her own store in a new shopping precinct.
Are either coming back – not anymore.
Vote:June 22nd, 2011 at 1:29 pm
Alphakiwi, how about we get way more radical:
1. No company tax at all.
Rely on taxing distributions (ie dividends).
We’d want to toughen the regulations on thin capitalisation and on liquidations (to avoid people using liquidations to effect tax-free returns to shareholders).
Way lower compliance costs for companies and for the government. Encourages companies to re-invest in productivity enhancing investments. Likely attracts a number of offshore companies to New Zealand.
Vote:June 22nd, 2011 at 1:36 pm
It’s a pretty good excuse, and of course ‘later in life’ people don’t really want to leave their friends and family if they’re on to something like ‘a good thing’.
I must confess to being in something like the same boat as you boy – I’ve been in Sydney for three months for a 62% pay bump. Buying a house here is really something else though, I’m going to have to marry rich! My old employers did throw a sackload of cash at me when I told them I’m leaving (WAY more than I thought they could throw!) but still wasn’t anywhere near enough, and money wasn’t the only reason in this case though it was a major one.
Vote:June 22nd, 2011 at 1:39 pm
Sadly I’ve come to the conclusion that that will be my children’s fate also. I’ve got ties here that would be hard to break and my preferred backup is the USA, which has even worse shit on the horizon than we do – although it’s nothing they could not turn around rapidly if they had the political will. But my kids will be free.
I’m pushing all of them to aim at an entrepreneurial lifestyle rather than a wage/salary job – but I also have to recognise the fact that if any of them did start a business here they’d have the likes of “Sanctuary” and “Mickey Savage” on their asses forever, not just for ever-increasing taxation but everything else, plus being a whipping boy every election. No point really.
Vote:June 22nd, 2011 at 2:27 pm
The part of NZ’s predicament that defies belief is that given a Government with vision & steel balls we could have it all. Take the wretched Greens out of the equation & mine our resources such as coal, gold & oil & we would be in the cream. We don’t have to create a wasteland. Modern mining techniques are relatively surgical & land can be reinstated.
Instead we pitifully dissect the economic cake, tax the crap out of winners & fight over the crumbs while letting the luddites dictate our children & grandchildren’s futures. The Greens should no longer be looked upon as benign nutters….they are the enemy.
Vote:June 22nd, 2011 at 2:35 pm
Nasska says: “Instead we pitifully dissect the economic cake, tax the crap out of winners & fight over the crumbs while letting the luddites dictate our children & grandchildren’s futures.”
Totally on the money.
Ka – ching.
Vote:June 22nd, 2011 at 5:04 pm
The graph is biased. Can we see the data behind the graph? It looks like dodgy as.
Why not use the Zaphod Key measure of blocks of cheese? I’m sure those over 100k income can afford a lot more cheese from the cuts given to them than those on 30k.
Even looking at your graph with the poor comparison it’s clear that those earning under $32k got shafted. If the measure was fair the graph would decline over the whole length not rise to $32K and then taper off
Vote:June 22nd, 2011 at 6:17 pm
Can’t argue with that logic!
What exactly is the problem? More specifically, where is the bias?
No. That’s not clear. You’d really need to know how much tax they were paying in the first place! Someone paying no tax would gain no benefit from taxcuts – but they’re hardly being shafted.
Vote:June 22nd, 2011 at 6:34 pm
The graph is misleading, in that it artificially presents the quantum of benefits from the tax cuts by starting the y-axis at 15%.
It also fails to distinguish between the effects of Labour’s ‘grudging’ tax cuts and National’s.
Aside from that, a splendid post!
Vote:June 22nd, 2011 at 6:52 pm
mikenmild the point DPF was making was those on lower incomes recieved more of a benfit than those on higher incomes. Whether the axis went to zero or not you can still see that.
The point of Labours tax cuts was to attempt to bribe the electorate to giving them another term, it had nothing to do with them thinking it was a good idea. Therefore they shouldnt get much credit for them.
I don’t understand why everyone who advocates a capital gains tax wants to exempt the family home. Including it on everything drastically slashes compliance costs (relative to tax raised) and potential avoidance. Plus it would make home owners realise houses going up in price was a bad concept and encourage more downward pressure on prices (a house going up doesnt make the owner/occupier any better off so theyd suddely want it to stay the same price). It would raise significantly more tax allowing income (and potentially other) taxes to be slashed and make everyone better off as taxes would be less of a disincentive to work harder.
Vote:June 22nd, 2011 at 7:19 pm
Bullitt
I’m all for a broad capital gains tax. Your argument makes perfect sense.
I think your first comment comes down to ‘tax cut from Labour = grudging and sneaky’ but ‘tax cut from National = noble and generous’. I think there’s more to it than that.
Personally, I hoped there’d be bit more discussion about AphaKiwi’s comment at 12.28, at least those are some ideas for a debate. Too much of Kiwiblog is insults rather than discussion
Vote:June 22nd, 2011 at 7:36 pm
i love how lefties struggle with this concept
“Now of course when you cut taxes, those who pay more tax get a larger tax cut. Just like how a bank which pays 5% interest on your investment pays mroe money to someone with $10,000 invested than $2,000 invested.”
and also – fuck you low earners. you had it sweet for fucking years.
i felt like a dude in the matrix under labour – hooked up to the system like a battery, paying for the shit heads you left school early and dont like to work.. ohhh and the few poor bastards that genuinely struggle (who still get the same amount of help).
if you dont like what you earn, stop watching tv for 5 hours a night and up skill
Vote:June 22nd, 2011 at 8:04 pm
“mikenmild the point DPF was making was those on lower incomes recieved more of a benfit than those on higher incomes.
…As a percentage of earnings. Which DPF chose because it supports his case. What are the raw figures, and how much of a difference do they make to the people who got them? Percentage tax reduction doesn’t mean anything to real people – how much extra they have in their pockets does (oh, and how much they are having to pay in increased costs elsewhere – including GST).
“and also – fuck you low earners. you had it sweet for fucking years.”
I’d love to see your definition of “fucking sweet”…
Vote:June 22nd, 2011 at 8:22 pm
Lies and statistics. Nearly the entire differential will come from Labour’s tax cuts which increased the range the second to lowest bracket operated in significantly, and reduced its rate by memory. Nationals tax cuts on the other hand favoured the better off, with an axing of the top rate, made up by an increase in GST. So yeah National has favoured higher earners.
You can believe its the right thing to do, but stop misrepresenting the what is attributable to who.
Vote:June 22nd, 2011 at 8:25 pm
Yeah Jeff, pretty weak effort really. Like the nonsense trend line for the opinion polls. I don’t think DPF’s really trying.
Vote:June 22nd, 2011 at 8:25 pm
dime says: “if you dont like what you earn, stop watching tv for 5 hours a night and up skill”
Exactly.
And if you don’t like the thought of being kicked off the dole because you can no longer make a career choice based on welfare, then maybe its time to get a job….
Vote:June 22nd, 2011 at 8:43 pm
weizguy – had it sweet = being the recipient of my money.
i also dont recall labour putting up their tax rate? calling them pricks? did that happen?? they are the first to get any relief.
but ah no, its not FAIR that some dude paying $3000 in tax a year gets less money back than a guy like me paying ten times that
Vote:June 22nd, 2011 at 8:47 pm
dime
I think the argument could be better focused on what the tax system should move to from here. That’d be more constructive than arguing over who cut or raised taxes when.
Are any of the current income taxes too high or too low? What mix of tax and spending changes would reduce the deficit?
Vote:June 22nd, 2011 at 9:46 pm
mike – those answers all easy. scroll up, theres a bunch of options.
you know what would make things a bit nicer? some of you lefties being a bit more appreciative of the high income earners and employers that enable these hand outs in the first place. i get sick of being told im greedy or im a rich prick and things arent FAIR for low income earners. i dont like being vilified for being successful.
in the last 2 years ive created 3 full time jobs, paying 3 times the minimum wage, maybe more and 1 part time job from scratch. but according to militant lefties, im still the asshole.
bugs me.
those jobs were created in the worst recession of all time i may add. a big punt on our part. a simple goddam thank you from the parasite lefties scabbing off society would be nice.
ok, rant over.
Vote:June 22nd, 2011 at 10:01 pm
“A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.”
Alexander Tyler, 1787
Vote:June 22nd, 2011 at 10:17 pm
“weizguy – had it sweet = being the recipient of my money.”
So earning the minimum wage, or close to it makes things “sweet”, because they had some of “your” money. Right.
“but ah no, its not FAIR that some dude paying $3000 in tax a year gets less money back than a guy like me paying ten times that”
Where did I say anything about fairness? Or about getting “less” money. I was simply pointing out that DPF chose a measure that doesn’t give us a very good indication of what these tax cuts mean to the people getting them. For instance, my tax cut last year was in the thousands, whereas someone on the minimum wage would be paying around 100 less tax (offset by GST changes). This isn’t (at this stage) a question of fairness, it’s a question of what those tax cuts actually mean – then we can have a conversation about fairness.
Vote:June 22nd, 2011 at 10:26 pm
Hilarious reading through this thread. The basic presuppositions of left and right economics are different. The left believe everything earned belongs to the state and taxation is a mechanism for the state to release some resource, preferably the same qualtity, for us to live on irrespective of how much was earned by individuals. It is an absolutely failed ideology. I’ve never resented paying tax – and I’ve paid heaps – but the notion that tax cuts unfairly favour ‘the rich’ is outstaning nonsense from the very people who refuse to move to countries where regulated wealth redistribution has been left to wreck economies, lives and futures.
Vote:June 22nd, 2011 at 11:13 pm
Hilarious as in tragic for the country kk. If only the lefty fools would understand they only undermine their very own base by the politics of envy, yet since they’re clearly not clever enough to think of some other meme that wouldn’t undermine the economy and promote them amongst their base, they simply persist in advocating the failed policies of the noughties, despite the carnage it’s caused.
I’m really not interested in Australia but that’s a place where strangely, having continued apace with Rogernomics over the decades since we abandoned it, they have prospered and we have faltered. How pray tell do lefties explain that. Esp given the national Aussie propensity toward laziness, lack of education and a strong trade union movement. Yet in spite of all of that, they prosper and we falter. Sure they have their lefties but their lefties are realistic and know what makes sense in the economy and what doesn’t. Ours don’t. Not even our mainstream lefty party promulgates realistic viable policies, instead all their naive ramblings are based on what they think their base want to hear, rather than what they know is right for the country and thereby for their base.
Their idiocy is profound, surpassed only by their evil. For I refuse to believe people like Goff don’t actually know what the right answer is. They know. They just don’t want to do it. One word sums them all up. Arseholes.
Vote:June 23rd, 2011 at 7:45 am
reid
I’d like to now what policy differences followed in Australia have led to their comparative wealth over NZ. Compulsory superannuation? Digging up lots of minerals?
Vote:June 23rd, 2011 at 7:50 am
Failure appears to be NZ’s destiny. Abetted and facilitated by a socialistic mindset and the policies of envy propagated by every government over the last two decades.
Vote:June 23rd, 2011 at 8:31 am
@Reid 11.13pm – Well said – you’re totally right.
But its a WOFTAM to try and explain that to the dog whilstling, Labour apologists who spend their entire day on Kiwiblog trying to spin the usual propaganda.
If you have any doubt about that statement, just take a look who posts early in the morning and late at night – with barely a stop in between for a pee (or a job search).
Same old, same old.
Vote:June 23rd, 2011 at 9:22 pm
Ironically Dime, Labours tax policy was much more pro own your business than Nationals, by way of their complete inability to achieve what they intended.
If you structured your affairs correctly, you would pay yourself the maximum you could up until the third tax rate (i.e. 24% by memory) which they ended up extending its range. You would then pay tax in the company on any amount you wanted to reinvest so it was taxed only at 30% and then the rest would be distributed by tax free loans redeemable on demand via your family trust and taxed at 33%. Topped off with some WFF if you had a family the tax structure worked out quite well for business owners.
Those on the other end earning high amounts via salary, i.e. professionals, got pillaged because such simple tax planning isn’t an option.
Under National they have curtailed some of these disparities (trust rate is same as top rate – can’t avoid income being counted for WFF via trusts – GST is harder to get around at least legally).
In saying the above, I agree with you, I too strongly dislike those who critise the people who are prepared to take a risk, grow a business and employ people for daring to get ahead. It annoys me. But I hardly think National has done what is best for small / medium business in NZ, and most of its pro business dealings have really only favoured large established business, with the exemption of the 90 day rule.
Vote:June 24th, 2011 at 11:10 am
nasska (849) Says:
The part of NZ’s predicament that defies belief is that given a Government with vision & steel balls we could have it all. Take the wretched Greens out of the equation & mine our resources such as coal, gold & oil & we would be in the cream. We don’t have to create a wasteland. Modern mining techniques are relatively surgical & land can be reinstated.
Go look at this travellers report about Nauru as a case study about what happens after you transfer your mineral wealth to other countries.
http://edition.cnn.com/2011/IREPORT/06/17/nauru.colt/index.html?iref=allsearch
If the government were really serious about mining our mineral wealth they would be doing it for strategic advantage (like China and rare earth metals) rather than selling rights to anyone for a pittance of tax.
Vote: