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Polity: MSD dumps on National’s “net tax” nonsense

Written By: - Date published: 3:33 pm, July 10th, 2014 - 47 comments
Categories: capital gains, Economy, gst, housing, national, Politics, public services, same old national, tax, welfare - Tags: , ,

polity_square_for_lynnReposted from Polity.

Even the government’s own advisors think the “net tax” figures have been brandishing in recent years are a crock. Here’s an exact from page 20 of MSD’s Household Incomes Report out yesterday:

  • For half of households with dependent children the amount received through welfare benefits and tax credits is greater than or equal to the amount they pay in income tax.
    • For example, single-earner two-child families with less than around $60,000 from wages pay no net income tax. They receive more from WFF tax credits than they pay in income tax and ACC.
    • Such households nevertheless pay GST on almost all the goods and services they purchase. A more comprehensive analysis needs to include tax paid through GST especially as lower-income households generally apply all or almost all their income to expenditure on GST-able goods and services, whereas higher-income households apply a lesser proportion of their income to GST-able expenditure, with a portion going to savings and interest payments which do not attract GST. GST outgoings are therefore generally a higher proportion of the income of lower-income households than for higher-income households.

(Emphasis added – RS)

MSD is, of course, absolutely right. I have been making this argument publicly for several years. (Here is my most recent.)The astonishing thing here is the government’s own advisors breaking ranks.

MSD has gone out of its way to criticise the misleading way that government Ministers are presenting information to New Zealanders about their tax system. That is a brave thing to do, in the best traditions of the public service. Good on MSD for doing it.


Rob Salmond also points out from the MSD report, the effect of:-

 

47 comments on “Polity: MSD dumps on National’s “net tax” nonsense”

  1. Tracey 1

    the govt has been misleading people?!?

  2. greywarbler 2

    But somehow these National fools seem to still [be lying that we are in] the 1970s.
    FIFY

  3. Philj 3

    xox
    Mike Joy, water quality scientist, said last night in Wellington that government statistics (DOC, MBIE etc) were often unavailable, non existent, massaged or incorrect.How often have I heard that lately? The government didn’t want to know the child poverty stats and declined to fund the collection of them! They really don’t want to know, cause we have a rock star economy and booming growth. haha!

  4. Jim47 4

    The national party say income tax .
    Gst is consumer tax.
    So their claim is correct.

    • Tracey 4.1

      and misleading

    • One Anonymous Bloke 4.2

      ‘The truth, the whole truth, and nothing but the truth.’

      There’s a reason it’s phrased that way. What a pity they aren’t held to that standard.

    • joe90 4.3

      The national party say income tax .

      A lie.

      “I utterly reject those propositions. Twelve percent of households pay 76 percent of all net tax in New Zealand,” he said.

      http://www.radionz.co.nz/news/political/244476/%27fudge-it-budget%27-for-a-few-labour

      • One Anonymous Bloke 4.3.1

        Jim47, meet exhibit a: the lying Prime Minister, who’s been lying to you.

        Just say no to his lies.

      • Lanthanide 4.3.2

        joe, I listened to the sound bite on the radio at the time (and posted on The Standard at the time) that I think that transcription is incorrect. I am pretty sure Key said “76 percent of all net income tax”. The reason I’m sure that’s what he said, is because when I first heard the topic brought up, I paid close attention to what he said to check if he would say “income tax” or not, and was satisfied that he had.

        I subsequently spent about 30 minutes trying to find the audio on the RNZ website but couldn’t. I believe the soundbite was included in one of their hourly updates, which are only kept for 24 hours, and it was around 30-36 hours after the fact when I went looking for it.

        • framu 4.3.2.1

          isnt what key actually said somewhat irrelevant?

          given he leaves wiggle room in his words so frequently i think we need to switch to ‘what a reasonable person would take keys words to mean” setting

  5. Gruntie 5

    If course they are Jim47 – the govt would never spin anything would they on a Planet Key where everyone is happy, living in warm homes and well fed eh?

  6. Naki man 6

    I would think that low income people spend a larger proportion of their income on rent or mortgage
    than those on a larger income, therefore paying bugger all in GST.

    • One Anonymous Bloke 6.1

      So they’re either paying the landlord’s tax or the bank’s tax and the rest goes on GST, but no capital gains? Good to know, and perhaps if you could “think” you “woulda” seen it coming 😆

      • Naki man 6.1.1

        No they don’t pay the landlords tax or the banks tax you dickhead. Only an idiot like yourself would come up with such crap.

    • In Vino 6.2

      So it is great for people whose income mostly goes on rent to have so little left to pay GST with? Compassionate little rat-bag, aren’t you Naki half-man?

  7. dimebag russell 7

    thats what you think.
    find out the truth and tell us all.

  8. dimebag russell 8

    I see naki man has not come back yet with the skinny.
    I guess it was just an opinion then?

  9. Weepu's beard 9

    I’m so angry right now. This government shall be known as the fifth National government for massaging figures.

    • dave 9.1

      i think we going wake up one day to find out we are in a massive hole and we are as broke as Ireland Greece or Spain . with all the book cooking figures cants be trusted . house hold debt levels are a basket case of which i fear will end up unpayable debt and a blight on the prospects of an entire generation while the private sector socialises loses privatises the profits kiwi saver and Cullen fund will be plundered because there only pools of capital we have .

  10. Descendant Of Sssmith 10

    Well duh someone on benefit clearly receives more cause otherwise they’d be paying to receive a negative benefit.

    Anyway lets see a report that tells you which businesses employees receive more in benefits than they pay in tax.

    Who are these businesses that don’t pay enough money to their employees, despite all the business tax cuts in the last 30 years that they said would enable them to pay pay increases and create more jobs, to live off without a tax payer top up?

    About time some work was done to identify which employers are costing the tax payer so much.

    The US can tell you how much tax payer funding goes to McDonald employees or Walmart employees.

    It’s about time this information for NZ businesses was made public in NZ as well.

  11. riffer 11

    Hang on. I call bullshit on MSDs figures. I’m earning 10% more than the $60,000 figure claimed.

    I have a single income family. I’m paying just under $600 a fortnight and getting $212 in WFF a fortnight.

    How would you explain that then? I haven’t even started on the GST.

    Now I don’t mind paying tax – its my contribution to society. But I just can’t agree with those figures.

    What gives?

    • One Anonymous Bloke 11.1

      It sounds like the problem’s in the Maths somewhere.

      Post your entire household budget (don’t be shy) and let’s see if we can’t work this out together.

  12. riffer 12

    I also have two kids. And two others I pay child support for.

  13. riffer 13

    $67314 p.a.

    $2589.23 pay per fortnight.
    $545.82 paye per fortnight

    2 children, 9 and 14.

    WFF $212 per fortnight.

    My earnings ain’t that much more than the $60,000 quoted.

    What I spend my money on makes no difference to IRD or MSD.

    • One Anonymous Bloke 13.1

      I note you have four kids, not two. So, which of their figures are you calling bullshit on?

      • riffer 13.1.1

        I don’t get WFF for the two that don’t live with me. I pay child support for them. Please keep up.

        • One Anonymous Bloke 13.1.1.1

          The MSD example is a single-earner two-child family. You have four children. You also earn more than the stated “less than around $60k.” Please try and keep up.

          If your only evidence of ‘bullshit’ is your own circumstance you have a feeble argument.

          I’d be ashamed of it, but perhaps you have lower standards.

    • burt 13.2

      differ

      Back in 2007-2008 you would have been paying $673.92 per fortnight on that outrageously high income. You rich prick !

      See it’s people like you that got these bloody filthy tax cuts under National which has … Well it’s … It’s lifted NZ out of recession.

      • Draco T Bastard 13.2.1

        Once you take away the Christchurch rebuild NZ is still in recession and getting deeper all the time as all the wealth goes to the rich. It’s what always happens going back to the beginning of recorded history. It’s why every single religion that came out of the M.E. bans interest. It’s only hubris that has us believing that we’re any different.

        • burt 13.2.1.1

          M.E. religion … Yes… Those models of fairness and respect for human rights. Let’s use those examples to advance our far left agenda because people living under those doctrines are so much better off than under western democracies.

      • Draco T Bastard 13.2.2

        Once you take away the Christchurch rebuild NZ is still in recession and getting deeper all the time as all the wealth goes to the rich. It’s what always happens going back to the beginning of recorded history. It’s why every single religion that came out of the M.E. bans interest. It’s only hubris that has us believing that we’re any different.

        • burt 13.2.2.1

          Middle eastern religions. Those bastions of fairness and respect for human rights. Those empires of equality. Yep, let’s justify socialism using what are possibly some of the most draconian instructions on the planet. I can see the parallels between socialism and middle eastern religions in how they operate using coercion and control while keeping people poor funnelling wealth to the elite leaders – but I never expected somebody to hold them up as examples of viable economic models. Still, if you’ve never noticed the hardship socialism invariably creates for poor people while it’s pretending to help them ( just like religions institutions ) then I guess it’s no surprise you use them as a justification against capitalism.

          • Draco T Bastard 13.2.2.1.1

            Christianity is included in those M.E. religions.

            Anyway, the point I was getting at was the fact that interest causes the collapse of the economy has been noted and dealt with throughout history by removing it and/or regular debt jubilees. We’re actually trying very, very hard not to deal with it so that a few people can continue to get richer with the inevitable result that our economy is getting worse showing increasing poverty and instability. And all because of the selfish rich.

            Still, if you’ve never noticed the hardship socialism invariably creates for poor people while it’s pretending to help them ( just like religions institutions ) then I guess it’s no surprise you use them as a justification against capitalism.

            Two things:

            1. Piketty proved quite conclusively that we were better off under the socialist doctrines after WWII than we are now
            2. It’s capitalism that causes poverty and hardship for the many while rewarding the sociopaths
            • burt 13.2.2.1.1.1

              The selfish rich … Like politicians on great salaries using money extracted from low paid workers via union fees to pay for their political advertising ? Those self serving pricks, the sociopaths who claim to be helping the poor while banking their own money spending g the money of the poor to gain power ? Like church leaders ?

              I’m please you have at least one author you can quote, saves you claiming socialism works because your parents told you to vote Labour and you’ve just repeated the mantra without justification or acknowledgement that it always fails.

              • Draco T Bastard

                Like politicians on great salaries using money extracted from low paid workers via union fees to pay for their political advertising ?

                Wow, are you still trying to pass that lie off as truth? Or is it that you’re just to scared to admit the truth that people voluntarily support unions?

                Find anywhere on this board where I’ve said that I vote Labour. My politics is purely related to the facts – the facts that prove that capitalism and the rich are the problem.

  14. dave 14

    i think the rental supplement should be cut and working for families there papering over the real issuse that real icomes are far to low

    • greywarbler 14.1

      @dave14
      You don’t care if families are struggling, homeless or starving then, just so you can point your finger at the oppressor and declaim ‘Look how bad you are, you mean and hateful person, fie on you, I speet on your boots!’

      While we are waiting for better conditions and fairer distribution, I want to keep the payments that enable families to function at the same level or better, more than they are getting now. T

      There is nobody more contemptible than an idealist who doesn’t actually care about people’s lives or needs.

    • greywarbler 14.2

      @dave14
      You don’t care if families are struggling, homeless or starving then, just so you can point your finger at the oppressor and declaim ‘Look how bad you are, you mean and hateful person, fie on you, I speet on your boots!’

      While we are waiting for better conditions and fairer distribution, I want to keep the payments that enable families to function at the same level or better, more than they are getting now. T

      There is nobody more contemptible than an idealist who doesn’t actually care about people’s lives or needs.

      (lprent I’m getting a message too when I go to submit that the page has been reset. I’ve gone back and added this so will see what happens now.)

      • dave 14.2.1

        rental supplement only end up in landlords pockets and working for family s subsidise low wage employers while the top 10 percent get a free ride at the tax payer expense, housing became unaffordable because the wankers pushed easy credit with no restrictions turn off the gasoline and leave the dirty speculators high and dry i do care but we must get the cost of living under control because our fuck up economy only benifits key and co.

    • greywarbler 14.3

      @dave14
      You don’t care if families are struggling, homeless or starving then, just so you can point your finger at the oppressor and declaim ‘Look how bad you are, you mean and hateful person, fie on you, I speet on your boots!’

      While we are waiting for better conditions and fairer distribution, I want to keep the payments that enable families to function at the same level or better, more than they are getting now. T

      There is nobody more contemptible than an idealist who doesn’t actually care about people’s lives or needs.

      (lprent I’m getting a message too when I go to submit that the page has been reset. I’ve gone back and added this so will see what happens now.)

  15. AmaKiwi 15

    Governments are experts at new measurements to mask their failures.

    Problem: GDP is not growing, but governments want numbers to show it is so they can claim all is well under their leadership.

    New solution in Europe and the UK: This year many will include estimates of illegal drug sales and illegal prostitution in their GDP measurements!

    I’m not joking. This is for real!

    Too bad they don’t include estimates of bribes to politicians.

    • Colonial Viper 15.1

      Campaign contributions from Goldman Sachs which are spent by politicians on media buys and PR staff are already included in GDP figures.

  16. Takere 16

    And sole parents that earn more than the so called average wage of $52k say wah?? With Pullah Benefits push to get sole parents into the workforce with at least 20 hrs of work per week+. I can’t see them been accounted for or earning $60k. =Poverty Trap! With only this past week 490 laid off, NZ Post, Truck Co in the South and 200 miners too down south ….. there’s no way the 82,000 imaginary jobs Pullah & Joyce keep harping on about have ever materialised! Get rid of these monkeys!

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