Bill English knows a thing or two about screwing every possible cent out of the system. He gets his generous $276,000 salary. For years he received his unjustified Wellington accommodation allowance. The rules were changed so he could get an even bigger Wellington allowance as a Minister, but he got caught out and grudgingly paid that back. Bill gets all his other perks and benefits, he gets a free TV, he gets his house cleaned at taxpayer’s expense. He even managed to find time in his busy schedule to make sure he applied for an extra $20 per week for an extra hour’s cleaning (that’s some impressive attention to detail!). He made good and sure he screwed every last penny out of the taxpayer.
But Twenty Dollar Bill wants us to do as he says, not as he does. Playing the rules to maximise your income simply isn’t on says Bill:
Finance minister Bill English has signalled the government will next year get tough with tax-dodgers by closing loopholes that allow wage earners to avoid paying their share of tax.
The IRD says the government is missing out on $300 million a year because of wage earners who squirrel away money into trust accounts to avoid paying the top income tax rate. More is lost because of earnings that are “sheltered” by a company created solely to avoid tax.
The IRD, in its latest submission to the Tax Working Group, says the problem is that New Zealand’s multitude of tax rates is encouraging bad behaviour. It said the trust account and company tax rates were too far out of line with income tax rates. Taxpayers were placing income in a trust account, paying 33 cents for every dollar earned, rather than the top rate of 38c. Another common ploy was for individual taxpayers to “shelter” their money by creating a company so that they paid 30 cents of every dollar earned in tax rather than the top rate.
English said large-scale “legitimate avoidance behaviour” by higher-income earners undermined the goodwill of lower-income earners.
This seems like a good initiative. Close the loopholes that let people avoid paying their fair share of taxes while still “passing the legal test” (as Bill might put it). Stop the abuse of trusts (how’s the Endeavour trust doing Bill?). That sort of thing. But for blindingly obvious reasons Bill English has no credibility in making this call. He screwed the taxpayer for every penny. Any punter out there avoiding taxes will be inclined to ask what business Twenty Dollar Bill has telling them not to do the same…