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Goff: I’ll reverse unfair tax cuts for the rich

Written By: - Date published: 8:37 pm, April 24th, 2010 - 124 comments
Categories: capitalism, class war, Economy, tax - Tags: ,

Labour leader Phil Goff has come out swinging against National’s proposal to cut the top tax rate. In TV3’s The Nation Goff said he would reverse any reduction National pushes through of the top tax rate from 38 cents in the dollar.

This is common-sense stuff coming from Labour’s leader. New Zealand already has one of the lowest top tax rates in the OECD. It’s just crazy that National are pushing ahead with tax cuts for the wealthy based on a nonsense neo-liberal voodoo economics notion that it will somehow magically help everyone. What nonsense.

New Zealand is already a grossly inequitable place, with the wealthy already getting far more than their fair share. And Goff’s announcement on The Nation is an important line in the sand.

It’s great to see Phil Goff living up to his promise to stand up for the many, not the few. National’s plan will only benefit the very wealthy, like Prime Minister John Key.

Now we can stand assured, the 6th Labour Government will fix that injustice.

124 comments on “Goff: I’ll reverse unfair tax cuts for the rich”

  1. Fisiani 1

    Promising to put up tax out of spite of “rick pricks” shows Goff to be a true disciple of Michael Cullen

  2. Michael Foxglove 2

    I’ve heard lot of working Kiwis describe mega-wealthy people as ‘rich pricks’. Any why? Because there’s a (very accurate) perception that many of these people have no concept of what life is like for struggling Kiwis in their day to day life. There’s a social disconnect there. And you don’t fix it by making the rich even richer.

    • Jared 2.1

      Would you honestly describe those in the top bracket as mega wealthy? And I don’t mean those earning $100k plus. I know plenty of families that have the breadwinner on 70-80k a year, with a mortgage and kids it doesn’t exactly go far. I would have thought if anything Phil Goff would be trying to woo those in the top tax bracket not alienate them.

      • Michael Foxglove 2.1.1

        I didn’t describe those people who earn just over the top rate as mega-wealthy. The mega-wealthy are people like your mate John Key – the ones who will benefit by far the most from cuts to the top tax rate.

        Got anything to say about the social disconnect Jared?

        • Jared

          The social disconnect will always be extrapolated by flagrantly outrageous lifestyles of the minority that aren’t necessarily representative of the top tax bracket. Regardless of the perception of those “mega wealthy” they still pay the lions share of the income tax paid with people like Rob Fyfe, on $2.4 Million a year paying around $885,000 a year in tax. Considering the mega wealthy are funding the majority of government spending provided by income tax its not a bracket to be sniffed at when trying to score political points.

          • Captain Rehab

            of one hundred surveyed only half were paying their tax, Jarad and mostly they’re parasites living off the surplus value of the people who do the real work.

            • Jared

              They are? So they aren’t business owners providing jobs and income for employees, they aren’t doctors either. Just they are mostly parasites because they earn a good living, they couldn’t possibly provide benefit to society. Which is what it really comes down to, the value of a days work. Be honest, and I would argue the majority of those in the top bracket are decent citizens, who do you exactly despise? is your criteria simply that they are in the top tax bracket?

              • Descendant Of Smith

                No doubt Jared The Fair Minded you would also concede that the majority of people on a benefit are decent citizens also.

                So are the majority of workers. So are the majority of Maori, or unionists, or goths, or homosexuals, or Christians, or Greenies.

                Your point is.

              • Ari

                Do business owners arrange personally for those jobs to be created, Jared? Do they advocate on behalf of the continuation of those jobs when times get tough?

                Perhaps some do, but the answer is that there is nothing inherent in owning a business that makes one “create jobs”. Many businesses try to avoid creating jobs as much as possible, using automation, because it avoids conflict with organised labour. Business owners not involved in actually creating jobs merely skim the profits off the work of others- which is not exactly what I’d describe as productive enterprise. Maybe they worked hard for the money to get there, but we shouldn’t reward people so disproportionately simply because they already have money. If they want more, it should involve increasing the real wealth of society- that is, putting people in jobs, improving quality of life, and leaving the country a better place than we found it.

                Sadly that is an attitude that many businesses in New Zealand (especially the large ones that ship their profits overseas) don’t share.

                As for the top tax bracket: Personally, I wouldn’t mind if we removed some of the ways to cheat the top tax bracket and exemptions for investment, but we then moved up the income required to qualify for the bracket. You could easily make such a change in a revenue-neutral or revenue-positive way. There are certainly people who qualify for our top tax bracket that aren’t super-rich- which is an arguement for adding in narrower, higher-tax bands at the top.

                But none of that has to do with the fact that they’re decent citizens. Nobody’s suggesting we arrest them- just that their success gives them a responsibility to pay their own opportunities forward to the next generation, through taxes.

              • Draco T Bastard

                They’re not providing the jobs. They never have done. That’s done by the community. What they’re doing is controlling the jobs and the resources so that they become rich by other peoples work.

            • Alwyn

              Given the prevalence of polls that put National so far in front it appears that Phil will not, unfortunately, survive for long after the next election and will, like Helen, fall on his sword for the good of the party.
              He will then retire, like so many ex-MPs, with a six figure pension which is, I believe, completely untaxed. It is therefore hardly surprising that he is quite happy to have high rates of income tax bit is very unhappy with a rise in GST. The income tax won’t apply to him. The rise in GST will be difficult to avoid.
              Can anyone confirm whether the MPs superannuation, for people who have been there as long as Phil, is completely exempt from income tax or is this just a scurrilous rumour put about by some of my acquaintances who still rave about Helen Clark and Michael Cullen?

          • Sam

            But how much of the wealth do these people own?

            Come on mate, use your brain. Apples with apples, Jared.

          • marsman

            jared – ‘”mega wealthy’ they still pay the lions share of the income tax paid’

            is that not because they receive the lions share of income earned?

        • TightyRighty

          yea plenty, Take Sam Kelt, one of the countries mega-wealthy. this is a guy who got pulled over because his mid-seventies dunger had no warrant or rego, because he was too busy to get around to it. did he send a flunkey to sort it out? no, he did it. your whole premise is that many hard working kiwi’s should suffer because your envious of a few. mental disconnect? the green eyed monster is an ugly thing michael.

      • Draco T Bastard 2.1.2

        More distraction.

        1.) People on $70k to $80k with families aren’t paying the top tax rate due to WfF.
        2.) Those people in that bracket will barely be affected by the top tax rate anyway.

      • crib 2.1.3

        “I know plenty of families that have the breadwinner on 70-80k a year, with a mortgage and kids it doesn’t exactly go far.”

        And for those on < 50k a year it goes even less

      • Marty G 2.1.4

        ” know plenty of families that have the breadwinner on 70-80k a year, with a mortgage and kids it doesn’t exactly go far”

        If they’re on 70-80K then 0% to 12.5% of their income is subject to the 38% rate.

  3. Lazy Susan 3

    Good on Goff – NACT have enough money in the pot for tax cuts for the rich but zip for anything. else.

    Interesting to see that TV3 6pm news quoted Victoria University advocating a lower top rate of tax and increasing GST as “GST was a tax that the wealthy couldn’t avoid”, What particular rock have they been hiding under? The wealthy are well versed in the art of passing much of their expenditure through GST registered companies and claiming back the GST.

  4. OK so thats restoring top tax rate and restoring 12.5% GST. What about going the whole hog and wiping GST from all essential food and fuel, whacking on a property speculation tax, nationalising the banks profits not just their bad debts – that would give mortgage relief to those on 70-80k. Goff wouldnt lose one vote, he would win a huge majority. When the Aussie banks go off in a huff, Goff could do a Chavez and nationalise transport, energy and communications, unproductive polluting farms and bankrupt factories and use the Cullen fund to provide capital for their development. Then we could say that Goff owes Cullen something. But I guess that’s not what either had in mind.

    • Jared 4.1

      Labour would never even consider nationalising banks, clearly. And Mallard has already indicated that he feels removing GST on “healthy food” is a pointless and futile exercise. Whether the Labour party would be privy to removing GST on food in general when in power and not an up in the air statement in opposition (considering their opposition to removing GST on food when they were in power last) it remains to be unseen.

    • uke 4.2

      Now if Goff would then abolish those “bankrupt factories”, that would really be something. (Pigs will fly too, of course).

      It’s a funny thing about the Left, which I do count myself as part of: it’s accepted that some poor bastards are still going to have to waste their lives slaving away in factories.

  5. Jared 5

    Labour would never even consider nationalising the banks, and Trev Mallard has already said in a veiled statement that he thinks removing GST from healthy food is a futile exercise http://blog.labour.org.nz/index.php/2010/04/22/spot-the-irony/

  6. Draco T Bastard 6

    TV3 News talking about GST

    …that’s one tax that the wealthy can’t dodge

    Yes they can and do. There’s also the fact that the wealthy pay far less of their earnings out in GST as a proportion of their anyway. This means, of course, that the wealthy actually pay proportionally less tax than the poor.

    Tax alignment can be done – raise the business and trust taxes to 38%.

  7. SPC 7

    That’s the sort of distinction between National and Labour positions that helps Labour.

  8. just saying 8

    Two things:

    People only pay the top tax on income OVER 70,000. they pay the same tax on income up to the different thresholds as everyone else does. So those struggling $70,000 income earners won’t be much affected, even without working for families.

    And, I’m sick to death of this nonsense about the rich not being able to avoid gst. Many, possibly most, suppliers to business are quite happy to rewrite non-business purchases up as business expenses, to keep the bigger customesrs happy – after all they don’t want to lose them to another supplier who will accomodate this “need”

    And while I’m in a ranting mood – employing workers is not like sponsoring children for oxfam. Employers provide jobs to increase their profits, not to provide a public service. It’s self interest not public-minded self sacrifice.

    • uke 8.1

      “employing workers is not like sponsoring children for oxfam. Employers provide jobs to increase their profits, not to provide a public service. It’s self interest not public-minded self sacrifice.”

      Yes, this is such a strange self-righteous myth.

      Surplus value derived from the workers labour (profit) is also used by the capitalist to keep the workforce in their place; pay for all those right-wing employment lawyers to find new ways to screw them, fund political lobby groups (eg. roundtable) to deregulate, privatise, sell-off public assets and further stack the deck in the private sector’s favour.

  9. Sam 9

    It’s too late to be in before the foaming at the mouth ‘nz overtax the wealthy’ crowd, but fuck it, worth linking anyway:

    . Wonderful.

    • Descendant Of Smith 9.1

      Thanks for that link.

      The P is for Potential business modeling made me laugh out loud.

  10. Nick C 10

    The term ‘neo-liberal voodoo economics’ is thrown around a lot on this blog. May i suggest that the members of the tax working group know a lot more about economics than Michael Foxglove, or whatever his name is.

    • Marty G 10.1

      and where does the tax working group say that cutting the top tax rate will improve growth or reduce inequality?

      Hint: they don’t because it won’t. It’s just a wealth grab.

    • Draco T Bastard 10.2

      May I suggest that the tax working group is delusional. This is proven by the fact that they’re basing their entire report upon the delusional neo-liberal economics theory, a belief in capitalism and eternal growth.

      • Nick C 10.2.1

        They have PHDs in economics, you (im guessing) dont.

        • uke

          But then look at where putting our faith in the “expertise” of PhD-toting economists like Greenspan etc. has taken the world in the last two years, ie. down the global financial toilet.

          Maybe all these guys PhDs are in “how the stuff the world economy”.

        • Marty G

          Nick C. The TWG doesn’t say their tax reforms will increase growth and they say they will worsen inequality. So, we can listen to them. And they offer no substantive reason to adopt their suggestions.

        • Draco T Bastard

          When what they say doesn’t relate to reality there’s no point in listening to what they say or any value in their PhDs.

          • Jim Nald

            Some PhD thinking only dwell on particular parts of the brain in theorising in an isolated way but does not engage the whole brain and does not consider numerous aspects of issues in a wide-ranging holistic way.

            Just because those three letters may appear after a person’s name does not mean that person is authoritatively right and that your thoughts are worthless or incorrect.

            Listen, investigate and think for yourself.

    • Daveosaurus 10.3

      From observation, the term “voodoo economics” has been around at least since the 1980s. It appears to refer to the illogical thought process that is required to understand a system which consists of “1. Cut taxes. 2. ???? 3. Profit”, and voodoo was probably chosen as the metaphor because Underpants Gnomes didn’t exist back then.

  11. Mac1 11

    @Just saying,
    No, you’re not ‘just saying’, and I hope that you keep saying more with the passion and truth that you possess- it’s certainly not ranting.

    Since it’s now Sunday, “Amen, brother (or sister)!” to the last paragraph. This bollocks “public service” argument is trotted out to justify youth rates and minimum rates. My employer expects me to provide the service, funnily enough.

  12. Irascible 12

    It’s interesting to note that the PAYE equivalent tax in many European countries is 42% and in Scandanvia it’s higher.
    The low PAYE tax campaigns are designed to force the taxpayer into private insurance schemes (another form of taxation but this time for the private company) as the Government reduces its ability to provide social welfare and systems for the public good.

  13. gingercrush 13

    I’m not sure National is going to leave much room for Labour. This budget we’re likely to see tax cuts across the board (though certainly most will go to higher incomes); moves around depreciation on property; the removal of some areas to fix how much tax someone pays) but also a rise in GST to cover that. That still gives them one more budget to do more things around tax then no doubt something else at the election.

    Labour is right to focus on low and middle income earners (its their voter base) but I think its a mistake to be seen to be attacking the rich (or the so-so rich). Also the “many and not the few” is starting to sound stupid and Goff doesn’t pull it off convincingly. If they want to make change and have low and middle incomes earners the focus. There needs to be a no tax threshold (something National isn’t doing at though I suspect they might be looking at it) but if they want to either keep the top tax rate high or increase that tax they have to sufficiently raise the threshold. When Labour did that change in 1999 (or was it 2000?) and put the top rate of tax up for years they did nothing and allowed more people to enter that tax zone. Either cut the threshold so its $100, 000+ or make sure that the threshold changes so more and more people aren’t affected by it.

    There is also the issue that Labour is going to need to over promise this election. Unless something happens and the whole country is pissed off at National (and that isn’t likely no matter how much you on the left want to believe it) Labour is in for a real fight (my prediction they lose). Therefore, they will have to carefully balance over promising while removing the question of its affordability. Somewhat ironic I guess since it was the reverse position last election. But then National for over a year always looked like it was getting in and could get away with it (especially when Labour basically pinged the whole campaign on not trusting John Key and offered few differences to what they were doing the last nine years).

    Labour’s budget in 2008 and the world recession meant National had to change what they’d do with tax. The projections for growth weren’t that good and the surpluses were gone. National will likely do the exact same thing. Sure growth outlook is likely to be better and there may well be a clear path for surpluses again but we’re not entering boom times (no matter how Goff seems to paint it). Therefore, there just isn’t much room for Labour.


    BTW having watched that interview. All I can conclude is that Duncan Garner is absolutely terrible. Goff had little room to advance anything because Garner wouldn’t allow it. Instead the answers had to be simple because that’s all Garner allowed. What should have been an interview where we learned more about Goff and the future of the Labour Party. We got well nothing. Stephen Parker’s interview with Hide was rather awful too. The only thing I liked about the show was the new pieces on defence spending.

    Though why is it that whenever military (defence) experts are spoken to, they always have grandiose ideas about what defence capacity New Zealand needs and predictions of dangerous times ahead.

    • lprent 13.1

      Though why is it that whenever military (defence) experts are spoken to, they always have grandiose ideas about what defence capacity New Zealand needs and predictions of dangerous times ahead.

      Because military always focus on the capabilities of possible opponents compared to our capabilities. They don’t look particularly at expectations of intent. That is how they should look at the situation. They need to look at worst case scenarios for political intentions.

      To build military capabilities takes many years, usually up to a decade or more. However political situations can change in a much shorter time periods.

      Figure it through. Look at how fast Fiji has shifted from being moderately stable to a paranoid dictatorship in the last decade. Or have a look at the vast shifts in the Indonesian political system over the last decade. Or China in the decade after Mao.

  14. tsmithfield 14

    “Stupid is as stupid does.”

    Goff is set to reinforce the image of Labour as the party that loves to tax. National will have plenty of head-room to continue down the path of tax reduction as the economy allows it. Tax reduction certainly resonated at the previous election, and I suspect one term won’t have been long enough for the wheel to turn on this one.

    Furthermore, increasing the tax threshold for wealthy is unfair and pointless. Its unfair because those likely to be caught in the net are those who are unlucky enough to be high earning PAYE earners. Those who are self-employed or wealthy have a legion of accountants who can find the inevitable loopholes created by new tax changes. Thus, it is highly unlikely that this group will end up paying anymore at all because they can find lawful ways to avoid it. It is pointless because, in the extremely unlikely possibility of a change of government next time, the Labour government is unlikely to collect much more tax with this sort of move for the reasons I have just advanced. I think this was the experience the last time they put the upper tax bracket to 39%.

    Furthermore, despite the possibility that occasionally personal purchases are masked as business expenses by some wealthy, this practice would not account for the majority of purchases the wealthy make. For a start, it is illegal and they would be in deep shit if they were caught. Secondly, there are not huge opportunities for this sort of behaviour anyway. Sure, if you are building your own house and you are a builder, there will be opportunities. However, if you want to buy a luxury boat, it would be much harder to justify that as a business expense. Therefore, the wealthy will still pay more tax on GST because they spend a lot more in nominal terms than low income earners.

    • Ari 14.1

      Right, because promising to restore lower taxes in one area and restore higher taxes in another really just means you love to tax in general, rather than that you object to WHO is being taxed.

      Don’t be ignorant, let’s have a real debate please.

      As for the loopholes and exemptions being too easy for the rich to use, I agree. Frankly, we should close them and turn anything we still need into a benefit of one sort or another- the government is likely to be much more careful paying out money directly than in applying exemptions, and the rules are less likely to be abused that way.

      And actually, they do collect a lot of tax from the top rate even with the loopholes and cheats. There’s probably a disproportionate impact on the “upper class” workers of New Zealand than on the queens and kings of capital, however- which is a problem Goff should ALSO commit to solving.

      • Draco T Bastard 14.1.1

        There’s probably a disproportionate impact on the “upper class’ workers of New Zealand than on the queens and kings of capital, however- which is a problem Goff should ALSO commit to solving.


        PAYE doesn’t allow for businesses expenses, and working for someone else is still a business, whereas owning the business and/or trust does and it’s at that point that the “queens and kings of capital” get the advantage of being able to reduce the taxes that they pay.

    • just saying 14.2

      I think this is far more widespread than you realise. For example I guy I know is part of a business in which one of his major suppliers also sells bmx bikes, sports shoes and clothing, golfing and boating stuff………… get the picture. And as an added bonus this new “business equipment” is tax deductible at the end of the year. The business has the usual kind of innner city premises. Hmmmmm now what kinds of things would office and electronics suppliers sell that might be useful or desirable for his family and home?

      Maybe illegal, but with lots of you-scratch-my-back-I-scratch-yours, pretty much undetectable, and lets face it – there are many who see tax evasion as evidence of superiority and almost a moral duty against the evil state robbers, and many others that condone it.

  15. pinkoscantbetrusted 15

    How come this is posted on the Standard before the programme even aired ?

    [Umm – what? How come you’re too dim to click on the one and only link in the post? — r0b]

    • Marty G 15.1

      The Nation airs twice. 11am Saturday and 9am Sunday, I think. And it was on 3News last night.

  16. Descendant Of Smith 16

    Simple question tsmithfield – explain to me how National is going to pay for the future cost of NZS and aged care and health without increasing taxation.

    At the end of the day this is probably the most pressing issue that sits on our doorstep.

    The lower age to 60, the don’t income or asset test, the pay out of the consolidated fund NZS scheme that was introduced by National. Cause by the life of me I can’t see how lowering taxes is going to help meet this future cost.

    When we talk about catching up with Australia how come we never mention the fact their super is income and asset tested – including trusts, artwork, etc. That you can’t include underage spouses – they have to go to work. Employers also have to pay 9% towards their staff super.

    How come when you right wingers talk about matching Australia’s tax rates and when you talk about bludgers you don’t talk about matching these things as well. How often have I heard the well off say they want to pay less tax so they can make their own provision for these things.

    Well advocate to make your own provision – advocate to income and asset test the wealthy in return for lower tax rates. Advocate to remove the trust loopholes. Increase the number of investigative staff in IRD to run through businesses to check on rorting – man we would hear the whinging then – have a look at drawings from trusts to see where they are actually going.

    I’ve seen a quite a few where the money is going back to the person who set up the trust – not to those named as the beneficiary. If the named beneficiaries knew and cared their could be some interesting legal action at some point in the future.

    Let’s police these things much more vigorously.

    (Actually thank god we live in a country where they are not. Much of our system relies on people’s honesty and integrity and their social contract. If anything that is what irks people like myself – it’s not that you can’t do these things and get away with it it’s that so many do. )

    And before you mention people ripping off the benefit system irks me just as much but I don’t call the rest bludgers because of the few that do.

    • tsmithfield 16.1

      DOS “Simple question tsmithfield explain to me how National is going to pay for the future cost of NZS and aged care and health without increasing taxation.”

      We get more tax in by increasing the size of the pie available to tax, not by increasing the tax rates. Increasing taxes becomes self-defeating if it has the effect of reducing the size of the pie by reducing incentives to be productive.

      DOS “Well advocate to make your own provision advocate to income and asset test the wealthy in return for lower tax rates. Advocate to remove the trust loopholes. Increase the number of investigative staff in IRD to run through businesses to check on rorting man we would hear the whinging then have a look at drawings from trusts to see where they are actually going.

      I’ve seen a quite a few where the money is going back to the person who set up the trust not to those named as the beneficiary. If the named beneficiaries knew and cared their could be some interesting legal action at some point in the future.

      Let’s police these things much more vigorously.”

      Policing requires a cost-benefit calculation. Little point in spending $10 for every $5 of tax recovered. Better to make the tax system as simple as possible so there is a lot less scope for loopholes to be exploited. This also reduces the cost of administering the system. Think about it. A simple tax system would mean less need for enforcement, thus lower government costs. Also, businesses etc would be spending a lot less on accountants meaning more money to be put to productive use thus helping the overall economy.

      People who engage in tax evasion are stupid. However, most tax avoidance is not like that. It is using loopholes in the law in a lawful way. My accountant has advised that any scheme that has been set up specifically to avoid tax is open to challenge from IRD, and that tax advantage can only be gained if it is ancillary to a legitimate purpose. Hence, trusts set up for the purpose of avoiding tax are illegal. However, because tax law is so complex, there are invariably loopholes to be exploited. So, while the tax system remains highly complex, there will always be loopholes.

  17. Descendant Of Smith 17

    So here’s a simple system:

    Tax businesses at 10% of gross income with no expenses at all being allowable as deductions for tax purposes.

    Make it illegal to pay anyone anything by renumeration other than by wage or salary with PAYE being deducted at source. No stock options, no superannuation schemes, no phone accounts, no magazine subscriptions, no corporate boxes, no overseas travel.

    The only need for more complex regulatory accounting is to report back to shareholders to whom businesses would be accountable.

    Trusts are also taxed in the same way removing any incentive to move assets and income to a trust.

    I can’t think of anything more simple – would that work for you – 10% aside cause I haven’t done any calculations to work out where that level would be.

    The only thing left to police might be businesses not putting all their cash sales through the books which happens now anyway.

    • prism 17.1

      Dos – Sounds like a nice transparent straightforward simple tax. Has the easy understanding and lack of complexity that is always being called for by business leaders. And everyone would be working under the same system, providing a level playing field which would buffer the impacts as the competition has the same. Ordinary workers have had their ability to claim for unusual expenses so let’s widen that attitude.

  18. Jim Nald 18

    my oh my
    gift-wrap thy GST hike
    with tax cuts
    but we’ll all
    in no time
    pay the price

    when National cuts the cake
    the slice for the working poor
    vanishes into
    c r u m b s

    from bad to worse
    poor to poorer

  19. tsmithfield 19

    You’re on the right track thinking in terms of simple.

    Not so sure about your proposal though. For instance, in your scenario, businesses would get taxed regardless of whether they are generating a huge profit or making a huge loss. People might be less inclined to start up a business if they could face a huge tax bill at the end of the first year when they may still be in a loss position.

    Would need to think about some of the other ideas you raise. However, good on you for at least trying to think of a simpler system.

    • Descendant Of Smith 19.1

      Yeah but remember that “loss” for tax purposes is only based on what you can currently claim as a business expense.
      So businesses currently create losses by creating a new business or a trust for instance and selling itself to it. This then reduces their tax liability – hence on paper a loss.

      Isn’t that exactly what Sam Morgan was talking about. By shifting his income to a charitable foundation he pays no tax.

      What you are partly reminding us of is how currently taxpayers support businesses to start up – by allowing them additional tax breaks. Once successful then then begrudge returning the tax payers largess that helped them get set up.

      If however the business is making a real loss – sales are less than the costs of actually running the business – then that’s not a taxation issue.

      If very profitable businesses currently avoiding tax had to pay then the burden on the small businessman and the newly established business might be substantially less.

  20. Zaphod Beeblebrox 20

    Be worth asking the Maori Party if they support dropping the top rate. Will they vote for it?

    • Anne 20.1

      Probably. Peter Sharples is on record as having said that he bought a house based on his ministerial salary. He’ll be looking for a drop in the tax rate to help pay his mortgage.

    • Jenny 20.2

      The Maori Party might agree to vote to increase the top tax rate Z.B. if the Labour Party agreed to vote for the Maori Party’s GST off food bill.

      • Marty G 20.2.1

        the maori party will have to vote for national’s tax cuts for the rich and gst increase in the budget, or break the confidence and supply deal. You know what ‘supply’ means? Tax.

        And Katene’s Bill will be vetoed by the government. The government is allowed to use the financial veto to can any private members’ bills that have major financial impacts on the government. Katene’s Bill would cost it $2 billion a year.

  21. Jenny 21

    Spot the irony

    by Trevor Mallard on April 22nd, 2010
    In two weeks the Maori Party will vote for a very silly bill to take GST off “Healthy Food’


    The above post on Red Alert is how Trevor Mallard has announced that Labour has decided to stand with National and ACT and not support this bill.

    Trevor Mallard justifies his position by attacking the Maori Party, who because they are in a confidence and suppy agreement with National will themselves have to stand with National and ACT two weeks later to raise GST to 15%.

    The real irony here, is that the Labour Party has also endorsed the GST increase, by admitting that on becoming the government they would probably not repeal it.

    Though we may not agree with the Maori Party voting to raise GST, the Labour Party is doubly damned, because as well as refusing to agree to reverse the rise in GST to 15% they also oppose removing this tax from food even at the new higher rate.

    No amount of sophistry and finger pointing by Mallard, (or anyone else), can disguise this fact.

    Labour Party strategists must know that traditional Labour voters (Maori and Pakeha) will be uncomfortable with this diehard stand in support of GST.

    So what are Labour’s Strategies for getting around this?

    Labour has two strategies.

    Goff has said a Labour administration would (instead of lowering GST) consider raising income taxes for people earning over $70 thousand.

    This is just a smokescreen to disguise the fact that the Labour Party leadership will consider just about anything to keep Roger Douglas’s GST tax whole and intact. Goff and the other closet Rogergnomes, know with the certainty of instinct, that any loosening of the GST vice will deligitimise this whole regressive Rogergnomics flat tax regime.

    If it means having to raise the top and middle tax income tax thresholds so that he can avoid having to tamper with GST, Goff will promise to do that instead.

    Anything to avoid any threat to the Labour Party’s whole neo-liberal agenda.

    Labour’s other strategy is to try and ignore and down play Rahui Katene’s bill as much as possible.

    Hoping that the public will stay unaware of Labour’s fanatic defence of GST.

    No doubt the mainstream media will go along with this, with the barest mention of this bill during its passage through the house that they can get away with.

    • Marty G 21.1

      labour is opposing raising gst. there is a broad consensus that it’s better to have gst on everything then make exceptions. I don’t really agree, the aussies and the UK get along fine without GST on food.

      But you have to ask where the replacement revenue comes from – you’re talking $2 billion.

      The other thing about Katene’s bill that is really dumb is that it’s for ‘healthy’ food as poorly defined by her. It’s just bad policy because she hasn’t thought it through very well and it shows a poor understanding of how GST works. I’ll write a post at some point explaining in more depth.

      • Jenny 21.1.1

        “But you have to ask where the replacement revenue comes from you’re talking $2 billion.”
        Marty G.

        As you well know Marty a Financial Transaction Tax could replace GST in totality.

        There is no excuse for ignoring this fact.

        You have promised to to write a post at some point explaining in more depth how GST works.

        Maybe you would like to include an explanation of why you think that GST is a better way of raising tax revenue than an FTT.

        I look forward to you keeping your own challenge.

        • Jenny

          Marty I fully believe that you will keep your promise to do an in depth post on GST.

          But I also suspect that you will get round to this after Rahui Katene’s bill has been stabbed to death in silence.

          A policy of deliberate silence is one of the two tactics that is being used by the Labour Party to protect the sanctity of GST. (The other is to put up a smokescreen by offering to tax the rich more.)

          In line with this policy I believe there will be very little counter debate on this bill in the house, (or anywhere else) and it will just be rudely voted down by National ACT and Labour.

          If there ever were to be a proper debate on GST it should include the missing ingredient.

          The missing ingredient from the GST debate.

          • Pascal's bookie

            I’m not sure that removing gst from certain classes of food will actually lower the final price.

            If you run a supermarket you pay gst based on what you’ve sold. If people are pretty much gauranteed to buy a certian basket of basic goods then that is your well, bread and butter. Above that you make more money by selling them extras like wine, flash biscuits and the like.

            If people are currently buying the basic basket for say $100, then I’m not sure why the supermarket will automatically and permanently lower that price just becasue you remove gst on it.

            It seems to me that they will pocket that extra money themselves, and use it to lower the retail (gst incl) price of the extras, in an attempt to get more than that basic $100 dollars out of you.

  22. Gus 22

    Yeah and what about the GST increase ? Is that prick Goff going to wind that back to help all the poor people he represents ? Oh god no “we will have to look at the numbers”. What a dead beat he his.

  23. Jim Nald 23

    Goff will prick the bubble Key
    Key who’s blowing wind and hot air
    flatulence and fart
    The Oz gap and other gaps
    Key needs to close
    Dead? Inevitable life’s end
    Beat? Not Goff

  24. Ianmac 24

    I am sure that the caution in not planning to reduce 15% GST back to 12.5% is the right one, because of the huge amount of change and uncertainty. Instead Labour might be able to shift the burden of 15% in some other tax-relief way. How about no Tax until $12,000 PA or maybe until $24,000?

    • Jenny 24.1

      OK Ianmac, but what about Labour’s refusal to back Rahui Katene’s private members bill for the removal of GST off food.

      What’s your excuse for this one?

    • prism 24.2

      As someone who has been a beneficiary I don’t think it is a good idea for there to be no tax at all on low incomes, however achieved. It is far too easy to despise others worse off, and beneficiaries are always on the bad books of the rabid ignorant, and it is unpleasant to receive the rubbish delivered.
      No there should be a low tax of 10% from the beginning of earnings. Everyone will then be contributing to the running of the country.

  25. tsmithfield 25

    Here is my idea for a very simple tax system with little room for avoidance/evasion.
    Its 20/20/20.

    The first $20000 of taxable income is tax-free for everyone.
    20% flat tax rate on all taxable income over $20000 (company or personal).
    20% GST.
    Do away with WFF because its unfair and too easy to manipulate. Its unfair because one person doing the same job can effectively be paid more than another simply for having children.

    On this basis someone who is on a low income (say 20k) will only pay the 20% GST as their contribution to the system. Given that 10k or more is likely to be going on non-GST expenses (rent, board, mortgage etc), someone on 20k will only be paying approx $2000 in total tax. Low income earners are benefited a lot more than high income earners on the 20k tax free income because its a higher percentage of a low income earners total income.

    • prism 25.1

      Those ‘ simply having children’ are doing one of the most important tasks there is to do, more important and more expensive, than those without children. The potential of children for good, bad or indifferent, is so important that parents must be given every help to achieve well-balanced children and well-balanced family sizes.
      Having children shouldn’t be talked about casually like a personal hobby.

    • Marty G 25.2

      have you costed your system ts? if you haven’t, it’s just pissing in the wind.

      not hard to do, the treasury site has the info you need.

      • tsmithfield 25.2.1

        Thanks for that. I’ll have a look.

        I was only meaning to put forward something conceptual. Obviously, the actual figures may vary.

        • felix

          So your proposal is to almost halve the income tax on the rich and pay for it by almost doubling GST.

          No surprise really.

          • tsmithfield

            Of course, many of the poor would pay no income tax at all under my plan. Can’t get much fairer than that can you? The income tax would be very simple and difficult to avoid. Wouldn’t be worth trying to avoid it for that value anyway. Since the wealthy spend a lot more in nominal terms than the poor, they would end up contributing a lot more through the increased GST. So it would even out quite a bit, even though their income tax will have reduced.

            • felix

              Many of the poor pay virtually no income tax already. Your idea lumps them with a massive increase in the cost of living with little to no recompense.

              Just so you can give the rich a massive discount. Disgusting idea even for you.

              • tsmithfield

                Actually, many of the poor would be paying $3-$4 thousand at the $20k level at the moment. This would disappear under my proposal. The impact of increased GST would only be $750 per year, so many of the poor would be a lot better off.

                Consider someone on 25k compared to someone on 200k under my proposal. The person on 25k would be paying $1000 in tax compared to the person on 200k paying $36000 in tax. See, the person on 200k is paying 36 x more tax than the person on 25 k. In percentage terms the person on 25k is only paying an effective tax rate of 4% compared to the person on 200k paying an effective tax rate of 18%.

                Not only that, but the person on 200k will likely be paying out a lot more in the increased GST.

                How is that not fair?

              • Pascal's bookie

                In percentage terms the person on 25k is only paying an effective tax rate of 4%

                You’re ignoring the gst. Assume they both have the same outgoings and what happens?

              • tsmithfield

                Its an incorrect assumption to expect they both will be paying the same GST. A person on 25k will likely be paying approx 50% of their income on non-GST expenses such as rent, interest on loans etc.

                This means only 12.5 k of expenditure that incurs GST. In contrast the person on 200k will likely be spending a lot more on GST expenses, say between 60 and 100k. Thus, the person on 200k will be contributing another $4500 to $7500 in tax compared to the person on 25 k who will be contributing $937 extra in GST above what they currently pay.

              • Pascal's bookie

                So the 25 k person is not paying 4% tax, and the gap is nowhere near as large as you tried to spin it.

                How about you just answer the question? Assume all things equal, as economists are wont to do, and what happens?

                Equally importantly, what happens relative to the current system. Who gets taxed more, and who gets taxed less.

                I suspect that this proposal is just another attempt to solve the glaring problem that so many right wingers percieve exists in our current system; that the richest amoung us don’t have enough money.

              • tsmithfield

                “How about you just answer the question? Assume all things equal, as economists are wont to do, and what happens?”

                Because its a silly assumption to make. I know a family on 400k per year that thinks they struggle. What tends to happen is that expenditure rises to meet the income available. In this case, the kids are going to all sorts of after school activities, the woman in the relationship loves to buy fine art etc. So to assume a person on 200k spends the same as a person on 25k is an unrealistic assumption to make.

                The other part of the plan was to eliminate WFF to help fund the change. I accept this would leave some families worse off which would not be a desirable outcome. However, under my plan, less would need the full amount of WFF to maintain their position, so the amount actually paid in WFF would drop considerably, even in a “no-one is worse off scenario”. So the reduction might still be enough to leave the scheme as fiscally neutral.

                You tend to look at the negative side of the equation. The positive side is that the poor would see it as highly worth their while to try and improve their position due to the reduced fiscal drag as their income increases. Surely it is better to have the poor more wealthy than to have a system that consigns them to being poor.

              • felix

                ts you lose any credibility you might have been able to fool a casual observer into thinking you had when you talk about “struggling” as “not being able to afford as much fine art as one would like”.

                Of course as most will be aware by now you’ve previously admitted that you don’t actually believe a lot of what you write here so I doubt there’s much point examining your obscene suggestions any further.

              • tsmithfield

                Since when has believing what you write have anything to do with debating? You should be debating on the merits of the argument before you, not on whether you think someone believes it or not.

              • lprent

                felix: He is actually correct. I don’t expect people to believe what they argue. Exaggeration is one of the best ways to show issues in any proposal or policy.

                Personally I suspect that his proposal would create far more inequities than it solves. In particular the short-term nature of it with regard to removing WFF and the subsequent increased economic disincentive to having kids is economic short-term stupidity at its very finest.

              • felix

                Depends what your reason for being here is I suppose – I’m not here to practice for the debating society.

              • tsmithfield

                No. Sometimes I take a position more extreme that what I actually believe to try and stimulate people to think about why they hold the particular positions they do. Sometimes I deliberately play a devils advocate role to contradict the dominant view if I feel that the debate is becoming self-confirming. Sometimes I debate exactly what I believe. As I said, it doesn’t really matter whether I believe it or not. Its the merits of the argument itself that is relevant.

              • felix

                Sorry ts, I just don’t see any merit in transferring huge amounts of the cost of running our society onto the poorest members of our society just so the rich can get even richer.

                Nothing you’ve said has suggested that you have a problem with this so I guess YMMV.

                Worth remembering too that they’re just numbers pulled out of the air anyway ts. I suppose the idea of basing a tax policy around the idea that “all numbers must equal 20” appeals to the sort of mind that thinks justice policy should be based on sports rules.

              • tsmithfield

                You’re right. The idea is conceptual. I wasn’t intending that the figures and would be set in concrete as I said earlier. However, I was trying to demonstrate the sort of tax system that would be very cost effective to administer and eliminate avoidance. It might be that the reduction in avoidance and churn would free up more money that could be directed to helping the poor.

                Also, this sort of model would make NZ a very favourable target for foreign investment creating more jobs and helping us close the gap with OZ.

              • felix

                I was trying to demonstrate the sort of tax system that would be very cost effective to administer and eliminate avoidance.

                You haven’t demonstrated this at all.

                Putting more emphasis on GST makes avoidance easier for the rich as anyone with a company can put most of their living costs through it. That’s one of the reasons GST is referred to as a “tax on the poor” – because generally the rich have company structures to play with and the poor don’t.

              • felixtalksbollix

                “Putting more emphasis on GST makes avoidance easier for the rich as anyone with a company can put most of their living costs through it.”

                What absolute tosh, if you think this is the case go ahead and register for GST then try and put most of your living costs through for a GST refund.

              • tsmithfield

                Felix, I don’t know why you think the GST system is a cash cow for company owners to milk. To a small extent that could be happening. And I can see how say a builder building their own house could claim materials for their own personal house as a business expense for instance.

                But, in my experience of running a business for 25 years, and in helping my wife with her real estate business for 6 years, it isn’t that easy, and it simply isn’t worth the risk.

                For a start, anything you try and claim GST for has to have some obvious business purpose related to the business in question. Thus, a lot of things people are likely to buy won’t meet that definition. For instance, if you were a builder, you would probably find it hard to justify claiming GST on your groceries, or a large purchase such as a boat. Putting a personal vehicle in the business and claiming GST on it is possible. But then there are FBT considerations etc to worry about. Secondly, the risks of getting caught are just way too high.

                We are very cautious about what we claim GST on for the reasons advanced above. I suspect most other businesses with reasonable common sense are the same.

              • felix

                Very disingenuous Tim, I never said anything about a “cash cow” – just that it’s much, much easier to avoid paying GST if you have the advantage of a company structure.

                And that it’s generally the rich who have that advantage.

                And that you’ve failed to demonstrate any way in which your “proposal” would eliminate or reduce this (or any other) avoidance. Quite the opposite in fact.

                Would you like to hear my proposal for the tax system? I have no specific numbers in mind and it involves virtually no conceptual difference to the existing system (it basically involves shifting quite a lot of the tax burden from one sector to another) but I suggest that it might help to cure aids. Interested? ‘Cos I’m getting a bit bored with your fantasy.

              • tsmithfield

                I disagree with you on the GST argument entirely.

                Have you ever heard of private citizens putting the pressure on tradespeople to do jobs for cash, rather than charging the GST? This is well known behaviour from private people seeking to avoid GST to get the job done cheaper. I suspect this goes on a lot more than business people who face the possibility of being audited by the tax department.

                You don’t need to be in a business to cheat the GST system. And it is much more difficult in a business where the threat of a tax audit is very real.

                So far as fantasies go, you seem to be the one with grandiose fantasies of business people left right and centre ripping off the GST system to their hearts content.

              • felix

                What I’m talking about isn’t necessarily a “rip off” or illegal, it’s just an advantage.

                I suspect that from your privileged position you aren’t even aware of the existence of people who don’t share the advantages you do.

                Which is why your heart bleeds for the poor downtrodden upper classes who sometimes can’t even afford good fine art for their children.

              • Descendant Of Smith

                The tradesman and cash payment comment is interesting.

                I’ve never once requested this but I’ve had plenty of tradesman (at least 30) over the years get shitty when I wanted a (GST or otherwise) receipt, or refused to pay cash under the table – in some cases they were looking to rip off their own employer. My father-in-law spoke volumes about his tradesman doing this and would fire them instantly when caught but from the number of offers I and other people I know have had there are certainly plenty that do this.

                Ever noticed too how in quite a few cash businesses not everything gets rung up on the till. I keep an eye out for this ever since some twenty years ago, after going to a meeting organised by a local business advisor for people looking to start up businesses who said – if 10% to 15% of your cash sales aren’t being recorded then you are doing something wrong.

                I have an accountant mate who can explain in some detail why this is probably a false economy and poor advice but it happens a lot.

              • tsmithfield

                Yes. I must admit, coffee at work. Then again, you might not have been feeling like coffee if you hadn’t been working.

                Granted, there is an area of small cross-over in cafeteria expenses where you could have a slight argument. However, these are usually a very small percentage of company expenditure, and scarcely make a difference.

                There are aspects such as house and office expenses, where it is available to claim expenses for a proportion of a family home that is used for business. My wife claims a small percentage of power, rates etc for this reason. But she has to be able to justify the percentage claimed. So the expenses claimed have to relate to business. And its fair enough, because she would be claiming a lot more if she was renting an office somewhere. As mentioned earlier, you could purchase your car through the company, call it a company vehicle, and claim the GST. However, then there are fringe benefit tax considerations. Generally, the cost and hassle of FBT doesn’t make this idea worthwhile. Also, you have to repay GST when the vehicle is sold.

                There is actually very little scope under GST for legal avoidance compared to some of the other taxes where there are all sorts of set-offs and things applied between various tax rates. Of course it is quite easy to avoid GST ILLEGALLY through cashies, or claiming personal expenditure as business expenditure. However, this is not what we have been talking about.

              • felix

                It’s just an example to show that the whole area is not as black and white as you pretend. There are many more.

                Depending on the nature of your business and the nature of your personal life the advantages can actually be of considerable value and still perfectly legal.

                Of course, you might not have experience of this. Equally, you might be so used to it that you don’t notice – it doesn’t matter which, the point is that you are completely wrong when you say that the rich can’t avoid GST any easier than the poor.

                And of course, as you mention, we haven’t even begun to talk about the illegal manipulation of GST.

                Quick question – do you think raising GST will encourage or discourage illegal rorting of the system?

              • tsmithfield

                Hmmm, I would be interested to see you come up with something more substantial than a cup of coffee to make your point. I have already pointed out some areas that could be construed as personal benefit but are in fact expenses incurred during the course of business. How about thinking of something substantial that would meet the criteria rather than just making general statements.

                To answer your question, I think there will be more motivation to avoid GST with the increase. However, there will be reduced motivation to avoid income tax due to the reduction in that aspect. However, illegal avoidance is more likely with shady, transient types of business people. These people are likely already doing cashies and the like so it may not make all that much difference. For respectable, established businesses, the GST cost is passed on anyway, so there is no point trying to do something so risky as to illegally avoid the tax.

                Remember that National is likely to raise to 15% anyway. So my proposal for 20% isn’t quite the near-doubling you were suggesting.

        • tsmithfield

          “What I’m talking about isn’t necessarily a “rip off’ or illegal, it’s just an advantage.”

          All expenses claimed for GST must relate to legitimate business expenses. Anything outside of this is illegal. Period.

          So, you are being disingenuous when you claim that business can get an “advantage” out of GST that is not also an illegal rip-off. Either GST is legally claimable or its not. There is no half-way house on this. You need to decide your position on this rather than sitting on the fence.

          “I suspect that from your privileged position you aren’t even aware of the existence of people who don’t share the advantages you do.”

          You don’t know me and haven’t got the slightest justification for making that statement. It is patently untrue. I’m not as “privileged” as you may think, and I certainly know plenty of people in need and help where I can.

          “Which is why your heart bleeds for the poor downtrodden upper classes who sometimes can’t even afford good fine art for their children.”

          So far as that example of the family on 400k was concerned, my point there was to demonstrate that people tend to extend their commitments to the level of their income. For instance, they probably have a very large mortgage. Perhaps they have other fixed expenses they have committed themselves to. And yes, they may have their own little indulgences, similar to the way less well-healed people might have a flutter on the races or the like.
          People often manage to fritter away their money no matter how much they have. This being the case, many of the wealthy are likely to contribute a lot more in GST if they spend most of their income in this sort of way.

          My heart doesn’t “bleed” for this family at all. They were just a good example to make my point. In fact, I think they are rather silly for not taking better advantage of their situation.

          • felix

            No, there are plenty of things which are legitimate business expenses but which people without companies use and have to buy as well. If you can’t identify any legal, legitimate tax advantages enjoyed as a result of a company structure then you’re either a) deliberately misreading my comment or b) so accustomed to these types of advantages that you can’t comprehend the fact that they don’t exist for everyone else.

            I suspect it’s a bit of both.

            As for not knowing anything about you, I’m basing my opinion on everything I’ve seen you write here and elsewhere. Perhaps you should be more careful writing things you don’t really believe if you don’t want to be judged by them.

            p.s. I notice you still haven’t attempted to answer Pascal’s question. My hopes were never high that you would though.

            • tsmithfield

              I am well aware of legal tax advantages with respect to other taxes.

              I am just saying that with GST it is impossible to gain a LEGAL advantage for an expense if it is not related to business.I have already acknowledged it is possible to claim a personal expense that LOOKS like a business expense. However, that is not a legal advantage. What you are saying is that it is possible to manipulate GST to gain an advantage in a LEGAL way. Perhaps you could give a concrete example of how GST can be manipulated in a LEGAL way to gain an advantage.

              Pascals question in assuming that someone on 200k spends the same on GST as someone on 25k was based on an unrealistic assumption. This is why I did not answer it. Having said that, I know someone who is a multi-millionaire who actually would spend less than a person on 25k. However, this is would be the exception rather than the rule. This person is quite an eccentric. But this is always the way with GST. It is a voluntary tax. If you decide to spend very little then you don’t pay the tax. Thus, GST encourages saving and investment which is something we need.

              • felix

                No, I’m not saying anything about manipulating GST. A very simple concrete example would be the cup of coffee my company just paid for. If I didn’t have a company I would have paid for a coffee myself (I like coffee). Seeing as I’m working today my company foots the bill instead and pays no GST on it (coffee and tea are legit expenses).

                Perfectly legal and ethical advantage. A trivial one perhaps, but there are many others on many scales. When you’re used to this type of special advantage it becomes hard to see the wood for the trees.

                Of course there are plenty of people who are illegally manipulating the GST system but that’s not what I’m talking about (for now).

  26. Adrian 26

    I staggered at the stupidity of some people who have obviously never been in a productive job i.e one that actually makes things, 10% tax and no deductions HA !!! What about a builder, 70% materials and 30% labour the same for farming, engineering, fishing ad infinitum. Whereas a shiny arse with a suit and a breif case sprouting bullshit has about 20% costs.

  27. Descendant Of Smith 27

    “Whereas a shiny arse with a suit and a brief case sprouting bullshit has about 20% costs.”

    Yeah but that’s the group paying less tax than the average builder at present.

    Don’t get misled by the 10% it might be as low as 2% – as I said didn’t do the calcs cause didn’t have the data.

    Taxation and profit are not the same thing.

    There’s no reason why taxation should be based on profit.

    Other threads have also suggested other alternatives as well.

    Maybe you have some constructive ideas?

  28. Bill 28

    Anybody else notice that although the link is headed “Goff throws tax counter-punch before fight”, fully half the article is the journo Jane Luscombe going in to bat for the lower high tax bracket brigade?

    Have a wee read if you haven’t yet.

    Nice wee indicator of where the corporate media stands and probably indicative of how they will expect their journalists to tackle any other issues where leftish propositions run against their preferred pro-corporate policies.

    • Zaphod Beeblebrox 28.1

      Journos earn over $70K don’t they?

      • Marty G 28.1.1

        not the junior ones but the higher ups do. your political editors are on 120K or so.

      • Bill 28.1.2

        Their salary has nothing to do with it. The preferred ideology of the medium they work for determines the angle taken and the line peddled.

        There is a zero chance that any will be unwilling to parrot the company line as such people would have been pushed aside and out of journalism at the first inkling of ‘subservience’.

        Opinion piece writers are a different story.

        They are given space so that there appears on the surface of things to be a spread of opinion. But opinion pieces are treated as less authoritative than news pieces by readers and besides they are ‘one off’ and so cannot not hammer the same relentless line as news pieces do from across a spread of bought and paid for safe sources and repeated over extended periods of time

        • Draco T Bastard

          I think you got the wrong word there Bill

          1. serving or acting in a subordinate capacity; subordinate.
          2. servile; excessively submissive; obsequious: subservient persons; subservient conduct.
          3. useful in promoting a purpose or end.

          I think you mean:

          1. Also, independency. the state or quality of being independent.
          2. freedom from the control, influence, support, aid, or the like, of others.
          3. Archaic. a competency.

          • Bill

            shit…subservience leads to promotion… ‘subversion’ was the word what I was meant to be using methinks.

            Thanks Draco….I think.

          • Anne

            Bill may have meant ‘subversion’ 🙂

  29. jcuknz 29

    Putting the 38% or greater back on won’t get my vote as I’m on Super but correcting the 21% back down to 19.5% or lower could influence me.

    Having children as opposed to a child is completely wrong as world population skyrockets beyond earths ability to cope and provide a decent living standard for all.

    The beauty of GST as opposed to the myriad of different duties it replaced is that it applies to everything and is much simpler to understand and run..

    :workers’ may do the real work but with good leadership they are worthless and good leaders should be rewarded for the effort they put into keeping the rest of us gainfully occupied. perhaps not to the degree of excess currently in vogue but a good worker is worth his hire at whatever level.

    I have just had a brilliant idea … issue everybody with a card showing their income and you pay GST according to your income … think of the people who would be needed to run such a scheme .. we would have no unemployment and need to import thousands to cope.

    • Marty G 29.1

      “correcting the 21% back down to 19.5%”

      oh dear, you think that this rate was increased by cullen eh?

      no. you see everyone got a 4.5% low income rebate on the first $9500 that then abated at 1.5% until it was all gone at $38000. While the 0-$38000 headline tax rate was 19.5%, in reality everyone paid 15% on the first $9500 and 21% from there to $38000. Cullen improved this by making the bottom rate official, lowing it to 12.5% and extending it to $14,000.

    • Draco T Bastard 29.2

      Administration is important but not to the tune of several hundred times the average wage. And the average capitalist, the biggest bludgers around, isn’t a leader.

    • prism 29.3

      Interesting thought about adjusting state charges according to income. I think that in some Scandinavian countries fines are adjusted this way. Those who have the dosh pay more, the idea being that the sting be adjusted to the mass.

    • prism 29.4

      “Having children as opposed to a child is completely wrong as world population skyrockets beyond earths ability to cope and provide a decent living standard for all.”
      Great. When I wanted bread you gave me a stone (with theoretical precepts impaled upon). Having less children can be achieved but involves government spending in education, free condoms and operations for sterilisation of both males and females. Or living in one-sex enclaves. One can become a priest and sublimate the sexual urge in other ways.
      China has been given heaps of abuse for its efforts to control its population exponential growth. It is not easy and cannot be handled by making high-handed statements, especially by people who are out of the fertility zone.

      • Draco T Bastard 29.4.1

        China has been given heaps of abuse for its efforts to control its population exponential growth.

        That has always pissed me off. They had a problem and implemented a solution. Sure, they could have gone about it better but they had to act immediately and education and other methods takes a couple of generations.

        And they still have problems because not everybody listens. Some people will always believe that they can do what ever they want no matter what the evidence says.

        • jcuknz

          The ME ME syndrome which all of us suffer from in various ways for sure. or maybe the stuff the bureaucratic bastards sickness …..

  30. jcuknz 30

    >>>oh dear, you think that this rate was increased by cullen eh?<<<
    Oh Dear! what makes you think I'm blaming Cullen? It happened this year in the mid year of a National Government term. I'm just pointing out that the reduction in top rate will not have any effect on me or its reversal, but the 21.5% RWT hits my small amount of personal savings returns … but what the hell, it only amounted to about $3 … I can bear that for the good of the country. I guess the rich pricks will either invest it or spend it, both will increase the drain on the planet's limited resources … sorry if that is too Greenish for you.

    Just becuase China has been abused doesn't mean it isn't a neccessary action which should be taken by individuals for the sake of their child and child's child. Have your enjoyment but don't cause the world to suffer for your lack of good sense. A parrallel action should be old age pensions world wide to remove the need for couples to have numerous children to look after them in their old age.

    I know that is idealistic naievity but one can always hope that common sense will prevail and write towards that.

    • prism 30.1

      jcuknz Don’t preach at me about population increase. I noted how difficult it was to limit child numbers. Preaching at people not to ‘have your enjoyment’ is the response of someone probably too old or too constrained by proscriptive mores to live a full life. And behind the people having bigger families is custom and tradition, and/or churches such as the Catholics. There may be prominent people who decry the use of condoms. Common sense would suggest a lot of initiatives would be tried to assist people of child-bearing age to limit their numbers. Long experience with NZ governments knows that they are unable to maintain funds and support for such worthwhile forward-looking policies.

      The rest of the world largely follows the same pattern. Your idea of old age pensions is a good one, except that there is another problem. Too many oldies living off the state for a third of their adult lives is unaffordable. Many don’t even do voluntary work to give back to community what they can. Get stressed about that. Raising the retirement age to 70 is one answer being adopted, and poorer older people will be harrassed by government to work full time, and be forced to go to retraining programs and hunt for work, making their lives difficult and miserable and if there is no top-up from the state, living in poor conditions with little ease in their old age.

  31. jcuknz 31

    Prism …. I am not and did not, if you read my contribution more carefully, ‘preach against people enjoying themselves’ but rather to do it with care and consideration for the danger to mankind from the population explosion. this is preferable to another world war or rampant disease to limit numbers. Your repeated assumptions about me are amusing to a degree but suggest an unfortunate desire to attack the person rather than the idea.

  32. prism 32

    jcuknz Oh dear you are far too cerebral and analytical for me to discuss anything with. You keep stating ideal situations and what would be good for everyone to do, all lovely theory that doesn’t correspond with real life. Having sex ‘with care and consideration’ while at the same time worrying about the population explosion and disease! Try asking rugby players not to injure each other on the playing field, and to play with care and consideration. Some things just won’t work.

    If we can limit alcohol selling hours and the age, we will do as much good as presenting serious facts and earnest ideals to young people which just float over their heads and produce sniggers. So what are you thinking you ought to do about it? The Catholic church prohibition against contraception is a good place to start. I remember a Colombian woman who had had 52 children personally not adopted. Chances are she was of the faith. And encouraging large families to break the tradition perhaps by advertising the advantages of small families as frequently as cancer in women is mentioned on television perhaps.

    I hope these practical examples of activities with potential value in affecting the birth rate amuse you.

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