I got it wrong: tax cuts for rich even bigger

100 comments on “I got it wrong: tax cuts for rich even bigger ”

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1. tsmithfield 1

   22 March 2010 at 5:20 am

   Marty: “(the Government isn’t investigating the source of the leak, confirming its truth).”

   So, on that basis, where the government is investigating leaks, the leaks are not true? Thus your interpretation would seem to contradict earlier articles here that proclaimed leaks as evidence that the government intends to mine some of our national landmarks. On the other hand, perhaps the government isn’t investigating the leaks because they leaked the information in the first place for the political purpose of ensuring the reality is much nicer than the expectation.

   Marty: ” That matters because GST as a % of spending is relatively the same whatever your income but much higher as a % of income for people on low incomes and lower for people on high incomes.”

   I would be interested to see some evidence to support this point. I would have thought that low income earners would spend less as a proportion of income on GST because they pay a much higher proportion of their income in rent/mortgage, which does not incur GST. However, if what you say is correct, then the wealthy will be paying, in absolute terms, much more in increased GST than the poor, offsetting in some degree any benefit they get in tax reduction.

   Marty: “I found that people on low incomes and middle incomes were slightly better off (anything between zero and $3 a week) if you didn’t count the fact their rents are going to go up.”

   If supply exceeds demand, then rental prices will hardly move. For supply to fall, owners of rental stock will need to sell their rentals. If there is a glut of sales due to the new legislation governing tax treatment for rentals, then house prices for ex-rental propterties will fall. Given that rental properties tend to be in the price range that poorer people are most likely to afford, a drop in prices will mean more poor people owning, rather than renting, houses. Given that interest rates are very low for the medium term, it is likely that poor people could be paying less for a mortgage than they do for rent. Therefore, many poor people could be better off not worse off in terms of housing costs.
   • Marty G 1.1

     22 March 2010 at 8:53 am

     “Marty: “(the Government isn’t investigating the source of the leak, confirming its truth).” So, on that basis, where the government is investigating leaks, the leaks are not true?”

     – Not at all. The fact they’re not investigating shows they leaked it.

     “Marty: ‘ That matters because GST as a % of spending is relatively the same whatever your income but much higher as a % of income for people on low incomes and lower for people on high incomes.’I would be interested to see some evidence to support this point.”

     – Then follow the link to the TWG figures. Really. I thought you’re meant to be one of the smart ones.

     “Marty: “I found that people on low incomes and middle incomes were slightly better off (anything between zero and $3 a week) if you didn’t count the fact their rents are going to go up.’ If supply exceeds demand, then rental prices will hardly move.

     – Who says supply exceeds demand? The TWG believes it will increase rents, so does everyone else. And you misunderstand how supply and demand works.
   • RedLogix 1.2

     22 March 2010 at 9:07 am

     ts,

     I’m going to re-post this earlier comment. It directly debunks the idea that property deflation will help low income people at all:

     To put it in a nutshell house prices were historically about 15 times the annual imputed rental value. The median rent at present is $15k pa; this means that the median house price SHOULD be $225k. Instead it is about $350k. This means that in order to restore historic ‘affordability’ for first time buyers by deflating the property market, prices would have to drop about 35%. (350-225/350 *100).

     At any one time about 33% of people rent and the other 66% own. Of the 2/3rd that do own about 2/3rd of them have a mortgage, or about 50% of the total. Because of the way most table mortgages are structured, of this 50%, around 20% of the total have a relatively small equity in their property.

     If the property market deflates 35% then around 20% of dwelling occupiers will find themselves ‘under water’ with their mortgage. In the short-term the bank usually doesn’t worry too much, but inevitably something forces their hand illness, pregnancy, loss of job, forced to move to a new town, relationship break-up and the property undergoes a forced sale leaving the owner with no equity, or due to the iniquitous nature of commercial law in this country, a substantial debt.These people are then forced back into renting and if overseas experience is anything to go by, will likely never own a home again.

     Moreover property deflation does not benefit first home buyers much either. In any one year they barely amount to 2% of the total market, but when prices are dropping banks demand larger deposits, ie LVR ratios of at least 80% to cover themselves, which makes it proportionately no easier for the first home buyer at all.

     New first time buyers will remain scarce, and would likely be heavily outnumbered by those being forced out of home-ownership.

     Deflation is the most destructive condition any economy can fall into be very careful what you ask for.

     Your thinking about supply and demand fails to take into account the dynamics of mortgage debt.
2. The Baron 2

   22 March 2010 at 8:50 am

   Bit of fun with the horizontal axis there huh Marty – really wanted to hammer home the “rich prick” argument huh.
   • lprent 2.1

     22 March 2010 at 8:55 am

     If he’d have wanted to do that, then he’d have extended the axis out. Hell he hasn’t even got John Key in the graph..
     • aj 2.1.1

       22 March 2010 at 9:35 am

       Agreed. This graph softens the look blow for lower income earners.
     • BLiP 2.1.2

       22 March 2010 at 12:46 pm

       lprent – did you notice that http://www.johnkey.co.nz has gone? It’s simply vanished into the intertubez vast trash bin unannounced? Either that, or the server’s gone down. Anyhow, maybe about time we targeted another “clueless” link. What about this one:

       John Key
       • Lanthanide 2.1.2.1

         22 March 2010 at 1:10 pm

         How curious. I went to the JK site just 2 or 3 days ago. Indeed it is now down, and clicking the link from google results in the same page.
3. Marty G 3

   22 March 2010 at 8:56 am

   No. The numbers for the distribution of income are from the IRD website, from $150,000 up it goes from $1000 increments to $5000 increments. I can’t help that.

   The values of tax cut for a given income are correct.
   • The Baron 3.1

     22 March 2010 at 10:27 am

     I am sure the values are indeed correct – I’m not calling those into question. I am calling into question your presentation of the data.

     I am sure you could have corrected the axis – it would be a simple thing to do in Excel. if you wanted to of course.
     • Lanthanide 3.1.1

       22 March 2010 at 10:38 am

       I agree. The graph as it is at the moment, is misleading to have different values on the x-axis without some explicit indicator on the axis that that is the case. I wondered why there was a steep increase in the slope at the upper end, but because most of the labels in that area are ommitted I didn’t twig that its because it goes from $1k to $5k increments. The current graph makes it looks like there is some step-change around this point, such that it looks like the tax rate is going to go even lower for the top-most band. Of course this is nonsense if you know the actual numbers involved, but that is what the graph is suggesting, which is wrong and misleading.

       I also think that losing accuracy on the bar graph at this level (which is barely visible as small blips) is much less important than having the much-more visible green linear line accurate. You should simply continue the slope of the green line, while dividing the bars in the 5k group by 5. Or alternatively just make the entire graph use 5k increments, which may actually make the point you’re trying to get home even clearer because the bars on the left side will be much much taller.

       At the very least this should be mentioned somewhere in the post, or as a note itself on the graph, that the x axis changes scale.
4. vto 4

   22 March 2010 at 9:16 am

   You sure you got it right this time then mr marty?
   • Marty G 4.1

     22 March 2010 at 9:25 am

     pretty confident. the current tax rates, the new tax rates, the current gst as % of income and the new ones are all from official sources and checked.

     you’re welcome to run the numbers as well, they’re all publicly available.

     are you happy that most people get next to nothing (even forgetting about higher rents) while a select few get $20,000 each?
     • vto 4.1.1

       22 March 2010 at 9:35 am

       Well it doesn’t worry me actually that a few will get $20,000 while I get nix. I’m not overly concerned about how big my neighbours wallet is.

       I do know that what you are saying is simple maths and bleeding obvious. Those who currently pay the most in tax will get the most back. Not quite sure how else that can work…
       • Marty G 4.1.1.1

         22 March 2010 at 9:45 am

         “I do know that what you are saying is simple maths and bleeding obvious. Those who currently pay the most in tax will get the most back.”

         vto. you’re smarter than that.

         these are not flat cuts that grow in proportion with income. they’re ramped up for the rich.

         “Not quite sure how else that can work ”

         Um… cutting more off the bottom tax bracket and less off the top one is the obvious solution.
         • vto 4.1.1.1.1

           22 March 2010 at 10:11 am

           Income should not be taxed fullstop.

           Govt can raise revenure through taxing elsewhere in the system, but taxing people’s hard work and base income is just inherently unfair.

           The govt should just raise its revenue from its great and profitable businesses like Kiwirail and Kiwibank. Then it would not have to tax anywhere – imagine that!
           • felix 4.1.1.1.1.1

             22 March 2010 at 10:50 am

             The Green Party would tend to agree somewhat, at least with the first bit.

             Pity you’ve all written them off as a bunch of c*mmies (I don’t mean you in particular v, we’ll make a greenie of you yet)
           • Clarke 4.1.1.1.1.2

             22 March 2010 at 10:54 am

             This is long-standing Green policy, IIRC …. the taxation system should tax “bads” rather than “goods” and not provide disincentives to productive activity.

             So if we’re going to raise government revenue from non-productive areas, we could start with a Tobin Tax to slow currency speculation, tax effluent flows into our rivers, and put a carbon tax on the companies dumping CO2 into the atmosphere. In effect it would remove externalities, to the greater benefit of both the wider economy and wage and salary earners.
             • vto …

               22 March 2010 at 11:12 am

               I don’t know about choosing “goods” and “bads”. That is inherently unstable and too subjective. It would end up completely mired and lost in political shenanagins. But it does fit the ‘bunch of commies’ line that felix refers to – hee hee.

               Better to simply tax non-essential spending. Leave out housing and food and maybe even health. Just tax tv’s, cars, prostitutes, toys, boats, … everything that money gets spent on except food etc. Something along these lines would satisfy some of the current inequities in the system.
             • Clarke …

               22 March 2010 at 12:33 pm

               Better to simply tax non-essential spending. Leave out housing and food and maybe even health. Just tax tv’s, cars, prostitutes, toys, boats, everything that money gets spent on except food etc. Something along these lines would satisfy some of the current inequities in the system.

               Leaving aside the almost perfect incoherence in that statement, does currency speculation count as non-essential?
             • felix …

               22 March 2010 at 2:50 pm

               That is inherently unstable and too subjective. It would end up completely mired and lost in political shenanagins. But it does fit the ‘bunch of commies’ line that felix refers to hee hee.

               But that’s exactly how we do it now, v. We incentivise behaviour by taxing certain activities and not taxing others. It’s just a matter of what you define as desirable and undesirable outcomes.

               If you really think workers should be able to keep more of the money they earn and businesses should be responsible for their actions then you should have a serious look into the policy.
           • lprent 4.1.1.1.1.3

             22 March 2010 at 12:13 pm

             The govt should just raise its revenue from its great and profitable businesses like Kiwirail and Kiwibank.

             And tax all competing businesses heavily? Or change these services into monopolies? Otherwise ‘tax evasion’ would simply be to not use those services which because they’re paying for such things as defense that have nothing to do with their core business would be higher cost than competitors without those costs.

             Sounds positively unhealthy at an economic level to me. In fact it sounds much like the economic model that ruined France under Louis XiV and his successors.
       • Lanthanide 4.1.1.2

         22 March 2010 at 9:52 am

         *sigh* By adjusting the thresholds only, not the rates.
5. Peter Johns 5

   22 March 2010 at 9:24 am

   I suspect you will find landlords will not be able to impose massive rises as the market will not bear it. My brother is just going to re rent his property in Pakuranga. He is not asking for more in rent & he will be happy to fix prices for a year to get a suitable tenant. There will be a lot of tenant pressue to limit rises as there is no excess money out there. People are still living as if the GFC has not happened, we are still in cloud cuckoo land in NZ regarding this. Landlords will need to suck this up. In the next 2-3 years rents are going to fall as we enter stage 2 of the GFC. 3 years ago these sort of rises would have happened as there was money around.
   BTW Marty, I am on $93600PA, what will be my extra take home pay?
   • Marty G 5.1

     22 March 2010 at 9:33 am

     about $27. Congrats. Remember it’s not a tax cut, it’s a wealth transfer from someone else.

     Maybe your brother, or his tenants.
     • TightyRighty 5.1.1

       22 March 2010 at 10:18 am

       a wealth transfer from someone else? cute marty. pretending that not paying your own money to the government is actually a transfer. you lefties, you can’t stop viewing other peoples money as your own.
       • The Baron 5.1.1.1

         22 March 2010 at 10:25 am

         Indeed – isn’t it more a case of him getting the money that he earned back in his pocket? Believe me, someone in that tax bracket will still be paying a very, very generous contribution to the overall health of our public services.

         And lo and behold, even your own calculations show that noone will be done any harm in that – all the “poor” end up on the level. Looks like a win win really – those that actually pay are getting a bit of a break after 10 years of overtaxation; and those that don’t pay (surprise surprise) aren’t getting anything.

         So at best, this is a wealth transfer from the state to the individual. I can understand if you hate that Marty – it may go against your politics. But be honest about the basis of your hate, and don’t dress it up as something that it isn’t.
       • Captain Rehab 5.1.1.2

         22 March 2010 at 10:32 am

         Cut all income tax and watch all services (including police) collapse. Then watch those on high incomes find their incomes collapsing along with society.

         The problem you rightards have is you don’t understand complex systems such as society so you think that everything an individual earns is to do with their efforts and nothing to do with the society that sets the parameters they have been able to earn within.

         Stupid. Stupid. Stupid.
         • TightyRighty 5.1.1.2.1

           22 March 2010 at 10:38 am

           everyone sees the need for tax, maybe you need to check yourself back in? I just don’t see the need for as much as we are paying, and all the movement away from core government services to being involved in all facets of society. what you leftards fail to see is that people earn money for themselves, not for the government. when you start treating tax cuts as “wealth transfers” you start seeing the public as a homogenous mass that you can dictate too. when you see tax cuts as reductions in the amount you pay to the government, you are looking at individual circumstances and how they can have flow on effects to the community.

           anit-spam: choose – not if the left have their way
         • The Baron 5.1.1.2.2

           22 March 2010 at 10:44 am

           What are you on about? These taxes are revenue neutral – in other words, there is just as much money as there always was to pay for those services.

           Nothing is going to collapse because you change the mix from personal to consumption taxes. The only thing that is under threat here Capt. is the left’s ability to impose envy taxes.

           More retarded hysteria from the left. Do you not read the paper?
           • Pete 5.1.1.2.2.1

             22 March 2010 at 12:48 pm

             Bullshit Baron.

             This ‘envy tax’ meme is pure crap.

             As you have already pointed out, it depends on your politics, in this case how scarce resources (incomes and tax earnings) are distributed amongst society.

             For many from the economic right ‘fairness’ amounts to income earners retaining the majority of their incomes (regardless of whether the income was due to more ‘hard work’ than the rubbish collector, elderly care worker or disability support worker their pitiful wages).

             For many on the economic left ‘fairness’ amounts to being able to support yourself and your family, and to avoid poverty and its trappings (crime, lower education rates, fewer opportunities for progression etc).

             Envy it is not – so STFU.
             • Marty G …

               22 March 2010 at 12:53 pm

               plus, nz’s highest tax rate was above 39% for several decades. if anything, cullen was restoring the norm.
             • TightyRighty …

               22 March 2010 at 1:39 pm

               “For many from the economic right ‘fairness’ amounts to income earners retaining the majority of their incomes (regardless of whether the income was due to more ‘hard work’ than the rubbish collector, elderly care worker or disability support worker their pitiful wages).”

               are you saying it would be unfair to resesnt much of the money you worked for being taken by the government with little accountability for where it is spent?

               “For many on the economic left ‘fairness’ amounts to being able to support yourself and your family, and to avoid poverty and its trappings (crime, lower education rates, fewer opportunities for progression etc).”

               and would you not be able to suppourt yourself and your family if you paid less tax? and could aspire to earning more money without getting whumped by the government once your income passed an abitary line? can you do this by yourself? or do you need the government to hold your hand and allow you a budget and tell you what to do all the time.

               whether you think it is envy or not, you are an idiot. thank you for showing us how retarded those on the left actually are.
             • Pascal's bookie …

               22 March 2010 at 4:06 pm

               And once again TR shows just how little he understands about the society s/he lives in.

               There is a huge amount of accountability in the political process. The OIA gives us whatever information we might wish to ask for. We have elections, and an open process for TR to campaign, lobby stand or parliament him/herself.

               The complaint TR has is that s/he doesn’t like the outcome and feels hard done by. “It’s not fair” Christ, why isn’t it fair? Was it not decided through a fair process? Or does TR think that his/her own version of ‘fair’ should be written in stone regardless of the outcome of the political process?

               TR has exactly the same options that any other citizen has to influence that outcome. If s/he doesn’t like the results, that’s just because s/he failed to get what s/he wanted. Ultimately, if TR doesn’t like the society the nation chooses to create, the option remains to leave. There is no wall to cross.
             • Pascal's bookie …

               22 March 2010 at 4:13 pm

               And once again TR shows just how little s/he understands about the society s/he lives in.

               There is a huge amount of accountability in the political process. The OIA gives us whatever information we might wish to ask for. We have elections, and an open process for TR to campaign, lobby stand or parliament him/herself. These are the same options open to all adult stakeholders.

               The complaint TR has is that s/he doesn’t like the outcome and feels hard done by. “It’s not fair” Christ, why isn’t it fair? Was it not decided through a fair process? Or does TR think that his/her own version of ‘fair’ should be written in stone regardless of the outcome of the political process?

               TR has exactly the same options that any other citizen has to influence that outcome. If s/he doesn’t like the results, that’s just because s/he failed to get what s/he wanted. Ultimately, if TR doesn’t like the society the nation chooses to create, the option remains to leave. There is no wall to cross.

               As for this ‘envy tax’ nonsense, governments have expenses. Those are determined by what the people want the govt to do. Obviously, the govt has to get the money from where the money is. If the right want to reduce the amount taken from those with money, they need to reduce what the amount of things that the govt does. They fail at this, repeatedly. Whenever they do slash services, they get thrown out on their ears by the electorate, and replaced by a govt that promises to restore those services by raising the necessary taxes.

               This means that the people like the services more than they hate the taxes.
6. Ed 6

   22 March 2010 at 9:26 am

   Under your calculations are the government collecting less tax overall? Who is paying for the big reductions?
   • Marty G 6.1

     22 March 2010 at 9:32 am

     It will be paid for by the property tax adjustments, in theory.

     Those taxes will be paid for by a mix of landlords (through lower returns) and tenants (through higher rents)
7. Peter Johns 7

   22 March 2010 at 9:42 am

   Thanks Marty. A change in tax is always a wealth transfer. If there is no increase in rents the landlord will pay more, but it will meet somewhere in the middle. However, landlords will be worse off after the tax changes on $PW scenario. We have to start looking at macro issues more than just the $PW tax being paid. Allocation of capital will change and what the Govt is trying to do is get more money going to the productive sector. This in the long run will hold NZ in better stead. We are not going to stay a first world economy if we carried on the way we were. Dairy, property & tourism is not going to keep us rich in the long run alone. If we carry on the same route taxes will need to rise to pay for our borrowings. That will happen in a few years time regardless in my opinion.
   • Marty G 7.1

     22 March 2010 at 9:47 am

     I agree with the point of the tax changes on property. I’m just pointing out that the income tax changes, when the property changes are considered, leave the poor renters out of pocket while the people above $250,000 get $20,000 each.

     There needs to be more compensation at the bottom end, and less of a cut at the top.
     • tsmithfield 7.1.1

       22 March 2010 at 10:27 am

       Marty, that reduction from 38% to 33% simply reverses Cullens stupid envy tax he introduced that National never agreed with in the first place.

       Most of the wealthy have undoubtably arranged their affairs to avoid this stupid tax increase, so it is a bit pointless having it anyway.
       • Captain Rehab 7.1.1.1

         22 March 2010 at 10:38 am

         “envy tax”? You frigging retard.
       • felix 7.1.1.2

         22 March 2010 at 10:38 am

         Of course txxxxxxx, the wealthy have been screaming for 10 years to reduce a tax rate that most of them don’t even pay. Now it all makes sense.

         I think someone slipped an extra couple of stupids in you coffee this morning. You should be careful, you were already well over the recommended daily children’s intake at your normal level.
         • tsmithfield 7.1.1.2.1

           22 March 2010 at 11:16 am

           You have heard about the spike in the set-up of trusts at just prior to the level where that tax kicks in, haven’t you? Probably the only wealthy people paying the 38% would be those on the PAYE system where they have no option but to pay it. However, all the others will undoubtably have arranged their affairs to avoid it.

           To that extent, the 38% tax is also unjust, because PAYE high income earners are paying it, and the rest of high income earners are mostly avoiding it.
           • felix 7.1.1.2.1.1

             22 March 2010 at 3:10 pm

             It seems you’ve moved beyond being unable to follow other people’s comments and are now unable to follow even your own.

             Do you remember writing this, 1 hour earlier?
             According to my accountant, it is already illegal to set up trusts for the specific purpose of avoiding tax, and there are a number of cases where people have been prosecuted on this basis.

             I think you need to tell your boss you can’t cope with running so many sockpuppets at once. It’s clearly impacting on your already stretched abilities.
             • tsmithfield …

               22 March 2010 at 5:05 pm

               Sorry, Felix, I forgot that I need to explain things simply for you, given that you’re intellectually impaired and all.

               Yes, it is illegal to set up a trust specifically for the purpose of tax avoidance. It can only be of ancillary benefit.

               Thats why you make sure there is another main purpose for the trust first, duh. So long as you can document and prove that the reason exists you are fine to claim tax benefits. Only half-wits set up a trust specifically for the purpose of avoiding tax.
             • felix …

               22 March 2010 at 6:43 pm

               I thought that bit I quoted would be enough to jog your memory. Apparently not. You also wrote this:

               “For instance, you would need to be able to put up a convincing argument that a trust was established for the purpose of say, estate planning, before the IRD would let you away with any tax claim. On that basis, there are probably a lot of trusts out there at the moment that might not be very water-tight if the IRD has a close look at them.”

               So there we have it. “High income earners are mostly avoiding” the top tax rate by using trusts which “might not be very water-tight if the IRD has a close look at them” in spite of this being something “only half-wits” would do.

               Genius.

               (Pssst. You’re using the same sockpuppet to say conflicting things. You’ve been doing it all day. Sharpen up.)
             • tsmithfield …

               22 March 2010 at 7:59 pm

               No contradictions there, Felix. Its just that the topic is too complex for you, so you see contradictions where none exist.

               Anyone can set up a trust. They don’t necessarilly have to be wealthy. However, they also might not get good advice.

               Trusts are considered effective to the degree that they are considered to be actively managed, and as I said before, any tax benefit has to be derived as an ancillary benefit.

               Not just the IRD, but other creditors can attack trusts that are considered to be shams. So it is important to get it right and get good advice. The wealthy can generally afford to do this, so their trusts are likely to be a lot more solid. Other than for a few clever dicks who think they have come up with the latest and brightest scheme but come a gutser when their arrangements come under scrutiny.
             • felix …

               22 March 2010 at 9:04 pm

               They’re your own words, dickhead.

               You said most of the rich are hiding their income behind trusts.
               You said most of the trusts wouldn’t meet the legal test if scrutinized.
               You said only half-wits do it, but most of the rich do it anyway.

               And faced with your your own words the best you can come up with is ‘maybe it’s not just the rich’.

               Of course! Poor people are people using trusts to pay MORE tax! You have heard about the spike in the set-up of trusts at just prior to the level where the top tax rate kicks in, haven’t you?

               I could keep quoting you back to yourself all night and you could keep wriggling and pretending you meant something else but the truth is plain for all to see. It’s not that the subject is too complex, it’s that you’re too simple.
             • tsmithfield …

               22 March 2010 at 10:13 pm

               No you are the dickhead in that you are putting words in my mouth that I didn’t say.

               For instance, I said that there are a lot of trusts that wouldn’t stand up to scrutiny.

               You have supplemented what I actually said to make your stupid point. For instance “You said most of the trusts wouldn’t meet the legal test if scrutinized.” That is quite different in meaning to what I actually said. There can be a lot of something without it being the most. There is a lot of sand at New Brighton Beach but it is not the most sand in the world.

               If you want to try and make up some bogus logic chain to try and trip me up, then at least do it properly. Twerp.
             • felix …

               23 March 2010 at 10:18 am

               Nonsense, I’m just sick of talking to someone who refuses to discuss in good faith.

               The real reason this thread is boring for me and difficult for you though is summed up by yourself here. As you admit, you’re not responding to what people say but to what you believe they think. On the other hand I’m quoting your own words back to you and you don’t like it, so you keep pretending you meant something else when you typed them.

               As I said, I can go on doing this as long as you like but the results will be much the same: me quoting, you lying, me quoting the lies, you getting angry, and on and on but it’s not that interesting. Tell you what though, just to keep you employed I’ll carry on this pointless discussion with you as soon as you answer the questions you’ve ignored here.
           • lprent 7.1.1.2.1.2

             22 March 2010 at 11:19 pm

             Is this a private war? Or can anyone join in. It looks like it isn’t going anywhere.

             On the other-hand it doesn’t look like a flame that a sysop needs to concern themself with (yet).
             • felix …

               23 March 2010 at 12:27 am

               I have no further interest in it. It’s like fighting a midget – funny for a while.
             • tsmithfield …

               23 March 2010 at 6:00 am

               Thats right, Felix, you arrogant prick. Run away at the moment I have proven you to be a liar. Coward.

               [lprent:
               1. You haven’t ‘proved’ any such thing. I’m finding your arguments a bit incoherent myself.
               2. As far as I can see felix is mostly quoting your own arguments back to you to highlight the logical inconsistencies. Logical inconsistencies are what he likes probing the most. He enlivens the mix a little with some expertly pointed needles to keep you motivated….
               3. I’m sure that he will continue to needle you, but I suspect that anger won’t help you. You just need a much more consistent and coherent arguments.
               4. Make a statement like that again and you’ll get some time off to cool down.
               ]
           • felix 7.1.1.2.1.3

             23 March 2010 at 10:20 am

             oops, this reply should’ve gone here.
             • tsmithfield …

               23 March 2010 at 2:56 pm

               Iprent, the problem is he didn’t quote me.

               I made a statement using the word “lots”. He translated that into the word “most”.
               That changed the meaning to something completely different to what was intended in the statement I made. I did point that out but got no response or correction.

               Calling Felix a liar was a bit harsh I agree. However, for him to misquote me and take what I said something completely out of context and ascribe another meaning to it.

               Here is what Felix quoted me as saying:

               You said most of the rich are hiding their income behind trusts.
               You said most of the trusts wouldn’t meet the legal test if scrutinized.
               You said only half-wits do it, but most of the rich do it anyway.

               This is quite different to what I actually said:

               Most of the wealthy have undoubtably arranged their affairs to avoid this stupid tax increase, so it is a bit pointless having it anyway.
               Only half-wits set up a trust specifically for the purpose of avoiding tax.
               there are probably a lot of trusts out there at the moment that might not be very water-tight if the IRD has a close look at them.
               it is illegal to set up a trust specifically for the purpose of tax avoidance. It can only be of ancillary benefit.
               The wealthy can generally afford to do this, so their trusts are likely to be a lot more solid.

               My points from various posts amount to:

               1. There is a stupid way of setting up trusts that involves using tax avoidance as the main purpose. There are probably lots of trusts like this that the IRD would like to look at.
               2. Trusts can be used for tax avoidance ancillary to some other purpose of the trust.
               3. The wealthy tend to get better advice and will set their trusts up in this way so they are not so vulnerable to attack.

               You can see this is quite different to the meaning that Felix was ascribing, which was why I was getting pissed off. There were no contradictions in what I was saying, despite the best efforts of Felix to claim otherwise.
               • lprent …

                 23 March 2010 at 4:12 pm

                 Grin… Just part of blogging…. Don’t get riled with it.

                 Just as a side issue, I seem to remember that IRD is one of the organisations getting some large scale job cuts. Makes it easier for the accountants to set up those dodgy trusts without detection.

                 Personally I think that the trusts should be abolished. It isn’t like we have significant death taxes any more. Cleaning up the legal structures, especially the speed of inheritance law would probably obviate most of the need for trusts. As it currently stands, I’d agree with Felix. Many if not most of them appear to be there to shield from taxes. Those that aren’t should probably be be companies anyway.
8. Zaphod Beeblebrox 8

   22 March 2010 at 9:45 am

   The property tax changes appear logical and well thought out. Personally, I would have preferred a property tax as it is easy to collect and the lower houses are the better (less debt, more wealth creation in other ventures).

   The GST rise is bewildering. If it is going to be revenue neutral after compensation, why bother?

   Why do we need to cut the top rate? I have seen no coherent argument to support this in a time of falling government revenue. If people cheat through trusts and company shelters- surely we should just prosecute.
9. Peter Johns 9

   22 March 2010 at 10:00 am

   ZB – trusts etc are legal so you cannot go after them at all under current rules. A lot of people on high income do not pay the 38% rate at all so in effect they may not get much of a tax cut. Also, a lot of low income people do not pay any tax at all due to WFF.
   • Zaphod Beeblebrox 9.1

     22 March 2010 at 11:26 am

     So the solution is to legalise the tax dodge? Income is income we should make people pay their fair share.
10. tsmithfield 10

    22 March 2010 at 10:09 am

    Marty, your analysis is over-simplistic for the following reasons:

    1. According to the TWG document you link to, whether or not the GST is passed on will depend on the price elasticity for given products. It might be that none or only some of the extra GST is passed on depending on the product. Therefore, the poor might not be hit will the full whack of the increase.

    2. GST is a voluntary tax, even to some degree for the poor. Even for people on a low income, there is still the opportunity to shop around for better prices. An increase in retail pricing due to GST will provide more incentive to do this. For instance, I can highly recommend “the powershop” as a much cheaper alternative for power compared to other retail power players. Also, the poor (who haven’t done so yet) could consider options such as growing vegetables rather than buying them, thus paying virtually no GST on the vegetables they grow. Those who smoke or drink (rich or poor) could consider giving up or reducing those habits, reducing the GST they pay and doing their health a favour at the same time. In taking up these and, probably a lot of other options, there is the opportunity for voluntary tax cuts through more effective expenditure.

    Thus, the overall impact of the increase of GST need not be as great as you suggest.
    • B 10.1

      22 March 2010 at 4:19 pm

      TS
      1. Mightnt retailers just as easily whack a bit extra onto their prices eg instead of inreasing something that is 10.99 by a few cents they may increase to 11.99?

      2. GST is not voluntary in any degree for the poor. After housing, every last cent is spent on essential living costs. I don’t know how u define poor but in my opinion it is not possible to smoke or drink if you are poor (unless you are missing rent payments or not paying bills). Growing veges might save you a few cents p/w in gst -whoopee. The fact is that it is already impossible for people trying to subsist on a low income – they simply cannot cover their costs. Shopping around wont help – it might allow them to meet more of their basic needs but they wont have money left over. I know this because I work helping people who are on a low income and I see the figures- they spend on bare essentials and already buy the absolute cheapest of everything. You sound like you have no idea of the actual reality of being poor.

      Thus your arguments do not prove that the full impact of the gst rise will not be felt (at least for low income people)
11. tsmithfield 11

    22 March 2010 at 10:15 am

    Zaphod “If people cheat through trusts and company shelters- surely we should just prosecute.”

    Trusts are set up for lots of reasons other than cheating on tax. If not careful, we can end up throwing out the baby with the bath water. According to my accountant, it is already illegal to set up trusts for the specific purpose of avoiding tax, and there are a number of cases where people have been prosecuted on this basis. According to my accountant, tax avoidance only becomes legitimate when it is an ancillary benefit to the main purpose for what ever structure is put in place.
    • felix 11.1

      22 March 2010 at 10:42 am

      Amazingly you not only read that sentence but also copied and pasted it without noticing the word “cheat”.

      Are you really this dense or are you just overworked? Have you had to take over some of the other aliases this week?
      • tsmithfield 11.1.1

        22 March 2010 at 10:53 am

        Just assuming what is implicit here judging by many other posts I have seen, that any use of a trust for tax avoidance must be cheating, and that the only reason a wealthy person would set up a trust is to cheat the system.

        The main point of that post was to point out where claiming tax advantage via a trust is OK and where it is not. For instance, you would need to be able to put up a convincing argument that a trust was established for the purpose of say, estate planning, before the IRD would let you away with any tax claim. On that basis, there are probably a lot of trusts out there at the moment that might not be very water-tight if the IRD has a close look at them.
        • felix 11.1.1.1

          22 March 2010 at 10:55 am

          So as usual you responded to your own arse rather than to anything anyone actually said.

          Moron.
        • Draco T Bastard 11.1.1.2

          23 March 2010 at 1:28 am

          On that basis, there are probably a lot of trusts out there at the moment that might not be very water-tight if the IRD has a close look at them.

          Then we should be hiring more people to work at the IRD so that such trusts can be found and prosecuted. What’s NACT doing? Oh, that’s right, decreasing the number of people at IRD. I can only assume that this is so that even less of these untrustworthy trusts can be prosecuted.
    • Pascal's bookie 11.2

      22 March 2010 at 10:46 am

      Most of the wealthy have undoubtably arranged their affairs to avoid this stupid tax increase, so it is a bit pointless having it anyway

      So you agree with Zaphod then?
12. aj 12

    22 March 2010 at 10:31 am

    One of the weak arguments given for for why the topmost income earners need such large cut, $20,000, is because they spend more.
    I’m thinking of working out how much extra they will have to spend for the tax cuts to be ‘neutral’ for them .. Marty might do it for me……

    Other ‘Key’ thoughts for the day”

    Cycleway
    Wages catching up with Australia
    • Lanthanide 12.1

      22 March 2010 at 10:46 am

      Someone who is getting $20k tax cut would have to be spending $800,000 before GST, or $900,000 including the current 12.5% GST rate in order for the $20k tax cut to be fully eaten up by the new 15% GST rate:
      $800,000 + 12.5% GST = $900,000
      $800,000 + 15% GST = $920,000
      • Lanthanide 12.1.1

        22 March 2010 at 10:49 am

        Can’t edit my post as someone else has posted.

        This calculation actually makes a complete farce of that argument in favour of tax cuts.

        “A person on John Key’s $350,000 salary gets $12,000 a year.”

        John Key would have to spend $480,000 in order for the full $12k to be eaten up by the GST raise. So he has to spend 37% more than his entire salary for the tax cut on that salary to match the GST rise.

        Clearly this is money going into their pockets, and not back to the government via GST.
        • Lanthanide 12.1.1.1

          22 March 2010 at 10:53 am

          Again I can’t edit my post as someone else has posted – be good if that could be fixed, other websites don’t have this issue.

          That is $480,000 before the current 12.5% GST. If we include the current 12.5% GST it comes to $540,000, or 54% more than his current salary.

          [lprent: I’ll have a look at it again. The difference between this site and other sites is the threaded nature of the comments. Useful for keeping the discussions in a post separated. Bit of a nuisance because the re-edit plugin appears to differentiate based on if someone has replied to your comment. There really isn’t any particular reason for the restriction IMHO. So if needs be I’ll hack a change and send it to the author.

          Cool – current version has a flag in admin. Should be OK now… ]
          • Lanthanide 12.1.1.1.1

            22 March 2010 at 11:09 am

            This site has threaded comments as well as editing: http://www.shamusyoung.com/twentysidedtale/

            Also I think the 6 minute timeout is pretty stingy, it’s very easy to write up some changes and simply run out of time to submit them. 10-15 minutes would be more reasonable.

            Captcha: appreciates
            • lprent 12.1.1.1.1.1

              22 March 2010 at 3:48 pm

              6 minutes is enough for minor editing. But if I have anything major to write, then I’ll usually do it in gedit or notepad externally, and copy/paste.

              Then if I have errors, I can fix in a real editor.

              But I must have a look at that ajax editor whne I have some spare time. It seems awfully clunky…
          • aj 12.1.1.1.2

            22 March 2010 at 3:01 pm

            Lanthanide thank you for your efforts – stunning.
    • Marty G 12.2

      22 March 2010 at 12:05 pm

      remember that $20,000 is just an average for the people with incomes over $250,000.

      The ‘real money’ goes to the Paul Reynolds types – nearly a thousand dollars a day.
      • The Baron 12.2.1

        22 March 2010 at 12:46 pm

        Did it ever occur to you, Marty, that one of the reasons that Paul Reynolds is paid soo much in nominal terms is because he is so exposed to taxes? His personal tax payments alone must total at least $2m.

        I’ve got a theory that over time, wages change to reflect changes in taxation – i.e. raise the top tax rate, and all the people in that top tax rate agitate for higher wages in the medium term. Seems logical, but never seen a study on it. The effect would be that wage differentials between “rich” and “poor” remain the same in real terms, but your Gini coefficients go up the wall.

        The times that goes out of whack is when the taxation base is changed – like now. I’m sure pay for the likes of the Reynold’s in this country will adjust in the medium term to reflect the same differentials.

        On a more directly relevant point – so surely this could be solved by having a “super rich” tax bracket, rather than treating everyone with over $70k as a “rich prick’? If that’s where the “real money” is, then why are you getting your panties in a bunch about the hard working kiwis in the $70-100k bracket, who are finally getting a break – and noone else losing out too!
13. Peter Johns 13

    22 March 2010 at 10:47 am

    We cannot catch up with Australia the way we are carrying on, they produce more tangibles than we do. What alternative do we have besides dairy, tourism etc. Er um minerals, water, oil & gas. I would rather have a rich NZ with holes in the ground, oil rigs than a load of native dancers showing off in front of a crowd of foreigeners as our main bread winner. NZ needs to create real wealth, tourism makes a nation go one way, down if you are too reliant on it.

    I hear there is a new process for processing lignite in the USA to fuel for USD30/bl. Maybe we can adapt this to NZ? http://www.theglobeandmail.com/report-on-business/commentary/texas-university-has-eureka-moment-for-coal-to-gas/article1502823/. Quote:
    ‘scientists in Texas say they have found a way to convert coal into gasoline at a cost of less than $30 (U.S.) a barrel – with zero release of pollutants.’
    This is the type of thing we need to be doing in NZ, get away from imports of oil/gas and make more valuble products. This will decrease borrowing as we have lignite in NZ and maybe export it as is and make bugger all money off it.
    • felix 13.1

      22 March 2010 at 3:02 pm

      Irrelevant. The export profits from any proposed mining belong to the companies who do the mining.

      No NZ companies are going to mine lignite or any other minerals.
14. Vanilla Eis 14

    22 March 2010 at 11:04 am

    “1. According to the TWG document you link to, whether or not the GST is passed on will depend on the price elasticity for given products. It might be that none or only some of the extra GST is passed on depending on the product. Therefore, the poor might not be hit will the full whack of the increase.”

    Actually, since people on lower incomes have to spend a greater proportion of their income on items such as food, electricity, petrol etc, and these items have relatively inelastic demand (Do you know of any reliable substitutes for food or electricity that won’t be affected by the GST increase?) then, they are more likely to “be hit will (sic) the full whack”.

    Big-ticket items have more room in the profit-margin to absorb the GST increase, especially if retailers like to stick to price-points. A TV at $1500 sounds a lot better than a TV at $1533.
    • tsmithfield 14.1

      22 March 2010 at 11:39 am

      You didn’t quote my second point in that post which addresses the issues you have raised.
      • Marty G 14.1.1

        22 March 2010 at 12:07 pm

        my numbers are from the graphs og gst as % of income by decile.
15. pollywog 15

    22 March 2010 at 11:13 am

    I would rather have a rich NZ with holes in the ground, oil rigs than a load of native dancers showing off in front of a crowd of foreigeners as our main bread winner.

    How about we just ship the show off natives to some backwater in the middle of nowhere then you can rape the land to your hearts content ?…and to think that shit was only 2 generations ago !

    http://www.stuff.co.nz/world/south-pacific/3484866/Devastated-Pacific-island-facing-starvation
    • Bored 15.1

      22 March 2010 at 12:53 pm

      Im with you PW, it saddens me that people like PJ and TS are so tied up in their day to day arguments about money that they never seem to stick their heads up, look over the parapet and talk about other realities such as endangered species, local extinctions and so on (except in terms of dollars).. And this myopia is not even a left / right issue, as long as either party frames the debate in enumerative dollar terms as opposed to value and impact terms we will suffer holes, global warming, extinctions, marginalised poor people etc etc.
    • aj 15.2

      22 March 2010 at 3:05 pm

      Sort of a more pleasant version of the Congo in the 19th and 20th century then?

      Saw the King Leopld’s Ghost docu over the weekend – tragic
    • aj 15.3

      22 March 2010 at 3:09 pm

      Sort of a more pleasant version of the Congo in the 19th and 20th century then?

      Saw the King Leopold’s Ghost docu over the weekend – tragic
16. infused 16

    22 March 2010 at 2:49 pm

    $14,000 isn’t an income, it’s govt support. They hardly pay any tax, go figure why they won’t get much of a decrease in tax.
17. freedom 17

    22 March 2010 at 3:28 pm

    infused
    not everyone on a low income is on a benefit
    think before you press the soundbite button, or those of us at the bottom will make your lives a little less comfortable, by stopping to do many of the jobs that let you keyboard jockeys shift numbers on a screen

    oh i’m sorry did i make an assumption, it must be contagious
    • The Baron 17.1

      22 March 2010 at 3:53 pm

      Either way, his point remains the same – its hard to get much of a tax cut when you pay f*ck all to the collective anyway. Noone likes a freeloader.
      • freedom 17.1.1

        22 March 2010 at 4:02 pm

        wow, a new low in tax arguements

        please educate us all Baron, at what income level does a worker have the right to a tax cut then?
        • The Baron 17.1.1.1

          22 March 2010 at 4:22 pm

          Ah, don’t know how you got the idea that I don’t think people should have tax cuts, Freedom. What I said was its hard to get much out of tax cuts when you don’t pay much tax. Bit of remedial reading required here – doesn’t look like you’d meet the national standard.

          Everyone should get an income tax cut – lo and behold, they are. Its just that some are getting a smaller tax cuts than others, because they pay hardly any income tax in the first place. Hence, my freeloading call – they’re costing society more than they pay in.

          I don’t begrudge that – I’m happy to pay a share to keep everyone happier and healthier. But I also think its fair that those that pay the most should get the most when the state decides to lower the rates.

          You clearly have different values, and a hatred for people that don’t get their hands dirty. So sad – there is so much hatred in the NZ left. Helen’s most ugly legacy, that.
          • freedom 17.1.1.1.1

            22 March 2010 at 4:38 pm

            Baron,
            “You clearly have different values, and a hatred for people that don’t get their hands dirty.”

            so so wrong, you have no idea what my values are, please do not attempt to harrass them.

            It is the profit ratio of certain tasks that is the brunt of my hatred. A person is free to do the work they choose, i simply wish there was more equality in the renumeration of employment.

            Your arrogance is crystal clear and my comprehension is fine. Perhaps i misread your freeloader comment, but i believe i was not alone in doing so.
            • The Baron 17.1.1.1.1.1

              22 March 2010 at 5:26 pm

              So you’re arguing an entirely different point then – about how unfair it is that someone who cleans a toilet isn’t paid more. That’s a minimum wage debate, probably.

              This is about whether someone who pays hardly any tax can reasonably ask for a hefty tax cut. I say no, they can’t. Maybe there will be a day that you stop doing the work that you do at the moment – I’ll wait and see.

              Maybe there will also be a day though that you will look to upskill yourself and increase your lot in life without looking for someone else to pay your fair share for you. You’re clearly articulate and clever – so what part of the “evil system” is holding you at the bottom? Is it arrogant of me to ask that? or is it selfish of you to think that you don’t have to do your best to contribute to our society too?

              Why is upholding our values and society’s standards only my responsibility? Now that’s freeloading at its worst.
              • freedom …

                22 March 2010 at 5:41 pm

                i have numerous skills, some of which are more highly developed than others, all of which hold merit in a functioning community.

                i have repeatedly given my best on the goat track of circumstance
                the rewards have often been diminished by selfish acts of capatilist nihilsm
                other times they have simply been stolen

                i was taught to believe in an honest day’s pay for an honest day’s work
                i guess i was given the wrong books
18. Pete 18

    22 March 2010 at 3:59 pm

    TightyRighty @ 1:39pm

    “For many from the economic right ‘fairness’ amounts to income earners retaining the majority of their incomes (regardless of whether the income was due to more ‘hard work’ than the rubbish collector, elderly care worker or disability support worker *on* their pitiful wages).

    are you saying it would be unfair to resesnt much of the money you worked for being taken by the government with little accountability for where it is spent?”

    You’re entitled to resent it all you want – the point is, if the worst-off in society (ie think about an extreme here, for example a child who’s Dad is in jail and Mum is out of work), would be better off if you gave up a few cents in each dollar to ensure that that child (or say one in five children) gets the support they need so they don’t turn out to be a criminal and/or other financial burden on society – ironically enough, another platform for the ignorant libertarian type (like you TR). Do you not see that trickle-down is false? (actually don’t answer that – I think we already know the answer). As far as accountability goes, that’s up to the giovernment of the day – I propose electing a CCO or some-such to ensure this happens across the public sector – great idea isn’t it? That’s what your libertarian buddies are doing right now.

    Oh, and for the record, there are few exceptions to the ‘accountablity’ issue, we have enough mechanisms available to us to check how our money is spent – if we are so inclined. You should try it sometime – most of it is available on these fair interwebs. And, by the way, just because you don’t agree HOW it is spent (or that it’s spent at all), doesn’t mean an accountable process isn’t used.

    “For many on the economic left ‘fairness’ amounts to being able to support yourself and your family, and to avoid poverty and its trappings (crime, lower education rates, fewer opportunities for progression etc).

    and would you not be able to suppourt yourself and your family if you paid less tax? and could aspire to earning more money without getting whumped by the government once your income passed an abitary line? can you do this by yourself? or do you need the government to hold your hand and allow you a budget and tell you what to do all the time.”

    Sure, SOME may be able to – but as a proportion should we gear tax changes to allow this to happen more easily, or rely on some charitable libertarian (yes, that is an oxymoron) to help these families out? You can throw out the hypotheticals all you want, but the point is do you care about those that are worse-off and want to help them gain a level of equity – or do you think that ‘aspiration’ (FFS that is an overused word by you chumps) will pull them all out of poverty – regardless of an ongoing need for low-skill workers?

    Oh, and you can pull the ‘Nanny State’ line all you want, but as a country we aren’t, and never have been a communist state – try the hyperbole in the sewer somewhere.

    “whether you think it is envy or not, you are an idiot. thank you for showing us how retarded those on the left actually are.”

    You proved nothing there with your ridiculous questions numb-nuts, fuck off. Oh, and I never said I was a leftie – just what many of them believed – try to work on your reading and comprehension skills (and try using the ‘Shift’ key occasionally).
    • TightyRighty 18.1

      22 March 2010 at 4:08 pm

      pathetic. a proper weasley, pissant, “it’s all the fault of rich people”, “they should subsidise my stupidity” reply.

      trying to pathetically smear me as someone without reading and comprehension skills when you say that i allude to the “nanny state”, yet nowhere is it mentioned. all i did was mention government hand holding. i’ve dropped nanny state as it is overused. you come up with all the exaggerations you want though. you actually haven’t answered my questons. you have just thrown out the rhetoric, and insisted that people want to remain poor. congrats on that.

      my point stands, you are an idiot, and it’s no suprise that on the back of a no-substance attack, you comment on my grammar. maybe my shift key is broken and i can’t afford to fix it? you are so inclusive and compassionate aren’t you?
      • Pascal's bookie 18.1.1

        22 March 2010 at 4:29 pm

        trying to pathetically smear me as someone without reading and comprehension skills when you say that i allude to the “nanny state’, yet nowhere is it mentioned.

        Go look up the definition of allude. The rest of your comment is typically non responsive.
19. Pete 19

    22 March 2010 at 4:34 pm

    Ha,

    The ‘Nanny State’ line I was referring to is exactly what you mentioned you dork, a ‘line’ is something that is a allusion to something. I’ll stick by the comprehension “smear”.

    “and insisted that people want to remain poor” – c’mon TR, again with the comprehension, go back to the original post you responded to:

    “For many on the economic left ‘fairness’ amounts to being able to support yourself and your family, and to avoid poverty and its trappings” Where’s the argument for people to remain poor?? Also, when a family is able to live above the poverty line how is this a direct correlation with remaining poor? I don’t see the logic…

    Anyway, some are repeated, but here are your precious answers:

    “are you saying it would be unfair to resesnt much of the money you worked for being taken by the government with little accountability for where it is spent?”

    See my post above – “You’re entitled to resent it all you want”, the rest is just your own silly hyperbole.

    “and would you not be able to suppourt (sic) yourself and your family if you paid less tax?”

    See my post above – “Sure, SOME may be able to” etc etc

    “and could aspire to earning more money without getting whumped by the government once your income passed an abitary line?”

    Ah, ‘aspire’, God I love that word. Aspirations don’t pay the bills, neither does the paltry amount some low-income earners get pay for everything they and their families need. That’s why we have public and social services – paid for by tax – available for everyone, so there is a level of equity. I’m sure that sits well with most NZers (yourself, obviously, excluded).

    “can you do this by yourself?”

    Sure I can – I’m in the top tax bracket.

    “or do you need the government to hold your hand and allow you a budget and tell you what to do all the time.”

    Nah, I don’t, and I’ve never heard of that happening – except maybe prisoners and the like – hyperbole again TR?

    Though I do think we should have an option for people to get budgetting advice if they want it – however, this won’t help them with the AMOUNT of money they get in their pockets.

    Is that OK, or do you still need a lie-down?
20. freedom 20

    22 March 2010 at 9:35 pm

    and remember kiddies

    the only way many can have more
    is if a few take less

    so we know that will never happen
21. SPC 21

    22 March 2010 at 11:46 pm

    So beyond depreciation allowances – its onto ring fencing property losses as everyone sort of guessed. Some are now even mentioning LAQC.

    But it’s still a minor reform and really just a way to deliver the north of $50 tax cut promised to the middle class (in days of budget plenty) – to a select few years before a budget surplus is restored.

    Essentially the tactic of elite privilege to the refrain of trickle down apologetics – step (change) down from the top rate to the middle class marginal tax rate for the few on higher incomes.

    This is not the economic reform that is needed, apart from the property tax changes being in the right direction.

    The GST proposal itself is not well thought through – half taxpayers should be compensated for the tax increase on spending and the other half rewarded with lower tax on savings income/incentives to invest. The approach chosen is wasteful.
22. tsmithfield 22

    23 March 2010 at 5:43 pm

    Thank you for seeing my point.

    I would have to agree to disagree with you on trusts as I think they do serve a number of legitimate purposes, and getting rid of them will cause complications.

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