IMF: higher taxes for rich will cut inequality and won’t hurt growth

Written By: - Date published: 12:30 pm, October 14th, 2017 - 104 comments
Categories: bill english, capital gains, don brash, Economy, gst, john key, labour, tax, winston peters - Tags: , , ,

The International Monetary Fund (IMF) says it now favours higher taxes on the rich and has demolished the myth this might adversely affect economic growth.

The authoritative Washington-based think tank in its influential half-yearly monitor also argued for taxes on capital, suggesting a wealth and/or land taxes should be considered, something that will make Gareth Morgan as happy as if the Opportunities Party was in election talks, or even in parliament.

Scaremongers on the Right regularly trot out the high taxes will damage growth fable to scare the electorate and other parties against advocating a more progressive tax regime. Labour has bought into this myth which is why it was too timid to go to the electorate with a firm policy of higher taxes for the 1 percent.

Don Brash, John Key, Bill English and many bank economists have long argued that hitting the rich is bad for economic growth, but the IMF notes there should be “significantly higher” taxes on those with higher incomes than currently prevail.

“Advanced economies with relatively low levels of progressivity in their personal income tax (PIT) may therefore have scope for raising the top marginal tax rates without hampering economic growth,” it added.

“Empirical analysis suggest that there is no systemic adverse trade-offs between increasing growth and decreasing equality,” the IMF noted.

The IMF argument is backed by the OECD, another respected body that could hardly be described as radical or leftist, which in a 2014 paper, Trends in Inequality and its impact on Economic Growth, studied the economic performance of its advanced nation members over a long period and found more equal societies have better economic performance.

The thrust of the IMF paper is a warning to governments about excessive inequality, which it says can erode social cohesion, lead to political polarisation and ultimately lower economic growth.

The paper says it is difficult to rationalise the decline of progressivity in OECD countries since the 1980s.

New Zealand, which once prided itself on being one of the most equal socially cohesive societies in the world, has had one of the steepest rises in inequality in a world of rising inequality.

Since the 1980s, New Zealand’s inequality, has moved closer to unequal countries like the United States. New Zealand’s rate of increase in inequality has been exceeded only by Finland and Sweden.

One measure of inequality in New Zealand compares the incomes of those near the top (the 80th percentile) with those near the bottom (the 20th percentile). In 1980, someone near the top earned 2.4 times what someone near the bottom did, after factoring in housing costs. Now, they earn three times more.

The IMF paper, also argued that different types of wealth taxes should be considered as part of a nation’s armoury to fight excessive inequality.

It notes capital income is even more unequally distributed than labour income and it is rising, and it is often taxed at a lower rate than labour (for New Zealand make that zero).

It says there needs to be adequate tax of capital to protect the progressivity of the tax system, as the wealthy, due to their superior resources, have far more ability to reclassify their income as capital (ie tax dodge).

“Many countries (none named) should emphasise reducing opportunities for tax evasion and avoidances.”

“Taxes on real estate or land are both equitable and efficient and remain underused,” the paper says.

In countries, where there is a low capital gains tax, or in New Zealand’s case, none, the degree to which the fairness of the tax system has diminished since the 1980s is even more exaggerated, the IMF authors state.

“In reality, tax systems may be even less progressive than suggested… because wealthy individuals often have more access to tax relief and more opportunities to avoid taxes.”

“The wealthier have more resources to dedicate to tax planning, as well as incentives to engage in such activities.”

The authors cite another paper by Alstadsaeter Johannesen and Zucman who provided empirical evidence “that tax evasion is particularly high at the upper end of the income distribution” – ie the lack of a capital gains tax gives the 1 percent even more opportunity to rort and cheat.

In what would be even more music to the ears of Mr Morgan, the IMF paper explores the merits of a universal basic income (UBI) as a means of reducing inequality. While it could significantly reduce poverty and reduce income uncertainty resulting from the affects of automation (robots), it is not suitable for countries with a relatively good safety net welfare system.

In such countries “a UBI would result in a very large reduction in progressivity and losses in the size of benefits for many poor households and could even lead to higher poverty”.

The IMF paper taxes a sideswipe at regressive value added taxes, such as GST, which it says are good for increasing revenue but “not to enhance equity”.

The authors says that health and education play a vital role in reducing income inequality over the medium term, addressing the persistence of poverty across generations, enhancing social mobility and ultimately promoting sustained inclusive growth.

They say that in some advanced countries the life expectancy gap between those with tertiary education and those without has even widened in recent years as has the infant mortality rate between the top and bottom socioeconomic quintiles.

The authors, however, are sceptical about the prospect of countries redressing the inequities identified. They say it will be difficult to politically implement a return to a more progressive and fairer tax system, such as prevailed before the 1980s, “because better-off individuals tend to have more influence”, via lobbying, access to the media and political engagement.

It is especially difficult because, unlike in the UK, the Labour Party does not even have a policy of restoring progressivity to the tax system and it might be even more difficult if Winston Peters and New Zealand decide that enough is not enough.

 

Simon Louisson formerly worked for The Wall Street Journal, NZPA, Reuters, The Jerusalem Post and was a political and media adviser to the Green Party around the 2014 election

104 comments on “IMF: higher taxes for rich will cut inequality and won’t hurt growth ”

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  1. RedLogix 1
    14 October 2017 at 12:46 pm

    Absolutely excellent post Simon. This is the kind of work I enjoy a lot and watching the IMF slowly come on board is like the mirage of an oasis, slowly turning out to be real. (Of course reality never quite measures up to hope, but it’s still way better than the sterile, harsh desert of hard-core neo-liberalism I’ve lived with most my adult life.)

    Really worth reading in conjunction with this post is this interesting article from the Gran:

    Every few years the New Economics Foundation publishes the Happy Planet Index – a measure of progress that looks at life expectancy, wellbeing and equality rather than the narrow metric of GDP, and plots these measures against ecological impact. Costa Rica tops the list of countries every time. With a life expectancy of 79.1 years and levels of wellbeing in the top 7% of the world, Costa Rica matches many Scandinavian nations in these areas and neatly outperforms the United States. And it manages all of this with a GDP per capita of only $10,000 (£7,640), less than one fifth that of the US.

    In this sense, Costa Rica is the most efficient economy on earth: it produces high standards of living with low GDP and minimal pressure on the environment.

    https://www.theguardian.com/working-in-development/2017/oct/07/how-to-avert-the-apocalypse-take-lessons-from-costa-rica

    Again Costa Rica is not paradise on earth. Nor is Cuba which is another Latin American country which has also … almost accidentally hit the wealth/inequality sweet spot.

    But like the Nordic countries, Finlan, Denmark, etc they do provide some fascinating data points, aspects that are worth thinking about.

  2. bwaghorn 2
    14 October 2017 at 1:04 pm

    whats this i hear . Top had ideas that would help fix the problems , well i never

  3. Bill 3
    14 October 2017 at 1:20 pm

    I don’t think there has ever been any doubt about what the IMF are proposing.

    The argument that an economy will suffer if the richer are taxed more has always just been a distraction or cover that allowed for the limiting and rolling back of working class power that had accompanied the (mostly) post WWII experiment with social democracy.

    It’s primarily what the promotion of 19thC Liberalism from the 1970s has always been about – a realignment of power within society.

    • Draco T Bastard 3.1
      14 October 2017 at 3:16 pm

      It’s primarily what the promotion of 19thC Liberalism from the 1970s has always been about – a realignment of power within society.

      And that realignment has been detrimental to society as it’s increased poverty and slowed or even stopped development of local economies.

      • Bill 3.1.1
        14 October 2017 at 3:53 pm

        Well yes. But the point is that those who favoured a return to Liberalism and the power it would deliver to them don’t give a rats arse about poverty or much of whatever else besides power.

        Corbyn (just an old school social democrat) has some reasonable stuff to say about it (the power Liberalism delivers and some of what might be done about it) in this Guardian article from today.

  4. Psycho Milt 4
    14 October 2017 at 1:24 pm

    It says there needs to be adequate tax of capital to protect the progressivity of the tax system, as the wealthy, due to their superior resources, have far more ability to reclassify their income as capital (ie tax dodge).

    Yeah, that one’s even more important than raising the top rate. Those of us on wages and salaries don’t get to choose how much income tax we pay, but the wealthy do. If the top rate were to go up, I wouldn’t have any qualms about it and probably wouldn’t even notice the difference, but it would rankle if the wealthy were left to continue dodging their own taxes. Don’t do one without the other.

    • Antoine 4.1
      14 October 2017 at 1:53 pm

      If you draw your argument to the logical conclusion, you might as well just add the capital tax and leave the top income tax rate (which the wealthy can avoid anyway) where it is??

      A.

      • tracey 4.1.1
        14 October 2017 at 1:57 pm

        Because?

        • Antoine 4.1.1.1
          14 October 2017 at 1:59 pm

          Because “the wealthy get to choose how much income tax they pay” so raising the top tax rate is not effective at fighting excessive inequality? It penalises the upper middle class without touching the 1%ers?

          A.

          • Stuart Munro 4.1.1.1.1
            14 October 2017 at 4:01 pm

            The answer to that of course is to impose substantial additional taxes on their evasion vehicles. Got a trust? Pay up.

            • Patricia Bremner 4.1.1.1.1.1
              14 October 2017 at 7:36 pm

              One of the greatest tax dodges has been religious groups and so-called charities.

              They should have to prove they distribute 75% of their income to qualify for tax free status.

              Further they should have to produce audits yearly.

              If this was done, religions and charities would become much rarer beasts IMO.

              The super wealthy should have special taxes, to avoid money bottlenecks.

              The super poor should have reverse taxes to add to their living income.

              We find the 1% often turn themselves into charities or foundations. Is that a tax dodge??

              • Stuart Munro …
                15 October 2017 at 8:18 am

                NZ’s non-tithing core churches are not particularly exploitive, though I’m not sure they’d meet your 75% threshold – they run on mighty slender margins and most are involved in real charity work.

                Outfits like Sanitarium and the Exclusive Brethren are obvious targets. The Mormon Church would be… unhappy… and might flex some international muscle to resist.

      • Psycho Milt 4.1.2
        14 October 2017 at 2:02 pm

        If you draw your argument to the logical conclusion, you might as well just add the capital tax and leave the top income tax rate (which the wealthy can avoid anyway) where it is??

        I guess that’s a matter of opinion. I’m starting from the subjective view that the reduction of progressiveness in income tax by previous governments is that something that should be rolled back, even if only partly, so the top tax rate should increase.

        • Antoine 4.1.2.1
          14 October 2017 at 3:03 pm

          Whereas I start from the view that the top personal income tax rate, trust rate and company rate should be aligned at the same level and that level should preferably not be very high.

          > the reduction of progressiveness in income tax by previous governments is that something that should be rolled back

          You get the progressiveness through the capital tax, don’t need to do it through the income tax as well?

          A.

          • Draco T Bastard 4.1.2.1.1
            14 October 2017 at 3:26 pm

            Whereas I start from the view that the top personal income tax rate, trust rate and company rate should be aligned at the same level and that level should preferably not be very high.

            They should all be aligned at a very high rate as this would encourage more investment.

            A company has three options of either investment (tax deductible), keeping the money in the company (taxed at high rate) or paying out in dividends (also tax deductible (if it isn’t it should be) but taxed on the personal income rate of the shareholders). Same would also apply to trusts. the best option for the company and the shareholders if they want to avoid paying tax is the investment option. Else they pay the tax.

            You get the progressiveness through the capital tax, don’t need to do it through the income tax as well?

            Part of the reason for high income taxes is actually to prevent people having excessively high incomes. No point in paying someone $1m if they’re only going to get $10,000 more per year than paying them $500,000. The $1m income would just be a waste for the company.

            • Incognito 4.1.2.1.1.1
              14 October 2017 at 6:37 pm

              Part of the reason for high income taxes is actually to prevent people having excessively high incomes.

              IMO this is the root cause of the problem that a redistributive ‘corrective’ measure such as progressive tax is aimed at (actually, that’s only one side of the redistribution, and it never gets taken to full completion); it is perceived as penalising and even as ‘legalised theft’ by some. In other words, ‘giving’ heaps to someone and then trying to take away heaps from them is all back-to-front to me. Deal with the root cause of income & wealth inequality and the tax problem largely disappears. Taxes are generally seen as the key issue but they are merely a distraction and used as such by the well-heeled; the incomes and assets almost always escape real scrutiny.

              • Draco T Bastard …
                14 October 2017 at 6:45 pm

                Taxes are generally seen as the key issue but they are merely a distraction and used as such by the well-heeled; the incomes and assets almost always escape real scrutiny.

                QFT

          • Psycho Milt 4.1.2.1.2
            14 October 2017 at 5:07 pm

            …the top personal income tax rate, trust rate and company rate should be aligned at the same level…

            No arguments there, only about where that level should be.

            You get the progressiveness through the capital tax, don’t need to do it through the income tax as well?

            I don’t believe so. The capital tax only restricts the ability of the wealthy to dodge paying taxes while whinging to anyone who’ll listen about the onerous tax burden that’s placed on them. The progressive part comes from taxing higher incomes at higher rates, and successive governments over the last 30 years have reduced the progressiveness of our income tax rates.

          • mikesh 4.1.2.1.3
            15 October 2017 at 12:45 pm

            ¨You get the progressiveness through the capital tax, don’t need to do it through the income tax as well?¨

            I see a ¨capital¨ tax as a tax on capital´s yield – in other words a form of income tax – rather than a tax on capital itself. I don´t see any justification for taxing capital (except possibly where it is part of an inheritance tax levied at death). This implies excluding capital gains taxes since, contrary to what many think, capital gain is capital rather than income. It might not exclude, however,
            Gareth Morgan´s proposal to tax ¨Imputed income¨.

  5. Andre 5
    14 October 2017 at 1:26 pm

    As always, Nick Hanauer’s latest rant on the topic of top tax rates and a healthy economy is worth reading.

    http://www.politico.com/magazine/story/2017/10/11/republican-tax-cut-for-rich-economy-215696

    • UncookedSelachimorpha 5.2
      14 October 2017 at 5:37 pm

      An quote worth repeating from the newer Hanauer article:

      “The rich are “job creators,” we’ve told you. The more money and incentives we wealthy few have to invest in creating jobs, the better the economy is for everybody—especially you.

      That’s a lie.

      There is is simply no empirical evidence nor plausible economic mechanism to support the claim that cutting top tax rates spurs economic growth.”

      • Andre 5.2.1
        14 October 2017 at 6:14 pm

        Growing up a good mate’s family had a small business that they did very well out of, and they had expensive recreational habits.

        When there was some new levy or policy introduced that effectively amounted to a tax raise, the subject came up of what they would do about it. And the father said something about how if he wanted to keep getting his new toys, he would have to figure out how to get more income. So he did things he would have preferred not to do and grew the business, employing more people.

        Then when the Douglas tax cuts came and they were keeping a lot more of their gross income, he decided the aggravation running a bigger business for the extra cash in hand wasn’t needed and he scaled back, shedding those extra people.

        Which shows shows an exactly opposite example to the myth that give rich people more money then they’ll create more jobs.

  6. Incognito 6
    14 October 2017 at 1:30 pm

    Another great post today!

    In my view, the last two paragraphs are the most telling ones.

    We can equal the concerted actions of those “better-off individuals” to status quo protected by Establishment at all cost! Their collective influence is through dictating & owning the narrative, in public political discourse.

    We will never make any serious headway if our ‘progressive’ parties timidly buy into this narrative, time after time. If IMF and OECD can (slowly) change their tune then so could our so-called Left! They not only could, they should!! Not just the ‘tune’ but the whole darn hymn sheet while they’re at it.

    I don’t have a lot of confidence in IMF trail blazing a path to a truly more equal and equitable society; they will only go as far as to find the sweet spot that maximises ROI (profits) and leaves ownership untouched and in the hands of the same few people as before, IMHO. I see it in the same light as National proclaiming to have suddenly found a social conscience as is supposedly evident through their social investment practices; it sounds compelling but really it is a Trojan horse.

  7. tracey 7
    14 October 2017 at 1:58 pm

    Great post thanks. I had understood it was usually accepted economic theory that if you gave tax cuts to the lower earners in tight times you boost the economy cos it goes back in spending. More generally if you give tax cuts tot he high earners they pay down debts or go on hols (money out of the country)…

    • Andre 7.1
      14 October 2017 at 2:21 pm

      That’s not the economic theory promoted by RWNJs. Their theory is give more money to the people that already have the most and it somehow trickles down to everyone else, like a kind of golden shower.

  8. Philj 8
    14 October 2017 at 1:59 pm

    IMF – higher taxes on the rich? Just when exactly did they wake up to this amazing realisation? No credibility.

    • RedLogix 8.1
      14 October 2017 at 2:42 pm

      The important thing here is not that you or I rate the IMF’s ‘credibility’ poorly, but that many people do.

      Ten years ago this would have been unthinkable; now it’s not.

      • Draco T Bastard 8.1.1
        14 October 2017 at 6:53 pm

        People are going to be looking at these major institutions that have been changing their tune over taxes on the rich over the last few years and realise that the Left* have been saying that for decades. At that point we can hope that the majority of people will realise that it’s the Left with credible economic capabilities and not the Right-wing**.

        * Excluding Labour
        ** Including Labour

    • Hongi Ika 8.2
      15 October 2017 at 6:23 am

      Nah trickle down works best.

  9. The Chairman 9
    14 October 2017 at 2:37 pm

    Clearly, our history has shown the income tax rate at the top end has considerably dropped.

    On the other hand, our CGT has (over the years) been more rigorously enforced and strengthen by the bright line test.

    It wasn’t a high CGT that produced a more equal society, it was (among other things) the high rate of income tax.

    Therefore, if we want to improve equality, we must consider correctly identifying and reversing the drivers which have led to the inequality we currently face.

    Which points to the changes in the income tax rate and the share of the income pool employees attain opposed to upper management.

    Tax minimisation also has to be addressed. Losses should be ring-fenced to the business they were made in and tax liabilities in general should be harder to wright off.

    When considering a land or wealth tax, one mustn’t make the mistake Garth made. Which was lumping all property owners together and classing them (therefore taxing them) as if they are all well off.

    Treating a struggling home owning pensioner the same as a well to do home owning successful high-flyer will create more inequality

    The high cost of housing (which is due to a mix of contributing factors that I won’t delve into now) also needs to be addressed.

    • Draco T Bastard 9.1
      14 October 2017 at 7:06 pm

      Losses should be ring-fenced to the business they were made in and tax liabilities in general should be harder to wright off.

      I think that all finances of a business needs to be ring-fenced. Shouldn’t be able to right a loss of one business off the income of another business even if the one making the loss is a subsidiary.
      Transfer Pricing needs to be banned. Apple US should not be able to charge Apple NZ for using its logo and it most definitely shouldn’t be a tax write-off.
      A business shouldn’t be able to borrow to pay dividends. And the interest on the loan most definitely shouldn’t then be a tax write-off.

      Basically, if a business has a tax write-off then there should be a way for the government to tax that payment. I.e, A business buys something from another business in the same country then the second business pay tax on their profit. The government doesn’t lose any taxes. On the other hand a tax write off for a local business which spent outside of the country the government isn’t going get the tax from that second business.

      • The Chairman 9.1.1
        15 October 2017 at 9:39 am

        Yes, I largely agree. It’s a matter of identifying the holes and plugging them.

        • Descendant Of Sssmith 9.1.1.1
          16 October 2017 at 7:43 pm

          The simplest way to avoid tax writeoffs is to tax at gross sales and leave the issue of expenses, etc to the owners and shareholders to sort out.

          I’ve argued this for many years now.

          Deducting the tax at POS for electronic transactions through the EFTPOS system and this amount going direct to government the hundreds of millions of dollars lost each year by businesses not paying and going bust will be almost eliminated.

          The broadening of the tax base to all businesses for all sales in the NZ economy, including those that currently expense it away offshore, would mean that many current NZ businesses would pay less while the banks and international companies would pay more.

          Ultimately you could net off all wages under a certain amount (say for instance $100,000) and simply have progressive tax rates for everything over that and lift the minimum wage to a living wage.

          The fact is for most wage earners the employer pays the PAYE and removing the tax burden of the PAYE to the employer for incomes up to $100,000 will encourage more employment not less because you’ve reduced the real cost and puts people labour on the same cost basis to a large extent as the emerging work force of robots for whom no PAYE gets paid.

          Businesses would still need to file monthly returns for gross cash sales and pay the tax on this each month.

          You can leave the tax collection rate as collect same amount of tax as is done now and make the tax gains from less avoidance (due to the difficulty to evade based on gross income), reduced black market (due to the low rate), more immediate payment and less defaulting.

          Additionally governments should forecast collection amounts for the year in budgets and by law 50% of tax collected over that total in a year should be returned to the businesses from whom it was collected.

          The other 50% can be used by government with a focus on reducing government debt.

          South Africa already does this for small businesses:

          http://www.sars.gov.za/TaxTypes/TT/Pages/default.aspx

          • mikesh 9.1.1.1.1
            16 October 2017 at 10:13 pm

            Such a tax would seriously disadvantage a high volume/low margin company. eg if the revenue tax rate was set at, say, 0.5%, a company whose profit was 2% of revenue would find that its tax bill was 5 times its profit. However a company with a profit rate of 10% of turnover would enjoy a tax rate of 50% of profit.

            • Descendant Of Sssmith 9.1.1.1.1.1
              16 October 2017 at 10:34 pm

              Nonsense because your whole premise for that statement is the status quo in that you believe there should be a relationship between tax and profit.

              The level of profit in such a tax system is irrelevant – the issue of expenses and profit is between the owners and shareholders. If they have an issue with not enough profit then they should take more interest in what the actual costs of the business are.

              Every business should pay tax as part of the cost of operating in New Zealand to help pay for the legal and societal framework in which they can operate and flourish.

              Those that pay no tax now because they make no profit or can shift it offshore are freeloading off the businesses that do make a profit.

              Profit is let’s face it simply a form of private taxation.

              The purpose is to ensure the tax base is wider than it is now.

              First you have to get past the paradigm that tax and profit have some sort of useful relationship. What we’ve seen is the ability to shift and minimise that profit despite high earnings makes that type of relationship pretty useless.

              • mikesh …
                17 October 2017 at 8:50 am

                ¨Nonsense because your whole premise for that statement is the status quo in that you believe there should be a relationship between tax and profit.

                The level of profit in such a tax system is irrelevant – the issue of expenses and profit is between the owners and shareholders. If they have an issue with not enough profit then they should take more interest in what the actual costs of the business are.¨

                It´s the after tax profit that is of interest to the shareholders. Introducing a tax that is not proportional to profit is simply unsound economically. A tax based on revenue would to all intents and purposes would be just another expense, but one not related to any service provided to the company.

                This is different from, say, a land tax. A land tax would be an expense which could be taken into account when forming a budget. However, unlike a land tax, if one tried to budget for a revenue tax by raising prices, the revenue tax payable would also rise.

                • Descendant Of Sssmith …
                  18 October 2017 at 5:25 pm

                  It´s the after tax profit that is of interest to the shareholders.

                  Fundamentally that’s one of the problems. Minimising profit to reduce tax liability, often to nil, is seen as good management by many. There’s far too much focus on that than what real expenses are being extracted, including massive amounts of capital via high executive salaries for one.

                  A tax based on revenue would to all intents and purposes would be just another expense, but one not related to any service provided to the company.

                  The society the business operates in provides many, many services to all companies. From education and health systems, to roads and other infrastructure, to the civilness and lawfulness of society, ……

                  Every business should pay significantly towards this. No business should ever pay nothing.

                  • Nic the NZer …
                    18 October 2017 at 5:50 pm

                    “Minimising profit to reduce tax liability, often to nil, is seen as good management by many. ”

                    Doesn’t that mean no dividend payments to shareholders? What do they get for their investment? It sounds like such a company is being operated in the interests of managers over shareholders in this instance.

                  • Nic the NZer …
                    18 October 2017 at 5:55 pm

                    Another way to deal with this (which I heard suggested by ultra progressive economists) is to have no company tax and instead impute all profits onto the owners (where it is taxed). This seems a much better strategy than what presently happens where company tax is passed onto consumers often times.

                    • mikesh …
                      19 October 2017 at 9:05 am

                      I have often thought that this would be a good idea. All profits should be tax free, but paid to shareholders as dividends, with the latter paying tax on their dividends at their own personal tax rates. If a company wished to retain all or part of the profit for investment purposes, they would issue new shares, in lieu of dividends, to their shareholders.

                  • mikesh …
                    19 October 2017 at 8:58 am

                    There are different sorts of tax: Some are based on ownership eg land tax, capital gains tax; some are ¨punitive¨ eg taxes on alcohol and tobacco; some are based on productive activity eg income tax, company tax. Generally speaking it is considered that the taxing of productive activity should be more or less proportional to the returns on that activity (while recognising the need for progressiveness). A revenue tax seems to be a tax on productive activity, but one that is no longer proportional to the returns obtained. Activities involving large turnover at small margins are disadvantaged as compared with lower turnover at larger margins.

                    It may be argued, as you do, that earnings and profits should be irrelevant to the amount of tax paid, but most people seem to think the those who earn more should shoulder a larger proportion of the governmentś need for revenue.

                  • mikesh …
                    19 October 2017 at 9:45 am

                    ¨Fundamentally that’s one of the problems. Minimising profit to reduce tax liability, often to nil, is seen as good management by many. There’s far too much focus on that than what real expenses are being extracted, including massive amounts of capital via high executive salaries for one.¨

                    I don´t think a revenue tax would discourage the extraction of ¨massive amounts of capital via high executive salaries¨. And as far as ¨minimising profit to to reduce tax liability¨ is concerned, I don´t think that happens except in the case of transfer pricing from overseas. However, I don´t think we should mess up our own tax system just to combat this; which is not to say that transfer pricing is not something we should be fighting against.

                    ¨The society the business operates in provides many, many services to all companies. From education and health systems, to roads and other infrastructure, to the civilness and lawfulness of society, ……

                    Every business should pay significantly towards this. No business should ever pay nothing.¨

                    I have never suggested that we should not pay taxes. However a revenue tax is not a payment for a service provided specifically to a company (unlike ,say, a land tax), but generally to the community as a whole.

                • Draco T Bastard …
                  18 October 2017 at 6:15 pm

                  A tax based on revenue would to all intents and purposes would be just another expense, but one not related to any service provided to the company.

                  A viable society with an educated populace is a service rendered by society to business.

                  Introducing a tax that is not proportional to profit is simply unsound economically.

                  It would still be proportional.

                  However, unlike a land tax, if one tried to budget for a revenue tax by raising prices, the revenue tax payable would also rise.

                  Proving it’s proportionality.

                  • KJT …
                    19 October 2017 at 1:02 pm

                    DTB. How do you tax a builder on Revenue compared with an accountant.
                    Over 3/4 of a builders revenue is expenses such as materials, tools and staff.
                    An accountant. Can work from home, and just keep their copies of the accounting standards up to date.

            • Draco T Bastard 9.1.1.1.1.2
              18 October 2017 at 6:11 pm

              But isn’t it the point of capitalism that if a business can’t survive it doesn’t?

              It’s not the governments job to ensure a faulty business model can continue.

              • mikesh …
                19 October 2017 at 9:18 am

                A business model may be faulty under one system of taxation while OK under another. The governmentś job is to provide a tax system which achieves a fair outcome. Fairness is best achieved if the tax burden is shared in proportion to income received. A tax based on revenue doesn´t achieve this.

                • Draco T Bastard …
                  19 October 2017 at 12:54 pm

                  The tax system should apply equally to all participants with everyone paying their fair share. When some get advantages then the tax system is actually wrong. If a business can only work when the tax system is wrong then the business shouldn’t be in existence.

                  And, yes, a tax based upon revenue does achieve this. Or are you saying that PAYE is wrong and that we should treat everyone the same as businesses with all their tax write-offs?

                  • KJT …
                    19 October 2017 at 1:06 pm

                    Childcare, travel to work, uniform and protective gear should be tax deductible for employees, as it once was.

                    The principle was that employers would pay all work related expenses out of their, tax deductible income. Of course this is not happening.

                    Taxing gross revenue is totally distorting, as the amount of profit over revenue varies greatly according to the business. High turnover businesses such as supermarkets, typically have 3 to 4% margins for example.

                    • mikesh …
                      19 October 2017 at 6:14 pm

                      ¨Childcare, travel to work, uniform and protective gear should be tax deductible for employees, as it once was.¨

                      Uniform and protective gear should be provided by the employer, but if the employee has to provide his own he should be paid an allowance. This used to be a provision in most industrial awards. I´m not sure what the situation is now that the award system has been discontinued.

                      Child care and travel to work should not be deductible since these do not contribute to the earning of taxable income as required by the Income Tax Act.

                      Interest is another oddball expense. It doesn´t contribute directly to the earning of taxable income but the Act allows it., which would seem to be something of an anomaly.

                    • Draco T Bastard …
                      19 October 2017 at 6:25 pm

                      Child care and travel to work should not be deductible since these do not contribute to the earning of taxable income as required by the Income Tax Act.

                      But they do for the people on PAYE.

                    • mikesh …
                      19 October 2017 at 8:28 pm

                      ¨But they do for the people on PAYE.¨

                      They don´t, actually. They put people in positions where they can start to earn taxable income, but they don´t contribute to the actual earning of that income. Anyhow, that´s the Commissioner of Inland Revenue´s position on the matter.

                      Arguably it´s the same with interest. Borrowing enables borrowers to invest, but it´s the actual investing that earns the taxable income.

                  • mikesh …
                    19 October 2017 at 5:56 pm

                    ¨When some get advantages then the tax system is actually wrong.¨

                    That is it in a nutshell. A tax system based on revenue rather than income gives some people an advantage.

  10. WILD KATIPO 10
    14 October 2017 at 3:00 pm

    Great post but , … its all been said BEFORE. We know all this.

    We’ve had the John Pilgers , the Hugh Prices , the Alister Barry’s , – all brilliant and all factual , concise , prophetic and who have provided the counter arguments against neo liberalism.

    My question is ,… WHY has it taken 33 years to even timidly revisit all this ?

    IMF and OECD aside , – really ?!!?

    And yes I realize these ‘report’s’ are delivered as a generic global critique , – but they are directly relevant to this country because we were the TEST CASE GUINEA PIGS !!!

    Did we have to wait until 2017 ( 33 years after the fact ! ) to receive a mild report from them on what we all knew ALREADY ? How many more representatives from social agency’s do we have to sagely nod our heads in agreement towards then ignore , – how many more Metiria’s do we need to crucify before we start to actually get off our arses, and set our sights squarely on those treasonous fuckers who caused all this to happen in this country ?

    All these excuses , all this inertia about ‘ it cant be done’ , ‘ the problems too big ‘ , ‘ it could never happen because ‘the cards are all stacked against us ‘ ,…

    BULL BLOODY SHIT !!!

    The very self same heads of the neo liberal treason are the very same treasonous bastards who ,- after leaving cushy and influential govt appointed positions such as Treasury and the Reserve Bank , – are the very self same scumbags such as Don Brash , Ruth Richardson , Jenny Shipley and Chris Tremain – who after fucking us all up , – are now CEO’s heading such illustrious outfits as the China Construction Bank (CCB) NZ , the Industrial and Commercial Bank of China (ICBC) ,The Bank of China .

    Shipley v Brash: Who earns more Chinese bank cash? | Stuff.co.nz
    http://www.stuff.co.nz/business/…/Shipley-v-Brash-Who-earns-more-Chinese-bank-cash

    You’ve HAD all the evidence . You KNOW all the players. You’ve all SEEN what they’ve done to this country.

    And yet like Cambodia or post Nazi Germany or any number of east European or South American banana republics , – you let these crooks , plunderer’s and thieves walk the streets free while sneering contemptuously at the poor , – the very same poverty class THEY created and yet all you / we ever do is wring your hands and pontificate on how we ever got to this level !!!

    THAT is the real criminality in all of this :

    A beaten , hollowed out public ground down by ALLOWING these perfidious thugs the ability to do what they did to us and walk scot bloody free! And then to add injury to insult? – then allowing the filthy shitheads to keep on doing it , never learning the lesson and then voting the pricks back in again !

    These white collar penpushers went WAY beyond just being simply parsimonious : these fuckers had an agenda. A viscous agenda. And yes I know , – this article is all about taxation and equality , – and some would say this little rant is going off topic. BUT IS IT ?!!? ,- REALLY ?!!? , – because last time I looked it was also about society’s being EQUITABLE !!!

    Here’s a good read :

    New Right Fight – Who are the New Right?
    http://www.newrightfight.co.nz/pageA.html

    Now then , – if New Zealanders , – and those in particular on the Left , are serious about change , … one of the first things that need to be done is the dismantling of much of what these treasonous bastards managed to get into law . And , – by association , – exposure of the same for their crimes. In doing that, it would give a kind of ‘catarrh – ick ‘ – like momentum to expelling the ideology of these self serving trougher society wreckers and hopefully resulting in convictions and long prison sentences for their acts of treason by stealth. That and the corruption of our democratic foundations.

    THEN , … we can talk about problem solving and finding a solution.

    And just so we all know where we stand on all this , – here’s a few good documentary’s provided by Ed a day or so ago that actually not only names and shames these bastards – but gives close up footage of every eye movement , every averted glance and every falter of the voice of these liars in action.

    Enjoy.

    New Zealand – In a Land of Plenty Full Doco – YouTube
    Video for New Zealand – In a Land of Plenty Full Doco▶ 1:44:13

    • WILD KATIPO 10.1
      14 October 2017 at 3:00 pm

      And here’s the second one .

      New Zealand – Somebody Elses Country Full Doco – YouTube
      Video for New Zealand – Somebody Elses Country Full Doco▶ 1:47:20

      • cleangreen 10.1.1
        15 October 2017 at 5:59 pm

        Thanks Wild Katipo.

        Shit I just finished watching it I was blown away as during 1987-1998 I was in Canada working and never saw this all before.

        Just as well I was away then, I loved seeing Winston there fighting for us and MMP then with Jim Anderton.

        Two great guys. Thanks again mate.

    • Philj 10.2
      14 October 2017 at 8:40 pm

      Good rant WK. I enjoyed reading it. We are not alone or powerless. Cheers.

    • Ed 10.3
      14 October 2017 at 10:32 pm

      Brilliant Wild Kapito.
      We share a lot of ideas. I love the passion you speak with; if only we had courageous and passionate politicians who would take on the establishment.
      The UK have Corbyn.
      Who do we have?

  11. tuppence shrewsbury 11
    14 October 2017 at 3:44 pm

    outside a handful of second rate property developers, who i’ll include in that description those who purchase homes primary, secondary and tertiary for profit with no intention of improving the housing stock qualitatively or quantitively, i don’t think you’ll find too many people will argue against a capital tax AS LONG AS there is a reduction in income tax, for which the vast majority of capital owners, income is derived from capital. the positive impacts of changing the gearing of the various taxes to be more equitable between will greatly discourage any form of gaming, gearing in anticipation of events related to tax and avoidance, as by it’s very nature it makes these things redundant.

    The problem for New Zealand is that the current system has been established for too long to not cause immense pain in it’s implementation. So a transitional period of say 5 years is necessary. this is problematic in itself due to the election cycle being only three years and allows for pandering to interested parties. The transitional period should allow for tax free sales of existing stock only, once it’s changed hands it’s liable for tax. once 5 years is up, it’s all taxed regardless.

    simply increasing overall tax rates will not be a panacea to inequality.

    • The Chairman 11.1
      14 October 2017 at 4:14 pm

      “Simply increasing overall tax rates will not be a panacea to inequality”

      Of course not. But tax increases for the top end plays a vital role in the required correction.

  12. Whispering Kate 12
    14 October 2017 at 4:24 pm

    “The authors, however, are sceptical about the prospect of countries redressing the inequities identified. They say it will be difficult to politically implement a return to a more progressive and fairer tax system, such as prevailed before the 1980s, “because better-off individuals tend to have more influence”, via lobbying, access to the media and political engagement.”

    The above paragraph doesn’t make for optimistic results for a fairer system. Political parties are too frightened of their own shadow to make contentious legislation. The last time anybody had a pair of cojones was the pig farmer and what a pig’s breakfast he created. Now there is so much wealth and influence saturating our country true democracy just doesn’t work anymore.

    • The Chairman 12.1
      14 October 2017 at 4:38 pm

      “The authors, however, are sceptical about the prospect of countries redressing the inequities identified. They say it will be difficult to politically implement a return to a more progressive and fairer tax system, such as prevailed before the 1980s, “because better-off individuals tend to have more influence”, via lobbying, access to the media and political engagement.”

      And yet, isn’t it interesting that better-off individuals are using their influence to call for a CGT?

      http://www.newshub.co.nz/home/money/2017/10/bnz-chief-calls-for-capital-gains-tax-to-fight-the-big-gap-between-rich-and-poor.html

      • CoroDale 12.1.1
        14 October 2017 at 9:25 pm

        And yet, interesting that they don’t call for restrictions on private banks creating money with debt. Lets spin positive and say CGT is a first step, towards the truth about all.

      • Incognito 12.1.2
        14 October 2017 at 10:24 pm

        And yet, isn’t it interesting that better-off individuals are using their influence to call for a CGT?

        Before I open the bubbly I’d like to see much much more evidence of a real change of heart. To me it is a little too convenient, too cute, and too piecemeal to point to some kind of epiphany. It reminds me of Bill English and his so-called Hardship Budget in 2015 to tackle child poverty. It was heralded amongst much fanfare as a game-changer and as “the first, beyond inflation, since 1977” and a “package to lift children out of poverty will see benefits rise beyond inflation for the first time in 30 years” – note that arithmetic has never been Bill’s strongest skill. So, more than two years later, how much impact has this made? Is child poverty substantially less now? Obviously, it is not and the message is that we have to view these kinds of announcements from IMF and BNZ alike under a similar light of healthy scepticism and critical analysis.

        • The Chairman 12.1.2.1
          15 October 2017 at 9:44 am

          The well to do calling for a CGT tends to be a distraction from us focusing on increasing the tax rate on their huge salaries and returns.

          A number want to offset a CGT with lower income tax.

          Labour are doing similar. Advocating for a CGT, but avoiding calling for income tax increases at the top end.

      • mikesh 12.1.3
        15 October 2017 at 1:30 pm

        ¨And yet, isn’t it interesting that better-off individuals are using their influence to call for a CGT?¨

        Where this is the case I think they do so because they fear that, if they don´t, they may find themselves faced with something even less palatable.

        • Incognito 12.1.3.1
          15 October 2017 at 1:34 pm

          I agree; it is not a step forward in the right direction but more of a ‘tactical retreat’ to consolidate power.

        • The Chairman 12.1.3.2
          15 October 2017 at 1:49 pm

          Indeed, mikesh

          As I said above, the well to do calling for a CGT tends to be a distraction from us focusing on increasing the tax rate on their huge salaries and returns.

          A number want to offset a CGT with lower income tax.

          Keeping in mind, it wasn’t a CGT that helped make us a more equal society in the past. It was (among other things) our high income tax rate.

        • mikesh 12.1.3.3
          15 October 2017 at 4:58 pm

          It was interesting that the BNZ CEO, interviewed on The Nation yesterday, opined that a capital gains tax would do little to improve the economy, and that the case for CGT rested mainly on the issue of fairness. However, except in situations covered by the brightline test, I don´t see CGT enhancing fairness in the tax system, so I guess we might as well consign it to the waste paper bin.

          • Stuart Munro 12.1.3.3.1
            15 October 2017 at 6:41 pm

            No, let’s keep it.

            Best indicator of how necessary it is how much property speculators hate the idea. It’s a proven idea worldwide – in fact we are almost the only advanced country stupid enough not to have one.

            No need to reinvent the wheel – CGT – just like everyone else.

            • mikesh 12.1.3.3.1.1
              16 October 2017 at 8:14 am

              I am not aware that property speculators ¨hate the idea¨, and, even if they did, it´s not evidence that capital gains taxes make for a fairer tax system.
              And just because other countries have stupid tax systems doesn´t mean we have to.

              • KJT …
                19 October 2017 at 9:24 pm

                A “fair” tax system is where all income is treated equally.

                Whatever the semantics, capital gains is money income to those that are fortunate enough to acquire it.

                We are the ones that have the stupid tax system, where consumption and wages are overtaxed, and capital is way under taxed. To the advantage of those who already have lots of money capital and to the detriment of everyone else.

                It was Adam Smith who said tax rentiers and landowners, not entrepreneurs and workers. Though I think he would have had something to say about today’s financial entrepreneurs.

                • mikesh …
                  20 October 2017 at 8:36 pm

                  [[ “fair” tax system is where all income is treated equally.]]

                  True.

                  [[Whatever the semantics, capital gains is money income to those that are fortunate enough to acquire it.]]

                  Untrue. Except where property (or shares) is purchased for the purpose of resale; these situations are covered by the ¨brightline¨ test.

                  The Income Tax Act leaves income undefined, but I think you will find that legal and tax experts agree that capital gain is not income.

                  [[We are the ones that have the stupid tax system, where consumption and wages are overtaxed, and capital is way under taxed. To the advantage of those who already have lots of money capital and to the detriment of everyone else.]]

                  Very likely true. But why not, in that case, tax the whole of capital rather than just the capital gain. Land and/or property taxes collected on a regualar basis, in much the same way that rates are collected, would seem to be a better idea where real estate is concerned.

                  [[It was Adam Smith who said tax rentiers and landowners, not entrepreneurs and workers. Though I think he would have had something to say about today’s financial entrepreneurs.]]

                  You seem to be confused about this. Rentiers don´t sell their properties for ¨capital gain¨ but rent them out for the rental income that they can yield.

    • Tracey 12.2
      14 October 2017 at 8:02 pm

      They will pay for some different experts

  13. cleangreen 13
    14 October 2017 at 4:24 pm

    So why was the agressive global “austerity” plan implimented even in NZ (slowly) and all other countries that forced all our sale of viable assets at fire sale prices?????????/

    Was that the ‘vehicle’ to rob us of our assets?????

    Probably it was another rort by the golbal elite again..

  14. UncookedSelachimorpha 14
    14 October 2017 at 5:42 pm

    Great post, thanks Simon.

  15. DH 15
    14 October 2017 at 6:25 pm

    I wish they’d both leave taxes alone the meddling pricks.

    A tax increase is a pay cut and no-one is going to take that quietly. The management class has a great deal of influence over their pay and when you raise their taxes they simply scratch each others backs and pay themselves more to make up for it.

    Wage rises don’t appear out of thin air, they take their pay rises off the lesser paid who don’t have any influence over their pay. The Unions used to watch those management salaries like a hawk but they’re all dead or gone now.

    When Clarke’s Labour Govt raised the top rate to 39% we saw all the already overpaid bureaucrats indulge in an orgy of huge pay rises for themselves and the end result was a widening of the gap between those at the top … and those at the bottom.

    Actions have consequences and tax increases don’t occur in a vacuum. Leave the bloody thing alone.

    • The Chairman 15.1
      15 October 2017 at 9:55 am

      Tax increases or not, salaries of the management class continue to soar regardless.

      And there are a number of contributing factors for that, weak unions is one of them.

      Tax increases don’t occur in a vacuum, hence it’s only one of a number of factors that need to be addressed.

      • Nic the NZer 15.1.1
        15 October 2017 at 10:15 am

        The left needs to pick its battles.

        Some other factors driving inequality the IMF doesn’t discuss,
        1) The government aiming to have about 1 in 25 workers be unemployed (which effects wages).
        2) The cuts to most public services since the 1980’s reducing access to public services.
        3) The cuts to most public services pushing those working in those sectors down the overall pay scale.
        4) The overall growth rate of the economy being lower since the 1980’s and this improving the relative profitability of asset speculation.
        5) The de-regulation of lending making it much easier to facilitate asset speculation.

        The government of today could address all these areas by regulating stronger or simply by spending more on some sectors. It can do this without raising a cent more in taxes.

        Even the more reasonable research faction (which has almost no say in which policies are prescribed when the IMF negotiates) of the IMF still believes that the status quo should prevail in these areas.

        • The Chairman 15.1.1.1
          15 October 2017 at 10:30 am

          Raising taxes would give the Government more scope to spend more on public services.

          Nevertheless, you forgot to add foreign ownership, thus returns heading offshore. Leaving a fiscal hole in our economy.

          Since the 80’s, this country has off loaded a number of our most lucrative sectors/businesses to offshore investors and done away with capital controls.

          • Nic the NZer 15.1.1.1.1
            15 October 2017 at 12:22 pm

            “Raising taxes would give the Government more scope to spend more on public services.”

            No it would not. Though effectively taxation creates a higher level of unemployment (reduces total spending), which may increase the amount that the government is able to spend on the economy without running into inflation constraints of the economy. But in no way does the governments spending program ever depend on the availability of funding. Simply put the government can at all times afford to purchase everything for sale in NZ dollars.

            Further if you want the IMF’s effective beliefs on this (as exposed by their forecasts and policy prescriptions) it gets even more bizarre they believe in negative spending multipliers, probably through some Ricardian Equivalence mechanism. That means they believe when the government increases its spending then the private sector automatically sequesters its spending (to pay for taxes they expect in the future) meaning there would be no need for taxation at all to restrict total spending. In practice this does not appear to occur however.

            “Nevertheless, you forgot to add foreign ownership, thus returns heading offshore. Leaving a fiscal hole in our economy”

            Returns heading off shore *can* leave a hole in total spending in the economy (a fiscal hole would pertain to government tax collection) when those profits are not re-spent on the economy again. This, like non-investment style saving (or repayment of private debt), like taxation reduces total spending, increases unemployment and so just creates more opportunity for government spending to fill that gap.

            • The Chairman 15.1.1.1.1.1
              15 October 2017 at 5:23 pm

              “But in no way does the governments spending program ever depend on the availability of funding”. 

              It wasn’t what I was claiming.

              The availability of funding in the hand does however improve their scope to spend. However, I wasn’t suggesting Government spending was totally reliant on it.

              “Though effectively taxation creates a higher level of unemployment” 

              We’ve had higher taxes in the past with low unemployment, thus I disagree on this point.

              Higher tax at the top end allows for the revenue to be redistributed, increasing demand, thus is an economic stimulus. When met by more production, inflation will be fine and it will result in more tax revenue.

              • Nic the NZer …
                15 October 2017 at 7:37 pm

                I can’t discern the meaning of the statement,

                “The availability of funding in the hand does however improve their scope to spend.”

                It appears to imply some kind of spending constraint. As I already commented,

                “Simply put the government can at all times afford to purchase everything for sale in NZ dollars.”

                “We’ve had higher taxes in the past with low unemployment, thus I disagree on this point.”

                That’s a fair comment (I didn’t explain this well), however, just as taxation reduces total spending (and thus increases unemployment) government spending increases total spending (it adds directly to GDP actually) and thus increases employment and at the times you are referring to public spending was much larger compensating fully for the higher taxation.
                Also, obviously its much more straight forward, when seeking to increase demand, to simply increase demand, rather than hoping to redistribute that spending enough to influence demand.

  16. joe90 16
    14 October 2017 at 6:36 pm

    Corporate tax rates, according to Dwight D.

    • Andre 16.1
      14 October 2017 at 6:58 pm

      Note that Dwight D.’s argument for high corporate tax rates pushes companies to a high-capital-gain low-dividend mode, which is OK if capital gains are taxed at a rate similar to ordinary income. As they were in the US, but not in NZ (although Dubya dramatically lowered the CGT rate and Obama didn’t push it back up).

      Another difference is that in the US, corporate profits are taxed before dividends are paid, then the shareholders that receive the dividends pay income tax on them. Whereas in NZ, corporate tax paid creates imputation credits, which effectively means NZ shareholders then don’t have to pay income tax on the dividends.

      • mikesh 16.1.1
        15 October 2017 at 2:17 pm

        ¨Another difference is that in the US, corporate profits are taxed before dividends are paid, then the shareholders that receive the dividends pay income tax on them. Whereas in NZ, corporate tax paid creates imputation credits, which effectively means NZ shareholders then don’t have to pay income tax on the dividends.¨

        Shareholders do pay tax on dividends. The imputation credit provides them a tax credit for portion of the tax, paid by the company, included in the dividend. If the shareholder´s personal tax rate is therefor greater than the company´s he will have to pay extra tax; if less, he can claim a tax refund of the the difference.

  17. One Two 17
    14 October 2017 at 8:15 pm

    So how much in $$ do ‘ The Realm of New Zealand’, and other debtor nations OWE THE IMF…

    IMF trying to position itself in a positive light, using deflection..

    IMF is very much part of the problem!

  18. Richard 18
    14 October 2017 at 10:23 pm

    The Dutch have got the answer!

  19. Adrian 19
    15 October 2017 at 9:05 am

    In the IMF s case it’s philosophy comes from the top, only when the change in the form of new directorate comes at the top does this change, as has happened recently.
    Of course they are comfortable with higher taxes because IMF salaries and perks are huge to start with and any increased taxes will be negated by a lift in these payments.
    In a conversation about 12 years ago with a relative who is a senior staffer I posited an argument and was accused of being a Marxist, that wouldn’t happen today maybe a gentle ” .. well, you’ve always been a bit of a socialist Adrian “.

    • Nic the NZer 19.1
      15 October 2017 at 10:23 am

      I think (as they are employed internationally) IMF staff are typically exempt from, taxation one way or another. This is not to say they are fairly paid however, given the costs and destruction imposed by almost every intervention they have ever done they would still be to expensive even if they worked entirely Pro Bono. More simply the world would be a better place if the IMF didn’t exist.

  20. CHCOff 20
    15 October 2017 at 3:52 pm

    Whatever the politics of the methodology, where public sectors are designated, they would give better value using wide spread lay persons accounting in their organisational trees of things:

    What is present value, what are incomings, what are outgoings tallies, all within the one and same mechanism.

    In an ideal world that would be the approach in the private sector also, but in terms of pragmatic functionalism and practicality, a compliment of styles would be best.

  21. Michael who failed Civics 21
    15 October 2017 at 5:37 pm

    Will one of you lot in Labour’s inner circle pass this on to Grant Robertson? I think he (and the rest of us) would benefit from his reading it. It’s a shame the report wasn’t around before the last election but Grant will have another three years to reflect on it and produce a tax policy before the next one.

  22. CoroDale 22
    15 October 2017 at 8:40 pm

    IMF / World Bank Annual Meetings conclude today, and this year the European Investment Bank was participating.
    Note worthy that the European Investment Bank (EIB) is being forced by German restrictions; from a banking bail-out phase, to an uncharted phase of banking bail-in. Expect confidence in the financial system to reach new lows.
    For example; protests in France today, opposing Agenda 21 style austerity.
    Despite the debt-elephant in the room; meeting agenda was on strengthening Europe, greening business, unilateral vs multilateral development, and naturally the weather. (http://www.KenFM.de, http://www.actvism.org, http://www.eib.org)