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Inequality and the rich

Written By: - Date published: 1:56 pm, December 29th, 2011 - 75 comments
Categories: Economy, Media - Tags:

In today’s Herald, Geof Nightingale, tax partner and member of National’s Tax Working Group, joins the argument for greater inequality in New Zealand. He quotes the OECD report saying that

The OECD reckons it’s vital Governments review their tax and transfer systems and increase the top tax rate so well-off individuals contribute their fair share. It also stresses the need to improve tax compliance and eliminate tax loopholes. At first glance, it would seem that New Zealand is heading the other way when in Budget 2010 we rebalanced our tax system by reducing personal tax rates and increasing GST.

Nightingale prefers the argument of the Tax Working Group that

The OECD recognises the dangers of rising tax rates and benefit levels, noting they can produce disincentives (to work, to save or even to remain in New Zealand) and damage economic growth. The Tax Working Group saw the danger signs a while back when tasked with examining New Zealand’s tax policy. As a result it recommended reducing personal tax rates, but increasing GST and taxes on property. The theory being, reducing personal tax rates increases the incentives for people to enter the workforce and increasing tax on consumption would encourage savings.

I saw Nightingale’s presentation to the Tax Working Group conference – it can be viewed here. I found two of the slides particularly interesting. One was headed “Equality measures” – it showed the changes recommended by the Working Groups left 23% of children in poverty after lowering of taxes at the upper end – no change. Also the scale showing the benefit to those at the top end topped out at $120,000 income – a lot less than Nightingale would be earning.

Nightingale is right about one thing – Generation Inequality is not happy. His special pleading won’t change that.

It is ironical that in the same edition of the Herald that gives space to Nightingale, Garth George writes his last column as the editors decided that “his column does not fit in with their future plans for the opinion pages.” Here’s what Garth thinks is important:

Meanwhile, let’s take a look at what I consider to be the most serious and vexing problem facing New Zealand – and the Western World – now and in the immediate future: income inequality and unemployment.

In their book The Spirit Level, British epidemiologists Richard Wilkinson and Kate Pickett reveal that among the world’s wealthiest countries, it is the more unequal ones that do worse, according to almost every quality of life indicator. The fundamental findings, which are backed by sound social science research, is that inequality damages community life and the relationships that hold nations together. They show that many social problems are more common in societies with larger income differences.

And the sad thing is New Zealand is among the most unequal of the “rich” countries. We have poorer health, higher teenage birth rates, more people in prison, more mental illness, more obesity, more drug abuse, lower levels of child well-being, huge personal debt, and less social mobility than the more equal rich countries.

In a newspaper article, Britain’s Archbishop of York, Dr John Sentamu, wrote: “Evidence-based research confirms what many have always believed: that inequality is divisive. It weakens the bonds of caring, kindness and trust between us . “If we are not to see a generation of young people damaged by long-term unemployment, and a society becoming increasingly anti-social, we need resolute action to tackle these insidious and corrosive [economic and social issues]. If we want a happier and less divided society, then an important step would be to reduce the income differences between rich and poor.”

As we enter the second decade of the third millennium, let us all think on these things.

Blessings for the New Year.

Good on you Garth – I’m with you. Let’s hope the Herald editors’ plans do not involve more Nightingale-type opinions.

75 comments on “Inequality and the rich ”

  1. Colonial Viper 1

    All Nightingale is doing is singing for his $800/hour charge out rate to wealthy clients. He’s not interested in helping the economy for the 99%, just the economy of the 1%.
    Next he’ll be calling the rich pricks “job creators”, instead of the more appropriate “parasites on labour”.

    • Rodel 1.1

      CV….I Have to agree with the probable word play. Jon Stewart (Daily Show) says republicans can’t use the expression, ‘the rich’ any more.It’s been changed to the more appealing … ‘job creators’.
      Shades of Frank Luntz….

        • Lanthanide 1.1.1.1

          Except his successful television program does create jobs for those working on it. Not a huge number of jobs, and it’s probably static or slowly declining, but jobs none-the-less. It’s not entirely clear that all of those jobs would continue to exist without his show, either.

        • felix 1.1.1.2

          And what, chris?

          • chris73 1.1.1.2.1

            Theres something about rich, white people making money lamenting about the poor that doesn’t seem right a la Mike Moore

            Uppe-middle class cringe or guilt I guess?

            • Colonial Viper 1.1.1.2.1.1

              People who start out with social consciences can keep them and still get rich you know.

              Unlike financial market traders who have been shown to be even more psychopathic than run of the mill psuchopaths.

              http://www.spiegel.de/international/zeitgeist/0,1518,788462,00.html

            • felix 1.1.1.2.1.2

              So if you’re rich you can’t point out cynicisms? If you’re rich you can’t analyse the manipulative use of language in politics and the media?

              Is that what you’re saying, chris?

              • chris73

                I guess its easier to point out the inequalities when you’re higher up the food chain I suppose.

                • Lanthanide

                  And yet so many rich people are completely blind to what poverty is really like and swear black and blue that it doesn’t happen in this country and they just waste all their money on piss and fags and they’re all just lazy bums that need a kick up the arse to get out and work hard for their money like they themselves have their entire life and they never got given any handouts by the government.

                  You know the type.

                  • chris73

                    you mean the types whose taxes actually pay for the above bludgers?

                    • Colonial Viper

                      you mean the types whose taxes actually pay for the above bludgers?

                      Isn’t that the very least that the wealthy and powerful can do for their designing in systemic poverty in what should be a rich country?

                      Oh yeah, and stop attacking the victims of the very same capitalist system that the wealthy and powerful direct.

                    • KJT

                      I am actually more upset about my taxes paying for these bludgers.

                      http://kjt-kt.blogspot.com/2011/03/kia-ora-yeah-we-should-be-doing.html
                      “Politicians who accept an income from the people of NZ, while they sell them, and the country out, to their sponsors from private corporates”.

                      Far more costly.

                      Society should look after the sick, old and those unable to find work.

                      After all, with a bit of bad luck they could be any of us.

                  • prism

                    @Lanthanide
                    What you say is what happens for sure. And looking further, the rich people encourage and exploit that tendency to over-indulgence that we all have, but which lower income people cannot afford to allow to indulge regularly and develop into addiction. This then makes it even harder for those already struggling in jobs offering low incomes who would like to improve their living standards.

                    Why else is it so hard to stop gambling parlours and alcohol outlets setting up against the wishes of communities who recognise these mendacious methods of enriching some and degrading many, and costing all through higher taxes required for police and a lower moral and personal code amongst the good-time guys and gals and the addicted.

                • Colonial Viper

                  I guess its easier to point out the inequalities when you’re higher up the food chain I suppose.

                  Of course. Its hard to afford a subscription to The Economist when you are on the minimum wage.

                  • chris73

                    Naah I’m sure the local library has a copy

                    • logie97

                      …apparently the “local library” is up for discussion in the user pays model.

                    • Colonial Viper

                      Yes quite right. But do note that the local library isn’t open the hours that easily fit what many minimum wage shift workers do. Getting to the local library can also be expensive and time consuming in the bigger cities.

                      So your example illustrates perfectly why it is so much easier the wealthy to be aware of the issues – they have access to a wealth of information and professional advice at their finger tips.

                • felix

                  “I guess its easier to point out the inequalities when you’re higher up the food chain”

                  And, chris?

                  Come on man, you were heading somewhere with that. Cat got your tongue?

                  • logie97

                    Isn’t amazing how the middle class, aspiring upper class, continue to smash the lower classes. Get off our ladder pricks…
                    They never have a bad word for the “Ruling Class” – Time changes nothing.

                  • chris73

                    Did Jon Stewart always think this way or has he now got a conscience because hes done well for himself and feels guilty, I really don’t know but I know I wouldn’t feel comfortable being a “working class hero” while living amongst those I choose to critique

                    But thats just me

                    (and no cat hasn’t got my toungue but my dog had my leash so I thought I’d take him for a walk)

    • Populuxe1 1.2

      Except they’re not “job creators”, they’re “profit maximisers” and all too often these things are mutually exclusive.

  2. Jellytussle 2

    How true is this…………..”In 2010, just 12 per cent of individual taxpayers contributed a disproportionate 49 per cent of all personal income tax.” ?
    How much of the wealth do the 12% own?

    • Peter 2.1

      Don’t know how much wealth but they earned about 40% of the taxable income.

      • Peter 2.1.1

        PS The bottom 12% actually earning receive about 1.6 % of the taxable income compared to the top 12% receiving 40% of taxable income. These people earn up to $10,000 pa compared to the top 12% who earn anything in excess of $70,000 pa.

        The average taxable earnings of the bottom 12% is about $4900. They pay an average tax of 10.5 cents in the dollar. The average taxable earnings of the top 12% is in the vicinity of $108000. They pay an average tax in the vicinity of 26 cents in the dollar.

        So the “rich” earn on average over 20 times as much as the “poor” but only pay about 15.5 cents in the dollar more in tax on each dollar earned. In addition lets not forget the regressive nature of GST, where “rich” and “poor” alike pay 15 cents on each dollar spent.

        Source – Treasury

      • Roger 2.1.2

        This is the problem with the argument that the top small percentage pay a much larger percentage of the tax take therefore the balance is out of whack and the poor need to take a larger burden or the economy will not grow blah blah blah…

        If the top 12% were being taxed at the exact same rate as everybody else they would still be paying 40% of the total income tax. Would this lead to the same argument that they should pay less tax?

        • KJT 2.1.2.1

          Using income tax figures is a fudge. If you use total tax figures the top 12% pay nowhere near 40% of tax.

          Most of the tax (60%) is actually paid by the middle percentiles including the lower end of the 12%. between 50k and 90k.

          The top 4% have had average pay increases of 17% and tax cuts as well as using tax dodges not available to the less wealthy. They do not pay their requisite proportion of tax. Especially as they are the greatest users of and the greatest drain on the resources of our society.

    • Peter 2.2

      The trust between us disappeared with the bankers word-wide rout.

  3. Matt 3

    A society that aims first for freedom will not end up with equality but it will end up with a closer approach to equality than any other system ever developed. A society that aims for equality will end up with neither.

    “You can only aim at equality by giving some people the right to take things from others. And what ultimately happens when you aim for equality is that A and B decide what C should do for D. Except they take a little bit of commission off on the way.”

    • McFlock 3.1

      I’d much rather “A & B deciding what C should do for D” than “A deciding what B, C & D should do for A”. But then neither are the case.
        
      Democracy means that A, B, C & D decide what A, B, C & D should do for D, where D isthe person who needs help. But then nutbar freidmanites understand less about democracy than they do about markets economics, which is not half as much as they think they do.
       
       

    • Colonial Viper 3.2

      A society that aims first for freedom will not end up with equality but it will end up with a closer approach to equality than any other system ever developed.
       

      Bullshit
       
      Unless you are using the US as an example of a society that aims for
      “freedom first”. Look how well that has gone. Freedom for capitalists, freedom for corporations, slavery for everyone else.

      • prism 3.2.1

        CV
        And the freedom to bristle with guns and solve political differences by assassinating their leaders, and yet still strut about and say ‘How fine are we, What a piece of work is man, How noble his reason’ etc.

    • Jenny 3.3

      A society that aims first for freedom will not end up with equality but it will end up with a closer approach to equality than any other system ever developed.

      Matt

      The hypocrisy of the right on the issue of freedom as typified by ACT:

      ACT New Zealand’s self described party of “individual freedom” voted for the intrusive video surveillance bill. But of course like Matt, ACT see no contradiction, between state spying and intrusion, and ‘freedom’.

      Right wing supporters of privilege, like Matt, while crying freedom – In practice, are always at the forefront of calling for state repression. As it is the state which ultimately and unequally protects their freedom to exploit, while restricting the freedom to resist.

      Banks and the financiers are perfectly free to lord it over the world in the interest of the elites, and are ‘perfectly free’ to knowingly crash the economy out of greedy self interest, and then have the state bail them out.

      But as a citizen, you are not ‘perfectly free’ to protest about it, in public spaces like Aotea Square.

      In the latter case, the state response is completely different. In fact the state threatens the protesters with jail time. Surely the ultimate state act, of removing all personal freedom from you. (Apart, that is, from gunning you down. As the Egyptian state chooses to do faced with similar protests in Tahrir Square)

      It is all OK for Matt to trot out right wing rationalisations for inequality. But if Matt were sincere in his support for personal freedom, he would be decrying the removal of the personal freedoms of the Aotea occupiers. But of course he won’t do that, because the occupiers are challenging ‘the perfect freedom’ to exploit that is behind Matt’s talk of freedom.

      “Modern libertarianism is the disguise adopted by those who wish to exploit without restraint. It pretends that only the state intrudes on our liberties. It ignores the role of banks, corporations and the rich in making us less free. It denies the need for the state to curb them in order to protect the freedoms of weaker people. This bastardized, one-eyed philosophy is a con trick, whose promoters attempt to wrongfoot justice by pitching it against liberty. By this means they have turned “freedom” into an instrument of oppression.”

      George Monbiot

      http://www.commondreams.org/view/2011/12/20-5

  4. henry olongo 4

    Hey Matt, I think your rant about freedom is pretty vacuous. File under rhetoric How is your fantasy relevant to this post about inequality & agenda-setting in the corporate media?

  5. Populuxe1 5

    I have no problem getting rich through genuinely earned work profit, but I object to people who deliberately manipulate, rort and circumvent the system to make money that they can’t possibly need. I strenuously object to governments who make it policy to assist in this behaviour. I think tax breaks for the wealthy should be tied directly to their contribution to the arts, charity and other public foundations.

    • infused 5.1

      The arts? What the hell are you smoking?

      • Colonial Viper 5.1.1

        Encouraging charitable giving to the arts and creative endeavours is a pretty good idea don’t you think.

      • Populuxe1 5.1.2

        The arts foster creative thinking, highlight complex ideas, nurture national identity and human empathy – all healthy for a society. I agree with Chris Finlayson that private funding of the arts should be encouraged (not that he really does more than pay lip service to this, and I don’t believe public funding should be reduced). James Wallace, Adrienne Lady Stewart, and Fiona Campbell (founder of the Real Art Roadshow which trucks contemporary art to schools) all put their money where their mouth is and all respect to them.

        • infused 5.1.2.1

          The only people that care about art, are art people.

          [lprent: Apologies and a note. Never schedule bans to end between xmas eve and new years day. I forgot to turn the moderation off. ]

          • fender 5.1.2.1.1

            Well there must be alot of “art people” as you put it around then infused, get out more.

            Your comments are normally painted in shit, thought you were an art person too.

  6. Mbossa 6

    I must say I was a little surprised to read something so reasonable coming from Garth George. It almost seems like the prospect of imminent unemployment caused him to grow a heart.

  7. Pete 7

    I read a fascinating article in the Atlantic a couple of months ago called Can the Middle Class be Saved?. It opened with this sobering comment:

    In October 2005, three Citigroup analysts released a report describing the pattern of growth in the U.S. economy. To really understand the future of the economy and the stock market, they wrote, you first needed to recognize that there was “no such animal as the U.S. consumer,” and that concepts such as “average” consumer debt and “average” consumer spending were highly misleading.

    In fact, they said, America was composed of two distinct groups: the rich and the rest. And for the purposes of investment decisions, the second group didn’t matter; tracking its spending habits or worrying over its savings rate was a waste of time. All the action in the American economy was at the top: the richest 1 percent of households earned as much each year as the bottom 60 percent put together; they possessed as much wealth as the bottom 90 percent; and with each passing year, a greater share of the nation’s treasure was flowing through their hands and into their pockets. It was this segment of the population, almost exclusively, that held the key to future growth and future returns. The analysts, Ajay Kapur, Niall Macleod, and Narendra Singh, had coined a term for this state of affairs: plutonomy.

  8. KJT 8

    No published comments on Nightingales column.

    Wonder why not?

    To give Garth G his due, even the ones that totally disagreed with him were published.

  9. Dr Terry 9

    Perhaps rather than all focus being placed on “equality” (which can never happen in human affairs), we should think in terms of “justice for all”. Our country may be on the brink of monstrous injustices, if this creature and his like have their way.
    Garth George more recent signs of enlightenment must have greatly worried the Herald. Has everybody noticed that the Herald dismissed Tracy Barnett a few weeks back? She was too truthful, a threat to this newspaper.

    • RedLogix 9.1

      Perhaps rather than all focus being placed on “equality”

      Without wanting to come over too picky, this surely isn’t so. No-one but no-one has been advocating that all people should be exactly the same. You are right, this never has been, nor ever will be so. There always will be differences between people.

      What we are concerned about however is a tiny elite who have exploited their positions of power and privilege within advanced, high-tech capitalist economies to capture a grossly disproportionate segment of income and wealth for themselves.

      It is this extreme of wealth and poverty that is so deeply corrosive, unjust and destructive of the decent humane life that should be accessible for every human on the planet.

      • KJT 9.1.1

        I do not think there are many here who thinks a surgeon and a wharfie should earn the same.

        Just that the children of the wharfie or the surgeon have the same opportunity to become a surgeon.

        These people should not be getting lots of wealth for destruction.
        http://www.dailymail.co.uk/news/article-1235576/How-bankers-destroy-7-1-create-Hospital-cleaners-valuable-society-say-researchers.html
        or these. http://www.huffingtonpost.com/johann-hari/how-goldman-sachs-gambled_b_633436.html

        Also. Just the fact of already having wealth should not allow the further accumulation without earning it. It then ends up in fewer and fewer parasitic hands.

        Allan Gates obviously agrees. He has said that his children will be left enough to live comfortably, but most of his fortune will go to charity.

        • Colonial Viper 9.1.1.1

          Surgeons are considered as just another labour class by administrative managers these days. Highly unionised like wharfies of course, which also makes them stronger.

          Someone please explain to me why a NZ banking CEO should earn 5 times or 10 times the wage of a specialist surgeon working in the NZ health system. That is obscene.

          • logie97 9.1.1.1.1

            It seems that no one can put a value on anyone’s labour or contribution to society. We have a school funding system based on the “professional status” of its community.

            Perhaps that debate needs to be had. People are loathed to criticize surgeons because they might need one one day. However a surgeon can do SFA without a nurse, an orderly, or an anesthetist, and who taught the “skilled”. Some would say that they learnt despite the teacher, but who built the school for the learning to take place, and who was the benevolent Minister of Education who …

            FFS we all live in one system, yet the self interest in us all overlooks the wider good.

          • KJT 9.1.1.1.2

            There has always been only two classes.

            Workers. Including professionals, innovators and those who start business through their own efforts..

            Parasites including bankers and those with unearned wealth. , Who live off the workers.

  10. felix 10

    So Garth is now unemployed and seeing his income dramatically reduced and he suddenly sees income equality and unemployment as the two most important issues.

    Well fuck me if that doesn’t just make him even more of a prick than he ever was.

  11. randal 11

    stop that felix.
    nearly fell of me chair.
    but you right.
    the nig nono for that lot is income redistribution but only if it is going to the poor.
    if they can get their own hands on the money then its okay.

  12. johnm 12

    “There is no question upheaval is on the way, particularly in the US. If Ron Paul becomes president much can be rolled back and changed peacefully. Another four years of this president could spell violent revolution in the US. The utter temerity of recent legislation, which allows the president to name anyone a terrorist, goes far beyond the pale. It is the throwing of the gauntlet.

    2012 is going to be quite a year with falling economies in the UK, Europe, the US, China, Japan and the remainder of Asia. Latin America, and Mexico by comparison should fare fairly well overall. England is in a death spiral. Europe is next, the US is not far behind and China and Japan will soon join the disjoined group. We are about to witness the end of the period that developed since the end of WWII. That is economically, financially, socially and politically. The transition into the future is going to be borne out of chaos. If you have any doubt just look at the recent legislation passed in the US allowing the president to pick up and incarcerate, torture or murder dissidents. Americans will be labeled terrorists for any reason government decides. ”

    “We are about to witness the end of the period that developed since the end of WWII. That is economically, financially, socially and politically. The transition into the future is going to be borne out of chaos.”
    refer link: http://globalresearch.ca/index.php?context=va&aid=28381

    As AFKTT and many others keep saying we are now well into the collapse phase of Industrial Civilisation with Oil supply set to to slide rapidly into terminal decline. Cheap oil is gone forever.

    Relevance to post? We need a healthy society as equal as possible free from the greedy wealth worship I am alright scourge. We need to reach out to our less fortunate kiwi brothers and sisters and enable them with ourselves to meet the greatest challenge we have ever faced: Coping with a paradigm now in sunset and meeting the new energy constrained future along with the additional challenge of climate change.

    • happynz 12.1

      I’m a bit perplexed by your post’s support for Ron Paul. The man’s Libertarian fantasies and bizarre faith in the invisible controlling ‘hand of the market’ don’t give you pause? Paul’s strident anti-government stance is a bit strange for a man who has spent much of his life on the government payroll.

  13. johnm 13

    “The normalcy bias, or normality bias, refers to a mental state people enter when facing a disaster. It causes people to underestimate both the possibility of a disaster occurring and its possible effects. This often results in situations where people fail to adequately prepare for a disaster, and on a larger scale, the failure of governments to include the populace in its disaster preparations. The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred then it never will occur. It also results in the inability of people to cope with a disaster once it occurs. People with a normalcy bias have difficulties reacting to something they have not experienced before. People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation.”

    Why we just don’t get it that our World is already vastly different. We need a strong united society to cope not a divided money gubber grab the spoils which we have now.

  14. randal 14

    what a lot of frigging garbage.
    Barack Obama is the best president the United States has Had since FDR and JFK.
    rampant scaremongering of your sort is straight out of the 1950’s.
    as for ron paul.
    he will do nothing for the poor of the USA.
    he just another greedy who would like to join the gingrinch in having a $1,000,000 charge card at tiffanys.
    please spare us that sort of nonsense.
    lp must be taking a xmas nap letting your sort of nonsense through.
    never mind. it is useful to listen the rantings of madmen just to compare it with sanity.

    • Colonial Viper 14.1

      Barack Obama is the best president the United States has Had since FDR and JFK.

      LOL, certainly the top 0.1% think so.

      1) Guantanamo is still open, Afghanistan appears to be open ended war, and Iraq is slowly collapsing again immediately after the withdrawal of US troops.

      2) Obama insists that Wall St’s massive financial fraud has been “unethical” but not “illegal”, there have been no invesstigations let alone prosecutions of top executive bankers, and he is continuing to allow massive cash injections into big banks even as millions of homeowners have lost their homes.

      3) The US is stepping up economic sanctions against 80% of Iran’s income, squeezing Iran’s livelihood against the wall. This is also what the US did to Japan in the years leading up to WWII. Foreign wars help encumbent US Presidents in election years, of course.

      4) Check out the massive U6 underemployment stats and also the Shadowstats unemployment figures. Meanwhile, there are over 700 billionaires in the US now.

      5) He’s kept Geithner, Bernanke in charge of the sinking ship. US Govt debt to GDP has just crossed 100%.

    • Muzza 14.2

      Yes Randal LP must be away because your post is , let’s say, lacking in political understanding.
      BO a great president, LMFAO – do you seriously believe that !
      Baa aaa ck to sleep little Jandal !

      [lprent: I am around. Why would I need to intervene? Just people disagreeing. No behavior patterns that need rectifying. ]

  15. johnm 15

    Hi randal
    If Barack Obama is the best president since FDR and JFK why are there 46,000,000 Americans on foodstamps with no new deal for them on offer?
    The International Energy Agency itself says we are well past peak oil and there are numerous warnings of overall oil supply decline. Refer Chris Martenson :The next 20 years will be totally different to the previous 20. This is not scaremongering.

    It is not nonsense to say that Major events happening in the outside World beyond this narrow blog will affect us big time!
    Narrow blinkered viewpoints are not necessarily sane!

  16. randal 16

    well golly gee.
    you guys should go to the USA and help them. sounds like they need it.
    sounds like you know how to do it.
    in the meantime.
    what is the average wage here.
    how many people get it or over.
    what do they do with it when they’ve got it?
    when was the last time you had a pay rise?
    why doesn’t the stats department tell us waht we want to know so we can make proper analyses and comparisons?
    is that clear enough?

    • Mike 16.1

      The average wage here is somewhere around $950 per week I think. But that is misleading and I wish the media wouldn’t always go on about the average wage. 70% of working wage and salary earners in this country earn less than the average wage, but many sheeple think that the average represents a typical or middle of the road worker. High salaries drag up the average disproportionately.

      It’s far better to use the median which I think is somewhere around $650 – $700 per week. That way you know that 50% of the working population earn more than the median and 50% earn less.

      The fact of the matter is that it is our entire monetary and economic system that is at fault. Almost the entire money supply is created as interest attracting debt. For new money to be added to the money supply (as the exponentially increasing economic growth model requires) it has to be borrowed into existence. The interest is never created but has to be paid back along with the principle. Total principle plus interest is greater then the total money supply. Hence public and / or private debt simply increases and increases until collapse.

      The most profitable economic sector on the planet is that of financial trading and speculative gain. Where vast amounts of money are used simply to generate more money and where there is absolutely no productive gain or benefit to society whatsoever. Is it a world we really want where a Wall St hedge fund manager gets $300 million a year for contributing absolutely nothing to society or the real economy whilst a scientist looking for a cure for a disease who is helping society might make $60 thousand if they are lucky? Is it a sign of a responsible, positive economic system that the total amount of money in the entire world’s money supply is around $70 trillion yet the ‘value’ of the existing speculative derivatives being bought and sold is around $700 trillion?! That’s 10 times the GDP of the whole planet! Consider this, for one person to become a millionare, roughly 100 people somewhere in the world must have no money at all. For someone to become a billionaire, roughly 100,000 human beings somewhere in the world must have no money at all. In order for someone like Bill Gates, who some think is wonderful due to his foundation, to have 50 billion dollars, 5 million human beings must have nothing.

      Healthcare contributes a large share of GDP, which means that a large portion of economic growth is determined by sick and dying people! If the amount of money spent on healthcare increases, that is considered to be a good thing in economics speak. The more sick and unhealthy people there are, the higher the GDP is. That’s sick. Inflation hurts the poor the most, yet they are the people who have the least amount of influence over it.

      Unfortunately, there is no profit in things that are beneficial to society such as saving lives, peace, sustainability, social responsibility. We live in a society where there are unprecedented levels of wealth, yet there are also unprecedented levels of social failings; increasing levels of violence, self harm amongst kids, drug abuse, mental illness, child abuse, etc. Does that not seem wrong? Activities which are detremental to society and human kind such as war, illness and disease, financial speculation, greed, etc; are the activities which whithin our monetary and economic system are rewarded with massive profits. That’s a defective system surely?

      • Muzza 16.1.1

        Mike, very well said indeed. We live in a world where people are taught that money & profit above all else is king.
        It’s not sustainable, there are some who know this will end badly, for the masses who have no or litle understanding about where the continued money chase is leading us.

  17. We live in a world where people are taught that money & profit above all else is king.

    Who teaches that?

    It’s up to parents and communities to teach better.

    • Colonial Viper 17.1

      Who teaches that?

      Our entire political economic corporate system.

    • Muzza 17.2

      Didn’t you notice the title of this thread Pete? How do you think we arrived at this place. Worship of money is playing a huge part, and it is used by various means against people, whether that know it or not.
      In case you need some help Pete.
      1: marketIng , advertising, targets people, needs money = king
      2: GFC , debt, pensions, stock markets, commodity prIces, OCR, foreign debt, budgets, foreign exchange.

      Even you should get the examples Pete, because if you think money/currency is not force fed onto people , you need to head off to pasture old son!

  18. DH 18

    Some of you guys need to spend a little more time researching & less time bickering IMO. I found this site when googling for info on NZ taxes after reading the Herald commentary by Nightingale. No-one here seems to dispute the figures which I find a little puzzling. The 12% paying 49% of tax claim is correct only on paper, by any real analysis it is false and demonstrably so.

    The 12% figure was likely calculated from the Treasury report here;

    http://www.treasury.govt.nz/budget/2010/taxpayers

    (It’s actually 11.2% without rounding but the report adds up to 12% & 49% for the top five groups)

    Note that the percentage of taxpayers in each income bracket is worked out from the total of 3,374,000 ‘taxpayers’. Well that 3,374,000 includes 314,000 welfare beneficiaries on the DPB, dole, invalids & sickness, 550,000 OAPs collecting super, the 236,000 at the bottom of the report who declared zero income, part timers, casual workers etc etc. The number of real taxpayers is likely less than 2,000,000 and if the true figures are used it will push up the 12% to a more believable 18-19% paying 49% of the tax.

    Also note the report gives stats on extra GST paid by income bracket which allows one to work out how much GST each group pays. The GST burden is carried mostly by the middle income groups.

    Work it out in terms of real tax and the top 12% pay about 35% of income tax and when GST is added to the tax intake they pay around 30% of tax. Not so disproportionate then is it.

    The recent claims about nett taxpayers was also fiction, for similar reasons.

    • lprent 18.1

      Thanks, I’d been a bit frustrated that I hadn’t had time to look this up. So I hurriedly wrapped your comment into a post to highlight it before hitting the road today.

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