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Polity: Poor pay more tax than rich in UK

Written By: - Date published: 7:55 am, July 19th, 2014 - 134 comments
Categories: tax, uk politics - Tags: , , ,

polity_square_for_lynnReposted from Polity.

The Guardian has a good account of recent British research into tax.

According to survey research, most people believe that the rich pay a higher proportion of their income in tax than the poor. The British public collectively estimates the poor pay around 24% of their income in tax, while the rich pay around 35%.

The truth is very different. Once you add up income tax bills, VAT bills, Council tax bills, and other taxes, the poorest actually pay around 43% of their income in tax, compared to only 35% for the rich.

This finding doesn’t really surprise me, because a milder version of it true in New Zealand, too. As I found in my book about the New Zealand Tax system, in this country both very low income and quite high income people pay roughly the same proportions of their income in tax, and both ends of the distributions pay substantially more then the people in the middle. Here’s the chart from chapter 8:

You can have this kind of tax distribution despite having personal income tax rates that go steadily up with income because of the way different people spend their money.

Because many people at the very low end of the income distribution are not householders, they have basically no expenditures that avoid GST. And because they make very little money, they also do not save much. So GST eats a full 15% of their income (sometimes more if they are dipping into previous savings).

But as people start being responsible for rent or mortgage payments, which generally comes with having a higher income, a portion of their expenditure avoids GST, bringing the tax rate as a proportion of their income down. And, as they find room in their budget to save money or spend money overseas, their exposure to GST drops again.

New Zealand is not a country where people always pay tax at a higher level as they earn more. The middle class pays less than anyone, and the poor and the rich pay at roughly similar rates.

134 comments on “Polity: Poor pay more tax than rich in UK ”

  1. karol 1

    Kind of reflects how middle income people are the main focus of contemporary politics and politicians. Meanwhile those on low incomes tend to just give up, and stop voting, knowing pollies are just not working for them.

  2. Draco T Bastard 2

    You can have this kind of tax distribution despite having personal income tax rates that go steadily up with income because of the way different people spend their money.

    Simply put: Because of GST.

    Of course, that’s what sales taxes are designed to do – reduce taxes on the rich and increase taxes on the poor.

  3. mikesh 3

    I don’t think GST is payable on private rental. However, this doesn’t alter the basic argument. If we exclude housing costs, whether mortgage or rental, the poor are paying a greater proportion of their income in GST.

  4. Ergo Robertina 4

    This is why we need a financial transaction tax which would shift some of the burden away from those on low incomes.
    The top 10% in NZ have more than the other 90%; the top 1% more than the bottom 70, and they’re taxed at a similar rate as those who have to spend all their money just to live.
    Those on low incomes are also gamed on things like pre-pay power, for which they pay a premium.
    But there is no political mechanism to effect change.

    • Colonial Viper 4.1

      But there is no political mechanism to effect change.

      And this is a serious problem. Overseas it is leading to pressure cooker social-political situations, and giving a leg up to extremist groups like the Golden Dawn.

  5. big bruv 5

    So those who get the most from the public purse also pay the most into it. Sounds like a good deal to me.

    • blue leopard 5.1

      @Big Bruv

      “There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

      ― Elizabeth Warren

      • big bruv 5.1.1

        Blue Leopard

        Your reasoning falls at the first hurdle. Given that you support a “progressive” tax system then the man who built the factory paid far more than the workers under him who built the roads. Those at the bottom of the heap in a “progressive” tax system are the ones who should be paying more, they are the ones who owe society a debt. Those who build the factories or the businesses are the ones who should be paying a lot less, or be allowed to keep a lot more of what they earn.

        • KJT 5.1.1.1

          “Those who build the factories or the businesses are the ones who should be paying a lot less, or be allowed to keep a lot more of what they earn”.

          Agree. Entrepreneurs, builders, machinists and other workers, who build the businesses, should be allowed to keep more of what they earn.
          Interest takers and those who only contribute money should keep less.

        • blue leopard 5.1.1.2

          @ Big Bruv

          I am not getting your reasoning here at all ( did your comment contain any reasoning or were you just asserting your belief without any?)

          Those who benefit the most from society are those who collect the most wealth – it is these people who owe the most to society – for the good fortune which they have derived from the social structure – hence it is they that need to pay more, not those who are struggling to get by – who are clearly benefiting the least from society.

          The bonus about taxing in such a way is that those gathering the most money don’t cause a collapse in society by capturing the pool of wealth and ending up with a monopoly of power that vast wealth also brings them.

          It would also mean that the government would be less likely to have to make up for societal failures such as joblessness and wages that don’t cover living costs.

          Those benefiting the most from society are fools to support ideologies that collapse the very society that they happen to benefit the most from. If redistribution doesn’t occur society will collapse -collapse is an utterly predictable outcome when wealth collects in fewer and fewer hands.

          If you asked me whether someone who was investing in productive enterprises should be paying less tax than those who are simply investing in non-productive speculation with their wealth (making ‘money on their money’) – then I would agree – however when the question is between those with lots of wealth and those with none, or next to none, then my response is still the same; those collecting wealth (through whatever means) certainly need to be taxed more than those not gathering it/going backwards.

  6. big bruv 6

    “Meanwhile those on low incomes tend to just give up, and stop voting, knowing pollies are just not working for them.”

    Except in NZ where we have WFF. Those who have had kids, or have no more than they can afford end up paying for other peoples kids.

    • KJT 6.1

      Those whose kids we have paid for, or who expect to live off the work of those kids later, who refuse to pay their share.

      • big bruv 6.1.1

        See, only a socialist would think or speak like that. Somebody who is not going to rely on others for the rest of their lives would already have made provision for their retirement.

        • Draco T Bastard 6.1.1.1

          Saving money achieves nothing. You’re still going to be dependent upon those younguns you disparage.

          • big bruv 6.1.1.1.1

            Draco

            I do not despise the young. I despise bludgers and parasites. Not just benefit parasites but also those who reach middle age having done nothing to make themselves more employable and then moan about being in the minimum wage.

            If we had more people in NZ who were prepared to take personal responsibility for themselves and to dig in a little harder at their job then we would have far more money available for the very few genuine beneficiaries who really need our help.

            • Draco T Bastard 6.1.1.1.1.1

              Now that’s a rant of pure stereotyping and mythologising.

              For starters, nobody wants to be on welfare. Those extremely few people who are defrauding welfare don’t want to be on welfare except for the fact that they can get more money – they’re working and probably have a living income outside of welfare. Just because it’s probably illegal work doesn’t detract from that.

              Then there’s a question of people who have reached middle age and have done all that society have told them that they should do (got an education, written CVs, etc) and still find themselves unable to get a job. These people aren’t being hired because of what the employers are doing and there is, quite simply, nothing that they themselves can do about it. At a guess, I’d say that there were essentially no people who reach middle age without doing something to improve their employability.

              And the two problems with money is 1.) that most of it’s going to far too few people – the rich and 2.) the way that it’s created that actually causes even more money to go to the rich.

              Then we come down to the fact that, over the last thirty years, the politicians have been implementing the neo-liberal paradigm and destroying our economy. Rebuild and diversify the economy (agricultural economies have always been poor economies and NZ isn’t an exception) and we’ll get back to 0% unemployment. Even those that at present find themselves unable to get a job will be employed. Of course, the employers don’t like that idea as it means that they won’t be able to force wages down as they have since the 1980s.

              • Colonial Viper

                DTB, that’s way too much nuance and holistic thinking for BB. He just wants subhuman targets to despise and lord over.

              • KJT

                Thanks, DTB. I would have put that link up if you hadn’t.

                Mind you, as research has shown, right wing authoritarian followers cannot be convinced by facts that conflict with their indoctrination.

            • KJT 6.1.1.1.1.2

              “I despise bludgers and parasites”.

              So do I.

              The children of the rich who have done nothing to earn the money, who live lives of leisure and contribute nothing.

              Those who made their money by asset stripping and shutting down perfectly good companies so they could burgle the, then, defined benefit pension schemes.

              Those who made a mint by buying, at fire sale prices their mates in Government set, essential assets that tax payers had built up over decades, to strip them and run them down.

              Those whose businesses would not exist without other businesses and PAYE tax payers paying WFF and other welfare so their employees can live. A subsidy to poor businesses who cannot/or will not pay a decent wage. Look up Walmart in the USA for the business model.

              Those invested in failing finance companies knowing they would be bailed out by tax payers when they failed.

              Those who sit in parliament, collecting an income from us, while working for those who will pay them in directorships and other bribes when they leave.

              Those who sit idly by gaining fortunes from the highest interest rates in the Western world due to absurd RBA.

              Yep. Past time we cleaned out the parasites.

            • One Anonymous Bloke 6.1.1.1.1.3

              National creates bludgers and parasites, tens of thousands more: more unemployed, more long-term unemployed, lower wage increases.

              Rabid wingnut’s own goal: always more parasites under National.

              • Naki man

                “National creates bludgers and parasites, tens of thousands more: more unemployed, more long-term unemployed, lower wage increases.”

                Don’t be such a tool AOB, National is slowly getting the parasites off welfare. There are parasites that post on this site, funny how they are all extreme lefties. One complaining that he gets cold in the morning and has to wear several layers of clothes.
                Most people would just get off their arse and get a job.

                • KJT

                  And a comment from the lunatic fringe.

                • Draco T Bastard

                  Most people would just get off their arse and get a job.

                  The people on welfare would get a job – if there were any available.

                  • big bruv

                    “The people on welfare would get a job – if there were any available.”

                    There are jobs available, most of those who have been on the dole long term have no desire to ever work.

                    • One Anonymous Bloke

                      Why are there so many more of them under National? Is it because their policies are based on false beliefs much?

                    • fender

                      [citation needed] big bruv Hitlers little nephew..

              • Naki man

                “National creates bludgers and parasites, tens of thousands more: more unemployed, more long-term unemployed, lower wage increases.”

                Don’t be such a tool AOB, National is slowly getting the parasites off welfare. There are parasites that post on this site, funny how they are all extreme lefties. One complaining that he gets cold in the morning and has to wear several layers of clothes.
                Most people would just get off their arse and get a job.

                • Draco T Bastard

                  National is slowly getting the parasites off welfare.

                  Nope, National have been giving them even more welfare – Rio Tinto, SkyCity, Warner Bros – the list goes on.

                • One Anonymous Bloke

                  Why are there always so many more long-term unemployed under National? Is it because people hate National so much they become parasites out of spite? Or is it because National, and especially Bill English, could crash a parked car?

                  His economic policy is earthquakes and population growth.

        • KJT 6.1.1.2

          Yes I am a socialist.
          I am also a capitalist.

          Capitalism does not work when a few hoard all the wealth.

          When your “savings” disappear because of the next neo-liberal financial meltdown, or they are worth nothing because self interested individuals have destroyed our society, I expect, like all the advocates of “individual responsibility” you will again be back to us “socialists” with your hand out, to bail you out.

          Meanwhile, I will continue to invest in my children’s and other young peoples future, the reason why I have little savings.

          A much wiser investment than relying on a proven dysfunctional financial system which depends on unrealistic, infinite growth.

        • mpledger 6.1.1.3

          Even if you have money in retirement, you need society to function in order for that retirement money to have any value.

          When you’re old and sick and can’t hold a drivers license than getting food, health care and transport is going to depend on there being young people educated enough and willing enough to protect your wealth, get you food, get you health care and drive you around.

          • Richard McGrath 6.1.1.3.1

            If older people have children, it is surely their responsibility to enquire into the welfare of their parents before the burden should be shoved onto strangers.

          • Colonial Viper 6.1.1.3.2

            mpledger – you hit the bullseye. It’s not the numbers in a bank account which matter, it is the social cohesion and real physical capabilities of the economy (and the workers within it) which determine whether or not anything of value can be delivered in exchange for those electronic numbers.

            McGrath: cases of adult children abandoning their parents are already common. And the trend is worsening. This is the inevitable result of an individualistic society which has scoffed for too long at ‘family values’ in favour of ‘doing what suits me, when it suits me.’

  7. Colonial Viper 7

    Actual taxes paid by the top 10% need to go up by about a third; those paid by the bottom 10% need to decrease by about half.

    • Colonial Viper 7.1

      I will add – there needs to be a corporate super tax. Any profits over $100M pa to be taxed at 49%. So that means every major bank in NZ.

      • nadis 7.1.1

        I can assure that instantly, no corporate will ever make more than $100mm in profits. NZ will become a country with no large resident businesses, but lots of offshore companies operating here.

        And the same thing with Tobin or transaction tax. No transactions would get settled here, thus there’d be no transaction taxes levied. Unless the entire globe levies the same transaction tax, transactions will just gravitate to the jurisdiction with no tax.

        You cant just wish for things to be true.

        The best thing we could do is get rid of all the tax system related transfer payments, reduce dramatically the scope and magnitude of allowable deductions and tax offsets, make the first $30k of income tax free for everyone and just move the other tax thresholds up to compensate, increase GST to 20%. Most people at the lower end would be a lot better off. Get rid of WFF – the inequity it creates is a joke.

        • Colonial Viper 7.1.1.1

          I can assure that instantly, no corporate will ever make more than $100mm in profits. NZ will become a country with no large resident businesses, but lots of offshore companies operating here.

          Huh? Why are you trying to make something so simple sound so hard?

          Simply require those companies to be registered here if they wish to have any access to the NZ banking network, lease buy or operate NZ property, or to move any money internationally. Easy to do and no big deal to enforce.

          Further, any established major corporates which currently make high profits but restructure to avoid these new regs will be sanctioned, and their operations and clients given to their competitors which are willing to operate within the NZ commercial framework.

          Piece of cake.

          • Gosman 7.1.1.1.1

            Name me the countries around the world who have successfully implemented such policies.

            • felix 7.1.1.1.1.1

              How about you name those who have successfully implemented pure unregulated free-market capitalism.

              Then people might feel some obligation to justify to you every suggestion of the slightest deviation from it.

              • Richard McGrath

                The closest to unregulated FMC would be in the USA and Great Britain in the 18th and 19th centuries, with massive improvements in the standard of living for people in those countries, as measured by life expectancy.

                • fender

                  Nothing to do with improved nutrition, delivery of clean water, removal of waste, improved health practices or mortality reductions driven primarily by medicine???

                  • RedLogix

                    fender,

                    Absolutely. Clean water and sewerage treatment were by far the two single biggest contributors to life expectancy.

                    Built almost entirely by governments.

          • big bruv 7.1.1.1.2

            Viper

            Would it not be much easier for you to advocate nationalisation of all industry and business?

            After all, if you are going to deny them their profits then it makes no sense for them to remain in the NZ market given our insignificance.

            I am sure that the average Kiwi would love to hear why he has to put up with inferior NZ made products and services simply because the left don’t like the idea of companies making a profit.

            • felix 7.1.1.1.2.1

              Good to see you staunchly defending your right to be taxed by corporations.

            • KJT 7.1.1.1.2.2

              You are a joke BB.

              As I look around me, at the 25 year old New Zealand made fridge, the cupboard full of crown Lynn china, and the pair of wooly/leather boots made in the 80’s.
              Lees forklifts some of which are still in use 30 years on.
              Shoes which lasted years.
              Remembering New Zealand firms which used to honour their warranties with pride as I take back yet another shoddy imported piece of crap which stopped working almost as soon as I got it home, to be told it is past its warranty.
              Remembering when New Zealanders had jobs they could be proud off, making quality goods, instead of being in minimum hours minimum wage service jobs.

              And I think of the e-book made in China that the shop was surprised when it lasted 2 years. The parade of toasters and kettles, which last 6 months if you are lucky. Pots which fall apart in a year. Whiteware which now has a “5 year life”.
              Railway wagons which have cost more in repairs, this year, than the ones we used to make, in Thames and Hillside, cost in their entire lifespan.
              Working on a ship made in China where nothing worked even when it was new.

              We can do without the poor quality British made cars, machinery and other manufactured goods they used to force us to take, the cheap rubbish they made for “the colonies” to pay for our quality commodities.
              Same as we can do without the short lived, expensive in lost jobs, constant replacement and added debt, crap, China and the States send us.

              Yes please. Bring back the “poor quality New Zealand made goods”.

              • Colonial Viper

                man, I am going to bookmark your comment KJT, you remind me what path our nation has missed out on.

              • BM

                Think of it this way.

                You can buy a quality appliance for $5000 and get 20 years use or you can pay $1250 for a cheaper version and get 5 years.

                What do you think the better deal is?

                • KJT

                  When you factor in the real costs, Lifecycle costs, borrowing to buy the junk, the lost jobs in New Zealand, the time lost due to things not working etc. and the use of irreplaceable resources, the, cheap junk, is not really cheap.

                  • BM

                    I disagree, it gives people options, what do you do if you can’t afford the 5k to buy that fridge freezer, you need a fridge.

                    What happens is you pay through the nose for a clapped out second hand piece of shit, that’s what happens or you go into debt to purchase that overpriced fridge.

                    At least with a cheaper versions people have the ability to buy a semi decent product with at least a two year warranty.

                    How about buying school shoes, I was just discussing this with my partner, she remembers having one pair of school shoes because that’s all her family could afford and they were brought oversize to start with so they could last at least 2-3 years.
                    These days a family can go down and buy 5 pairs of proper fitting school shoes at the same price it used to cost for one.

                    Yeah, the good old days.

              • Richard McGrath

                You forgot the Trekka 4WD vehicles, also made in Godzone.

                • RedLogix

                  For quite a few decades at least 45% by value (and a larger portion by volume) of all cars assembled in NZ was manufactured locally.

                  In the Hutt Valley alone there were companies making, seats, carpets, wiring harnesses, paint, automotive glass, springs, wheels, tyres, batteries, etc – all perfectly capable of operating to world class standards. (And those are the ones I can recall off the top of my head.)

                  Sure there are always other countries where anything can be done cheaper. There always are. Without exception.

                  That is why if you want any kind of manufacturing economy – it is a always a strategic political decision.

                  • Colonial Viper

                    NZ workers are being told to be competitive with developing world labour, slave labour, child labour, prison labour, and if you can’t then sorry your industry is going to be offshored.

                    That is why if you want any kind of manufacturing economy – it is a always a strategic political decision.

                    Absolutely. It is a decision of the society which needs to be reflected in the politics. Instead what we have had is neoclassical economists and financiers tell us what our societies can and cannot choose, according to their dictates.

                    And a compliant spineless political class which has largely gone along with it.

                    The issue now is the expected degradation of globalisation in the next 30-40 years. If we do not rebuild some of our own internal capabilities, we are going to be left high and dry as complex international logistics and supply networks strain and buckle.

      • Naki man 7.1.2

        CV, what you are saying is big companies are not allowed to make reasonable profits.
        100 mill might be a small profit for a very big company. It is about % profit not a magic number that sounds big pulled out of someones arse. The last thing this country needs is a banking system that is not profitable. If these banks don’t have deep pockets then they cant take the losses and we all lose.

        • Colonial Viper 7.1.2.1

          The last thing this country needs is a banking system that is not profitable. If these banks don’t have deep pockets then they cant take the losses and we all lose.

          I’m quite happy for some of the tax monies taken from the big banks currently usurious billion dollar profits to be put aside in a Reserve Bank contingency fund for a rainy day.

    • big bruv 7.2

      Why do you say that Viper ? (other than out of pure envy for those who earn a big wage)

      If somebody earns $200K or so and pays nearly $54k a year in tax is that not enough in your book?

      • deep throat 7.2.1

        @big buv
        if you want know what God thinks about money just look at those he lets have it.

        • nadis 7.2.1.1

          ok – I’m thinking of people like Stephen Tindall, David Levene, Peter Leitch etc and many others of similar philanthropic ilk in NZ and philanthropists like Warren Buffet, Bill Gates and numerous others overseas. Whats your point?

          • KJT 7.2.1.1.1

            Warren Buffet is on record as saying the wealthy should pay more tax, a lot more.
            “Why should I pay less tax than my secretary”.

            Bill Gates has said he will leave his children comfortable, but no one should inherit a vast fortune.

            It seems that most of those who really did earn their money through entrepreneurship and effort, are happy to contribute back to society.

      • Colonial Viper 7.2.2

        If somebody earns $200K or so and pays nearly $54k a year in tax is that not enough in your book?

        As I said, they should be paying roughly $70K in tax i.e. approx 1/3 more.

        (other than out of pure envy for those who earn a big wage)

        On the contrary, I am grateful for their significant contribution to our health, education and social welfare system.

        • Richard McGrath 7.2.2.1

          But CV, why shouldn’t a person on $200k gross be paying $150k in tax? Surely they can live comfortably on a net $50k?

          • Colonial Viper 7.2.2.1.1

            Well, let’s not go down the road of being mean, McGrath.

            • Richard McGrath 7.2.2.1.1.1

              That is not a satisfactory answer. The socialist French president advocated a 75% tax on some people’s income. Why would such a tax on $200k be “mean”?

              • Colonial Viper

                I have no issue with a 75% income tax rate on the top 0.1% of income earners, applied to say each dollar above $750K pa, simply to send a signal.

      • KJT 7.2.3

        I agree with you there. As people on about 200k tend to be surgeons, school headmasters, engineers, small business owners, entrepreneurs, and other useful people, I think they pay enough tax. (The ones that do pay their proper tax).

        45% rate should cut in about 250k like Australia. Of course it is higher because they have State taxes as well.

        In fact why don’t we just match Aussie income tax rates?

        The abatement rate for people on welfare and the stand-down periods prevent them from working, and keep them in a poverty trap, Those should be changed. The highest marginal tax is paid by the poorest people trying to get ahead.

        PAYE earners and those on low incomes are taxed too much because we do not make those with a lot of wealth pay their share.

        Inheritance taxes (why should someone inherit unearned wealth beyound a certain amount. It stops capitalism from working, because wealth is concentrated in too few conservative hands).
        FTT. The financial system now earns way in excess of any productive benefit they provide to our society.
        Wealth taxes. Including CGT on any house over the Auckland median.

        If we tax those who have gained the most from our functioning society, in proportion, we may even be able to get rid of the horribly regressive, and business destroying, GST.
        Removing company and even income taxes may be an option.

        Then we will have enough for a UBI, removing welfare as such.

        • Colonial Viper 7.2.3.1

          You raise a lot of good points, and basically I would feel the tax system would be far more progressive if:

          1) People on $30K pa paid far less effective taxes than those on $200K pa. That’s not the case now once you take regressive taxes like GST and petrol into account. How this is accomplished I don’t know (raise taxes on the top 1% – which those on $200K just fall inside? Drop taxes on the bottom 50%?)

          2) the following taxes are must haves: Death Tax, wealth tax and FTT.

          In fact why don’t we just match Aussie income tax rates?

          The abatement rate for people on welfare and the stand-down periods prevent them from working, and keep them in a poverty trap, Those should be changed. The highest marginal tax is paid by the poorest people trying to get ahead.

          PAYE earners and those on low incomes are taxed too much because we do not make those with a lot of wealth pay their share.

          Every note you hit here, hits spot on, in my mind.

  8. big bruv 8

    Viper

    I am well aware of what you said, I did not ask you what you, said I asked why you said it.

    I am genuinely interested in your reasoning, if (as you say) you do not want to raise taxes simply out of envy then I really would like to know why you think that $54k a year is not enough.

    • felix 8.1

      I would like to know why you think $130,000 is not enough.

      • KJT 8.1.1

        I don’t think it is enough, when you have to support 5 other adults without work.

        Mind you, it would be plenty if we still had a functioning society with employment for them and/or a functional welfare system. The society that National, and neo-liberal Labour, has been destroying, like a bunch of rats, slowly removing the foundations.

        Personally I would be better off paying more tax, so they can be educated further and/or have jobs, and/or a UBI.

        And they are not BB’s fantasy of the lazy unemployed.
        All the young people I know, desperately want liveable jobs. 12 hours guaranteed a week at a fast food joint is not a liveable job.
        One can’t work due to health reasons, though he has tried, and the others, despite having good tertiary qualifications, and references, and trying in Auckland etc, haven’t been able to secure full time work.
        It is just maths. 25000 unemployed in Northland. 200 jobs.

        We want more income for Government, not out of envy, but so our country can function successfully.

        • Colonial Viper 8.1.1.1

          I don’t think it is enough, when you have to support 5 other adults without work.

          It’s $11,000 net in hand every month. In a very comfortable communal (flatting style) living arrangement making mortgage repayments of $750 pw, there’s still loads of budget to go around. Once the house is paid off and owned freehold life is easy. Even if no one else is doing paid work, but just contributing to the household via their labour.

          *Not everyone is going to be able to own a new car, or head overseas on big holidays all at once, but short of certain higher end luxuries there would be no impediment to a secure financial life.

          • KJT 8.1.1.1.1

            Most people in Auckland now have a mortgage of 300k CV.

            • Colonial Viper 8.1.1.1.1.1

              $750 pw repayments means that mortgage will be paid off in around 11 years, KJT.

          • big bruv 8.1.1.1.2

            Viper

            I note that you still cannot tell me why $54k is not enough.

            • One Anonymous Bloke 8.1.1.1.2.1

              I note you are whining about taxes, no sense of pride in our collective achievements, and no doubt a staunch patriot too. A mass of confused and contradictory false beliefs all wrapped into a whinging, thrashing little bundle of bigotry and hatred.

              Hates “parasites”, votes for the parties that create more of them 😆

              • KJT

                Yep. If BB is really against more people without work, and on welfare he would not support the people that ‘always’ increase unemployment.

              • big bruv

                OAB

                Interesting comments. What makes them so interesting is that they come from a person of the left. The left side of politics has always been, and will always remain, the last bastion of hatred and bigotry.

                You guys hate the “rich”, you hate big business, you hate anybody who does not share your failed political ideology, you hate free speech and you hate anybody who dares speak out against what you believe in.

                What you guys support is a return to fortress NZ, a return to heavy unionised workplaces complete with the corruption and violence that goes along with unions.

                • KJT

                  Projection much!

                  Unions are and were democratic organisations, unlike the corporates that BB loves so much.

                  That, “failed ideology” worked, to make both businesses and workers prosperous.

                  • big bruv

                    “Unions are and were democratic organisations”

                    Only somebody in their 20’s could make such a statement. Had you actually lived through the days of compulsory unionism, and the very real threats of violence that were directed against those who dared speak out you know that you could not make such a comment and expect to be believed.

                    If unions were such bastions of democracy then why is it that so few Kiwis see the need to belong?

                    • KJT

                      I was born in 1959, BB.

                      The reason for belonging to Unions, collective democratic action to improve peoples lives, no longer exists, because it has been made illegal.
                      An attack on human freedoms by the RWNJ’s who tell us they believe in freedom. Except for those whose work produces the wealth, of course.

                    • One Anonymous Bloke

                      Union members get paid more. Better outlaw freedom of speech, association and assembly. Except for chambers of commerce etc.

                    • RedLogix

                      Had you actually lived through the days of compulsory unionism, and the very real threats of violence that were directed against those who dared speak out you know that you could not make such a comment and expect to be believed.

                      Now try speaking out against the management of the corporate you work for …

                    • Colonial Viper

                      I suspect BB is the one in his “20’s”

                • One Anonymous Bloke

                  The only person talking hatred is you: I don’t hate rich people. I don’t have an ideology: I’m as biased as the next person and I believe in evidence-based policy.

                  I note your failure to defend your support for the parties that creates the parasites you despise – your words, hate-merchant. How many more tens of thousands of parasites under National was it?

                  • big bruv

                    OAB

                    Again you make statements that simply do not stand up to any type of truth test.

                    Parasites are the same irrespective of who holds the treasury benches. Labour might “create” jobs in the government sector (the best paying ones always going to loyal party members) but the reality is that these “jobs” are nothing more than the benefit in disguise.

                    I applaud any party who gets rid of these positions, the people “employed” are nothing more than a financial drain on those who create the wealth. It is far better to have those parasites out looking for real work and then going on to make a real contribution to society.

                    Imagine that OAB, a society were we could really look after the few genuine cases, a society that did not defend parasites, a society that said to those who lose their (real) job through no fault of their own “we will help you get back on your own feet”

                    That is the type of NZ I want to live in.

                    • KJT

                      Who, creates the wealth, BB?

                      http://kjt-kt.blogspot.co.nz/2012/08/the-wealth-creator-myth-stealing.html
                      “The wealthy got their wealth by entrepreneurship and starting new business” ?.
                      Well! no. Most are wealthy because they are born with it. The majority of the rest because they gamed our system to make money from existing assets and public utilities. Morally, no different from robbing someones house.

                      How Allan Gibb’s made a Mint out of a Former Public Utility.
                      “”Gibbs spotted his opportunity early in 1990 when he did his hallmark one-page analysis of what Telecom might be worth. “It was a lovely, fat company, with huge margins and a lazy balance sheet. It was obvious if you could keep the margins it would be a fantastic business.” Like an alpha predator, he went for the throat””.

                      “The wealthy became wealthy through start-ups and entrepreneurship. Selling people products they want”.?

                      Less than 1% of the wealth held by wealthy households in the USA is invested as so called “angel capital”. In reality the wealthy avoid risky start-ups, like the plague. They prefer privatizations of State utilities and financial products where there return is assured by tax payer funding. Those that are too big or too essential for the State to allow them to fail.
                      Affluent Survey.”

                    • One Anonymous Bloke

                      So all the jobs lost since 2007 were lost from the government sector. Thanks for informing me, I never knew there were so many government sector jobs in manufacturing.

                      Fucking parasites. I’d hate to think any of them have been re-hired as consultants by the government you support.

                    • KJT

                      A New Zealand, BB, where people doing useful jobs such as producing power, making sure buildings are up to scratch etc etc are sacked so the jobs can be contracted out to a private sector which costs twice as much and leaves us with leaky buildings and overpriced unreliable power.

                      Where so-called “wealth creators” destroy viable companies, society and infrastructure to make a buck out of our work..

                      Glad to hear that is the New Zealand you want.

                  • Richard McGrath

                    “I don’t have an ideology: I’m as biased as the next person and I believe in evidence-based policy.”

                    So if slavery was economically viable and cost-effective you’d be all for it?

                    • Draco T Bastard

                      Of course not – the evidence is that slavery is immoral. Evidence also shows that capitalism is immoral but we haven’t managed to get rid of it yet.

                    • One Anonymous Bloke

                      The evidence shows that focusing exclusively on your personal economic benefit turns you into a callous and unethical piece of trash.

                    • Richard McGrath

                      “…the evidence is that slavery is immoral”

                      You are not speaking of evidence but logic. I agree that it is immoral, but you can’t prove it is immoral with statistics, you need to use ethical arguments.

                    • felix

                      Yeah, because evidence means “something you can prove with statistics”.

                      FFS I thought you were supposed to be a doctor.

                    • Colonial Viper

                      The Left in NZ has grown weak at making moral and ethical arguments. Preferring numbers and research evidence to quite instead.

                    • Draco T Bastard

                      You are not speaking of evidence but logic.

                      Well, I’m pretty sure that the treatment of the slaves in the US prior to the end of their civil war is pretty good evidence that slavery is immoral. It’s also pretty good evidence, IMO, that capitalism itself is immoral.

                      The Left in NZ has grown weak at making moral and ethical arguments.

                      /agreed

                • anker

                  BB in response to OAB.

                  Don’t hate “the rich” as such, but I do hate greed. If you are rich, share it around. It feels better and it turns out giving is associated with happiness.

                  And like OAB I support evidence based policy.

            • Richard McGrath 8.1.1.1.2.2

              You won’t get a straight answer from this mob, BB.

            • Richard McGrath 8.1.1.1.2.3

              “I note that you still cannot tell me why $54k is not enough.”

              No answer yet to your question, BB.

              • One Anonymous Bloke

                Except for the one you can find by scrolling up. Reality’s Left wing bias strikes again.

                • Richard McGrath

                  You mean the one that was sent 55 minutes after my comment at 11.21 p.m.? Reality strikes again.

              • Draco T Bastard

                If $54k is enough then why do the greedy parasites want millions of dollars per year income?

      • Richard McGrath 8.1.2

        Perhaps it has to do with making provision for the future, allowing early retirement, making yourself independent of the government for financial succour, making places available on public hospital waiting lists by way of being able to afford private insurance or treatment overseas; the things that forward-thinking people might do.

  9. Molly 9

    Am I right in assuming that this post relates only to PAYE or income tax and does not take into account the very real benefits of trusts, and some business expenses?

    eg. car use, utility payments, accommodation free holidays provided by family trust properties in Hawaii?

    If so, the difference between low income – actual poor – and high income – hidden assets, would be even wider.

    • Colonial Viper 9.1

      Yep – the wealthy write the tax regs to benefit those who have access to good tax accountants.

      • Richard McGrath 9.1.1

        Having a flat rate of income tax which was equal to the corporate rate and trust rate would liberate many of those tax accountants into more productive work, CV. With an exemption from income tax for those earning less than $50k.

        • Colonial Viper 9.1.1.1

          And I don’t necessarily disagree; and with a UBI, it would simplify things a hell of a lot.

        • Draco T Bastard 9.1.1.2

          Having all income taxed on the progressive tax scale would do the same thing while being fairer and more ethical.

          • Richard McGrath 9.1.1.2.1

            So you would tax everyone down to the child who is paid for chores and the teenager who mows his grandparents’ lawn?

            • Draco T Bastard 9.1.1.2.1.1

              Ah, the old you must mean this extreme position argument that RWNJs come out with because they’re too bloody stupid and ignorant to think of an actual argument.

              • Richard McGrath

                I guess the personal abuse from DTB says something about him. He gets so upset by a comment that applied his previous comment (“having all income taxed”) to someone on a low wage. Certainly hit a raw nerve there. This is not an “extreme position argument” – there are plenty of teenagers working who would be affected by such a policy.

                • Draco T Bastard

                  Nope, I get upset by idiots such as you trying to make unsubstantiated and wildly incorrect statements in an attempt to discredit a solution but not have any actual argument against that solution.

                  All income is now taxed but we ignore a child’s pocket money.

                  • Richard McGrath

                    So a child’s earnings for working is not income?

                    • McFlock

                      Don’t know of any kids who get 45 grand a year pocket money.
                      If some do, it should be easy enough to tax.

                      Or do you want to stop leaping to absurdities?

                    • Richard McGrath

                      McFlock: “Don’t know of any kids who get 45 grand a year pocket money.
                      If some do, it should be easy enough to tax.

                      Or do you want to stop leaping to absurdities?”

                      In case you didn’t know, New Zealanders regardless of age are taxed at about 12 cents in the dollar on the first $14,000 of income. Are you saying the IRD tax tables are an “absurdity”?

                    • McFlock

                      nope.

                      I’m saying that you’re an absurdity.
                      I’m pretty sure i don’t know any kids who get $14k a year pocket money, either.

                      As tax evasion goes, white-collar tax fraud is quite rightly a higher priority for the IRD than whether a six year old correctly completed their IR3.

                      Hell, most kids in NZ wouldn’t even make the threshhold that you have to declare.

    • KJT 9.2

      I have always thought that trusts should be removed for anything other than genuine charities.

      They are simply a vehicle to avoid tax or legal responsibilities.

  10. JonL 10

    Just watched “Boys From The Blackstuff” again.

    In many ways, nothing much has changed in 30-odd years, except, maggie thatcher’s Britain has come to NZ…….

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