Written By:
Ben Clark - Date published:
10:09 am, April 19th, 2013 - 16 comments
Categories: gst, same old national, tax -
Tags:
National, far from being their idealised “low tax party” are in fact the “stealth tax party”.
While they’ve lowered the top rate of tax and the company rate, helping out the wealthiest, there has been regressive tax after regressive tax increase on the smaller hidden things.
Well GST isn’t so hidden, but whacking that up means that our poorest 10% have effectively >17% additional income tax, due to their situation of dis-savings.
But they’ve hiked a lot more things that we all pay, like ACC levies (especially on motorcyclists), and EQC (I realise there was an earthquake, but there were options like those proposed by the Greens).
But they’re still scrimping for money, desperate for their Budget surplus in 2014-15 (usefully after the election). Their plan isn’t going so well, which is why they’ve stopped going on about how their “re-balancing” means the tradeable sector doing so well, and the current account deficit (now ballooning out again after the Earthquake Insurance money lowered it for a while). They’ve had to stop saying it’s great that Kiwis are taking advantage of low interest rates and admit that there’s a new housing bubble…
There’s a good analysis here, of how much difficulty they’re having creating some Budget sparkle, while scrimping for cash and (regressive) taxes:
“Since this time last year the Government has increased the excise on fuel, rejected a cut to ACC levies, imposed higher taxes on “paperboys” and tried to bring in the so-called car park and cellphone tax before it was roundly rubbished and axed. Then there is the increase to prescription charges.”
Of course the main driver of inflation at the moment (more than prescription charges rising 67%), is the cigarette price hike. I’m not keen on smoking, but it’s yet more tax targeted at the many not the few from a stealth tax government.
What will be hit next?
Edit: Missed taxes – tax on employer’s Kiwisaver contribution, increased compulsory student loan repayments, and removal of 10% discount on early repayment…
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not a stealth tax as such, but they’ve changed the student loan scheme now so that you don’t get your money refunded if you overpay your annual loan repayment requirement (based on your annual income). so if, for example, you were in a reasonably high paying job, then got made redundant, you would have overpaid your annual student loan requirement by a reasonable amount, but won’t get that money back. at a time when you’re probably going to need it badly.
that’s on top of the reversal of national’s own policy of 10% discount on early repayments.
so yes, they are trying every method they can to raise funds.
Are you sure? Can you link to IRD website stating this is the new policy?
Pretty sure this isn’t right – the only time they won’t refund you is when it is an insignificant amount. However, since it goes the other way as well (i..e you’ve underpaid by an insignificant amount they won’t worry about it) I would assume the amount they consider insignificant is reasonably low.
no, i’m sure it’s right. will have to look at IRD website this evening to confirm, but we’re getting clients in this position, having no access to their overpaid student loan moneys.
To save you time tonight here is the change you are talking about:
http://www.ird.govt.nz/technical-tax/legislation/2011/2011-62/2011-62-borrowers-repay-obligs/
It basically changes it so that if each pay your student loan is assessed rather than annually. However, there is still provision for if you have significantly over or under paid to get a refund. At least that is my interpretation of it – if you have clients in that position it is worth writing to the Inland Revenue to request a refund – the actual obligation hasn’t changed and if you have significantly overpaid they have no authority to hold the refund.
yeah, except we have talked to the IRD and they are saying we can’t get it back.
“What will be hit next?”
Kiwisaver. They’ll introduce compulsory kiwisaver and use that as the excuse to get rid of the $1,000 sweetener. And/or trim back on the (poorly named) government ‘tax rebate’ portion even further than they already have.
Actually that’s one I missed – the tax on the employer’s contribution to KiwiSaver – that actually raises quite a bit for them. Employer’s contribution increases to 3%, but most of it goes to the Government…
Another stealth tax: the increase in Road User Charges, based on the maximum legal gross laden weight of the truck, rather than the usual gross laden weight (the difference can be significant).
another stealth tax is the whole look-through company regime, which is limiting losses that can be claimed against other income. this doesn’t just affect residential rentals, it affects all shareholders in companies that make losses & don’t have the asset base which will allow them to claim all of those losses. i can see the policy intent behind the regime, but it’s a complicated stealth tax which many people won’t understand.
and the RWNJ like to paint the Left as tax and spend…
NAct tax and borrow 😀
Yes stargazer
Our business is hitting this now -we run a small business, and a few years ago bought the premises with a large mortgage, and the business pays rent which pays the mortgage and rates etc. We are about to strike a very large tax bill based on the principal we are paying off. I haven’t earned a cent from the premises, as the rent all goes into the mortgage. I accept paying taxes if I am personally receiving rent as income to me personally, but this tax is a real strangler.
Employee ACC levies rose – the bit they take off with your PAYE. Company’s office charges back on again. Seen the price of passports?
Taxing paperboys? Next they will be taking cuts from Grannies winnings from bingo evenings.
Vehicle licensing fees have gone through the roof under this govt.
And the cost of a passport damn near doubled overnight. Guess they see that as a growth area.
What about the dream tax? *remembers the Facelift episode with Don Brash*