For 10 years, the IRD has been investigating the tax dealings of the country’s 250 richest people and their 7,500 companies and trusts. It turns out they had underpaid $500m of tax – $2m a piece– with hundreds of millions more in dispute. If you and I went into a government office and stole $10,000 of stuff, we would go to jail. But ripping us off for $500m was all just a mistake, apparently.
Pity the rich, they have so much money, hidden in so many nested organisations that its hard to keep track of it all. Perhaps we should do the kind thing and relief them of it… Well, one can dream.
You might remember the Nats were talking about tax avoidance a while back. They acknowledged the rich were using vehicles to avoid the 39%, then 38%, tax rate. Their solution, of course, was to spend billions on cutting that tax rate to 33% (on the grounds that they had to align the top income rate with the corporate rate – but then they went and cut the corporate rate to 28%). It was tax cuts for tax cheats, simple as that.
I want to see IRD go a lot further. They’ve only gone through the 250 people with net worth over $50m. The top 1% numbers 33,000. Let’s go through each of them. I bet there’s billions of unpaid taxes out there.