Capital Gains Tax finally on a major party's agenda

[avgas]

But to most people that idea would be fecking stupid wouldn't it?:innocent:
I used to think that. And I am still all for it.
I have built my skills around what people will need.

So if that is the case, and we wipe the slate clean. Perhaps we should remove currency too? I mean I would still get food for my family because people will need my simple skills to continue to live their lives.

I however think that once again - those that were poor before the wipe. Would become poor again. Why? Well I have to work to get my food so that wouldn't change. However clear the slate and remove currency - If I don't work, I die.
Cold simple fact if we wiped the slate clean and removed currency.

I actually live my life on the principle that if I don't work I die. I figure its the safest bet no matter what the circumstance. Clear the slate, take away all my money.....whatever. Survival really.

Why have they lost this skill? Should we blame the rich?

[avgas]

Not missing much. It's like arguing with a rubber band

Just seen your other post. It's a strawman: their study isn't a world study, but doesn't have to be in order to be correct. And what do you mean by "ceteris paribus" no longer exists? It's a concept, not a thing. Are you saying the world's so fucked up that all logical conclusions reached by studying it are invalid?
All things can no longer be considered equal. We have researched differences. To ignore them is to ignore the research really.

Logical? Define logical?
Is taking money from those who have earned it and giving it to those who have not logical?
In some instances yes. But on the same side of the coin you have to respect the fact that people might say decreasing the population is logical also.
We have excess of Money, Consumption and Population.
3 separate problems that are all interlinked.
As I stated in a previous post. Remove the money. This will sort both consumption (the pre-doom-rich will consume less or die) and population (the poor will die).
But that sounds illogical doesn't it.

[Oblivion]

I used to think that. And I am still all for it.
I have built my skills around what people will need.

So if that is the case, and we wipe the slate clean. Perhaps we should remove currency too? I mean I would still get food for my family because people will need my simple skills to continue to live their lives.

I however think that once again - those that were poor before the wipe. Would become poor again. Why? Well I have to work to get my food so that wouldn't change. However clear the slate and remove currency - If I don't work, I die.
Cold simple fact if we wiped the slate clean and removed currency.

I actually live my life on the principle that if I don't work I die. I figure its the safest bet no matter what the circumstance. Clear the slate, take away all my money.....whatever. Survival really.

Why have they lost this skill? Should we blame the rich?

Why have we lost this skill? Because society has deemed it that to undertake work, you need experience. But unless you have some of this "money" you cannot get this experience. People who have "money" are at school, getting experience.

People cannot afford to go out and get experience. Nowadays you can't go down to the local pub and ask for a job because society has deemed that it is too risky to work there if you are <18. And when you go to the supermarket to get a job, there are too many people and not enough jobs. The whole problem of people being poor, is because they do not have the necessary skills that society requires at that point in time. Demand vs. Supply. Like David, off Campbell Live tonight. (If you watched it that is) .THE BASIS OF AN ECONOMY. If we managed to educate everyone and put them in a position that was always required, E.g If we gave all the people of Africa a job of growing food for themselves and supplying the rest of the world, Then we could solve all of this shit that is happening. But too much money is being hoarded, by the corporations, making all this harder to accomplish.

[Winston001]

An completely outrageous idea that came to mind while my family and I were watching Fair go last week, was a G.E.R. (Global Economic reset). What this does is pretty much erase all the debt that all countries have. The economic system that is in place now is failing. Wipe the slate clean and start again. This time base things off Ceteris Paribus.

:innocent:

I'm not sure what you guys are getting at. Ceteris paribus is Latin for "all things being equal" and means discussing a hypothesis without outside influences or irrelevancies.

Anyway, so far as wiping the debt slate clean, we can't do that. The money borrowed comes from somebody - not a bank (they merely gather up the funds) - but actual people's savings. Chinese, Japanese, Arab, European - all sorts. If loans are wiped you also wipe out the life savings of other people.

Those people will never deal with you again.

[avgas]

Why have we lost this skill? Because society has deemed it that to undertake work, you need experience. But unless you have some of this "money" you cannot get this experience. People who have "money" are at school, getting experience.

People cannot afford to go out and get experience. Nowadays you can't go down to the local pub and ask for a job because society has deemed that it is too risky to work there if you are <18. And when you go to the supermarket to get a job, there are too many people and not enough jobs. The whole problem of people being poor, is because they do not have the necessary skills that society requires at that point in time. Demand vs. Supply. Like David, off Campbell Live tonight. (If you watched it that is) .THE BASIS OF AN ECONOMY. If we managed to educate everyone and put them in a position that was always required, E.g If we gave all the people of Africa a job of growing food for themselves and supplying the rest of the world, Then we could solve all of this shit that is happening. But too much money is being hoarded, by the corporations, making all this harder to accomplish.
First reaction: Hahahahahahahahahahahaha oh lord hahahahahahahahaha your making me cry its so funny

Second reaction:

Why have we lost this skill?.......


If we gave all the people of Africa a job of growing food for themselves and supplying the rest of the world, Then we could solve all of this shit that is happening.
Hmmmmmm you concern me a little. I don't even want to argue with a man who argues with himself.

Third Reaction:

Because society has deemed it that to undertake work, you need experience. But unless you have some of this "money" you cannot get this experience. People who have "money" are at school, getting experience.
Ok if your talking NZ. Your a complete nutbar. Plenty of work out there for those who want to work. Right now I my dad is begging for people to work underground in Chch with him. No experience required. Likewise I know of people who pick fruits, pump gas etc and there are ALWAYS jobs in these areas. We have plenty of jobs for those who want them. The problem is they don't want them.

However lets talk internationally.
- China : Govt pays for you to get trained
- India : Most get trained, even the poor. Only the poorest of the poor don't get trained. Ironically though - a small percentage of those become millionaires???
- Africa : Now here there is a big problem. No only do people not get trained. There is no where to train them, and there is very little to train them on. Therefore would you not say that investment in Business and Industry in Africa is a wise investment. Simply passing handouts to these people will not fix the problem.
And don't say the whole "teach a man to fish" BS. Yes that will help him survive, but teach a man how to build a business that supports a village (aka Kaikoura's Whale watch) and you will see significant benefits.

[HenryDorsetCase]

The objection is that "capital" (savings) arise originally from tax-paid money. Now the government wants a second bite. CGT looks like an attack on being provident.

But ok, leave that aside. I could live with a 15% CGT if income taxes remain flat. My objections are:

1. It is an idea which comes too late. The property boom is over. The time to introduce CGT was in 2000.

2. Tax yield from CGT takes a long long time to become a decent amount of money because only a small proportion of property is sold each year. About 15 years to reach fruition.

3. CGT will make no difference to property prices - other nations with this tax experienced the same and even greater property booms as NZ.

4. CGT will have exemptions which immediately introduces tax-dodging behaviour. Plenty of work for lawyers and accountants. Mmm...ok, so it isn't all bad. :D

That is the root of my objection, too.

but with Trotsky and co at 29%, provided JK doesnt get caught screwing a goat or something, its a non-issue.

[Clockwork]

So what you are saying then is once you have accumulated enough wealth that you can live off you investment earnings and not need a salary income you should no longer need to pay income tax. After all you must have already paid your fair share to get that wealthy in the first place, yes?

[HenryDorsetCase]

So what you are saying then is once you have accumulated enough wealth that you can live off you investment earnings and not need a salary income you should no longer need to pay income tax. After all you must have already paid your fair share to get that wealthy in the first place, yes?

well, my personal view is that I shouldnt have to pay any tax at all, and that you, personally, should support me like a James Bond villain in a hollowed out volcano, equipped with nuclear missiles and comely wenches.

[Clockwork]

Fembots? Sharks with Frikin' lasers? Anything else? I'll need to redo my budget.

[avgas]

Fembots? Sharks with Frikin' lasers? Anything else? I'll need to redo my budget.
http://courier-couriers.info/Index_files/packet_parcel_delivery.jpg
Got a delivery here for Mr Clockwork.
If you could just sign here, you can take your package of FemSharks with Lasers and I will be on my way.
Thankyou.

[Clockwork]

Last time I order anything on the internet..... not only the wrong items delivered but the wrong fuckin delivery address too!

Interesting point about about the distribution of taxes collected in NZ made earlier though, I wonder how it would correlate with the nation's wealth distribution?

[avgas]

<iframe width="560" height="349" src="http://www.youtube.com/embed/XyCY6mjWOPc" frameborder="0" allowfullscreen></iframe>

[Winston001]

well, my personal view is that I shouldnt have to pay any tax at all, and that you, personally, should support me like a James Bond villain in a hollowed out volcano, equipped with nuclear missiles and comely wenches.

AHA! So you are the guy with the key to those little doors in the side of the Lyttleton Tunnel (being inside a volcano).


So what you are saying then is once you have accumulated enough wealth that you can live off you investment earnings and not need a salary income you should no longer need to pay income tax. After all you must have already paid your fair share to get that wealthy in the first place, yes?

Theoretically. It would depend on what age you retired and how much you expected to spend each year. Age 40 - you'd want $3 million and with inflation even that might not be enough if you lived to 90.

The famous book "Rich Dad Poor Dad" by Robert Kiyosaki teaches financial freedom through owning property. The principle is other people (tenants) pay off the loans for you and after 25 years, the rent goes to you as income - taxable of course.

Personally I don't like Kiyosaki or his books...but his message is age-old and correct.

[oOGixxerOo]

I will vote Labour just for this capital gains tax, it is a fair tax and all profit should be taxed, period...

[Winston001]

Ok, so lets say we accept a CGT on property and business sales is fair enough. That new tax should go to the area where its created - your local council. Local authorities have huge expectations placed on them by government and citizens but only ratepayers to get the money from. I notice Dunedin currently has an $8 million shortfall which is a crisis for them.

[Swoop]

A Labour Party plan (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10741923)to charge capital gains tax on businesses operating out of residential properties could affect people with a home office.

If a business owner works from home, when the property is sold they will have to pay 15 per cent capital gains tax on the part of the residence used for running the firm, Labour says.

Associate finance spokesman David Parker said the idea was to capture businesses such as motels, where only part of the property was residential.

But he agreed that the rule could be extended to people such as a consultant who worked out of a spare room. Tax experts would need to clarify that. "The principle behind it is if you're claiming expenses [for working from home] you can hardly say that's not a business asset.

"You do need to have a rule around that, otherwise it would be unfair."

The proposal is contained in the party's taxation policy made public earlier this month. But it appears to have gone largely unnoticed.

Ernst & Young tax partner Jo Doolan said Labour had claimed that only a small proportion of New Zealanders would be impacted by capital gains tax, but because most firms employed fewer than five people many owner/operators could be affected.

"It's quite clear in [Labour's] document ... but they're hoping they can distract attention from it," Doolan said. "Let's not be sneaky about it and pretend it's not going to impact on a lot of people."

Small and medium enterprises (SMEs) could choose not to claim tax deductions for a home office, and would therefore avoid the capital gains tax. "Either way you're going to be paying more tax. We want our SMEs to grow and that's absolutely critical to the future. We can't afford to be hitting them."

Iain Craig, tax partner at Auckland accountancy firm BDO, hoped "commonsense would prevail" if Labour came to power.

The costs of a home office were things like furniture, computers, internet access and some insurance and rates. "None of these are items that point to an asset that's being applied to derive a capital gain. You're almost renting the asset for use as a home office."

There would also be issues in policing it, defining the areas used for operating the business, and valuing those areas, Craig said. Many entrepreneurial companies kept costs low by working from home. "Why would you punish that efficiency? It's going to add a whole lot of compliance obligations for very little practical effect," Craig said.

BusinessNZ chief executive Phil O'Reilly described the proposed tax as "absolutely counterproductive". If a person owned a house for 10 years but ran a business from the home for only half that time, which part would be subject to the tax? "It just shows you the ridiculous nature of this proposal."

It would also lead to a great deal of lobbying from interest groups to get themselves excluded from the legislation, he said.

"That's another classic of sand in the wheels of the economy, where people are not arguing about how much business they should be doing but how much tax they should be paying."

Expert says unwelcome idea right move

Auckland investment consultant Ed Schuck isn't thrilled at the prospect of having to pay capital gains tax on his home office should he sell the family home.

However, "with my investment consulting hat on" it's actually the right idea, he says. Schuck went into business for himself two years ago and hasn't looked back. "When you have your own business you eat what you kill." While other SME owners may not share his views, he says there is a case for capital gains tax in the economy generally. "From a consistency point of view it wouldn't be fair ... for folks at home to get away with it."

He disagrees with the argument that small businesses don't set up a home office for capital gain and therefore the asset should not be applied to the tax base. "I don't think [any] businesses own property for the purposes of speculative gain."

[Oscar]

Ok, so lets say we accept a CGT on property and business sales is fair enough. That new tax should go to the area where its created - your local council. Local authorities have huge expectations placed on them by government and citizens but only ratepayers to get the money from. I notice Dunedin currently has an $8 million shortfall which is a crisis for them.

Is that debt anything to do with the Stadium & Edifice Fixation that infects local body councillors throughout the land?

[cold comfort]

I will vote Labour just for this capital gains tax, it is a fair tax and all profit should be taxed, period...

Although i tend to agree (as Warren Buffett and Sam Morgan say its not fair they pay no tax on CG) can't help wondering why, if its so great, Labour didn't introduce it in the 9yrs they were in office.

[Big Dave]

Not surprising they only have a 30% approval rate. Tabling this when there is nothing to lose is good strategy.

When the incumbent Govt eventually fails, it will be below the radar.

[Oscar]

Although i tend to agree (as Warren Buffett and Sam Morgan say its not fair they pay no tax on CG) can't help wondering why, if its so great, Labour didn't introduce it in the 9yrs they were in office.

That's an argument you can use with pretty much all Labour policies.

[Oscar]

Not surprising they only have a 30% approval rate. Tabling this when there is nothing to lose is good strategy.

When the incumbent Govt eventually fails, it will be below the radar.

There is an interesting (and quite refreshing) change where both major parties give us the bad news (assets sales & CPT) before an election. In the eighties and nineties, both Labour and National would say pretty much anything to get elected and then stick it to us once they got in office.

[Winston001]

After all the reassurance NZ was better placed than other nations, our debt was low by comparison, no need to panic, don't worry about selling anything to reduce loans...duh THUD. Another international downgrade for us. http://www.stuff.co.nz/dominion-post/news/politics/5708882/New-Zealands-credit-rating-downgraded


And NO - this downgrading in not happening to everyone else. Switzerland, Norway, Germany and Canada still ride high along with other nations.

[mashman]

So this means it will be harder to borrow money? More expensive to borrow money?

[rainman]

After all the reassurance NZ was better placed than other nations, our debt was low by comparison, no need to panic, don't worry about selling anything to reduce loans...duh THUD. Another international downgrade for us. http://www.stuff.co.nz/dominion-post/news/politics/5708882/New-Zealands-credit-rating-downgraded


And NO - this downgrading in not happening to everyone else. Switzerland, Norway, Germany and Canada still ride high along with other nations.

Yeah, Johnny boy's doing a cracker of a job, isn't he?

[Winston001]

Yeah, Johnny boy's doing a cracker of a job, isn't he?

Awww come on man, bite properly. ;)



Mash - yes, our interest rates will rise slightly because NZ is now perceived as more risky.


To be honest I think the downgrade is harsh. For the record it has nothing to do with our politics - it is actually an assessment of us as a society. The economists think we'll run back to borrowing and spending as soon as we can.

[puddytat]

A society thats going to be sold out if you ask me. ( I know you didnt)
Why can there be any talk of selling stuff when our debt is only around 20% of GDP....
We're are in a better position than I would hazard a guess, of 75% of Nations.
Who the fuck are these people & why do we have to listen to these self appointed experts? If we stopped borrowing money then they'd be stuffed.:yes:
If this is the case , then you know & I know that its all spin & really its just to keep us worried so Govts can do what they want, & the Banks can keep the facade of stabilty a little longer.:facepalm:

Want to know whats really going on Aotearoa?
I'd recommend"War on News" by Martin "Bomber'' Bradbury......Google it:yes:
A good laugh & more of an alternative ,than standard media presentation of issues effecting you & I.

[BoristheBiter]

A society thats going to be sold out if you ask me. ( I know you didnt)
Why can there be any talk of selling stuff when our debt is only around 20% of GDP....
We're are in a better position than I would hazard a guess, of 75% of Nations.
Who the fuck are these people & why do we have to listen to these self appointed experts? If we stopped borrowing money then they'd be stuffed.:yes:
If this is the case , then you know & I know that its all spin & really its just to keep us worried so Govts can do what they want, & the Banks can keep the facade of stabilty a little longer.:facepalm:

It's not just government debt they take into consideration, it's personal as well and I think at the last count NZer's were spending $1.20 for every $1 they earned.

The credit rating is done on banking so has very little to do with the government other than it means they pay higher interest rates on the money they borrow.

[mashman]

It's not just government debt they take into consideration, it's personal as well and I think at the last count NZer's were spending $1.20 for every $1 they earned.

The credit rating is done on banking so has very little to do with the government other than it means they pay higher interest rates on the money they borrow.

Kinda strange given that 80%? of NZ's wealth is controlled by the 10%? of the population... How did the top 10% get so much of that wealth? Let me guess, they worked for it :rofl:

[BoristheBiter]

Kinda strange given that 80%? of NZ's wealth is controlled by the 10%? of the population... How did the top 10% get so much of that wealth? Let me guess, they worked for it :rofl:

A bit like how 80% of crime is committed by 20% of the population.

[mashman]

A bit like how 80% of crime is committed by 20% of the population.

because they don't have enough money to survive on, because 10% are hogging it to suck yet more money out of the local economy without a thought for the reprocussions. Some of the 10% are no doubt in your 20%...

[BoristheBiter]

because they don't have enough money to survive on, because 10% are hogging it to suck yet more money out of the local economy without a thought for the reprocussions. Some of the 10% are no doubt in your 20%...

:violin::violin::violin::violin::violin::violin:

Jealous much??

[mashman]

:violin::violin::violin::violin::violin::violin:

Jealous much??

:killingme I'm completely consumed with jealousy. I can barely contain myself at the thought of frolicking in pools of someone elses money with hired women named Inga.

[Usarka]

This thread must be moved to PD!

[Winston001]

Kinda strange given that 80%? of NZ's wealth is controlled by the 10%? of the population...

?? Where do you get that from?

The Department of Statistics records that 10% of the population control 50% of the wealth. http://www.stats.govt.nz/browse_for_stats/people_and_communities/Families/wealth-and-disparities-in-new-zealand.aspx Nevertheless that doesn't tell us much.

The more interesting fact is 50% (half of us) hold 90% of the wealth. That's not a healthy distribution IMHO.

[Ocean1]

The more interesting fact is 50% (half of us) hold 90% of the wealth. That's not a healthy distribution IMHO.

Get a few more numbers.

I think you'll recognise the shape of the curve, it's got little to do with any arbitrary health index.

[mashman]

?? Where do you get that from?

The Department of Statistics records that 10% of the population control 50% of the wealth. http://www.stats.govt.nz/browse_for_stats/people_and_communities/Families/wealth-and-disparities-in-new-zealand.aspx Nevertheless that doesn't tell us much.

The more interesting fact is 50% (half of us) hold 90% of the wealth. That's not a healthy distribution IMHO.

Asshat propoganda figures... thanks for the document... Shame there isn't anything more up to date, but would imagine things won't have changed that much.

Totally agree on that last part... and that was back in 2004.

[mashman]

Would an interest rate rise affecting floating rate mortgages automatically increase our levels of private debt? In that the mortgage rate goes up by x% and therefore my debt rises by $x once recalculated.

[BoristheBiter]

:killingme I'm completely consumed with jealousy. I can barely contain myself at the thought of frolicking in pools of someone elses money with hired women named Inga.

It's Olga, Inga was so last week.

[Winston001]

Would an interest rate rise affecting floating rate mortgages automatically increase our levels of private debt? In that the mortgage rate goes up by x% and therefore my debt rises by $x once recalculated.

Good question. Don't know. I've always assumed total debt was calculated on the nett sums owing. Its certainly possible to calculate a forward value of debt including annual interest in which case it would grow.

The importance of say 0.5% interest rise is sovereign (government) and private debt costs more each year to service. Thus outsiders looking at NZ conclude we can't spend/invest as much because of the extra interest burden. Our internal economy shrinks.

[mashman]

Good question. Don't know. I've always assumed total debt was calculated on the nett sums owing. Its certainly possible to calculate a forward value of debt including annual interest in which case it would grow.

The importance of say 0.5% interest rise is sovereign (government) and private debt costs more each year to service. Thus outsiders looking at NZ conclude we can't spend/invest as much because of the extra interest burden. Our internal economy shrinks.

It wouldn't really make sense to increase interest rates after being downgraded then? not that interest rates will rise, but I guess it would follow that if we have to borrow money at a higher rate, due to our downgraded credit rating, then something has to rise to cover the extra costs incurred? is there a "traditional" response to being downgraded?

[Oscar]

It wouldn't really make sense to increase interest rates after being downgraded then? not that interest rates will rise, but I guess it would follow that if we have to borrow money at a higher rate, due to our downgraded credit rating, then something has to rise to cover the extra costs incurred? is there a "traditional" response to being downgraded?

Usually the first thing that happens is that people sell our currency and it falls in value. Depending on which currencies the govt. is borrowing, this increases our indebtedness.

[Winston001]

It wouldn't really make sense to increase interest rates after being downgraded then? ... is there a "traditional" response to being downgraded?

Certainly, interest rates rise both internally and externally for NZ. That is because lenders (Dutch dentists, Saudi investment funds, Chinese banks) reckon we are more risky and require higher interest if we want their money.

Consequently lenders within NZ need more interest to cover what they borrow from overseas. Your mortgage rate rises. The NZ government has to follow this by offering to pay higher interest on government bonds. If they didn't, they wouldn't be able to borrow money.

It gets worse. Our currency drops with the credit rating (down at least 5% at the moment) which means our exports bring in more money. But as soon as we start offering a higher rate of interest (government, banks, councils), the currency jumps up. Wiping out export gains.

She's a hard road to tune an economy.


Usually the first thing that happens is that people sell our currency and it falls in value. Depending on which currencies the govt. is borrowing, this increases our indebtedness.

Exactly.

[mashman]

Usually the first thing that happens is that people sell our currency and it falls in value. Depending on which currencies the govt. is borrowing, this increases our indebtedness.



Certainly, interest rates rise both internally and externally for NZ. That is because lenders (Dutch dentists, Saudi investment funds, Chinese banks) reckon we are more risky and require higher interest if we want their money.

Consequently lenders within NZ need more interest to cover what they borrow from overseas. Your mortgage rate rises. The NZ government has to follow this by offering to pay higher interest on government bonds. If they didn't, they wouldn't be able to borrow money.

It gets worse. Our currency drops with the credit rating (down at least 5% at the moment) which means our exports bring in more money. But as soon as we start offering a higher rate of interest (government, banks, councils), the currency jumps up. Wiping out export gains.

She's a hard road to tune an economy.

I'm sorry I asked... kinda, but thanks for the info... It's kinda funny, for me anyway, seems a lot like a dog chasing its tail.

[BoristheBiter]

I'm sorry I asked... kinda, but thanks for the info... It's kinda funny, for me anyway, seems a lot like a dog chasing its tail.

Only if you only look to the money side when you should be looking at what it is funding and do we need it.

[Clockwork]

Certainly, interest rates rise both internally and externally for NZ. That is because lenders (Dutch dentists, Saudi investment funds, Chinese banks) reckon we are more risky and require higher interest if we want their money.

Consequently lenders within NZ need more interest to cover what they borrow from overseas. Your mortgage rate rises. The NZ government has to follow this by offering to pay higher interest on government bonds. If they didn't, they wouldn't be able to borrow money.

It gets worse. Our currency drops with the credit rating (down at least 5% at the moment) which means our exports bring in more money. But as soon as we start offering a higher rate of interest (government, banks, councils), the currency jumps up. Wiping out export gains.

She's a hard road to tune an economy.



Exactly.


Interesting post. Leads me to wonder if there actually is any way to 'tune' an economy. Seems to be for every positive action there is a negative compensation and vice versa.

Starting to wonder if the whole thing is meant be remain in a constant state of flux simply as a means to generating winners and losers.


....and the beat goes on!!

[avgas]

Interesting post. Leads me to wonder if there actually is any way to 'tune' an economy. Seems to be for every positive action there is a negative compensation and vice versa.

Starting to wonder if the whole thing is meant be remain in a constant state of flux simply as a means to generating winners and loosers.


....and the beat goes on!!
HOLY SHIT! YOU OF ALL PEOPLE!
are now starting to sound more like an economist..........pat yourself on the back sir - I believe you have become more aware and educated! :yes:

[Oscar]

I'm sorry I asked... kinda, but thanks for the info... It's kinda funny, for me anyway, seems a lot like a dog chasing its tail.

Interest rates will probably go up as overseas lenders increase risk premiums.
The ANZ borrowed $400m from the US on Friday (the first local bank to do so since the whole Euro zone problem started), the risk premium margin increased from 1.7% to 2%.

[Clockwork]

HOLY SHIT! YOU OF ALL PEOPLE!
are now starting to sound more like an economist..........


No need for the personal abuse.:facepalm:

[Winston001]

Only if you only look to the money side when you should be looking at what it is funding and do we need it.

Exactly. The problem is that we are used to government spending and cuts are unpopular. Private spending on McMansions and pure consumption using borrowed money fuels our balance of payments deficit.

What frustrates me is that we do not have a national conversation on these issues.


Interesting post. Leads me to wonder if there actually is any way to 'tune' an economy. Seems to be for every positive action there is a negative compensation and vice versa.

Starting to wonder if the whole thing is meant be remain in a constant state of flux simply as a means to generating winners and losers.




Every finance minister in the world would agree. :D As for being in flux, very true. But so are our daily lives, nothing is certain, illness strikes, accidents happen, redundancies etcetera.

One way to remove some uncertainty is a fixed exchange rate. TBH I don't understand how its done - or can be done by small countries. China is one place with a fixed rate.

[mashman]

....and the beat goes on!!


it's be nice if they could carry a tune to go with it :innocent:


Interest rates will probably go up as overseas lenders increase risk premiums.
The ANZ borrowed $400m from the US on Friday (the first local bank to do so since the whole Euro zone problem started), the risk premium margin increased from 1.7% to 2%.

Wonder how many mortgage defaults are on the way, especially if the double dip recession hits, or triple dip, as English already said that we'd had a double dip some months ago...



Only if you only look to the money side when you should be looking at what it is funding and do we need it.


like we'll ever find that out and get a chance to make those decisions... Lifetime perks for pollies would be the first on the block :yes:

[mashman]

What frustrates me is that we do not have a national conversation on these issues.

Heh, I think we all know how that would go. Great idea, but not our policy... next... let alone the bludger and bene bashing.

[BoristheBiter]

like we'll ever find that out and get a chance to make those decisions... Lifetime perks for pollies would be the first on the block :yes:

See, I knew I would get you thinking about getting rid of benefits.:bleh:

[mashman]

See, I knew I would get you thinking about getting rid of benefits.:bleh:

:rofl: nice...

[puddytat]

Well folks, I've just read on yahoo news that our dear leader has said that National will never implement a Capital Gains Tax.:gob: So .....
Rod Oram earlier today was rather scathing about the blase' approroach towards the Financial crisis & Credit downgrade by the Finance Minister & if anyone questions them there is always an offhand answer or some platitude.He also said that the blame for the downgrade could be laid squarely at Nationals feet because they have done nothing to inspire confidence or address debt, both Govt. & public & is still borrowing heavily, especially for Chch whereas like the Greens suggested & what America has done with its Natural disasters ,he should be creating a special levy to finance the rebuild.
Why is my Gut instinct telling me we're being set up to fail & that NZ will be sold by ShonKey by lunchtime in the next term.
Their arrogance is rather concerning.

[Hinny]

After all the reassurance NZ was better placed than other nations, our debt was low by comparison, no need to panic, don't worry about selling anything to reduce loans...duh THUD. Another international downgrade for us.

The reassurances are still valid. Cause of the downgrade as stated was not because of our high sovereign debt but the rate of borrowing.
Bill English stated that he was borrowing more than he needed to while interest rates were low so that he wouldn't have to borrow at higher rates later.
Does that make sense to anyone?

Before anybody goes lambasting John Key for mismanaging the economy they should accept that he is not the finance minister.
His demonstrated grasp of economics would make one consider that this is a good thing.
He does however seem to have the ability to dip his hand into the kitty whenever he feels like it. Giving $18m to Warner Bros. Borrowing money to buy US treasury bonds. Giving money to the Libyan Rebels.
Unbelievable.
His hero was Rob Muldoon and he seems to be adopting a style that is a mix of him and George Bush. Same policies...Same disregard for democracy ... but we are going to get a different outcome this time. Tui moment.

[Oscar]

The reassurances are still valid. Cause of the downgrade as stated was not because of our high sovereign debt but the rate of borrowing.
Bill English stated that he was borrowing more than he needed to while interest rates were low so that he wouldn't have to borrow at higher rates later.
Does that make sense to anyone?

Before anybody goes lambasting John Key for mismanaging the economy they should accept that he is not the finance minister.
His demonstrated grasp of economics would make one consider that this is a good thing.
He does however seem to have the ability to dip his hand into the kitty whenever he feels like it. Giving $18m to Warner Bros. Borrowing money to buy US treasury bonds. Giving money to the Libyan Rebels.
Unbelievable.
His hero was Rob Muldoon and he seems to be adopting a style that is a mix of him and George Bush. Same policies...Same disregard for democracy ... but we are going to get a different outcome this time. Tui moment.

Disregard for democracy?
He's making the sale of state assets an election issue.
You don't let the facts get in the way of your rant, I see...

[puddytat]

Before anybody goes lambasting John Key for mismanaging the economy they should accept that he is not the finance minister.
.

Really?
Nah its this bloke called Wall Street:yes:

[Hinny]

Disregard for democracy?
He's making the sale of state assets an election issue.
You don't let the facts get in the way of your rant, I see...

I was talking about the govt using urgency 20 times in two years.
Sale of state assets an election issue.... Tui moment.
It is a major con job.
The importance of protecting the security of our energy, food and water is of paramount importance to the future well being of NZ citizens.
An appreciation of the game playing involved in the current situation regarding energy illustrates the futility and fallacy of the private ownership models promoted by previous National governments.
"A competitive market will give us cheaper energy."
In hindsight that was clearly a load of horse manure.

[puddytat]

I was talking about the govt using urgency 20 times in two years.
.

Rather worrying when you consider that no previous Govts for the last 70 years felt the need to use "urgency as much....
As for them making it an election issue we'll here them going bla blah blah..... The have already made the decision I reckon,even more so now because of the credit downgrade.
I think we'll need to get out on the streets in force to stop it.:yes:

[paturoa]

I'm not in favour as the application will do nothing to address the current imbalance in taxation for the EXISTING taxes.

I've known plenty of self employeed, small business people over the years that pay next to no tax other than GST. I'm a wage and salary earner and I pay fecking heaps of tax.

Which ever political party that has the balls to effectively address the current holes in taxation will get my vote.

Introducing an equivalent across the board CGT tax onto the current biased taxation does absolutely nothing other than get me paying MORE tax.

http://i199.photobucket.com/albums/aa206/paturoa/svdownunder/current_tax.jpg

http://i199.photobucket.com/albums/aa206/paturoa/svdownunder/Taxwithcgt.jpg

[Winston001]

He does however seem to have the ability to dip his hand into the kitty whenever he feels like it. Giving $18m to Warner Bros.


Under the previous Labour government, $49.728 million was paid to movie producers. Nobody objected. http://www.med.govt.nz/templates/Page____17609.aspx

[Zedder]

Under the previous Labour government, $49.728 million was paid to movie producers. Nobody objected. http://www.med.govt.nz/templates/Page____17609.aspx

Payouts! Don't get me started on payouts Winston.......

[rainman]

What frustrates me is that we do not have a national conversation on these issues.

Indeedy, me too. And on a few other pressing issues besides. Yet what can be done when the masses have their sensibilities willingly anaesthetised by flat-screen TVs, RWCs (upgraded to Dan Carter's groin) and Smiley McSmilealot? Rod Oram was on NatRad this morning trying to have a conversation about our dependence on primary industry and our low value, low wage economy. Worth a listen, but you won't hear it on talk radio.


as English already said that we'd had a double dip some months ago...

Well, he certainly did.

[rainman]

Which ever political party that has the balls to effectively address the current holes in taxation will get my vote.

So, not Labour or National then.

By the way, dude, those charts are complete bollocks. But I get the point you are trying to make.

[mashman]

Which ever political party that has the balls to effectively address the current holes in taxation will get my vote.


Saw you and thought of this (http://nz.finance.yahoo.com/news/SMELLIE-ON-SMEs-Small-businessdesk-3371681310.html?x=0) :)... it'll be interesting to see who gets caught... TUI



Disregard for democracy?
He's making the sale of state assets an election issue.


:rofl: ... in this case I'm hoping that the public are just one trick pony voters and SOE sales are the stick.

I'd love to see more detail on Hone's proposal though :yes:

[Ocean1]

By the way, dude, those charts are complete bollocks. But I get the point you are trying to make.

The point being SMEs are avoiding tax?

That's bollox also.

The facts are rather different:

Table 5.2: Deadweight costs of different taxation
Taxation type Deadweight Cost
Corporate income tax: 40 percent
Labour income tax: 24 percent
GST: 8 percent
Municipal rates: 2 percent.


And the needy aren't getting their share of the tax spend?

No?

Year Ended March 2009
Percentage of GDP Central Govt Local Govt General Govt
Current outgoings
Collective consumption* 6.3% 1.9% 8.1%
Social assistance 22.2% 0.4% 22.6%
Other current spending 5.6% 1.1% 6.7%
Total current spending 34.1% 3.4% 37.5%

Source: http://www.2025taskforce.govt.nz/secondreport/31.htm


So not only do business pay the majority of tax they see almost none of the benefits.


Wish I was a wage slave.

[BoristheBiter]

The point being SMEs are avoiding tax?

That's bollox also.

The facts are rather different:

Table 5.2: Deadweight costs of different taxation
Taxation type Deadweight Cost
Corporate income tax: 40 percent
Labour income tax: 24 percent
GST: 8 percent
Municipal rates: 2 percent.


And the needy aren't getting their share of the tax spend?

No?

Year Ended March 2009
Percentage of GDP Central Govt Local Govt General Govt
Current outgoings
Collective consumption* 6.3% 1.9% 8.1%
Social assistance 22.2% 0.4% 22.6%
Other current spending 5.6% 1.1% 6.7%
Total current spending 34.1% 3.4% 37.5%

Source: http://www.2025taskforce.govt.nz/secondreport/31.htm


So not only do business pay the majority of tax they see almost none of the benefits.


Wish I was a wage slave.

You beat me to it.
I wish some of these idiots that think that if you own a business you are rolling in cash tried to start their own business.

If its that easy and you pay so much less tax then why don't they get off their arse and do the same...... Oh that's right they are full off shit.

Rant over.

[paturoa]

You beat me to it.
I wish some of these idiots that think that if you own a business you are rolling in cash tried to start their own business.

If its that easy and you pay so much less tax then why don't they get off their arse and do the same...... Oh that's right they are full off shit.

Rant over.

Nice rant - now engage your brain.

Well this full of shit idiot has known lots of people over the years (and currently knows a bunch) who have a really good life style (all the toys, overseas holidays etc etc etc) and pay bugger all net tax compared to myself (as a wage and salary earner). The one common thing about these people is that they all had successful small businesses (interestingly many were / are farmers).

Anyhow, my point is that, this needs to be resolved BEFORE CGT gets layered on top.

Your point about "if you own a business you are rolling in cash" is very valid. There is an exact equivalent for wage and salary earners, they are the ones on the low income / minimum wages, and they pay buger all net tax too (after working for families etc)

I'll make an assumption here, that your OK with wage and salary earners paying more tax as they earn more. If that is correct, then are you OK with small bus / self employeed who are doing OK, also paying a similar net tax?

My experience tells me they don't - or alternativly they all lied to me.

[paturoa]

The point being SMEs are avoiding tax?

That's bollox also.

The facts are rather different:

Table 5.2: Deadweight costs of different taxation
Taxation type Deadweight Cost
Corporate income tax: 40 percent
Labour income tax: 24 percent
GST: 8 percent
Municipal rates: 2 percent.


Well that's double double bollox.

The table you quote is "deadweight costs" which is defined in the link as "The marginal excess burden of taxation" or "Thus, for example, a 40 percent excess burden implies that for each dollar of additional revenue raised, the associated economic loss is 40 cents. With an excess burden of that magnitude, each additional dollar of revenue raised would need to yield a return to citizens of at least $1.40 in order to be worthwhile."

That in no way measures the relative net tax rates paid, it doesn't even extimate the gross tax paid.

[BoristheBiter]

Your point about "if you own a business you are rolling in cash" is very valid. There is an exact equivalent for wage and salary earners, they are the ones on the low income / minimum wages, and they pay buger all net tax too (after working for families etc)

I'll make an assumption here, that your OK with wage and salary earners paying more tax as they earn more. If that is correct, then are you OK with small bus / self employeed who are doing OK, also paying a similar net tax????

You know what they say about making assumptions.

I still pay tax probably more than a lot of people and i am fine with that as we all have to pay our way and that is not the point i am making.

If being is business, with all its perks, is so good why do so many people fail at it or fail to even give it a go?

What I actually think is the tax rate should be a flat tax across the board, no tax on savings and if you want a FBT then that should be on anything you sell at a profit.

[Oscar]

I was talking about the govt using urgency 20 times in two years.
Sale of state assets an election issue.... Tui moment.
It is a major con job.
The importance of protecting the security of our energy, food and water is of paramount importance to the future well being of NZ citizens.
An appreciation of the game playing involved in the current situation regarding energy illustrates the futility and fallacy of the private ownership models promoted by previous National governments.
"A competitive market will give us cheaper energy."
In hindsight that was clearly a load of horse manure.

As far as I'm concerned, I'll be happy to buy shares in NZ's energy.
Apart from that, you keep making statements that can't be proven one way or 'tother. How do you know that energy would have been cheaper under another model? Have you an alternative reality running somewhere's?

[Oscar]

Rather worrying when you consider that no previous Govts for the last 70 years felt the need to use "urgency as much....
As for them making it an election issue we'll here them going bla blah blah..... The have already made the decision I reckon,even more so now because of the credit downgrade.
I think we'll need to get out on the streets in force to stop it.:yes:

So just because you happen to disagree with the actions of one of the most popular Governments in a generation, you advocate revolution?

A wee bit patronising of you, no?

[Oscar]

:rofl: ... in this case I'm hoping that the public are just one trick pony voters and SOE sales are the stick.

I'd love to see more detail on Hone's proposal though :yes:

As I said earlier, I'm keen to invest in the SOE's - a brilliant opportunity.

[phill-k]

So just because you happen to disagree with the actions of one of the most popular Governments in a generation, you advocate revolution?

A wee bit patronising of you, no?

Just because National and JK are the most popular Govt in a generation does not mean they are governing with the interests of all NZ and its long term prospects as part of there fundamental principles - Read some of the comments being made by some of NZ's more free thinking economists like Bernard Hickey and Garth Morgan.

[Oscar]

Just because National and JK are the most popular Govt in a generation does not mean they are governing with the interests of all NZ and its long term prospects as part of there fundamental principles - Read some of the comments being made by some of NZ's more free thinking economists like Bernard Hickey and Garth Morgan.

I agree that these guys have some interesting view points, and that the Govt. is not perfect by a long chalk. But I am sick of left wing losers who, because they are not getting their own way label this Govt. as "anti-democratic".

[phill-k]

I agree that these guys have some interesting view points, and that the Govt. is not perfect by a long chalk. But I am sick of left wing losers who, because they are not getting their own way label this Govt. as "anti-democratic".

I have no issues with whether our Govt swings left or right, rather that they grasp the fact that we as a country need some very decisive decisions be made - Labour started it with talk of the CGT but we need more and further reform, our taxation system is failing NZ, as the chap on 60minutes said the other night those that have done well from life here in NZ have a moral obligation to willingly give back, it is a fact that there is a significant number of well healed NZers who are earning incomes that often exceed the average wage many times but who as a proportion pay very little towards the betterment of all NZ,
To suggest we sell off even parts of the businesses in NZ that provide essential services is just dumb, we have already had examples of this that demonstrate it patiently does not work, we need to overhaul our taxation system and those that have wealth in NZ need to have some empathy for those that don't. The continual slagging off at dole bludgers and welfare cheats needs to stop, they make up a relatively small proportion of our society by in large do not have much of a life but this bitterness towards these few gaining from others is breeding a generalised attitude of self interest rather than than an inclusive attitude something NZers had 20 - 30 yrs ago.

[Ocean1]

it is a fact that there is a significant number of well healed NZers who are earning incomes that often exceed the average wage many times but who as a proportion pay very little towards the betterment of all NZ,


So you'll have no trouble producing numerical references for this fact, then?

[rainman]

The point being SMEs are avoiding tax?

Um, no. The point that if you have a column chart showing percentage distributions (so, a "share of" graph, numbers that add up to 100%), if you just slap another 20% on every column you get the nonsense that the numbers add up to, in this case, 160%. This is then, to use the correct technical term, utter bollocks.

As to the OP's point, I have a small business and it costs me only slightly less than the equivalent earnings would in PAYE - although as I'm essentially a casualised employee that's about right I suppose.

I've spent a lot of time with various farmer's financials though, and I'll assure you it's not uncommon to find less in tax payments there than one might expect. There's a fair bit of risk in farming, of course, so some might see that as behaviour by design. Right up until they stick their hand out for drought relief, or climate subsidies, or whatever welfare scheme is in favour at the time, one would hope.

As to businesses in general, permit me to recycle some NRT links:

Barclays (http://www.guardian.co.uk/business/2011/feb/18/barclays-bank-113m-corporation-tax) - 1% of profits
Ah, buggrit, I'll just link the original NRT article (http://norightturn.blogspot.com/2011/02/tax-cheats-ii.html) showing our captains of industry shouldering their fair share of the burden. Not. (between 1.9% and 10.9%)

Or maybe some (http://www.forbes.com/2010/04/01/ge-exxon-walmart-business-washington-corporate-taxes.html) others (http://www.npr.org/2011/09/10/138867588/corporate-taxes-how-low-can-you-go) from (http://blogs.reuters.com/felix-salmon/2011/08/31/do-companies-pay-their-ceos-more-than-they-pay-in-taxes/) overseas, from 5 minutes (http://www.ips-dc.org/campaigns/tax-dodging-ceos/index.php) of cursory (http://www.businessinsider.com/companies-pay-lowest-tax-loopholes-2011-2) googling (http://www.turtletrader.com/post.html).

But wait on, I'm sure The Stranger or someone will be along presently to tell us all we have to do to solve our problems is lower company tax rates even further.

[mashman]

they're only looking into 350,000 "entities" in the UK (http://www.guardian.co.uk/football/2011/sep/20/hmrc-crackdown-tax-avoiding-footballers), those who earn over (GBP)2.5 million...

They reckon the top footballers alone cost them (GBP)100 million and there's a couple of hundred max. (http://www.guardian.co.uk/business/2011/jan/16/premier-league-footballers-tax-avoidance) ... wonder where they get that advice from, coz I doubt some of them figured it out themselves... bloody loopholes.

[Ocean1]

I have a small business and it costs me only slightly less than the equivalent earnings would in PAYE - although as I'm essentially a casualised employee that's about right I suppose.

As do I. Last quarter I earned more for the government than I did for myself. If that happens again I'm tearing up my bourgeoisie card.


I've spent a lot of time with various farmer's financials though, and I'll assure you it's not uncommon to find less in tax payments there than one might expect. There's a fair bit of risk in farming, of course, so some might see that as behaviour by design. Right up until they stick their hand out for drought relief, or climate subsidies, or whatever welfare scheme is in favour at the time, one would hope.

So benefit fraud isn't a problem because it's such a small percentage of GDP, but perfectly legal penny-pinching tax avoidance by a few cockies is economic disaster?


As to businesses in general, permit me to recycle some NRT links:

Which have what to do with NZ SMEs?

[puddytat]

So just because you happen to disagree with the actions of one of the most popular Governments in a generation, you advocate revolution?

A wee bit patronising of you, no?

No that is not what I was implying at all. What I am advocating is that if people feel strongly about an issue they have as much right as anybody to make themselves heard.
Not only do I think that some of these changes to Laws are un-democratic, so did a whole bunch of lawyers from the Law somethingorother.
As for asset sales ,well we all could potentially invest in shares,but a lot of us will never get around to it or cant afford it.
This left wing loser would simply prefer that our Kiwi Saver be invested in ourselves.
All of it.
Like our power generation for example.

[Winston001]

In truth I'm influenced by the international data on "happiness" surveys. Incidentally I think happiness itself is a momentary experience and prefer "fulfillment" as the real test.

Anyway the research points to happy/fulfilled communities as being in places where the wealth distribution is fairly equal. One of the index factors is relatively high taxation. Denmark from memory leads the list.

Sooo.....people are content when they feel relatively equal with one another and don't mind paying high taxes because the social benefits are worth it.

Doubtless the details and psychology involved are much more complex but its something to think about. Ultimately the surveys suggest redistribution of capital (CGT) is socially beneficial.

[rainman]

Last quarter I earned more for the government than I did for myself.

Unless there's something really special about "last quarter", fire your accountant.


So benefit fraud isn't a problem because it's such a small percentage of GDP, but perfectly legal penny-pinching tax avoidance by a few cockies is economic disaster?

How on earth did you reach that conclusion? And, at the risk of offending every lawyer in sight (oh well, how sad), what's "perfectly legal" got to do with ethics?


Which have what to do with NZ SMEs?

Nothing, directly, but they're indicative of the issue that companies can generally afford better tax advice than wage slaves. Except, clearly, yours.


Anyway the research points to happy/fulfilled communities as being in places where the wealth distribution is fairly equal.
...
Doubtless the details and psychology involved are much more complex but its something to think about. Ultimately the surveys suggest redistribution of capital (CGT) is socially beneficial.

Agreed, once again. Some good talks on this at the RSA and LSE. I may have posted them here before.

[Ocean1]

Denmark from memory leads the list.

The same place that leads the suicide list?


Sooo.....people are content when they feel relatively equal with one another

Well, the useless bastards on the bottom half of the list probably do.


and don't mind paying high taxes because the social benefits are worth it.

Again, I'm sure dole bludgers and the like don't mind that bit at all. Most of the middle-income and higher earners get a tad testy about working all that overtime.

[Winston001]

Again, I'm sure dole bludgers and the like don't mind that bit at all. Most of the middle-income and higher earners get a tad testy about working all that overtime.

Yeah I know. Its all very well talking about an egalitarian society where ownership of assets is similar across the whole population. However the only way to achieve that is to strip wealth from those who rise above the average...which begs the question, why would anyone bother? Where's the incentive to strive for excellence?

Anyway for those interested, here is a site which goes deeply into well-being and has plenty of data.

http://worlddatabaseofhappiness.eur.nl/hap_nat/nat_fp.php

[Ocean1]

strip wealth from those who rise above the average

Only just. I think you get to the 55th percentile (income) before you're tax negative, (paying more than you cost in benefits / subsidies).

[Winston001]

Good point!

But the argument is broader than that. Plenty of people are asset rich but cash poor. An average income isn't always a pointer to wealth. For example, owning a rental property which returns 2% after paying the rates, insurance, new toilet, repairing the blocked drains, yadda yadda (not wanting to sound bitter.. :D).

Ethically it must be wrong for the majority to forceably take from the minority. Yet that is what graduated taxes and a Capital Gains Tax do. Apparently its the price we pay for living in a civilised society....but if you lived in Bahrain or Alaska, you'd have very little taxation and a good lifestyle.

[Ocean1]

Apparently its the price we pay for living in a civilised society....

Bollox. It's the price we pay for allowing sucessive governments to form tax policy for the sole purpose of buying votes. That 55% isn't 49% because taking money from 51% of the population to buy the votes of 49% wouldn't work, would it?

What do you reckon that sort of performance disincentive is costing the country in lost revenue?

[Winston001]

What do you reckon that sort of performance disincentive is costing the country in lost revenue?

I'm with you but what I can't figure out is how the Scandinavian countries where tax is as high as 80% (at the top end) manage to have strong industrial economies and satisfied citizens?

Possibly its because those countries have homogeneous populations (no ethnic minorities) and agree with each other across the board. By contrast we have lots of arguments and disagreements, moaners and whingers, low levels of economic understanding, and can't agree on much at all.

[Ocean1]

I'm with you but what I can't figure out is how the Scandinavian countries where tax is as high as 80% (at the top end) manage to have strong industrial economies and satisfied citizens?

Possibly its because those countries have homogeneous populations (no ethnic minorities) and agree with each other across the board. By contrast we have lots of arguments and disagreements, moaners and whingers, low levels of economic understanding, and can't agree on much at all.

I suspect the higher taxed are seeing some of that redistribution heading back their way, so they're not getting specifically targeted and hit from both the giving and recieving ends.

I'd be very interested to see what sort of incentives productive industry are offered there, too. That's something we do astoundingly poorly.

[rainman]

why would anyone bother? Where's the incentive to strive for excellence?

A very big question indeed. It would be churlish to pick on the word "excellence" as being extremely value-laden; I'm sure Mother Teresa was't much concerned about whether she was paying more that "her share" of tax...as is the case for many, many truly excellent people.

Or, setting the question in a different context: where is the incentive for an individual bee or ant to "excel", using your mindset? You are part of a society. Aggressive individualism is a mental aberration.

In 50 years or so you'll be dead. In a hundred, forgotten. Who cares how much tax you pay?

[doc]

In 50 years or so you'll be dead. In a hundred, forgotten. Who cares how much tax you pay?

Umm...:sick: Those that paid it, at the time of collection

[rainman]

Umm...:sick: Those that paid it, at the time of collection

Just a short-term lack of perspective, I assure you. What is your life for? Maximising wealth and minimising tax? I would hope you are made of more than that.

[James Deuce]

A very big question indeed. It would be churlish to pick on the word "excellence" as being extremely value-laden; I'm sure Mother Teresa was't much concerned about whether she was paying more that "her share" of tax...as is the case for many, many truly excellent people.

Or, setting the question in a different context: where is the incentive for an individual bee or ant to "excel", using your mindset? You are part of a society. Aggressive individualism is a mental aberration.

In 50 years or so you'll be dead. In a hundred, forgotten. Who cares how much tax you pay? Really bad example. Mother Theresa, well known Albanian egomaniac, was a Nun. She paid for her "great" works with the wealth of a church that systematically exploited the poor and established a social strata that denied those same poor any upward mobility at all by promising death and an eternal afterlife of being on fire and sodomised if they dared to think for themselves. Warren Buffet and Bill Gates on the other hand exploited a system to earn billions and then pour billions back into the poor without setting anyone on fire or sodomising them.

[Ocean1]

I would hope you are made of more than that.

Well he might be.

If some cunt hadn't stolen most of the building materials.

[rainman]

Really bad example. Mother Theresa, well known Albanian egomaniac, was a Nun. She paid for her "great" works with the wealth of a church that systematically exploited the poor and established a social strata that denied those same poor any upward mobility at all by promising death and an eternal afterlife of being on fire and sodomised if they dared to think for themselves. Warren Buffet and Bill Gates on the other hand exploited a system to earn billions and then pour billions back into the poor without setting anyone on fire or sodomising them.

That's a bit simplistic a deconstruction for you to be taken in by, isn't it Jim?

I'm no fan of the Catholic (or any other) church either, but even allocating for the fucked up mentality implicit in the worldview contributing to it, her net contribution to the well-being of the world is doubtless positive and, I suspect, greater than all of ours added together.

And I seriously doubt she either set anyone on fire or sodomised them either.

Buffett and Gates have done good things too, no doubt. Although it'll take a lot to forgive Bill for Clippy.

[James Deuce]

That's a bit simplistic a deconstruction for you to be taken in by, isn't it Jim?

I'm no fan of the Catholic (or any other) church either, but even allocating for the fucked up mentality implicit in the worldview contributing to it, her net contribution to the well-being of the world is doubtless positive and, I suspect, greater than all of ours added together.



Not at all. She created a net negative effect in many of the Indian cities she worked in. There is a significant body of evidence to suggest that she went beyond being a harsh task mitress and well into the abusive end of the spectrum when dealing with both her charity cases and her volunteer workforce, denying care to those who wouldn't convert to Catholicism. I don't think she deserves the veneration accorded her or her subsequent beatification. I think she was simply a colonial hangover in a post-colonial disaster zone and the head of a superb PR agency.

But then I really loathe organised religion and charity. I think both need to be taxed out of existence.

[blue rider]

But then I really loathe organised religion and charity. I think both need to be taxed out of existence.

AMEN AMEN AMEN
praise the bearded sky fairy and all

[rainman]

Not at all. She created a net negative effect in many of the Indian cities she worked in. There is a significant body of evidence to suggest that she went beyond being a harsh task mitress and well into the abusive end of the spectrum when dealing with both her charity cases and her volunteer workforce, denying care to those who wouldn't convert to Catholicism. I don't think she deserves the veneration accorded her or her subsequent beatification. I think she was simply a colonial hangover in a post-colonial disaster zone and the head of a superb PR agency.

But then I really loathe organised religion and charity. I think both need to be taxed out of existence.

Seems a big claim that the places she did work in are worse off for her presence, despite her undoubtedly having a super-sized helping of religious hangups. Certainly the standard of care seems to be less than perfect, but is imperfect care not better than nothing?

Nonetheless, my point stands, just substitute Gandhi, Mandela, the Dalai Lama, or better yet the many others outside of the limelight who work for nothing or next to it in education, welfare, counselling, disaster relief, environmental causes, support for war victims, poverty alleviation, disability.... and all the other places where the market does a particularly terrible job.

I understand the loathing of organised religion (although hold that some people seem to need it, therefore it's merely a market response to demand), but how would you replace charity? More taxes and central distribution and control? Or just fuck'em, their bad luck?

[BoristheBiter]

Seems a big claim that the places she did work in are worse off for her presence, despite her undoubtedly having a super-sized helping of religious hangups. Certainly the standard of care seems to be less than perfect, but is imperfect care not better than nothing?

Nonetheless, my point stands, just substitute Gandhi, Mandela, the Dalai Lama, or better yet the many others outside of the limelight who work for nothing or next to it in education, welfare, counselling, disaster relief, environmental causes, support for war victims, poverty alleviation, disability.... and all the other places where the market does a particularly terrible job.

I understand the loathing of organised religion (although hold that some people seem to need it, therefore it's merely a market response to demand), but how would you replace charity? More taxes and central distribution and control? Or just fuck'em, their bad luck?

And all are paid for by larger organisations that when in a position of power with the ability to change things they remain the same. (except the DL)

[rainman]

And all are paid for by larger organisations that when in a position of power with the ability to change things they remain the same. (except the DL)

And your point is?

[Winston001]

It would be churlish to pick on the word "excellence" as being extremely value-laden;

True, but better than the ephemeral "success" which most interpret as material wealth.


Or, setting the question in a different context: where is the incentive for an individual bee or ant to "excel", using your mindset? You are part of a society. Aggressive individualism is a mental aberration.

Mmm...but ants and bees are extreme examples of a hive mind. Humans do not act and cooperate on such a deep level.

The human animal is primarily selfish which drives the effort to compete and excel. Once the essentials of food/clothing/shelter are obtained, humans cooperate because we are sociable and value the increased security of the group. Nevertheless we continue to compete and can successfully leave the group if we wish.


In 50 years or so you'll be dead. In a hundred, forgotten. Who cares how much tax you pay?

I do. Sorta. My ability to sit here in comfort and debate stems from my grandfather buying a farm in 1908 which is still in the family today. It has sustained three generations. Had my grandfather been too heavily taxed, that would not have been possible.

Similarly I have spent my lifetime trying to build up wealth to pass on to my children and putative grandchildren. A capital gains tax would crush that.

[mashman]

True, but better than the ephemeral "success" which most interpret as material wealth.


If we're splitting hairs... Can you have success without the material wealth these days? and what damage does that success inflict on the community around us?



Mmm...but ants and bees are extreme examples of a hive mind. Humans do not act and cooperate on such a deep level.


Doesn't us all working and paying tax, for the Crown, kinda lump us in that hive mind group?



The human animal is primarily selfish which drives the effort to compete and excel. Once the essentials of food/clothing/shelter are obtained, humans cooperate because we are sociable and value the increased security of the group. Nevertheless we continue to compete and can successfully leave the group if we wish.

I don't believe that it's selfishness that drives competition and excelling. I would have thought that was down to how inquisitive and innovative we are? Unless you were meaning the potential "rewards" from the use of the "product"?



I do. Sorta. My ability to sit here in comfort and debate stems from my grandfather buying a farm in 1908 which is still in the family today. It has sustained three generations. Had my grandfather been too heavily taxed, that would not have been possible.

Similarly I have spent my lifetime trying to build up wealth to pass on to my children and putative grandchildren. A capital gains tax would crush that.

I'm gonna be taxed, same as everyone else (ok, maybe more... hey ho) and if it's going towards helping those who need help (which it does, or at least the smallest portion possible does :facepalm:) then I'm fine with that, irrespective of level... tis the waste I can't stand, such as pay rises for public servants who already earn twice (if not slightly more) the national average salary, returning 33% of public money because a charitable donation was made, cycleways, politicians life perks, irrelevant infrastructure (transmission gully is a bad joke), lawyers, "compliance" fees etc...

Wouldn't your kids etc... only be hit with CGT if they sell? and as they haven't earned it, they're still gonna come out with more than they started with?... or they'll have enough equity in the asset to borrow and negate the need to sell and therefore bypass the CGT?

[rainman]

Mmm...but ants and bees are extreme examples of a hive mind. Humans do not act and cooperate on such a deep level.

They're not that extreme, just a community at a scale we can easily perceive. We're already a colony species, made up of various biological components that, as per the "selfish gene" logic, can be argued to drive our actions in some measure. How much of a stretch is it to see ourselves as part of a society that is evolving, a grand social organism that acts in ways that can be adjudged within an ethical framework of sorts? And thereby to understand our roles within this entity as not being limited by the boundary of the meatsack we appear to inhabit?


The human animal is primarily selfish which drives the effort to compete and excel. Once the essentials of food/clothing/shelter are obtained, humans cooperate because we are sociable and value the increased security of the group. Nevertheless we continue to compete and can successfully leave the group if we wish.

Too simplistic, I'm afraid. That we are generally self-interested does not mean that we are only self-interested, or that we should only be so. Where does love fit in your world-view? (Not desire, love). Or duty, obligation, compassion...? It would be a truly poor shadow of a life to life without those things.


I do. Sorta. My ability to sit here in comfort and debate stems from my grandfather buying a farm in 1908 which is still in the family today. It has sustained three generations. Had my grandfather been too heavily taxed, that would not have been possible.

Similarly I have spent my lifetime trying to build up wealth to pass on to my children and putative grandchildren. A capital gains tax would crush that.

15% on the capital gain at point of sale would crush that? Poor diddums. Methinks you protest too much.

Along the road from your grandfather's farm (who did he buy it from, by the way, and how are their families doing?) I'm sure there will have been hundreds or thousands of decisions and actions that have led to your present comfortable status. I'd bet tax rates (which have floated up and down over the years) have been a fairly small part of that story.

[BoristheBiter]

I'm gonna be taxed, same as everyone else (ok, maybe more... hey ho) and if it's going towards helping those who need help (which it does, or at least the smallest portion possible does :facepalm:) then I'm fine with that, irrespective of level... tis the waste I can't stand, such as pay rises for public servants who already earn twice (if not slightly more) the national average salary, returning 33% of public money because a charitable donation was made, cycleways, politicians life perks, irrelevant infrastructure (transmission gully is a bad joke), lawyers, "compliance" fees etc...

Wouldn't your kids etc... only be hit with CGT if they sell? and as they haven't earned it, they're still gonna come out with more than they started with?... or they'll have enough equity in the asset to borrow and negate the need to sell and therefore bypass the CGT?

See that is the problem. We see things the same way, Hate all the wasted spending, But it is what we class as wasted spending that the problems start.
You might hate the amount of public servants that get pay rises, at least they go to work.

[mashman]

See that is the problem. We see things the same way, Hate all the wasted spending, But it is what we class as wasted spending that the problems start.
You might hate the amount of public servants that get pay rises, at least they go to work.

no argument from me... ok maybe a little one re the working bit :laugh: and you know my solution for removing that bone of contention :yes:

[Winston001]

... tis the waste I can't stand, such as ... returning 33% of public money because a charitable donation was made..

Having a problem seeing anything wrong with this.

The rationale is:


charities provide social services
government avoids that responsibility, saves money and bureaucracy
charities by law cannot benefit individuals - must be a group of people
charities provide employment, and pay PAYE, GST, ACC and other taxes
the tax deduction for an individual equals 30% of the total donation - not a lot and many people do not bother
the tax deduction is a small incentive to give a larger donation

As a matter of interest, Roger Douglas (in the Fourth Labour government) proposed that the tax deduction be done away with. I assume you'll now be voting ACT Mash??

And again purely FYI, Roger Douglas also proposed that incorporated societies pay tax. He saw them as an uncontrolled grey-market.

[mashman]

Having a problem seeing anything wrong with this.

The rationale is:


charities provide social services
government avoids that responsibility, saves money and bureaucracy
charities by law cannot benefit individuals - must be a group of people
charities provide employment, and pay PAYE, GST, ACC and other taxes
the tax deduction for an individual equals 30% of the total donation - not a lot and many people do not bother
the tax deduction is a small incentive to give a larger donation

As a matter of interest, Roger Douglas (in the Fourth Labour government) proposed that the tax deduction be done away with. I assume you'll now be voting ACT Mash??

And again purely FYI, Roger Douglas also proposed that incorporated societies pay tax. He saw them as an uncontrolled grey-market.

I understand that it's a penny pinching point of view... it's the incentive side of it that really bothers me.

:rofl:@voting I'll give it a miss thanks... unless of course someone wants to implement the free local economy :laugh:.

[Winston001]

We're already a colony species, made up of various biological components that, as per the "selfish gene" logic, can be argued to drive our actions in some measure. How much of a stretch is it to see ourselves as part of a society that is evolving, a grand social organism that acts in ways that can be adjudged within an ethical framework of sorts?

Nazi Germany. Pol Pot. Idi Amin. The Rwandan genocide. Bosnia et seq. Monstrous episodes of human beings simply killed by other human beings. And this all happened during the flowering of our civilisation, vast advances in science, knowledge, and social attitudes.

Evolutionary psychology holds many of the answers for our behaviour. The veneer of modern society is tissue thin. I do not believe that man can cast aside the primal instincts from three million years of wandering in the savannah.



Too simplistic, I'm afraid. That we are generally self-interested does not mean that we are only self-interested, or that we should only be so. Where does love fit in your world-view? (Not desire, love). Or duty, obligation, compassion...? It would be a truly poor shadow of a life to life without those things.


Altruism in a nutshell. Ok, giving to the group (or an individual) appears to be unselfish. However the person giving has a chance of gaining higher status = more security. A concomitant benefit can be safety for one's children even though that may be bought through mortal danger.

Evolutionary psychology does not require judgements to be made as to whether love/loyalty/compassion are right or wrong. Personally I'm all for them. They exist and they are explainable.

[rainman]

Sorry for the slow response, been travelling.


I do not believe that man can cast aside the primal instincts from three million years of wandering in the savannah.

Never? So, what's a sane response to that idea: if you can't beat 'em, join 'em? It's OK?


Ok, giving to the group (or an individual) appears to be unselfish. However the person giving has a chance of gaining higher status = more security....

Evolutionary psychology does not require judgements to be made as to whether love/loyalty/compassion are right or wrong. Personally I'm all for them. They exist and they are explainable.

Too mechanistic and cynical for my tastes. Love is not caring for someone in exchange for sex, protection, shelter or some other advantage. Compassion isn't to look good to others. Undoubtedly many do feign these and other "affections" for social advantage but that doesn't mean the real deal does not or can not exist. Believing no only that we are no more than the sum of our parts, but further that we are constrained by our biology to act and think in certain ways is.... unskillful. We can do better than that.

Evolutionary Bio is fascinating but not the last word. A friend risked death repeatedly for the benefit of others. He gained nothing but the knowledge he was helping sick children. He's very quiet about this matter and would want no public accolades or even private praise. He does not know, and will never meet, the people he helped. He gains nothing by this, nor do his descendants. But it was the right thing to do and he is sufficiently enlightened to have made the decision. Explainable? Yes, but not by EvBio. People have been doing this (http://en.wikipedia.org/wiki/Mett%C4%81) for centuries (http://www.accesstoinsight.org/lib/authors/buddharakkhita/wheel365.html).

Note this isn't a plea to a higher absolute morality or deity, or even an appeal to the soul. I don't even think I have one of those - and certainly not a permanent one - and I'm definitely not big on deities. But I can tell you it's entirely possible (and fortunately not uncommon) for people to concern themselves the others for no personal gain at all.

[BoristheBiter]

Too mechanistic and cynical for my tastes. Love is not caring for someone in exchange for sex, protection, shelter or some other advantage. Compassion isn't to look good to others. Undoubtedly many do feign these and other "affections" for social advantage but that doesn't mean the real deal does not or can not exist. Believing no only that we are no more than the sum of our parts, but further that we are constrained by our biology to act and think in certain ways is.... unskillful. We can do better than that.

Evolutionary Bio is fascinating but not the last word. A friend risked death repeatedly for the benefit of others. He gained nothing but the knowledge he was helping sick children. He's very quiet about this matter and would want no public accolades or even private praise. He does not know, and will never meet, the people he helped. He gains nothing by this, nor do his descendants. But it was the right thing to do and he is sufficiently enlightened to have made the decision. Explainable? Yes, but not by EvBio. People have been doing this (http://en.wikipedia.org/wiki/Mett%C4%81) for centuries (http://www.accesstoinsight.org/lib/authors/buddharakkhita/wheel365.html).

Note this isn't a plea to a higher absolute morality or deity, or even an appeal to the soul. I don't even think I have one of those - and certainly not a permanent one - and I'm definitely not big on deities. But I can tell you it's entirely possible (and fortunately not uncommon) for people to concern themselves the others for no personal gain at all.

I think you are mistaking the "good of society" with empathy.

If you look at the "hive" culture all is done of the survival of the colony, there is no room for empathy in "hive" culture.

Until you take out the undesirables you will never have what you are looking for.
And who gets to decide who is undesirable.
With free thought comes free will and all its associated problems

[rainman]

I think you are mistaking the "good of society" with empathy.

If you look at the "hive" culture all is done of the survival of the colony, there is no room for empathy in "hive" culture.

Until you take out the undesirables you will never have what you are looking for.
And who gets to decide who is undesirable.
With free thought comes free will and all its associated problems

Not really, empathy is all about recognising the suffering of others as being valid and "made of the same stuff" as your own suffering. Basically, seeing that others are worth giving a shit about because they are kinda like you. Once you get there it's not a big leap to true compassion. The "good of society" logic is perhaps based in considerations of empathy, but can be motivated by duty or obligation as well, or even self-sacrifice.

There isn't that much room for empathy in traditional hive cultures because bees and ants have simpler brains, probably without the mirror neurons we have that may underpin empathy. There are those that say they possess no qualia - or that they aren't aware of their experiences in a subjective way, but I'm not sure we can know that to be honest. Anyway, it was an analogy - we're quite different to bees really, but just as the hive can act as one to protect the queen during a swarm, without needing a bunch of managers and government to tell them what to do and when, and without having to worry about their taxes and those lazy bludger male bees sitting on their arses and eating more than their share of the nectar, I did hope we might have understood that society or community is also an emergent property of the things called all of us. And what determines how good a society is, is what we each do.

Free will is important, but ask yourself: what makes someone exercise their free will to do things that disadvantage others, rather that those things that benefit others? Perhaps rampant individualism, "survival of the fittest and fuck the rest" economics has a lot to answer for. Maybe we should teach our kids "we first", not "me first", and see how that goes?

[Winston001]

Not really, empathy is all about recognising the suffering of others as being valid and "made of the same stuff" as your own suffering. Basically, seeing that others are worth giving a shit about because they are kinda like you. Once you get there it's not a big leap to true compassion. The "good of society" logic is perhaps based in considerations of empathy, but can be motivated by duty or obligation as well, or even self-sacrifice.


Nicely put.

So how do you explicate our advancement to a co-operative empathic culture (6000 years of social advancement to this point) with 20th century events - Rwanda, Pol Pot, the Japanese in Manchuria, Mao's purges....??

Please don't suggest its because these were backward societies. Russia the home of Dostoevsky, Catherine the Great, the Hermitage et al - Stalin eradicated whole populations: Germany the home of European culture with Wagner, Goethe, Freud...by state fiat murdered 6 million human beings. Unimaginable brutality. Carried out by other human beings who went home each night and loved their children... They had plenty of empathy.

[rainman]

So how do you explicate our advancement to a co-operative empathic culture (6000 years of social advancement to this point) with 20th century events - Rwanda, Pol Pot, the Japanese in Manchuria, Mao's purges....??

Humans are indeed an interesting (and frequently unpleasant) lot; I don't propose we could all transition to a happy state of co-operative mutualism overnight, and I certainly don't expect this to occur any time soon. Doesn't mean progress towards a more enlightened state is impossible, of course, either individually or collectively.

I do think devoted individualism is heading in exactly the wrong direction, though. Thus my objection to strident calls of protest along the lines of "the bastards, they're taxing meeeeeeee.....". There's more to life.

[mashman]

Humans are indeed an interesting (and frequently unpleasant) lot; I don't propose we could all transition to a happy state of co-operative mutualism overnight, and I certainly don't expect this to occur any time soon. Doesn't mean progress towards a more enlightened state is impossible, of course, either individually or collectively.

I do think devoted individualism is heading in exactly the wrong direction, though. Thus my objection to strident calls of protest along the lines of "the bastards, they're taxing meeeeeeee.....". There's more to life.

The problem I have with the "ideal" is that we're all waiting for someone else to go first to prove that "it (the ideal)" (peace and love man, for want of a better description) does exactly what it says on the tin. People love using the past as proof of what hasn't worked and what is absolute (usually prior human behaviour and social structures :facepalm:), and only sneek a peek at the future when challenged... and unfortunately when challenged they, more often than not, role out and hide behind the "Red" carpet (communism, socialism etc...) before dismissing any further thought on the subject. Shame really. Or at least that's my simple take.

You could "change" society tomorrow and noone would bat an eyelid as long as everyone else was in the same boat... after all, it has been decided by those uber brains that it's the best way for people to live, I mean, they wouldn't just change society for the sheer hell of it, TPTB would have had real reasons for the social shift.

[Winston001]

Ha, we seem to have strayed a long way from the original topic - I had to go back up the page to see CGT.

I do consider that evolutionary psychology/biology provides us with answers to the mysteries of why humans think and act in certain ways. Despite the veneer of civilisation, we are only a moment away from primal responses.

Still, none of this gainsays unselfish high-minded ethical behaviour. I'm all for it. Indeed we probably will evolve into a cooperative entity which may be biological or virtual - a cloud of self-aware electrons and photons with the power of Gods.





I do think devoted individualism is heading in exactly the wrong direction, though. Thus my objection to strident calls of protest along the lines of "the bastards, they're taxing meeeeeeee.....". There's more to life.

Ok, we'll just have to differ. The view of man which rings true for me is the integrity of the individual. Not at all costs to others, but each person is worthy of respect and should not be harnessed to the collective plough. Except...except the individual must owe and contribute to the collective. Therein lies the rub. How much?

[Winston001]

Was listening to Jim Mora on National Radio talking to Bernard Hickey who said the greatest period of growth experienced by the West was post World War II. At the same time taxation rates were very high by todays standards, yet that did not stiffle innovation and new business. There was an explosion of wealth which spread throughout society.

I'm choking at changing my point of view but it would be silly to ignore the evidence of history if Hickey is correct.

Maybe....just maybe, higher income taxation is justified. I do agree with him that capital or wealth taxes make sense but of course the devil is in the detail. I maintain that the best tax is a simple tax: applied evenly to all with no exemptions and exceptions.

So with a Capital Gains Tax you'd pay it on the sale of your home - as would everyone else. One concession could be a taxfree amount of say $50,000 to make it palatable.

[Ocean1]

So with a Capital Gains Tax you'd pay it on the sale of your home - as would everyone else. One concession could be a taxfree amount of say $50,000 to make it palatable.

There'd be a great deal of house swapping going on. "I'll sell you my house for $50k and buy your house for $20k, OK?

Stick with your instincts, it's either simple, with no exceptions or it's amenable to avoidance.

Oh, and you're not so simple minded as to link post WWII economic growth to high taxation, are you? Try constructing a Laffer curve, start with a big bag of variables and some basic regressive analisys. Take your time, with practice you can get any answer you want...

[Winston001]

Cheers, just struggling to keep an open mind.

I believe in taking the long view and studying history to see if its all been done before. For example the current slump the world is experiencing is not new or even unusual. The one difference is we can discuss it in real time instead of Letters to the Editor and delayed cable news as they had during the Great Depression, which makes events appear more urgent and apocryphal.

[mashman]

Was listening to Jim Mora on National Radio talking to Bernard Hickey who said the greatest period of growth experienced by the West was post World War II. At the same time taxation rates were very high by todays standards, yet that did not stiffle innovation and new business. There was an explosion of wealth which spread throughout society.

I'm choking at changing my point of view but it would be silly to ignore the evidence of history if Hickey is correct.

Maybe....just maybe, higher income taxation is justified. I do agree with him that capital or wealth taxes make sense but of course the devil is in the detail. I maintain that the best tax is a simple tax: applied evenly to all with no exemptions and exceptions.

So with a Capital Gains Tax you'd pay it on the sale of your home - as would everyone else. One concession could be a taxfree amount of say $50,000 to make it palatable.

Whilst you're choking, instead of lumping it all on the 1 tax, why not think about bringing in the financial transaction tax that has been mulled by the Greens and Mana to give the instant injection that CGT won't? If that allows for GST to be dropped completely, as has been touted, there may well be enough left over to bring in CGT at a lower rate?

[The Stranger]

So with a Capital Gains Tax you'd pay it on the sale of your home - as would everyone else. One concession could be a taxfree amount of say $50,000 to make it palatable.

There is no gain on the sale of a private home.
I buy a house for 100k and sell it for 200k 5 years later.
To buy a house of equivilent value I have to spend how much? 200k. Sorry, where's my gain?
If I have to pay tax on it then I'm out of pocket.

Investment property well ok, it was bought as an investment, but a private dwelling?
Doesn't make sense to me to push people backward (by taxing them) because say they have an extra kid and the current house is too small. Sure some may well get a windfall as an area becomes more popular etc, but try to look beyond the green eyed monster.

Private dwelling should not be taxed.

[Winston001]

Whilst you're choking, instead of lumping it all on the 1 tax, why not think about bringing in the financial transaction tax that has been mulled by the Greens and Mana?

Jim Anderton advocated this 15 years ago. In truth I don't know enough about it but it seems an odd sort of tax - taking money from people because they move it from one account to another, or one bank to another. Change a term deposit and you are taxed?? People would put money under their mattresses. The wealthy would establish off-shore accounts - lots of Kiwis already have Oz bank accounts.

A clean (but politically unacceptable) alternative is an annual assets tax on everyone.


There is no gain on the sale of a private home.
I buy a house for 100k and sell it for 200k 5 years later.
To buy a house of equivilent value I have to spend how much? 200k. Sorry, where's my gain?
If I have to pay tax on it then I'm out of pocket.

Investment property well ok, it was bought as an investment, but a private dwelling?


Understood.

The problem is defining a private home. What do you do if you own rental properties in the names of your children and move into each house as your "domicile" before selling? There are legal and illegal ways round CGT if exemptions are allowed.

If everyone was taxed the same, selling prices would drop to allow for it, otherwise nothing would ever sell.

[Usarka]

There is no gain on the sale of a private home.
I buy a house for 100k and sell it for 200k 5 years later.
To buy a house of equivilent value I have to spend how much? 200k. Sorry, where's my gain?
If I have to pay tax on it then I'm out of pocket.

Investment property well ok, it was bought as an investment, but a private dwelling?
Doesn't make sense to me to push people backward (by taxing them) because say they have an extra kid and the current house is too small. Sure some may well get a windfall as an area becomes more popular etc, but try to look beyond the green eyed monster.

Private dwelling should not be taxed.

I'm failing to see the problem. You bought an item for $100,000, sold it at $200,000. You are now $100,000 better off than when you purchased the property 5 years ago. You have earnt 100k. If you want another $200k house, take out a small mortgage.

You might instead decide to buy that $150,000 yacht that you wanted instead of buying another house. You couldn't have done it until you'd made the extra $50k from your capital gain....


Edit: I'm fairly sure it was going to exclude personal homes anyways...

[Ocean1]

I'm failing to see the problem. You bought an item for $100,000, sold it at $200,000. You are now $100,000 better off than when you purchased the property 5 years ago. You have earnt 100k. If you want another $200k house, take out a small mortgage.

You might instead decide to buy that $150,000 yacht that you wanted instead of buying another house. You couldn't have done it until you'd made the extra $50k from your capital gain....


Edit: I'm fairly sure it was going to exclude personal homes anyways...

Re edit: it was proposed as such.

The rest: He raised the inflation issue; he'd have to spend the total $200k from his old house to buy another of equivalent quality. You're effectively taxing inflation, penalising him for moving to a new location.

You could inflation adjust it, but who's inflation index do you use? Besides, government doesn't really care if it's actual "Gains" they just want to maximise the take.

[The Stranger]

I'm failing to see the problem. You bought an item for $100,000, sold it at $200,000. You are now $100,000 better off than when you purchased the property 5 years ago. You have earnt 100k. If you want another $200k house, take out a small mortgage.

You might instead decide to buy that $150,000 yacht that you wanted instead of buying another house. You couldn't have done it until you'd made the extra $50k from your capital gain....


Edit: I'm fairly sure it was going to exclude personal homes anyways...

Of course you fail to see the problem - because unfortunately you look at things the way the vast majority of people (incorrectly) do.
They fail to comprehend what money is and thus seek money as if it were a possession or a goal in and of itself.

It is not.
It is quite simply a store of value.
It is the value that is relevant not the money.
That value may take many forms and is not always accurately conveyed via a dollar value.
But - there has been on increase in value as a result of the sale of a family home - in general terms.

Whilst the proposed GCT was going to exclude the family home (and rightly so) Winston's example included it.

Whilst your yacht example is "possible", lets get real, how often does it really happen - compared to say a divorce causing a forced sale?
So now in a divorce not only does your equity get split AND the lawyers get their cut the govt says thank you too.
As if there isn't enough shit going on you now got to pay the govt for what? Nothing, just because they can.

I feel that the American system of if it is reinvested the CGT either doesn't apply or only applies to a portion not reinvested is fairer - at least to the family home. Let's face it there a a few basic necessities in life - shelter is one of them.

[The Stranger]

The problem is defining a private home. What do you do if you own rental properties in the names of your children and move into each house as your "domicile" before selling? There are legal and illegal ways round CGT if exemptions are allowed.

If everyone was taxed the same, selling prices would drop to allow for it, otherwise nothing would ever sell.

Isn't that the problem though. The have nots quibbling over the scraps.
Lets not try and be fair. I hate to have to be the one to tell you this but life is not fair.
It's just the way it is.

I get ill and I get shit. Someone else has an accident doing something stupid and someone pays them for it.
Is that really fiar?

So how about we go for the vast majority and not get all cry baby if we don't get everyone eh.

And in answer to your question there are numerous ways this could be handled. Intent is already part of the law - why not use that?
Or we could augment intent with x number of years - that also is part of the law, albeit perhaps case law.

How would tax cause prices to drop?
if I'm to pay tax when I sell my place I'm going to want top dollar thanks.
They have CGT in America and have had for many years. where did the sub prime mortgage fiasco start?
What even preceeded the recent recession? Hint - The sub prime mortgage fiasco. Sure there were other forces at work there also - but it resulted from over priced housing so how did that go for the CGT? Great result, I'm all for it.