Capital Gains Tax finally on a major party's agenda [Archive]

BoristheBiter

8th July 2011, 07:35

Usarka

8th July 2011, 07:40

Their line has and always will be tax the rich to give to the poor so you either need to hide your wealth, move somewhere else or just don't bother.

And the change of heart might signal some changes in thinking within the Labour camp.....?

If they move their stance to "tax every one fairly" and in doing so close some of the loop holes that let the rich get away with paying no tax, then I'm all for that.

If they stay with their previous thinking of look after the poor to the expense of the rich then i agree they can fuck themselves with a stick.

BoristheBiter

8th July 2011, 07:47

And the change of heart might signal some changes in thinking within the Labour camp.....?

If they move their stance to "tax every one fairly" and in doing so close some of the loop holes that let the rich get away with paying no tax, then I'm all for that.

If they stay with their previous thinking of look after the poor to the expense of the rich then i agree they can fuck themselves with a stick.

And that is all they will do, they are Labour after all, just like National will sell off state assets.

9 political party's and no one to vote for:facepalm:
Who said choice was a good thing?

Spearfish

8th July 2011, 08:41

It basically anyone other than ma n pa home owner will be taxed.

In most parts of the world capitol gains tax has been passed onto tenants or the property never gets any capitol improvements, they become cash focused, birth of the slum lord.

Considering there are a few families helping their children into their first homes by being their "landlord" until they can stand on their own, does that mean they pay capitol gains tax once the kids go it alone?

Its a continuation of labours "Rich bastard" philosophys. Kill the flowers to feed the weeds sorta thing.

But at least is in true opposition to the current incumbents so maybe their is real choice this time.

The question I want to know is what will either party's do with the pseudo referendum results after the election?

scissorhands

8th July 2011, 08:46

If it wasn't for no capital gains tax and cheap cars, our incoming immigrant numbers would drop considerably

More incoming future kiwis would choose Oz instead, and overall investment would suffer.

Bugger all gains anyway in the future around property. Cant see that changing for a good while.

I agree in principle about making housing affordable, but that can be easily done if they really want to.

Labour have few guns to present, and this one is a proven winner with those without money or homes

60sq/m units could be made in a factory for $50k and shipped on trucks but then Fletchers will lobby like fuck so that wont happen...

Big Dave

8th July 2011, 08:46

Give any Govt a tax stick and they will hit you with it eventually. The interest will be if Mr Goff keeps his job after the pasting the Harold predicts.

Big Dave

8th July 2011, 08:49

>>More incoming future kiwis would choose Oz instead, and overall investment would suffer.<<

Most can't get in. Lot stiffer immigration criteria.

Swoop

8th July 2011, 08:50

Another stupid idea from the liarbour criminals.

They have been told it is a stupid idea many times, but hey, they know better.:facepalm:

If this is brought in, rental costs will go up to cover the owner's loss OR there will be far less rental houses on the market (as investors sell up) which will cause what... rental prices going up.

Liarbour pretend to support the "little guy" and the lower end of the socio-economic spectrum. This will really help them.:shutup:

Well it won't. They will simply bleed the tax-paying middle classes by giving more handouts to the great unwashed.

EDIT: Looks like they want to out-do national with borrowing as well (http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10737071).

Spearfish

8th July 2011, 08:56

Sorry you'll need to elloborate for the stupid amongst us (me).

I can't work out if it's your point or not, but I'm assuming companies would be included in paying captical gains.

(and no I still haven't forgiven labour for the election bribes the last time they got in)

Anyone is assumed to be a property investor if its not for their own home, including commercial property.
So imagine what buildings, businessess, families trying to set their kids up in a home by being their "landlord", home run business, all are part of the mix.
Including any investments with your money KIWI saver has in property (usually used to balance risk over different types of investments).

Spearfish

8th July 2011, 09:04

I agree in principle about making housing affordable, but that can be easily done if they really want to.

Labour have few guns to present, and this one is a proven winner with those without money or homes

60sq/m units could be made in a factory for $50k and shipped on trucks but then Fletchers will lobby like fuck so that wont happen...

Its interesting what is condidered a starter home now compared to say 30 years ago.
30 years ago the house was a three bed rectangle with a choice of kitchen bench lengths in the middle of a muddy section with the expectation of "go to it".
I remember the whole cul-de-sac doing concrete parties, hand mixing concrete for drives and fences, all helping with decks..etc

Now its a 4 bed with en-suite, internal double garage, designer kitchen and only purchased if it meets with the approval of their "friends" on twitter.

BoristheBiter

8th July 2011, 09:16

Its interesting what is condidered a starter home now compared to say 30 years ago.
30 years ago the house was a three bed rectangle with a choice of kitchen bench lengths in the middle of a muddy section with the expectation of "go to it".
I remember the whole cul-de-sac doing concrete parties, hand mixing concrete for drives and fences, all helping with decks..etc
.

Ah yes 30 years on i still have the callused hands (and back pain) from digging it all out by hand.
Soft the new generation is, soft i tell you. they even get carpet.

Spearfish

8th July 2011, 09:21

Ah yes 30 years on i still have the callused hands (and back pain) from digging it all out by hand.
Soft the new generation is, soft i tell you. they even get carpet.

Carpet is no good it soaks up the oil and stains, stick with the polyurethane on the particleboard.

Fark is that my first "back in my day" moment? :facepalm:

Scuba_Steve

8th July 2011, 09:29

What do you think?

No sir I do not like it one bit :no:

Banditbandit

8th July 2011, 09:44

In most parts of the world capitol gains tax has been passed onto tenants or the property never gets any capitol improvements, they become cash focused, birth of the slum lord.

Yeah .. naaa .. that idea doesn't make sense ... We own rental properties ... and I can see that if I increase rents then I increase income and therefore pay more tax ... and if I become "cash focussed" and do no maintenance (which is tax deductable) then my income increases and I pay more tax ...

Now - most of us are wage earners and pay tax through PAYE .. if a Property investor makes money buying and selling houses ... and there is no capital gains tax ... how does their income get taxed? Are they, right now, paying no tax on the income they earn from selling houses? (They pay tax on rents) but most of their earnings are from selling at a profit ...

We're carrying these bastards ... our income tax through PAYE lets them get away with paying no tax ...

That does not seem fair to me.

Winston001

8th July 2011, 09:46

Labour's CGT smacks of the politics of envy. Hating the "rich pricks" even though this includes much of middle class NZ. Instead of strengthening the economy Labour's big idea is more tax. This from the party of thinkers and idealists. :facepalm:

Lets look at what CGT will not achieve:

1. Extra tax revenue. The Australian CGT took 15 years to take full effect.

2. A reduction in house prices. Most countries already have CGT including the USA and Australia - and almost every OECD country had huge house price increases since 2000. CGT didn't stop that.

3. New rental homes being built - why would an investor bother?

4. A shift to productive investment because there are few opportunities.

On the positive side CGT will mean lots more work for lawyers and accountants so it isn't all bad. :D

merv

8th July 2011, 09:54

Current rules are similar to those that trade shares regularly, you can be taxed on capital gain as it is a profit for a trader. So if you buy and sell houses to make money you are a trader (or developer) and IRD will be looking at you if you are a regular at this. If you are a person that doesn't trade as such but buy and hang on for a long time then you don't get charged capital gains tax and why should you? Same applies to such things as antiques and collectibles.

Question for those stupid enough to support this idea - if you sell an item on TradeMe for more than you paid for it should you be taxed on that capital gain? If not why not? Why is that any different to any long term property ownership?

The other point at the moment is there is no death duty in this country. If your olds die and leave you their house and you already own a house and you support capital gains tax on second or more properties then you should pay tax on 100% of the value of the house you just inherited or else you are a hypocrite in my view.

The real rort was those hiding behind trusts, LAQCs and the like and saying they were so "poor" their kids could claim student allowance, the family could get family allowance etc but the current Government has already made changes there so I don't see that capital gains tax is at all fair on anyone nor should be considered necessary if you close off the other real loopholes.

Capital gains tax be damned.

bogan

8th July 2011, 11:50

Just another way of shifting money from our existing revenue around. I'd be far more interested if any of the parties have plans for increasing that revenue in the long term. Keep as much of the primary sector and the associated secondary and tertiary sectors production/processing in NZ, would seem like a good start right? Seems like it's all going in the other direction these days.

Big Dave

8th July 2011, 12:04

I suspect people would be in favour - or not - depending on whether they own Rental Property.

Then the experts tell us that there is' too much personal wealth emphasis on Real Estate'.
Yet the financial institutions will allow 30% of income to be committed in repayments
and a decent abode in whoop-whoop costs hundreds of thousands of dollars.

neels

8th July 2011, 12:10

It'll just create more work for lawyers and accountants, instead of individuals buying and selling houses they'll do it through companies and claim all of the associated expenses against any profit.

There is still a means to claim property losses against personal tax, the changes to the LAQC rules are only to prevent people splitting property between two companies to claim losses at the maximum tax rate and pay tax on profits at the company tax rate.

Nice window dressing so the poor people think the rich people are being hit in the wallet to score some cheap votes.

All of which reminds me, must off to the accountants to change my company structure so I still get my tax refund next year....

HenryDorsetCase

8th July 2011, 12:37

I'm interested in this proposal, but I want to see the detail first.

I suspect it will be so riddled with exemptions, loopholes, and exceptions that it will do nothing more than cause a massive compliance cost, with no real revenue generated*. Basically its just so Labia can say "See how we look after the working man or woman in the street, and our voter base (beneficiaries), see how different we are from those bastards over there." JOhn Keys response "Nyah nyah suck on my poll lead, hippie"

bear in mind that if you buy and sell property with a view to taking a profit then its already taxable.

Meh.

*which is the reason they are talking about getting rid of gift duty

Spearfish

8th July 2011, 12:59

Yeah .. naaa .. that idea doesn't make sense ... We own rental properties ... and I can see that if I increase rents then I increase income and therefore pay more tax ... and if I become "cash focussed" and do no maintenance (which is tax deductable) then my income increases and I pay more tax ...

Now - most of us are wage earners and pay tax through PAYE .. if a Property investor makes money buying and selling houses ... and there is no capital gains tax ... how does their income get taxed? Are they, right now, paying no tax on the income they earn from selling houses? (They pay tax on rents) but most of their earnings are from selling at a profit ...

We're carrying these bastards ... our income tax through PAYE lets them get away with paying no tax ...

That does not seem fair to me.

Thats how it stands now but there are also limits to what is maintenance and what is classed as adding value to a property its all been revamped and closely watched now.
A leaky roof requiring replacement isn't maintenance your adding value (and tax under labour) but replacing one sheet of iron is or 1/3 a roof a year is maintenance.
Depreciation on the building stopped this year so the 5% or so claim for the building has gone already but when you sell, the Govt will claw back some of that depreciation you have already claimed up to the cut off point at a percentage = to you tax rate, that's how it stands now.
Laqc's are dead and buried so nothing for labour there.
With labours Tax any money over and above what you brought it for would also be taxed no matter how long you had owned the property so it will be interesting if the capitol gained tax is in addition to the dep claw back or what.

Property traders are like any other sales business, sell something for more than you pay for it deduct the expenses and pay tax on the left over. So labour are blowing bubbles there as well.

So Labour gets nothing unless a landlord sells something or will they tax the landlord every time there in a new valuation done?
Remains to be seen how things will suddenly need to be tweaked once the Pinko's are in.

DangerMice

8th July 2011, 13:04

Its interesting what is condidered a starter home now compared to say 30 years ago.
30 years ago the house was a three bed rectangle with a choice of kitchen bench lengths in the middle of a muddy section with the expectation of "go to it".
I remember the whole cul-de-sac doing concrete parties, hand mixing concrete for drives and fences, all helping with decks..etc

My first house is exactly as you describe, if ya'll wanna come round and concrete my drive that'd be sweet. Thanks! :msn-wink:

Tis true though, a lot of people want for their first house what their parent's house currently is, conveniently forgetting the steps their parents have taken along the way.

Spearfish

8th July 2011, 13:14

My first house is exactly as you describe, if ya'll wanna come round and concrete my drive that'd be sweet. Thanks! :msn-wink:

Tis true though, a lot of people want for their first house what their parent's house currently is, conveniently forgetting the steps their parents have taken along the way.

Many drives and garage floors were ruined by cracking the keg to early, usually a line across the floor where the troweling stopped and the 4x2 screed marks finished of the second half in a rush or a few ruts in the last couple of meters of drive:whocares::drinkup::done:.

slowpoke

8th July 2011, 13:47

Usarka

8th July 2011, 13:47

I always find these political discussions amusing because I'm sure if it was National that suggested it then most people would be arguing the opposite of what they've said in this thread.

Lets look at what CGT will not achieve:

1. Extra tax revenue. The Australian CGT took 15 years to take full effect.
So because it takes a while we shouldn't do it? Auckland's traffic problems are a testament to how bad that thinking is.

2. A reduction in house prices. Most countries already have CGT including the USA and Australia - and almost every OECD country had huge house price increases since 2000. CGT didn't stop that.
Good point, but one could also argue that Australia and USA (until recently) had higher wages too....

3. New rental homes being built - why would an investor bother?
Because they want somewhere to live. And just because there is a tax it doesn't mean there are NO profits.

4. A shift to productive investment because there are few opportunities.
Would you like some chicken with that egg?

Usarka

8th July 2011, 13:49

I suspect people would be in favour - or not - depending on whether they own Rental Property.

I did consider doing a poll.

I support it - and I own a rental property.
I oppose it - and I own a rental property.
I support it - and I'm a national voter.
I oppose it - and I'm a national voter.

etc.

More tax is not the answer, it's just lazy policy. You should be encouraging people to strive and grow, not hitting them with a stick everytime they manage to get slightly ahead of the pack.

Good ol' NZ, it's one of the few places in the world where it is actually frowned upon to succeed. Great message we're sending our kids.

Peoples response to political issues like this is as bad as arguing relgious issues. Seriously. The policy has not been released, so your feverent argument about more tax or lazy policy making at this stage is pure speculation.

If they were to reduce the other taxes (which they haven't said either way yet) then a capital gains makes it more fair and doesn't discourage you from working hard and doing well.

mashman

8th July 2011, 14:03

The rich have become victims of their own success... by hiding ?some? of their income from the govt, the govt have to get creative and go after the tax money in other ways... I'm for it :)

yachtie10

8th July 2011, 14:07

The rich have become victims of their own success... by hiding ?some? of their income from the govt, the govt have to get creative and go after the tax money in other ways... I'm for it :)

WTF
The rich have got sick of paying for everone else and have legally minimised there tax
CGT will make this worse as more tax for them to avoid

Labour are so desperate to buy votes this is the best they can come up with
i wait with baited breath

yachtie10

8th July 2011, 14:10

If they were to reduce the other taxes (which they haven't said either way yet) then a capital gains makes it more fair and doesn't discourage you from working hard and doing well.

Hahahaha like that will happen

I wonder what happens if people buy a house (like in 2007 at peak) and sell now at a loss will they be entitled to a tax refund?

Usarka

8th July 2011, 14:13

I wonder what happens if people buy a house (like in 2007 at peak) and sell now at a loss will they be entitled to a tax refund?

Then you don't pay tax. Same as if you get sick and can't work and eat into your savings. Bad luck to you, but you don't pay PAYE.

Do you guys understand tax at all? It doesn't mean NO profit, it means when you make some money some goes to the government which is used for public spending. As a principle why are people opposed to making the system fair?

Winston001

8th July 2011, 14:17

Peoples response to political issues like this is as bad as arguing relgious issues. Seriously.

If they were to reduce the other taxes (which they haven't said either way yet) then a capital gains makes it more fair and doesn't discourage you from working hard and doing well.

Mmmm....you make a good point. My personal reaction against CGT arises because Labour is proposing it. I percieve Labour as a party of intelligent but envious people. You'll recall Dr Cullen's telling reference to "you rich pricks" which translated to sneering at anyone who is silly enough to get beyond average.

I have to concede if National had the same policy, I'd be horrified but more inclined to listen.

FWIW we will probably have a CGT of some nature in the next 10 years simply because we are (maybe) the only OECD country not to have it.

mashman

8th July 2011, 15:00

WTF
The rich have got sick of paying for everone else and have legally minimised there tax
CGT will make this worse as more tax for them to avoid

Labour are so desperate to buy votes this is the best they can come up with
i wait with baited breath

awwww so they ran into the corner sulking, they haven't got jobs so why should I pay for them ha ha ha haaaaaaaa. If 100% of my income is taxable, then 100% of the considerably richer people's should be too. Bunch of silver spooned babies. Sounds very much like an entitlement complex to me :shit:... no way, not at the other end of the scale.

:blink:@worse... yeah, sure, like people don't hide as much of their money as they can already...

:rofl:@desperate... you wouldn't catch any political party trying to buy votes now would ya :blink:

yer a comedian...

MSTRS

8th July 2011, 15:30

Oscar

8th July 2011, 15:37

awwww so they ran into the corner sulking, they haven't got jobs so why should I pay for them ha ha ha haaaaaaaa. If 100% of my income is taxable, then 100% of the considerably richer people's should be too. Bunch of silver spooned babies. Sounds very much like an entitlement complex to me :shit:... no way, not at the other end of the scale.

:blink:@worse... yeah, sure, like people don't hide as much of their money as they can already...

:rofl:@desperate... you wouldn't catch any political party trying to buy votes now would ya :blink:

yer a comedian...

You are the definitive Looney Lefty Cloth Cap Curmudgeon.

mashman

8th July 2011, 15:41

You are the definitive Looney Lefty Cloth Cap Curmudgeon.

:rofl:... I have no political affiliations. Why should anyones income be treated as "special" income over anyone elses?

bogan

8th July 2011, 15:58

I know of a person who buys a house cheap (maybe mortgagee sale or a bit rundown). He then spends a couple of months doing it up and flicks it at a spectacular profit. CGT is aimed at this sort of person. I'm all for it.

Fair enough, how is CGT generally applied? point of sale, or yearly valuation?

:rofl:... I have no political affiliations. Why should anyones income be treated as "special" income over anyone elses?

So you're against the higher tax rate for high earners then?

Oscar

8th July 2011, 16:18

:rofl:... I have no political affiliations. Why should anyones income be treated as "special" income over anyone elses?

So you agree with a flat tax regime then?

Usarka

8th July 2011, 16:39

So you're against the higher tax rate for high earners then?

I'd be happy for a flat tax.

But at the same time I'd want all the legal loopholes closed that currently allow a lot of the higher earners to avoid paying tax.

Gremlin

8th July 2011, 16:48

I hope this has helped National win another election... they did need it after all :laugh:

With such an abundance of cheap rental houses, it definitely makes sense to reduce the supply...

And no, I don't have a rental property...

Oh... and Labour will run this policy simply by creating a new department, hire a bunch of staff for it, then claim unemployment has dropped....

Oblivion

8th July 2011, 16:53

I think that we can't afford to have a Labour government in power at this point in time. Labour work for the people, while also making the debt that we already have balloon out of control. Its not the people that we need to concentrate so much on, its getting jobs for those people to work. Creating jobs and solving unemployment come hand in hand.

yachtie10

8th July 2011, 17:03

I know of a person who buys a house cheap (maybe mortgagee sale or a bit rundown). He then spends a couple of months doing it up and flicks it at a spectacular profit. CGT is aimed at this sort of person. I'm all for it.

people who do this are taxed now. they pay tax on the profits of the business they are running(and if they arent paying they are breaking the law). If they had to pay CGT it would be a double tax

yachtie10

8th July 2011, 17:05

Then you don't pay tax. Same as if you get sick and can't work and eat into your savings. Bad luck to you, but you don't pay PAYE.

Do you guys understand tax at all? It doesn't mean NO profit, it means when you make some money some goes to the government which is used for public spending. As a principle why are people opposed to making the system fair?

If your going to insult people know what you are talking about.
People have claimed losses on share trading and all other sorts of business.
I dont know if this would apply to CGT because it hasnt been written yet.
Do you?

BoristheBiter

8th July 2011, 17:45

For any of this to work they would have to change the trust laws.
All you need to do is lock it up in a trust and you will not pay CGT as you don't own it the trust does.

Just like if you own a business, the business owns everything so pays for everything so pays less company tax because of low profits, you don't need much as the company pays for everything so you pay yourself a small wage and in doing so pay less tax.

See us rich pricks already know how not to pay tax so won't make a damned bit of difference all this will do is target middle income family's that are supposed to be labour voters anyway.

yachtie10

8th July 2011, 17:47

BoristheBiter

8th July 2011, 17:51

wouldnt the trust pay the CGT?

I depends on how it is set up.
It is like a company and the tax is done on a yearly basis so depending if you leave the money in you most likely will. if you pay out there is no money left in so no tax.
This is why they have closed the loop hole in LAQC's.

neels

8th July 2011, 18:06

This is why they have closed the loop hole in LAQC's.
And replaced them with LTC's, same net effect as LAQC unless you've split your loss making and profit making assets for tax purposes, more window dressing for the voters.

There seems to be a fundamental confusion between rental properties and CGT. Tax would only be paid if the property was sold, so it's only the speculators buying properties on interest only mortgages to flick on, or doing up and selling that are going to be hurt by this.

Let's not forget that it suits the govt for there to be private landlords. It costs them around $2.5k in lost tax for a flat I own (well the bank does), the capital cost for the govt to own it would be around $10k a year plus rates and maintenance, plus the cost of someone to administer it whereas my time is free.

If it became too unpalatable to own rental properties the real outcome would be either homeless people, or property prices dropping so renters could afford to buy, would be a real vote winner for a govt if they bought in a policy that either upped rents or shaved property values by 20%.

paturoa

8th July 2011, 18:22

So for those of you who are gullable enough to subrscribe to Liarbore's politics of evny.... (refer 7 deadly sins), fuxk off and grow a brain.

New or increased taxes (almost) never make any real difference to the issue they are targetted at. People simply find another method to get around the issue, or say fucxk you and carry on, with the net result being a shift of burden or taking a further hit in their disposable incomes. One of the few exceptions are reductions in tobacco consumption.

Liarbore will have you believe that it will "fix" the afforability of residential housing so more people can own their own homes. Oh realy? How? Show me proof of where this has worked elsewhere, cos there is a lot of evidence already referred to and published that shows otherwise.

Here is what would happen, the prices would stay roughly the same and middle NZ'ers will see more of their cash being paid in tax. Those that are investing in these properties will hold onto them longer, reducing the supply. Demand is growing so .....

I do beileve that it would divert a small amount of money to invest potentially productive investment types but, call me a sckeptic, as this money is from loans anyway.

Also from the portofolio of short sighted politics in unzud. Why the stick? Would not a carrot be a better idea?

schrodingers cat

8th July 2011, 18:36

Re: RICH PRICKS
These people take RISKS
As such they deserve REWARDS
Regulation serves to whack the ones who take stupid risks with other peoples money.

There was an example earlier of guy mentioned who buys houses cheap, tidies them up and flicks them off for a 'spectacular' profit. (PS how do you know what HIS nett profit is? Do you even know what NETT profit is?)

He is WORKING.
He is USING HIS SKILLS and taking a measured RISK. He deserves a REWARD
He is helping the economy go round and round to the benefit of others.

Heaven forbid should he decide to create a JOB for someone to take no RISK but USE THEIR SKILLS to get a lesser REWARD by WORKING

A capital gains tax needs a debate independent of the current announcement.
This is the 'battle for South Auckland' where;

Its a continuation of Labour's "Rich bastard" philosophy. Kill the flowers to feed the weeds...

It is time that all governments stopped being the countries largest employer (specifically all the indirect employment).

It is time people stopped expecting the 'Government' to fix all their ills.

Want a better life - go and make one for yourself.
Try WORK. Try RISK. Experience REWARD
Disclaimer - Reward not guaranteed

mashman

8th July 2011, 20:56

So you're against the higher tax rate for high earners then?

I reckon they could come up with a better system if they really wanted to :yes:. But alas, it seems to be the best they have :blink:. At the end of the day it's all about paying the bill eh? Here or abroad. We need a finite amount of money to keep this country "going". Actually, at this point in time I'll stop (:rofl:) and just concede that the current system isn't perfect, and that there isn't a perfect system? We can all agree that there isn't a perfect system? What's the next best thing? I'd go for removing money entirely... but ...

... if there is going to be a system where money is the "cure" to whatever "problem" (drugs, leaky homes, finance company buyouts, insurance company bailouts etc...) it is being raised for :blink:, then a proportional distribution and taxation of the country's finances is more beneficial to the country, than a small number of "individuals" who live by the hide it before they see it approach... and then call foul when something like the CGT is tabled. There is irony there too... I'm pretty sure of it :)... so to answer your question, yes and no :)

So you agree with a flat tax regime then?

:rofl:. If that's the way you choose to look at my suggesstion, and you agree that the flat tax rate is 100%, then yes :)

SPman

11th July 2011, 20:12

Whinge whinge moan moan bludgers Liarbour Helen whinge moan not fair I work hard bludgers get all my money whinge it's all my money whinge why should I pay for anything moan complain shout whinge etc etc etc......

FROSTY

12th July 2011, 15:04

oneofsix

12th July 2011, 15:12

How I see this is . Why on earth would all those currently renting houses out want to do so under this proposed law? There would be better investments than a house that some lowlife could turn into a crackhouse etc

so are you saying it will drive down house prices as all those that invested in a second, third or more houses as rentals sell out of the market, take their profits and run?

rainman

12th July 2011, 19:54

How I see this is . Why on earth would all those currently renting houses out want to do so under this proposed law? There would be better investments than a house that some lowlife could turn into a crackhouse etc

Well it's not guaranteed that the tenants will be crackheads y'know. You do get some choice over who you do business with.

I'm seriously looking at the financials of taking on a rental property at the moment. Yes, even knowing there may be CGT when I sell up again, and even in the middle of what I know to be a major and sustained recession (depression?). And knowing LAQCs are basically dead. There are still circumstances where being a landlord can make sense - it's a business that has existed for centuries, before all the tax trickery we have today.

This option is a close-run thing, and may not happen, but CGT wouldn't be a dealbreaker.

Winston001

12th July 2011, 23:55

so are you saying it will drive down house prices as all those that invested in a second, third or more houses as rentals sell out of the market, take their profits and run?

The very few investors who will be scared off by a CGT are mums and dads who own one rental house.

Anyone who owns two or more houses does so because that is their longterm investment plan. Selling out now makes no sense at all. The serious landlord with half a dozen properties wants those for income - any capital gain is good luck and only arrives in cash after they die.

Well it's not guaranteed that the tenants will be crackheads y'know. You do get some choice over who you do business with.

I'm seriously looking at the financials of taking on a rental property at the moment. Yes, even knowing there may be CGT when I sell up again, and even in the middle of what I know to be a major and sustained recession (depression?). And knowing LAQCs are basically dead. There are still circumstances where being a landlord can make sense - it's a business that has existed for centuries, before all the tax trickery we have today.

This option is a close-run thing, and may not happen, but CGT wouldn't be a dealbreaker.

Yep. Over the centuries owning property which other people pay off for you has been the simple road to financial security. Not always easy, unexciting, but solid.

As for the recession: buy in gloom, prosper in boom. Seen three cycles in my working lifetime. It works. But location is important.

FROSTY

13th July 2011, 20:24

Well it's not guaranteed that the tenants will be crackheads y'know. You do get some choice over who you do business with.

I'm seriously looking at the financials of taking on a rental property at the moment. Yes, even knowing there may be CGT when I sell up again, and even in the middle of what I know to be a major and sustained recession (depression?). And knowing LAQCs are basically dead. There are still circumstances where being a landlord can make sense - it's a business that has existed for centuries, before all the tax trickery we have today.

This option is a close-run thing, and may not happen, but CGT wouldn't be a dealbreaker.
Mon gimme a yeodle -i've been a landlord for a few years.sometimes you wonder why ya bother

slowpoke

17th July 2011, 14:34

So does anyone actually know what problem a CGT is supposed to fix?

From folks on here I'm hearing it's targeting untaxed income.

From my local labour pollie I'm hearing it's supposed to:
1. make housing more affordable
2. stop housing price bubbles
3. help us retain national assets
4. align us with most other developed nations

Commonsense tells me that "most other nations" with a CGT also experienced massive housing bubbles pre-GFC. My own experience in Western Australia where property speculation was rife even with a heinous stamp duty and a CGT tells me the smaller property bubble, lower price speculation is rubbish. A couple of years ago they had the highest capital city property prices in Australia, outstripping Sydney.

Housing is driven by supply and demand. Remove investors and there may be a small blip but it'll shortly pass then back to situation normal, except the Government is better off.....and there's another level of bureaucracy to deal with. And good luck finding an affordable rental.

As for retaining assets, what's the go with selling them in the first place? Why sell something that can make you money? Sure a decent wad of cash helps balance the books now but long term it's a drop in the ocean compared to the income stream that would come from retaining them. The whole ethos of asset sales has got me fucked, especially when the only entities capable of buying the assets are foreign corporations.

As someone previously mentioned, property is not a tax free investment. You pay tax on your earnings before buying the property, then assume risk when you purchase the property, make lifestyle concessions to obtain/retain the property, and send a fair bit of the rental income out into the community via property management, cleaning and maintenance fees, not to mention the actual building of investment type properties.

So a CGT doesn't just strip investors of cash pushing them out of the market, it flows on to reduced income streams for builders, cleaners, lawn mowers, handy men, real estate firms etc etc. So what's it s'posed to do again?

Oh that's right, get folks to invest in the sharemarket, and 'cos the average investor knows even less about shares than they do about property they'll give it to those good solid finance companies we keep seeing on the front page of the newspaper and court reports. Nice one :facepalm:

Usarka

17th July 2011, 16:10

So a CGT doesn't just strip investors of cash pushing them out of the market, it flows on to reduced income streams for builders, cleaners, lawn mowers, handy men, real estate firms etc etc. So what's it s'posed to do again?

How does it push them out of the market?

Instead of making $100,000 profit they only make $85,000? Oh noes. Put the rent up.

I'll bet that the Nats brains trust think that CGT is a good idea. But not a good idea to win them the election. My bet - National will win this election but will now CGT is firmly on the table they'll bring it in in a couple of years themselves. Then everyone here will then think it's an awesome idea.

Oh that's right, get folks to invest in the sharemarket, and 'cos the average investor knows even less about shares than they do about property they'll give it to those good solid finance companies we keep seeing on the front page of the newspaper and court reports. Nice one :facepalm:

Sale of shares included in the tax.

Blackflagged

17th July 2011, 16:17

It`s a fairer system.

Say your (Fat Cat) local dairy owner , works 12hr a day 7 days a week for just above minimum wage.15% of his Business sale profit, goes to fund tax cut for the unemployable, with no tax up to $5000.

Sale price less -15%Cgt -15%Gst - 0-39% Income tax & Accountants cut.

Sounds way Fairer

BoristheBiter

17th July 2011, 17:31

JimO

17th July 2011, 17:39

Only if you take away all the out goings as well.

what ?? like the stuff that gets shoplifted, or when the local black mongrel power prospect holds them up for the days takings or are you referring to them being able to feed the family out of the shop stock? bloody criminal shopkeepers

Winston001

17th July 2011, 18:08

Usarka

17th July 2011, 18:12

Asset sales - I don't like this. The governments position is that NZ needs $7 billion next year to repay existing loans. NZ cannot afford to roll over those loans. If - if that is true, selling everything in sight makes complete sense if we want to continue with our schools, hospitals etc.

Same position I am in. But I really like the idea of CGT. The guy on the news the other night saying he'd made $6million and was using the same roads, hospitals etc but didn't pay tax is why. Not to get the rich, but to make it fair.

My concern is that Labour won't make it fair, they'll use it to get the rich. And they'll continue with social spending like they've always done, damn the torpedoes.

But at least we'll have a fairer system that future Nat governments can tweak. And we'll still have assets. Trouble is if the Nats are right we'll also be fucked up the arse Greek-style.

Arrrrghhhh!????:blink:

short-circuit

17th July 2011, 18:16

JimO

17th July 2011, 18:22

Same position I am in. But I really like the idea of CGT. The guy on the news the other night saying he'd made $6million and was using the same roads, hospitals etc but didn't pay tax is why. Not to get the rich, but to make it fair.

whatever he does with that 6mil he will pay tax on, so 6 people sell shares or whatever make a killing and the rest of us that have assets get penalised because of them?? fuck the CGT i say, typical labour wanting more of OUR money to give to THOSE who wont look after themselves, its a small step to include the family home once its been introduced as well, a vast majority of people who rent wouldnt be able to buy a house even if prices did drop

Usarka

17th July 2011, 18:32

whatever he does with that 6mil he will pay tax on, so 6 people sell shares or whatever make a killing and the rest of us that have assets get penalised because of them?? fuck the CGT i say, typical labour wanting more of OUR money to give to THOSE who wont look after themselves, its a small step to include the family home once its been introduced as well, a vast majority of people who rent wouldnt be able to buy a house even if prices did drop

You don't get taxed on the assets, you get taxed on the income you make when you sell them. Just like every other person gets taxed on their income. This tax doesn't just go to dole bludgers - that's only a minor part. It gets used for things like infrastructure, health, roading, paying national debt etc.

I'd suggest that people who make income without paying tax are just as much bludgers as the beneficiaries they complain about.

Ocean1

17th July 2011, 18:54

Seems from what I've heard that some economists like the idea, particularly the more academic flavoured ones. Those more interested in the practicalities seem less impressed. Except accountants, they mostly seem to be rubbing their hands at the prospect of a hugely increased workload.

We've finally managed to contrive to have a relatively simple tax system, which sort of limits opportunities for shuffling income around for the purpose of avoiding tax. The wildly differing taxation offered by labour's scheme will re-open many doors for that sort of creative pea and shell game again.

Also, who reckons the government valuation might be subject to some ongoing debate beyond CBT day, eh?

JimO

17th July 2011, 19:00

I'd suggest that people who make income without paying tax are just as much bludgers as the beneficiaries they complain about.

really, you think someone who has worked hard, taken risks mortgaged themselves to the hilt and accumulated some assets or a few renters, paid tax on the way etc and make a few bucks on selling the renters are as bad as the cunts who dont work cos they cant be fucked getting out of bed and get by on the dole and the odd burg. your obviously a labour voter,fuck them greedy rich cunts eh!!

trustme

17th July 2011, 19:07

Ocean1

17th July 2011, 19:16

FAIR !!! 17% of the population pay 90% of the tax , lets raise their taxation rate to 39% & hit them with CGT. What could be fairer than that !!!!!:blink::blink::blink:

Complete the set: 55% of the population represent a net loss to the system.

Usarka

17th July 2011, 19:23

really, you think someone who has worked hard, taken risks mortgaged themselves to the hilt and accumulated some assets or a few renters, paid tax on the way etc and make a few bucks on selling the renters are as bad as the cunts who dont work cos they cant be fucked getting out of bed and get by on the dole and the odd burg. your obviously a labour voter,fuck them greedy rich cunts eh!!

I've never voted labour, always voted national. But I'd suggest unlike you I'm able to open both my eyes and think about what's good for the country rather than just what's good for me or blindly arguing the line of the party that I normally vote for.

FAIR !!! 17% of the population pay 90% of the tax , lets raise their taxation rate to 39% & hit them with CGT. What could be fairer than that !!!!!:blink::blink::blink:

I agree, raising the top tax doesn't help their cause and I'd be more supportive if they flattened the tax. But are you suggesting that the scale should be reversed and lower earners should pay tax higher rates???

Income is income. Tax it all or tax none of it.

JimO

17th July 2011, 20:04

But I'd suggest unlike you I'm able to open both my eyes and think about what's good for the country

you really think it will make a difference to the country, your deluded

pete376403

17th July 2011, 20:04

FAIR !!! 17% of the population pay 90% of the tax , lets raise their taxation rate to 39% & hit them with CGT. What could be fairer than that !!!!!

Complete the set: 55% of the population represent a net loss to the system.

genuinely interested to know where these figures come from - could either of you post references, please?

Usarka

17th July 2011, 20:09

FAIR !!! 17% of the population pay 90% of the tax , lets raise their taxation rate to 39% & hit them with CGT. What could be fairer than that !!!!!

I always though National voters were rational people and the labour voters were the emotional ones.

1) Yes we agree rasing the upper bracket is not fair. No one has said it is apart from the Labour party. This discussion is about CGT.

2) Are you suggesting that lower income earners should pay higher tax rate because they pay less total tax? Or should everyone pay the same?

you really think it will make a difference to the country, your deluded

I'm astounded by the awesome argument.

BoristheBiter

17th July 2011, 20:15

what ?? like the stuff that gets shoplifted, or when the local black mongrel power prospect holds them up for the days takings or are you referring to them being able to feed the family out of the shop stock? bloody criminal shopkeepers

No,

Like rates, interest on mortgage, upkeep, insurance, security.

That was what i was meaning.

JimO

17th July 2011, 20:17

No,

Like rates, interest on mortgage, upkeep, insurance, security.

That was what i was meaning.

any self employed tradesmen working from home can claim for a portion of that as well

BoristheBiter

17th July 2011, 20:24

any self employed tradesmen working from home can claim for that as well

But we are not talking about business which are taxed each year so all out goings are already used.

trustme

17th July 2011, 20:32

I always though National voters were rational people and the labour voters were the emotional ones.

1) Yes we agree rasing the upper bracket is not fair. No one has said it is apart from the Labour party. This discussion is about CGT.

2) Are you suggesting that lower income earners should pay higher tax rate because they pay less total tax? Or should everyone pay the same?

I'm astounded by the awesome argument.

Fundamentally I am not opposed to a CGT. Rational people will look to minimise their tax liability. When labour put the top tax rate up to 39% people looked for ways to minimise their liability rather than grow their business. CGT in conjunction with ba tax increase will see investment funds flow out of NZ in an effort to minimise tax liability , it will limit growth because people will not be willing to invest here.
Who remembers the tax exiles from the UK in the 60's

If you were paying 39% Tax + 15% GST + CGT. Would you stay ???

Blackflagged

17th July 2011, 20:34

"If you were paying 39% Tax + 15% GST + CGT. Would you stay ???" Now just need to mop up that last bit.

I've never voted labour, always voted national. But I'd suggest unlike you I'm able to open both my eyes and think about what's good for the country rather than just what's good for me or blindly arguing the line of the party that I normally vote for.

I agree, raising the top tax doesn't help their cause and I'd be more supportive if they flattened the tax. But are you suggesting that the scale should be reversed and lower earners should pay tax higher rates???

Income is income. Tax it all or tax none of it.

Thats right Taxs are good for the country!
Have it on family homes and if you do up an old motorbike and sell. Why not income is income.

Use to have 60% death duty`s in NZ now that would make us really successful!

Usarka

17th July 2011, 21:07

CGT in conjunction with ba tax increase will see investment funds flow out of NZ in an effort to minimise tax liability , it will limit growth because people will not be willing to invest here.
Who remembers the tax exiles from the UK in the 60's

Foreigners buying NZ shares do not need to pay capital gains when they sell the shares.

Kiwis buying overseas shares will still need to pay capital gains when they sell the shares.

Most of these other countries you describe already have captical gains tax.

Hitcher

17th July 2011, 21:48

In the famous words of Bill Clinton, this could be an interesting erection after all.

Or death throes for a political party that has lost touch with the ambitions of the people it once represented? A party that has so few members and unions with assets it will be struggling to fund a campaign come October?

A party with a vision more far sighted than taxing the shit out of "rich" people, perhaps with some ideas for sustainable growth for New Zealand may have a look in.

trustme

18th July 2011, 07:55

Foreigners buying NZ shares do not need to pay capital gains when they sell the shares.

Kiwis buying overseas shares will still need to pay capital gains when they sell the shares.

Most of these other countries you describe already have captical gains tax.

I know that you want to discuss CGT on its own merits, in broad terms I actually agree with a CGT . I don't think you can isolate it from Labours overall tax package , I suspect the cumulative effect of their total package will be very negative.

If Labour adopted Roger Douglas's tax reforms of the Rogernomics era then I would very likely be a supporter

What is rich ?? Define who is rich ??

I fall into that upper tax bracket, I live in a reasonable house in a good area , no mortgage still got kids. Funny thing is I am doing it as tough as when I had a small house,3 kids & a mortgage rate of 22 or 23%.
No world trips or expensive holidays, no bach, no boat , no sky , no flash car ,no spare money to plow into a super scheme, wife & I have bikes but no new ones on the horizon, no flash restaurants
Goff & all his cronies earn more than I do & they tell me I'm rich & should pay more tax.
Sounds like the ' poor me's ', no , not until someone starts telling me I'm rich.

Balls.

Usarka

18th July 2011, 08:00

Or death throes for a political party that has lost touch with the ambitions of the people it once represented? A party that has so few members and unions with assets it will be struggling to fund a campaign come October?

A party with a vision more far sighted than taxing the shit out of "rich" people, perhaps with some ideas for sustainable growth for New Zealand may have a look in.

I share all the concerns in this thread about Labours intent, ability etc.

The Nats have previously dismissed CGT - not because its a bad idea economically, but because it's "political suicide".

So I'd wager that the beloved National brains trust think it's a good tax, therefore the only argument they can come up with is anti-Labour slogans rather then anti-CGT.

I'd be happiest if National said "fuck it, we'll do it too and flatten out the tax structure".

trustme

18th July 2011, 08:04

I share all the concerns in this thread about Labours intent, ability etc.

The Nats have previously dismissed CGT - not because its a bad idea economically, but because it's "political suicide".

So I'd wager that the beloved National brains trust think it's a good tax, therefore the only argument they can come up with is anti-Labour slogans rather then anti-CGT.

I'd be happiest if National said "fuck it, we'll do it too and flatten out the tax structure".

I'd happily wear that

Swoop

18th July 2011, 08:10

Looks like this (http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10739182) has stuck a few more nails into liabore's coffin.
They really are seriously window-licking mad. One day they will get over their furvent frothing-at-the-mouth hate of the "rich pricks" and may see what a bunch of criminal arseholes they are.

Sale of shares included in the tax.
Don't forget all the other things that get included with that (precious metals, etc)

Spearfish

18th July 2011, 08:43

Pinko divide and conquer tactics.
If you think Labours tit still can supply the nation with colostrum then your sadly mistaken, all that's left in the left tit is mastitus the other just white and water.

trustme

18th July 2011, 08:50

FAIR !!! 17% of the population pay 90% of the tax , lets raise their taxation rate to 39% & hit them with CGT. What could be fairer than that !!!!!

genuinely interested to know where these figures come from - could either of you post references, please?

Buggered if I can find it , but I don't doubt it. We are talking population not tax payer. Kids don't pay tax, students don't pay tax, beneficiaries of all sorts may pay tax but it is way less tax than they receive in benefits, plenty of low wage earners receive more in subsidies than they pay in tax, some higher paid people get family support [ figure that one out ]
Net effect, 17 % of population pay tax

mashman

18th July 2011, 09:35

I'd be happiest if National said "fuck it, we'll do it too and flatten out the tax structure".

So I'd wager that the beloved National brains trust think it's a good tax, therefore the only argument they can come up with is anti-Labour slogans rather then anti-CGT.

According to Q+A on sunday morning, Labour offered National (can't remember the exact term) CGT as a "joint effort"... National turned them down. So they can't think it's a good idea at all... they'd rather sell everything first.

short-circuit

18th July 2011, 10:24

they'd rather sell everything first.

Which has got fuck all to do with fiscal prudence (because as we all know from experience it's actually an extremely expensive exercise that bleeds money in the long term) and everything to do with looking after their mates - the large corporates.

One day they will get over their furvent frothing-at-the-mouth hate of the "rich pricks" and may see what a bunch of criminal arseholes they are.

with this in mind, who are the real criminals?

Spearfish

18th July 2011, 11:17

Whats the compliance cost going to be for the GOVT and the public with Labours new Tax packages?

The no GST on fresh fruit and is going to be as complicated as CGT

For instance
a watermelon will be free of GST
If a shop cuts it in half and wraps it, its processed so isn't free of GST?
What about a tin of fruit or frozen veges?
A steak at a restaurant is + GST a fruit salad is - GST
but a fruit salad with ice cream is +GST?

A family member dies and leaves an inheritance, some in cash a bike or two and a house and its chattels, what is taxed with CGT, its all a gain isn't it?

A tradesman or small business is working from home and using the garage claiming expenses at a percentage for the garage used, eg rates, insurance, even some of the interest component of a mortgage as a cost for running that business, does that mean the whole house gets valued for CGT and the percentage used for tax claims becomes payable under CGT?

So the new labels on items could be a combination of
+ GST
including GST
+ GST if any

new ones
+ CGT
including CGT
+ CGT if any

ODD ones
+gst including CGT
gst included + CGT
GST if any+ CGT if any

How much to to fly to oz?

mashman

18th July 2011, 11:29

Which has got fuck all to do with fiscal prudence (because as we all know from experience it's actually an extremely expensive exercise that bleeds money in the long term) and everything to do with looking after their mates - the large corporates.

Surely not :shit:. T'was Cunliffe on the telly the other morning explaining that very point of view, as well as the Nats telling them to fuck off. It takes a looooong time to organise these asset sales... no doubt they've already wasted several 10's of millions seeking advice :rofl: in regards to the asset sales... can't even make their own minds up so they leave it to the lawyers, accountants and corporations to decide what's best for the "common man". Someone somewhere is laughing hard whilst selling out the people of NZ... I just wish it was me :)

mashman

18th July 2011, 11:38

Whats the compliance cost going to be for the GOVT and the public with Labours new Tax packages?

The no GST on fresh fruit and is going to be as complicated as CGT

Probably less than compliance costs for selling assets?

If you don't put GST on fruit and veges at the initial point of sale, i.e. the "garden", then is there need for anyone else to add GST on to the price of the item? Granted that seems a little simplistic, and as you mention there is effort getting from "garden" to store that will incur GST. But, if the point of origin, producer, isn't charging or being charged GST of fruit and veges, then would that not mean that fruit and veg becomes 15% cheaper at the checkout?

Oscar

18th July 2011, 11:38

The no GST on fresh fruit and is going to be as complicated as CGT

Good points.
However the no GST on fresh fruit and Vege makes me laugh.
There's a Tui Ad in it somewhere:

No GST on Friut and Vege? - Let's not go to KFC tonight, we'll buy an apple instead...

Oscar

18th July 2011, 11:40

Spearfish

18th July 2011, 12:00

Probably less than compliance costs for selling assets?

If you don't put GST on fruit and veges at the initial point of sale, i.e. the "garden", then is there need for anyone else to add GST on to the price of the item? Granted that seems a little simplistic, and as you mention there is effort getting from "garden" to store that will incur GST. But, if the point of origin, producer, isn't charging or being charged GST of fruit and veges, then would that not mean that fruit and veg becomes 15% cheaper at the checkout?

But if anyone who passes that product through them is earning over 60k then they have to pay gst.
The gardener grows it and sells their crop for 40k over the season, don't have to be GST registered BUT becomes the consumer of gst so any price they set essentially includes their costs (including the gst they have paid like you and me) with, hopefully a profit added.
So at this point some GST has been paid.
The company who they sold it to buys from all the growers in the area and is has to be GST registered so they ADD gst to the cost because they cant it pass through them plus it gets tricky if some of its sales are exempt and others aren't depending on who they sell it to so that adds a cost of compliance they will pass on.
They sell and distribute the produce to the local shops and processing companies. The shop pays the GST inclusive price the distributor has asked and added their margin.
Consumer goes into the shop buys a bag full of fruit and doesn't notice a scrap of difference and, if its anything like my house, the bloody stuff rots in the fruit bowl anyway.

mashman

18th July 2011, 12:46

What if the potatoes go from the garden to the McDonalds chip factory?

But if anyone who passes that product through them is earning over 60k then they have to pay gst.
The gardener grows it and sells their crop for 40k over the season, don't have to be GST registered BUT becomes the consumer of gst so any price they set essentially includes their costs (including the gst they have paid like you and me) with, hopefully a profit added.
So at this point some GST has been paid.
The company who they sold it to buys from all the growers in the area and is has to be GST registered so they ADD gst to the cost because they cant it pass through them plus it gets tricky if some of its sales are exempt and others aren't depending on who they sell it to so that adds a cost of compliance they will pass on.
They sell and distribute the produce to the local shops and processing companies. The shop pays the GST inclusive price the distributor has asked and added their margin.
Consumer goes into the shop buys a bag full of fruit and doesn't notice a scrap of difference and, if its anything like my house, the bloody stuff rots in the fruit bowl anyway.

If Maccas get to buy potatoes without GST on them, then that should (yeah yeah) make the end product cheaper? Irrespective of the GST that will be charged after that in the course of normal business? Especially when buying in bulk?

Oscar

18th July 2011, 12:49

If Maccas get to buy potatoes without GST on them, then that should (yeah yeah) make the end product cheaper? Irrespective of the GST that will be charged after that in the course of normal business? Especially when buying in bulk?

1. The proposal is that fresh fruit and veges have no GST.
2. Maths isn't your strong point is it?

Ocean1

18th July 2011, 13:34

genuinely interested to know where these figures come from - could either of you post references, please?

"the burden on high income earners is even higher once those on Working for Families, New Zealand Superannuation and other benefits are included. Under that scenario, the top 10 per cent of taxpayers shoulder 76 per cent of the tax burden."

http://www.stuff.co.nz/national/politics/3246158/Radical-tax-changes-recommended-to-Government

mashman

18th July 2011, 13:45

1. The proposal is that fresh fruit and veges have no GST.
2. Maths isn't your strong point is it?

1. aha, your point?
2. fruit and veges won't be cheaper from the supplier?

BoristheBiter

18th July 2011, 13:51

1. aha, your point?
2. fruit and veges won't be cheaper from the supplier?

No, because you get the GST back if on selling.

Oscar

18th July 2011, 13:59

1. aha, your point?
2. fruit and veges won't be cheaper from the supplier?

The only person that actually pays the GST is the end user.

NighthawkNZ

18th July 2011, 14:22

Now its a 4 bed with en-suite, internal double garage, designer kitchen and only purchased if it meets with the approval of their "friends" on twitter.

Fuck I wish...

oneofsix

18th July 2011, 14:25

The only person that actually pays the GST is the end user.

True but everyone else pretends they pay and then need to include mark up to cover administrating it.
Back the Mashman's point, when Macas buy the spuds they are fresh therefore Macas wont have to pay the suppliers pretend GST and should be able to pass on the 'savings'.
Contra; I can't remember Macas putting the price up to include GST in the first place. With 'raising costs' and other excuses I wont be expecting to see many price reductions outside the green grocers.

yachtie10

18th July 2011, 14:35

True but everyone else pretends they pay and then need to include mark up to cover administrating it.
Back the Mashman's point, when Macas buy the spuds they are fresh therefore Macas wont have to pay the suppliers pretend GST and should be able to pass on the 'savings'.
Contra; I can't remember Macas putting the price up to include GST in the first place. With 'raising costs' and other excuses I wont be expecting to see many price reductions outside the green grocers.

Maccas charge what they think you will pay (different in different stores)
The only thing that will make them cheaper is competition or a more sales at lower margin approach

Same with most fruit and vege. Do you think all the apples at packnsave are 3.99 a kilo because they cost exactly the same from suppliers. I dont believe the price would come down if GST is removed (In fact I can hear the argument that taking away the simplicity of the current GST calculation may add admin costs)

Oscar

18th July 2011, 14:39

Winston001

18th July 2011, 15:09

We've finally managed to contrive to have a relatively simple tax system, which sort of limits opportunities for shuffling income around for the purpose of avoiding tax. The wildly differing taxation offered by labour's scheme will re-open many doors for that sort of creative pea and shell game again.

Totally agree.

One of the reasons I don't like the CGT is the complexity it creates.

I'm not an accountant but I've learned and dealt with tax law as part of my career. Essentially since the Rodger Douglas era our system has become simpler and better, under both styles of government. Its far from perfect but better than elsewhere.

From a purely selfish perspective CGT is a winner. Lots and lots of work for lawyers and accountants. More civil servants jobs too. People will move their money from income - to avoid 39% - to capital at only 15%. Or sell the exempt family home, move into the rental for a couple of years = now that becomes the exempt family home, buy another rental, repeat...

Technically this won't be lawful but I bet it happens quite legitimately if the rental has always been intended as the retirement home. Alternatively the crib (bach) becomes the family home at retirement. Common enough.

Winston001

18th July 2011, 15:18

Another reason I don't like CGT is that it is driven by envy. Tax the rich pricks. In reality its middle NZ who have benefited from house value rises. And that is gone - too late. There won't actually be much tax gathered if the family home is exempt.

If Labour want to do the job properly they should propose an annual flat tax on all assets. Houses, farms, shares, bank accounts, bullion etc. Say 0.5%pa. No exclusions. Drop GST to 10% at the same time.

Simple and effective. That way the "wealthy" who have a small income are forced to contribute a small portion of capital, or sell it for someone else to make use of.

The Stranger

18th July 2011, 17:20

What do you think?

Personally i reckon that if we are going to have to pay tax it should be fair. And this means that some members of society shouldn't have an avenue of making money where they don't contribute especially when it's usually the more well-off. It also means that tax breaks shouldn't encourage people to invest in non-productive assets.

I've never given a party vote to labour before (gave them a electorate one once) but if they make this fair, and reduce the paye and company tax a bit to compensate then Labour will definitely be a choice for me for the first time ever come this election.

I expect a lot of opposition from farmers and investment property owners, but that sounds like to me a bunch of people who are having a good run and don't want their toys taken away :whistle: In the famous words of Bill Clinton, this could be an interesting erection after all.

Hmm, not likely to read the whole lot to see if these points have been covered off or not, so please excuse me for any that have been covered off.

1) We get what we deserve. If this goes ahead it will in time be extended to include everything and everyone. I know what they are saying now, but as always with these types of things it is the thin edge of the wedge. So look forward to tax on your family home and at a rate of 20%. It will come. One govt with "tweak it" then the next then the next. There is NO capital gain on a house. If you buy a house for 100k and sell it say 5yrs later for 200k you made nothing as you then need to go buy another house, and you know what it will cost to buy one the same? That's right 200k. You gained no value - and lets face it, that's what money is a store of value. IT WILL COME in time.

2) How do we save for retirement? Who gives a fuck, let's just tax em now and we'll figure it out later. Look, I really don't mind if you guys want to pay my super for me. Just don't fucken moan about eh.

3) One of the reasons mooted for the CGT is the buying and selling of properties. This is taxable now and at a higher rate than 15%. Why not simply enforce this as it will yield a better return than the CGT (in it's present proposed form). If it does replace the current regime speculation over the next few years at least just became a whole lot more attractive than risking getting landed with say 33% tax AND being labelled a speculator by the IRD.

4) I understood taxation was about redistribution of wealth to those whom need it most. Recent articles in the harold have pointed out that owning a rental is a very marginal return. By providing various tax incentives to landlords the govt is assisting those at the bottom of the food chain - the tenants - as the landlord then doesn't need to recover a "commercial" rate of return from them. Failing this either one of a couple of conditions will occur. Rents will rise or there will be a shortage of rental properties - which will lead to rents rising. Sure the landlord is being assisted too (see point 2).

5) So investing my money in shares purchased on the share market is somehow productive? Please explain this one, because as far as I can see it only aides someone else sell their shares - they hope for a capital gain. It doesn't even provide a roof over someone's head.

6) Assuming shares purchased on the stock market are in fact productive AND we actually have any company directors that are not in prison to run such companies is it for the government to actually say what risk profile you are to accept. Sure people can loose money on property as they can with say shares etc, but at least with property you are in control of your destiny - not someone/s whom you really do not know. My meagre experience is that NO ONE looks after your money as well as you do. Just ask Mr Versalko. But hey doesn't matter - see point 2.

7) Perhaps it's more productive to invest in say finance companies? Or maybe mom and pop should be in the business of providing venture capital - of which we are all well versed in the intricacies there of. - see point 2.

8) Perhaps mom and pop should stick to something safe instead - like gold maybe. Again, is this really productive?

Meh, there will still be national super when I retire anyway so enjoy your new tax - I know I will.

SPman

18th July 2011, 17:53

Another reason I don't like CGT is that it is driven by envy. Tax the rich pricks.

As opposed to policies that are driven by greed. Drop the top tax rate and slash all the policies that help the lower earners.

Hitcher

18th July 2011, 19:09

As opposed to policies that are driven by greed. Drop the top tax rate and slash all the policies that help the lower earners.

Policies that are driven by an obsessive focus on the wrong stuff. If CGT is the answer, then what's the question?

What on earth is CGT going to do to grow New Zealand's economy? That's the most important question that New Zealand policy makers have to stare down.

Rather than being obsessively picky about how to slice up the economic cake, why not focus on growing a bigger cake? That way everybody gets a bigger slice.

But that could be fun when the same people who support CGT are also opposed to carbon emissions, mining, farming, meat, immigration, foreign ownership...

short-circuit

18th July 2011, 19:15

Policies that are driven by an obsessive focus on the wrong stuff. If CGT is the answer, then what's the question?

What on earth is CGT going to do to grow New Zealand's economy? That's the most important question that New Zealand policy makers have to stare down.

Rather than being obsessively picky about how to slice up the economic cake, why not focus on growing a bigger cake? That way everybody gets a bigger slice.

But that could be fun when the same people who support CGT are also opposed to carbon emissions, mining, farming, meat, immigration, foreign ownership...

http://novovirtu.com/2010/11/22/the-lie-and-failure-of-trickle-down-economics/

Hitcher

18th July 2011, 19:38

http://novovirtu.com/2010/11/22/the-lie-and-failure-of-trickle-down-economics/

What I'm suggesting has nothing to do with "trickle down" economics. Making a bigger economic cake should directly benefit all members of that economy.

Anybody who believes that a tax system that hammers "rich" people and people who own property and other assets that appreciate in value just so that people who contribute nothing can be looked after (in very simplistic terms), are the ones who need a reality check. Or they could consider moving to a country that offers the measures they think will work. Good luck with that.

neels

18th July 2011, 19:56

Anybody who believes that a tax system that hammers "rich" people and people who own property and other assets that appreciate in value just so that people who contribute nothing can be looked after (in very simplistic terms), are the ones who need a reality check. Or they could consider moving to a country that offers the measures they think will work. Good luck with that.
Zimbabwe maybe? Seems to be working over there....

Ocean1

18th July 2011, 20:20

If Labour want to do the job properly they should propose an annual flat tax on all assets. Houses, farms, shares, bank accounts, bullion etc. Say 0.5%pa.

Great.

So, if, in spite of all of the manifold disincentives applied to the actual generation of wealth one nonetheless finds oneself still in possession of a small part of the fruits of one’s labour then Er Majesty’s revenue collectors will be into that as well.

Answer me this: Why should one aspire to be anything other than one of the majority who contribute less than they take?

trustme

18th July 2011, 20:27

2) How do we save for retirement? Who gives a fuck, let's just tax em now and we'll figure it out later. Look, I really don't mind if you guys want to pay my super for me. Just don't fucken moan about eh.

5) So investing my money in shares purchased on the share market is somehow productive? Please explain this one, because as far as I can see it only aides someone else sell their shares - they hope for a capital gain. It doesn't even provide a roof over someone's head.

Meh, there will still be national super when I retire anyway so enjoy your new tax - I know I will.

2/ You must be a lot older than me [early 50's] If not it will be you that moans like a stuck pig when your super gets carved to pieces because we can no longer afford it.

5/ Companies list on the share market to raise capital to assist them to grow. you are in effect backing the company to grow & give an increased return that results in a dividend paid to shareholders. Company grows = more jobs = more profits = more tax = growing economy. Michael Hill , Warehouse have looked to privatise because like Famers they have worked out that growth is cyclical & the shareholders demand for a return can stunt long term growth, but that is another story.

Meh, I'd actually like to leave this mortal coil with it still in some sort of shape for my kids, apparently you don't give a shit

the rest is tripe.

Spearfish

18th July 2011, 20:57

I guess all this uses the assumption that only Labour will get in.
The greens need to expand CGT into everything and everyone.
Labour are still short a few billion for this seasons voter purchase.
Like the biker motto over the ACC gouge WHO'S NEXT?

Winston001

18th July 2011, 21:55

Great.

So, if, in spite of all of the manifold disincentives applied to the actual generation of wealth one nonetheless finds oneself still in possession of a small part of the fruits of one’s labour then Er Majesty’s revenue collectors will be into that as well.

Answer me this: Why should one aspire to be anything other than one of the majority who contribute less than they take?

Actually we already have a quasi-wealth tax - local body rates. These are calculated on the capital value of your property. So its no big leap to have a national form of annual wealth tax.

BMWST?

18th July 2011, 22:08

Hitcher

18th July 2011, 22:11

Actually we already have a quasi-wealth tax - local body rates. These are calculated on the capital value of your property.

That's because rich people have more than one toilet, and they recycle.

rainman

18th July 2011, 22:58

Making a bigger economic cake should directly benefit all members of that economy.

Should's a fine thing. Certainly hasn't been everyone's experience of capitalism (cough, USA, cough), which is what I think the point about the folly of trickle-down was. Distribution is often more important than growth.

Anybody who believes that a tax system that hammers "rich" people and people who own property and other assets that appreciate in value just so that people who contribute nothing can be looked after (in very simplistic terms), are the ones who need a reality check. Or they could consider moving to a country that offers the measures they think will work. Good luck with that.

Or, for as long as we have a democracy, they can vote for who they like, on as sensible, or selfish, or misguided a basis as they wish.

Hinny

19th July 2011, 00:22

The very few investors who will be scared off by a CGT are mums and dads who own one rental house.

Anyone who owns two or more houses does so because that is their longterm investment plan. Selling out now makes no sense at all. The serious landlord with half a dozen properties wants those for income - any capital gain is good luck and only arrives in cash after they die.

As for the recession: buy in gloom, prosper in boom. Seen three cycles in my working lifetime..

Not my experience at all.
Property investors I know have houses they don't bother to rent out because it is too much hassle.
Second houses for most are for the income stream.

The rich people I know gain far less wealth per annum from income than from other sources.
CGT's are thus a way of sharing the burden of looking after our society.

As for the boom and bust cycles in NZ fortunes these have coincided with changes in govts.
The country Booms under Labour and Busts under National governments.
Hard pill for the right whingers to swallow.

The Greens condemn both parties for regarding economic growth as a measure of our collective success and therefore an imperative goal.

BoristheBiter

19th July 2011, 07:21

As for the boom and bust cycles in NZ fortunes these have coincided with changes in govts.
The country Booms under Labour and Busts under National governments.
Hard pill for the right whingers to swallow.

I think you mean all beneficiaries boom under Labour as its the only way they can get in is by bribing the country.

All i have seen is after three terms what ever party is in gets thrown out as people get bored and forget how bad the last one was.

If Labour was so good why did they go from a 17 billion surplus to a deficit in their last term?

Ocean1

19th July 2011, 07:47

Should's a fine thing. Certainly hasn't been everyone's experience of capitalism (cough, USA, cough), which is what I think the point about the folly of trickle-down was. Distribution is often more important than growth.

You miss the point. You contend that a trickle-down effect doesn't work because it fails to completely relieve any responsibility from those who choose not to earn as much as they want.

Consider: Those who do so choose tend to like the idea that there's some reason why they should bother. As H has already said; the only way to get more money out of the "rich" is to tax them less.

Or, for as long as we have a democracy, they can vote for who they like, on as sensible, or selfish, or misguided a basis as they wish.

Yeah. 'Cause they've "earned" that right along with the one that says the world ows them a living.

240

19th July 2011, 08:40

Hinny

19th July 2011, 08:41

as long as we have a democracy, they can vote for who they like, on as sensible, or selfish, or misguided a basis as they wish.

One of the great myths?
The Sheeple are controlled by the media.

Commentary about Rupert Murdoch recently stated that he had made and broken Govts.

John Key certainly has the run of the media.
Given this Govts. performance to date and the stated plan of action if they get re-elected, how is it possible that they enjoy such popularity?
Bill English told Parliament the tax take is up and yet they are borrowing furiously and cutting back expenditure. Borrowing more than they need, buying US treasury bonds, with borrowed money - Where will it end?
The interest on borrowing was recently reported to exceed the expenditure on Health, Education and Welfare. How ridiculous!
Our children are being left an unholy burden. Irreplaceable assets which should be our legacy, their heritage, are destined to be flogged off. Like the failed policy of flogging off the Clyde dam this can only be viewed as short term gain for long term pain.
Security of Energy and security of Food should be paramount concerns of a Govt. intent on protecting the well off-ness of current and future New Zealanders.
National Govts., past and present, have not, it would appear, had this notion as an idealogical priority.

'Only idiots would sell those off' has been a sentiment I have heard expressed a lot recently.
Considering the proposed sale of the best performing State owned enterprises is an alternative to a wider and fairer tax system it is no surprise which party would come up with choosing the dumb option. Not the 'trendy lefty intellectuals', that's for sure!

Hinny

19th July 2011, 08:54

YAs H has already said; the only way to get more money out of the "rich" is to tax them less.

FFS
What's that saying about Idiots expecting s different outcome from the same course of action?
It's never happened before so why the hell do you expect it to happen in the future?

Spearfish

19th July 2011, 09:21

The problem with a capital gains tax is that landlords will have to factor in tax payable when the investment is sold.
There are two ways to do this 1:increase the rent return of the property and 2: Increase the sale price on selling.Option 2 may not achieve the result they will need as the market for selling a property a lot more competitive for selling and buying rather than renting.The rental market however is a lot more able to be dictated to by the landlords as demand is strong for rental in most areas as most people start there and have little other options.I believe a CGT will see a huge increase in rent prices across the country.
(any way lets be honest it ain't gonna happen as labor have as much chance of getting in as Ducati have of winning the moto gp :devil2: :msn-wink: )

A few property investors bailed when the LAQC and depreciation on the building was killed, all thats happening is a different group with different investment structure are slowly moving in to property investment and in areas where rental numbers are low the rent is climbing.
Real estate is called real estate for a reason and unless lending institutions become happy with lending on other forms of investment then I cant see it changing.
by banks I don't include the (borrow 20 grand to fly the family out from the islands to bury your loved ones at 30%) sharks that target polys"

240

19th July 2011, 09:54

A few property investors bailed when the LAQC and depreciation on the building was killed, all thats happening is a different group with different investment structure are slowly moving in to property investment and in areas where rental numbers are low the rent is climbing.
Real estate is called real estate for a reason and unless lending institutions become happy with lending on other forms of investment then I cant see it changing.
by banks I don't include the (borrow 20 grand to fly the family out from the islands to bury your loved ones at 30%) sharks that target polys"

The vast majority of investors are "mum and dad" investors.They work (usually) to a tight financial framework which has little room for change.Based on overseas experiences they are advised to increase rent returns to accommodate sales tax.
Interestingly if someone sells below what they purchased the property for in a negative market they do not receive a tax break only an offset of tax for future use when another property is sold.If you don't buy another you are shit out of luck.The only people who will win from any CGT is accountants.

The Stranger

19th July 2011, 13:21

One of the great myths?
The Sheeple are controlled by the media.

Bingo.
Has anyone seen a balanced view of the CGT in the harold yet. I been looking but all I have found so far are exponents of CGT published en masse in the harold.

Is there no one out there who opposes it?

Hinny

19th July 2011, 15:28

Bingo.
Has anyone seen a balanced view of the CGT in the harold yet. I been looking but all I have found so far are exponents of CGT published en masse in the harold.

Is there no one out there who opposes it?

They are not out there . . . they are all posting on KB. :bleh:

Had a laugh on the weekend.
A couple of Right Wing mates and Gareth Morgan were arguing for CGT.
Almost made me reconsider my stance.

avgas

19th July 2011, 16:19

I reckon introduce capital gains tax, but make income tax flat.
That way more people can buy the family home, less people will be able to live the "I-have-5-mortgages-but-only-actually-earn-60k p/a" ripoff kiwi dream, but also the people at the top who have investment properties, and can afford to buy them only pay tax on how much they rip people off selling the house, not on how much they earn in a job.
Win-compromise-Win

However convincing the bottom tax payers that is a good idea would be impossible. Even though they would be better off - they can't stand the fact that others will ALSO benefit. Heaven forbid people at the top paying the same % of tax as them.
Surely the reason why people get rich is because they want to pay (proportionally) more tax.

Then again educating low income earners about percentage or fractions sounds like it might be a challenge......

(no I am not on a rich list, I just don't see the point of being being tax proportionally more by trying to achieve more, sounds tall poppy to me).

Banditbandit

19th July 2011, 16:33

They are not out there . . . they are all posting on KB. :bleh:

Had a laugh on the weekend.
A couple of Right Wing mates and Gareth Morgan were arguing for CGT.
Almost made me reconsider my stance.

Hahahaha .. if even the right wing can't agree on it ..

trustme

19th July 2011, 16:56

It is easy to mount an argument for CGT. In theory it will discourage people from land banking & investing in a property that gives the individual a capital growth but fails the grow our productive economy. The problem is that Labours policy wont fix some fundamental inequity within the tax system , they will make things worse.The few will pay more, the majority will probably pay less.

Once again they will punish excellence & reward indolence. The tune might be nice ,the orchestra in tone bloody deaf.

Hitcher

19th July 2011, 19:27

Policies like this aren't targeted at what's good for New Zealand. They're intended to curry favour with Labour's supporters who are unlikely to ever earn more than $150,000 a year, own a business, own shares and probably not even their own home.

Winston001

19th July 2011, 19:29

As opposed to policies that are driven by greed. Drop the top tax rate and slash all the policies that help the lower earners.

I know that is a popular view from the left and its a cute sound-bite. However what does it actually mean? The vast majority of New Zealanders are middle-class with modest assets. They only achieve those assets - which represent financial security - by working and saving.

Is that greedy? Trying to have a more secure life than your parents had, providing more opportunities for your children than you had? When people earn income, that is their money. Not yours and not the governments. Taking some tax is a compromise for the benefits of a fair society. Tax is not a punishment vested upon those who achieve.

Policies that are driven by an obsessive focus on the wrong stuff. If CGT is the answer, then what's the question?

What on earth is CGT going to do to grow New Zealand's economy?

Excellent post but this is KB - rational points WTF??

AD345

19th July 2011, 19:53

Capital gains tax is well overdue in NZ as our incredibly narrow tax base with its focus on earnings is not going to provide sustainable investment in our future. Unfortunately the CGT proposed by Labour falls far short of the mark.

Not applying the CT to the family home leaves the biggest loophole wide open and is simply pandering for votes. Also to have the tax apply only at realisation leaves the gate open for more dodging and hefty lawyers bills.

A true CGT should apply as broadly as possible, be collected annually on the value of the capital, probably at Govt. bond rate, and also on the extra earnings at realisation.

The mooted CGT from Labour is probably not going to be enough to get them in, but at least we are now having the discussion

Hitcher

19th July 2011, 19:56

CGT is also an inheritance tax. If you inherit a property, you'll get hit up for CGT when you sell it.

AD345

19th July 2011, 20:01

yep and so you should, just like any other increase in earnings

Ocean1

19th July 2011, 20:28

It's never happened before so why the hell do you expect it to happen in the future?

On the contrary, the relationship between marginal tax rates and revenue is inverse. Like so: http://mjperry.blogspot.com/2011/04/tax-rates-and-share-of-tax-revenues.html

FFS What's that saying about Idiots expecting s different outcome from the same course of action?

I suspect it's almost as common as idiots spouting shit based on dearly held assumptions without actually knowing what they're talking about.

rainman

19th July 2011, 20:34

You miss the point. You contend that a trickle-down effect doesn't work because it fails to completely relieve any responsibility from those who choose not to earn as much as they want.

Sorry, you think people can just choose to earn as much as they want? I'm fairly talented and have worked my arse off for years and I certainly have not had that luxury. Most people don't.

Yeah. 'Cause they've "earned" that right along with the one that says the world ows them a living.

Does it matter?

One of the great myths?
The Sheeple are controlled by the media.

Of course, but I was simply countering Ocean1s view which sounded a lot like "if you don't think like me you can piss off to Zimbabwe".

A few property investors bailed when the LAQC and depreciation on the building was killed

IANA tax expert by any means but from what I can see there's little impact from the new loss limitation rules for the average mom 'n pop investor. If the bank has you guaranteeing the loan (which is gonna be the case) you can probably still claim the rental losses in an LTC (excluding depreciation).

I know that is a popular view from the left and its a cute sound-bite. However what does it actually mean? The vast majority of New Zealanders are middle-class with modest assets.

The important number is not the number of middle class families trying to get ahead (which should be encouraged, of course). It's the vast levels of income of the extremely wealthy. Earning over $150k puts one in a very small slice of our society indeed. We are a little third world not-so-pacific island, with a very small number of wealthy.

Of course in one sense it's not unreasonable to earn over $150k - the narrative of hard work and just deserts has some validity - but when the proles are on $25k a year despite working their arses off and the cost of living is what it is, that does not make for a healthy society. So we get stuck in this dialogue about rich pricks and greed/envy dichotomies that is not very mature or useful, but we flip-flop back and forth regardless.

The solution would be to grow the economy and genuinely lift all boats, but a) that's a fairy tale told to the gullible poor, and b) growth is over; so plan b is for the extremely wealthy to share a bit more. Or more isolationism/less globalisation so we can control production and costs, manage wages, and get back on track to being a cohesive society.

Yeah I didn't think so either.

rainman

19th July 2011, 20:42

I suspect it's almost as common as idiots spouting shit based on dearly held assumptions without actually knowing what they're talking about.

I'd love to see percentage of total income earned by the top 1% over time.

Real income, not declared for tax purposes. And yes, including capital gains.

Ocean1

19th July 2011, 20:58

Sorry, you think people can just choose to earn as much as they want?

Yes. If you don’t want to starve you’d probably choose to earn enough to buy food. If someone else wasn’t paying for it.

If you want to earn enough to buy a new bike there’s nothing whatsoever preventing you from doing that. You just need to want it bad enough.

Does it matter?

Depends if you appreciate the difference between a self-regulating system and one controlled by positive feedback.

Of course, but I was simply countering Ocean1s view which sounded a lot like "if you don't think like me you can piss off to Zimbabwe".
I think you have me confused with someone else.

I don’t give a fuck where you live, as long as you don’t expect me to pay for it.

Hitcher

19th July 2011, 21:00

I'd love to see percentage of total income earned by the top 1% over time.

Real income, not declared for tax purposes. And yes, including capital gains.

If it's arousal you're seeking, I understand that there are many Internet channels that may be able to satisfy your yearnings.

Ocean1

19th July 2011, 21:01

I'd love to see percentage of total income earned by the top 1% over time.

Real income, not declared for tax purposes. And yes, including capital gains.

Probably findable. The point is if you tax anyone beyond a certain point they either stop earning or they hide their income. Pretty predictable innit?

Far more inteligent men than me have estimated the break-even point at 17%, tax more than that and you lose revenue, tax less than that and you lose revenue.

rainman

19th July 2011, 21:37

If you want to earn enough to buy a new bike there’s nothing whatsoever preventing you from doing that.

If you seriously think that is always true then you're a simplistic fool.

Probably findable. The point is if you tax anyone beyond a certain point they either stop earning or they hide their income. Pretty predictable innit?

Far more inteligent men than me have estimated the break-even point at 17%, tax more than that and you lose revenue, tax less than that and you lose revenue.

Sure, but again, a bit simplistic. Tax is not a nice easy black box with linear inputs and outputs. (Or perhaps, tax is relaitively simple, but people are complicated).

And these intelligent men wouldn't be economists, perchance? :laugh:

Hinny

19th July 2011, 21:43

On the contrary, the relationship between marginal tax rates and revenue is inverse. Like so: http://mjperry.blogspot.com/2011/04/tax-rates-and-share-of-tax-revenues.html

I suspect it's almost as common as idiots spouting shit based on dearly held assumptions without actually knowing what they're talking about.

Don't believe the hype! You sound like Bill English trying to justify tax cuts.

As to your second point, suspect no longer. I can confirm you should know you are spouting shite.

Like the ol' saying goes 'Statistics don't lie but Statisticians can be liars'

You are behaving as one of the 200K earners that think they are 'wealthy, rich pricks' that are getting their hard earned cash stolen off them to give to the dole bludging losers that won't get off their arses to earn a crust.
Get over yourself if you are in that category.
The people that boast about earning $6million without paying tax are the ones that need to pay their share. Basing the tax take on income alone was considered iniquitous by a previous Labour govt. and I would think the implementation of GST was seen as fair even though the poorest paid a greater percentage of their disposable income than the wealthy simply because they had to spend all their income to survive. I suspect few people would want to go back to Muldoon's top tax rate of 66%. (John Key's hero by the way)
As I stated earlier the wealthy people I know earn a smaller percentage of their total gain in wealth each year by way of taxable income. To imagine that this situation is fair beggars belief for me. Spreading the tax burden is fair, equitable, desirable and essential.
There is a documentary around at the moment about the transformation of Bogata by a couple of forward thinking Mayors. One thing that was done was to ask the rich to contribute more to help restore the city. A bit like the guy doing the rounds world wide with his begging bowl to help restore Christchurch. The rich came to the party.
The visionary innovations, fiscal control and the morality eschewed by these men transformed a city and its populace. Do you think the National party members of Parliament could be endowed with similar accolades? Have they done anything in the term of this parliament that could be considered visionary, inspirational, for the benefit of present and future New Zealanders. Like Hell. They are hell bent on repeating old mistakes. This is perhaps the ideology of conservatism and the reason that the future of this country is in such a perilous state. They want to repeat past mistakes and hope for a different outcome.

Two old sayings seem relevant here.
If you want to plan for today you cultivate wheat;
If you plan for the short term you cultivate trees;
If you plan for the future you cultivate people.
(Think cutting research and development expenditure, Apprenticeship and other trade training schemes, remedial reading programs etc etc etc.)

The other is from the great poet and visionary Mick Hucknell..
"The wealth of a nation cannot be achieved by keeping the downtrodden down."

So much of the invective I have read in this thread reminds me of these words from the song 'Working Class Hero".

'You think you're so clever and classless and free,
but you are all fuckin' peasants as far as I can see."

Ocean1

19th July 2011, 21:52

If you seriously think that is always true then you're a simplistic fool.

It's called the real world. The one where money doesn't REALLY grow on trees and "rich pricks" are as common as pixies at the bottom of the garden.

Tax is not a nice easy black box with linear inputs and outputs. (Or perhaps, tax is relaitively simple, but people are complicated).

Actually, it is, within fairly narrow behavioural limits. That 17% income tax rule is common through every entity where humans control revenue, corperate and private.

It's not complicated people that drive tax higher, it's the politics of ignorance and greed.

Ocean1

19th July 2011, 21:58

Don't believe the hype!

Here's another old saying: If you don't have numbers then you don't have facts, what you've got is an opinion.

Enough with the emotiver populist dribble, show me where high taxes have improved an economy's performance.

rainman

19th July 2011, 22:10

It's called the real world. The one where money doesn't REALLY grow on trees and "rich pricks" are as common as pixies at the bottom of the garden.

It always confuses me when you start arguing in support of the points I'm making.

the politics of ignorance and greed.

I think that's the problem too.

avgas

19th July 2011, 22:27

Of course in one sense it's not unreasonable to earn over $150k - the narrative of hard work and just deserts has some validity - but when the proles are on $25k a year despite working their arses off and the cost of living is what it is, that does not make for a healthy society. So we get stuck in this dialogue about rich pricks and greed/envy dichotomies that is not very mature or useful, but we flip-flop back and forth regardless.
Yes and no.
As someone who used to earn sub-$25K not so long ago - I can tell you right now, that the number of people who had money then is probably not too far from those who have it now.
My circumstances have changed, but I was not given a golden ticket by the elitists.....therefore it begs the question.
Are there really Rich and Poor in NZ, or are we distributed along the pay curve?
If so the only thing that separates one from the other is not the haves and have nots, but those whom complain, and those whom do not.

Something tells me this won't change, as those whom complain will not escape their own predicament. Many a minimum worker struggles in NZ.......but you won't see them all complain. Some of them see a way out.

240

19th July 2011, 22:35

http://www.stuff.co.nz/national/politics/5298346/Latest-poll-shows-Labour-struggling

avgas

19th July 2011, 22:35

The other is from the great poet and visionary Mick Hucknell..
"The wealth of a nation cannot be achieved by keeping the downtrodden down."
I prefer my one.
"You don't have a forest if you cut down the trees to feed the weeds".

avgas

19th July 2011, 22:36

http://www.stuff.co.nz/national/politics/5298346/Latest-poll-shows-Labour-struggling
Every day I'm struggling.....

rainman

20th July 2011, 00:36

Some of them see a way out.

The problem with this aspirational claptrap is that we can't all seem to raise ourselves up by our bootstraps and live the high life. Individually, sure - subject to the vagaries of health, good fortune, and good/evil people - some people can lift their game (at least for a while) and enjoy greater financial success, and this is mostly to be applauded. It seems at least to be better than wallowing in worthless indolence, which ain't good for the person or the society.

But, the problem is distribution, and the fact that our silly economic system is making things worse. And we're too dumb/juvenile to see it properly.

Where we seem to go wrong is in the aggregate. There's a helluva lot of poor starving people out there, more than ever, in fact, but about the same number of billionaires, although they probably have more and more billions than before. And these people (the uberwealthy) are actually wealth destroyers, somewhat counter-intuitively. The marginal utility of $1m when you have $1b is effectively zero. Hoarding more and more money/cars/ rolexes/cocaine/high-class hookers does little for the greater good - the value is further down, where spending moves it around a bit (although that's not an unqualified endorsement of trickle-down), and when it's spend on creating things of productive value, not penis-deficiency compensating Veblen goods. As a species we don't need more (any?) Rolexes and Lear jets, we need better food sources, clean energy, education, contraception, environmental rehab, water, support to solve conflicts.

The marginal value of $1m to almost any 100,000 of the 1.4b people living on $1.25 a day or less is way closer to infinity, and such a windfall would lead to new businesses being created and many lives being improved. Almost nothing at the bottom end gets wasted on pointless consumption. Most is wasted at the top end. And yet many here would aspire to be wealthy. It's just stupid and unbalanced.

(For NZ, you have to scale my story above as our wages are low to start but not $1.25 a day low, so we have a misguided view of the problem).

Winston001

20th July 2011, 10:14

You are behaving as one of the 200K earners that think they are 'wealthy, rich pricks' that are getting their hard earned cash stolen off them to give to the dole bludging losers that won't get off their arses to earn a crust.
Get over yourself if you are in that category.

I'm afraid you have fallen into an argumentative trap: when you do not have a strong counterpoint, you attack the other person, personally and emotively. Not just you of course, it is a mistake made on both sides.

So far as I know Ocean is on the bones of his bum but he's able to offer rational perspectives. You can disagree certainly, but please recognise that many people on the right of centre are ordinary and decent - as they are on the left.

Let me leaven these comments by saying I agree with some of what you say. :D

Winston001

20th July 2011, 10:23

There's a helluva lot of poor starving people out there, more than ever, in fact, but about the same number of billionaires, although they probably have more and more billions than before. And these people (the uberwealthy) are actually wealth destroyers, somewhat counter-intuitively. The marginal utility of $1m when you have $1b is effectively zero....

The marginal value of $1m to almost any 100,000 of the 1.4b people living on $1.25 a day or less is way closer to infinity...

No argument from me.

However lets reduce the argument to New Zealand which I contend is an egalitarian society without the extremes of wealth and poverty found in other parts of the world. I'm not even sure the USA fits your description although there are graphs suggesting it does.

Anyway - just who and where are all these rich people in NZ? The few I've come across put their trousers on one leg at a time, experience the same highs and lows of life as the rest of us, and you wouldn't notice them on the street.

There are sod all of them. I honestly think this is an empty debate in NZ. Straw men set up by Labour/Greens etc to draw political support from the bitter and envious. Hardly inspiring stuff.

Oscar

20th July 2011, 11:35

No argument from me.

However lets reduce the argument to New Zealand which I contend is an egalitarian society without the extremes of wealth and poverty found in other parts of the world.

There was an interesting exchange between the left and right a couple of elections ago about poverty in NZ.

I don't recall the politician involved, but he asked the Auckland City Mission to back up statements they'd been making about poverty in NZ. The examples that were forthcoming involved families having to seek help due to massive credit card debt.

Now I'm not saying there is no poverty in NZ, but to listen to some on left (the Green Party for instance), you think that the streets of South Auckland were blocked with starving children...

Winston001

20th July 2011, 11:37

What is "rich"? $5 million in family assets after repaying the mortgage? $300k family income per year?

Ocean1

20th July 2011, 12:28

Now I'm not saying there is no poverty in NZ, but to listen to some on left (the Green Party for instance), you think that the streets of South Auckland were blocked with starving children...

What is "rich"? $5 million in family assets after repaying the mortgage? $3000k family income per year?

Ask your grandfather about the standard of living when he was young. I'll bet you a pound to a pinch of shit the average standard in his day was below what we now consider the poverty line.

Perspective. What would the standard be if you took all the rich prick's cash and sharde it out? The same as if you let them keep it: on par with the Jones's.

Spearfish

20th July 2011, 13:14

Perspective. What would the standard be if you took all the rich prick's cash and sharde it out? The same as if you let them keep it: on par with the Jones's.

Let me know if that's going to happen I'll open the first KFC with a liquor licence with a dealership specialising in compact MPV's off the side.

Clockwork

20th July 2011, 13:40

2/ ....

5/ Companies list on the share market to raise capital to assist them to grow. you are in effect backing the company to grow & give an increased return that results in a dividend paid to shareholders. Company grows = more jobs = more profits = more tax = growing economy. Michael Hill , Warehouse have looked to privatise because like Famers they have worked out that growth is cyclical & the shareholders demand for a return can stunt long term growth, but that is another story.

Yeah but I think the point that was being made is that once the company has floated those shares they get no other benefit from the ongoing trading of those shares. In effect, asking society's savers to buy shares isn't necessarily going to make the companies or the country any wealthier or more productive.

edit... unless that company earns overseas income and redistributes it as dividends to local share holders. Of course that aint going to happen when we sell power companies the earn all their income locally then redistributes some of those profits to the overseas share holders.

trustme

20th July 2011, 14:26

Yeah but I think the point that was being made is that once the company has floated those shares they get no other benefit from the ongoing trading of those shares. In effect, asking society's savers to buy shares isn't necessarily going to make the companies or the country any wealthier or more productive.

edit... unless that company earns overseas income and redistributes it as dividends to local share holders. Of course that aint going to happen when we sell power companies the earn all their income locally then redistributes some of those profits to the overseas share holders.

Not quite. The shareholders are in effect the owners of the company, they want a return on their investment . For the shareholders to get a return, the company must trade profitably & growth is usually a requirement to generate increased income & therefore an increased return to the shareholder. Increased profit means an increase in share value.
If the share holder is not seeing an increased return in dividend or share value that company is going backwards.
I'd rather we invested in companies & fostered economic growth than continue land banking, hence my partial support for a CGT but not in the form Labour proposes

Oscar

20th July 2011, 14:35

Ask your grandfather about the standard of living when he was young. I'll bet you a pound to a pinch of shit the average standard in his day was below what we now consider the poverty line.

Perspective. What would the standard be if you took all the rich prick's cash and sharde it out? The same as if you let them keep it: on par with the Jones's.

I agree and what winds me up is when politicians crap about poverty in NZ.
There is child-abuse, child neglect and homelessness (which is mainly to do with mental illness), but by global standards, no poverty.

Oscar

20th July 2011, 14:37

This e-mail turned up the other day:

A young woman was about to finish her first year of university. Like so many others her age, she considered herself to be Labour Party minded, and she was very much in favour of higher taxes to support her education and for more government programs – in other words, the redistribution of wealth.

She was deeply ashamed that her father was a rather staunch blue-ribbon Conservative, a feeling she openly expressed. Based on the lectures that she had attended and the occasional chat with a professor, she felt that her father had for years harboured a selfish desire to keep what he thought should be his.

One day she was challenging her father on his opposition to higher taxes on the rich and the need for more government programs.

The self-professed objectivity proclaimed by her professors must be the truth, and she indicated so to her father. He responded by asking how she was doing at university.

Taken aback, she answered rather haughtily that she had a 90% average, and let him know that it was tough to maintain, insisting that she was taking a very difficult course load and was constantly studying, which left her no time to go out and party like other people she knew. She didn't even have time for a boyfriend, and didn't really have many university friends because she spent all her time studying.
Her father listened and then asked, “How is your friend Audrey doing?” She replied, “Audrey is barely getting by. All she takes are easy classes, she never studies and she barely has a 50% average. She is so popular on campus; university for her is a blast. She's always invited to all the parties, and lots of times she doesn't even show up for classes because she's too hung over.”

Her wise father asked his daughter, “Why don't you go to the Dean's office and ask him to deduct 20% off your average and give it to your friend who only has 50%. That way you will both have a 70% average, it would be fair and you would both be equal.”
The daughter, visibly shocked by her father's suggestion, angrily fired back, “That's a crazy idea; how would that be fair! I've worked really hard for my grades! I've invested a lot of time, and a lot of hard work! Audrey has done next to nothing toward her degree. She played while I worked my tail off!”

The father slowly smiled, winked and said gently, “Welcome to the Conservative side of the fence.”

Indiana_Jones

20th July 2011, 14:53

Unsure about the CGT bit, but the 39% tax can piss off.

Why does labour's solution to making it fair always seems to be dragging the people higher down to the level of the lower, rather then bringing the lower up....

-Indy

Clockwork

20th July 2011, 17:12

Not quite. The shareholders are in effect the owners of the company, they want a return on their investment . For the shareholders to get a return, the company must trade profitably & growth is usually a requirement to generate increased income & therefore an increased return to the shareholder. Increased profit means an increase in share value.
If the share holder is not seeing an increased return in dividend or share value that company is going backwards.
I'd rather we invested in companies & fostered economic growth than continue land banking, hence my partial support for a CGT but not in the form Labour proposes

A company simply has to return a profit in order to pay dividends, growth is simply an added bonus which preumably share traders are hoping for. Regardless, once the company's shares have been floated all subsequent share trading is speculation and really has no material effect on its producutivity or bottom line.

Now if Kiwis have so much spare money to invest, then as a nation we'd be better off if they invested in companies that earned their income from offshore not from domestic service providers that the nation already owns.

As for the original topic of the thread, on refelection (and speaking as someone who is likely to end up paying CGT) I really can't see why income earned in this way should not be part of the tax base. As to how it is subsequently spent by the Government, well that's a different debate.

As far as the GST on fruit and veg etc I'm swayed by the argument that it is best left simple as it is BUT as GST rises, that argument starts to loose some validity. however I believe that a tax free alowance of $5000 should more than compensate for that.

This current trend of abusing sales taxes to use them as a form of social engineering gets right up my nose and I'd love to see an end to it.

Hinny

20th July 2011, 19:20

No argument from me.

However lets reduce the argument to New Zealand which I contend is an egalitarian society without the extremes of wealth and poverty found in other parts of the world. I'm not even sure the USA fits your description although there are graphs suggesting it does.

Anyway - just who and where are all these rich people in NZ? The few I've come across put their trousers on one leg at a time, experience the same highs and lows of life as the rest of us, and you wouldn't notice them on the street.

There are sod all of them. I honestly think this is an empty debate in NZ. Straw men set up by Labour/Greens etc to draw political support from the bitter and envious. Hardly inspiring stuff.

Your contention might be mediated by referral to the OECD figures which show that the wide gap between the rich and poor is a major reason we rank as low as we do in the standard of living stakes.

The poverty in the States is extremely depressing to witness. Given the way that country plunders the wealth of the world you would think they could do a hell of a lot better looking after their own. It is a telling indictment of their political system.

I think your last line is a Nat party spin.
(Remember who the straw men are?)

Winston001

20th July 2011, 19:21

A company simply has to return a profit in order to pay dividends, growth is simply an added bonus which preumably share traders are hoping for. Regardless, once the company's shares have been floated all subsequent share trading is speculation and really has no material effect on its productivity or bottom line.

Mmmm sort of. The added growth isn't a bonus - it is a reward for giving your money to the business.

Strong businesses can turn to their shareholders for more money instead of borrowing from a bank, and the share price is an indication of the strength.

Now if Kiwis have so much spare money to invest, then as a nation we'd be better off if they invested in companies that earned their income from offshore not from domestic service providers that the nation already owns.

Agreed.

And this is exactly what the Cullen Fund (as it is popularly called), Kiwisaver, life insurance policies, and superannuation funds do. The overall problem is we are still infants as a nation at investing wisely.

As for the original topic of the thread, on reflection (and speaking as someone who is likely to end up paying CGT) I really can't see why income earned in this way should not be part of the tax base.

Yes I sort of agree even though my kids will be less well off.

But isn't the basic problem accumulation of assets? In the hands of a few families? A disproportionate amount of wealth unavailable to the rest of the community? A CGT is hopeless in attacking that.

Clockwork

20th July 2011, 19:39

But isn't the basic problem accumulation of assets? In the hands of a few families? A disproportionate amount of wealth unavailable to the rest of the community? A CGT is hopeless in attacking that.

Maybe. But you're talking about wealth (re)distribution again and that's just a matter of politics... I'm basing my point soley on the fact that I believe all sectors of society should share the tax burden as fairly as they can. the lack of a CGT has meant that only wage earners and spenders have been contributing so far.

Swoop

20th July 2011, 19:52

Why does labour's solution to making it fair always seems to be dragging the people higher down to the level of the lower, rather then bringing the lower up.
Because that is the mentality of labour.:facepalm:

Hinny

20th July 2011, 20:06

A company simply has to return a profit in order to pay dividends, growth is simply an added bonus which preumably share traders are hoping for. Regardless, once the company's shares have been floated all subsequent share trading is speculation and really has no material effect on its producutivity or bottom line.

Now if Kiwis have so much spare money to invest, then as a nation we'd be better off if they invested in companies that earned their income from offshore not from domestic service providers that the nation already owns.

As for the original topic of the thread, on refelection (and speaking as someone who is likely to end up paying CGT) I really can't see why income earned in this way should not be part of the tax base. As to how it is subsequently spent by the Government, well that's a different debate.

This current trend of abusing sales taxes to use them as a form of social engineering gets right up my nose and I'd love to see an end to it.

Good points.

The CGT consideration reminded me of the time I had to convince the tax dept. a client was able to live off his $6 per week of taxable income... He had five houses. LOL

Lost on the last point.
I thought social engineering was the role of Govt.

To possibly misquote the Hon. Trevor de Cleene; but certainly to convey the sentiment, 'The role of Govt is not to give the public what they want but rather what they need.'

puddytat

20th July 2011, 20:09

What is "rich"? $5 million in family assets after repaying the mortgage? $3000k family income per year?

If it was up to me, just so people dont feel like they are being unfairly victimised I would set the "Officially Rich Level " at around $200 Million.....

Then anything after that goes into collective coffers, for the greater good of all
& sundry to establish heaven on Earth .:yes:
Seems fair to me.

Ocean1

20th July 2011, 20:10

But isn't the basic problem accumulation of assets?

No. What possible justification is there for taxing assets? Neither they nor their owners benefit from any public support for their existance. At least earnings can be said to depend on public infrastructure and services.

There's even less reason to tax spending.

Clockwork

20th July 2011, 20:15

Good points.

The CGT consideration reminded me of the time I had to convince the tax dept. a client was able to live off his $6 per week of taxable income... He had five houses. LOL

Lost on the last point.
I thought social engineering was the role of Govt.

To possibly misquote the Hon. Trevor de Cleene; but certainly to convey the sentiment, 'The role of Govt is not to give the public what they want but rather what they need.'

I accept that Governements will social engineer (especially ones calling themselves "socialists") I just pisses me off when they do it using taxes.

Hitcher

20th July 2011, 20:16

No. What possible justification is there for taxing assets?

Local authorities and regional councils tax assets. They tax your property, usually based on its capital value.

Unlike central government, the only way they can account for who lives in their respective rohe is property ownership. They have few alternative options for revenue gathering, as local councils provide more than just services, so they can't totally go to a revenue gathering system that's based on that.

Winston001

20th July 2011, 20:18

What possible justification is there for taxing assets?

Because the rich pricks have them. Duhh...!! :blink:

Clockwork

20th July 2011, 20:20

No. What possible justification is there for taxing assets? Neither they nor their owners benefit from any public support for their existance. At least earnings can be said to depend on public infrastructure and services.

There's even less reason to tax spending.

Sorry, I don't buy that. Every member of society benifits directly or indirectly from most of the things that Government spends money on. And the more you have the more you stand to loose if society fails. The assests themselves aren't taxed just the realisation of any capital gains those assests may make.

Ocean1

20th July 2011, 20:24

Local authorities and regional councils tax assets. They tax your property, usually based on its capital value.

It hasn't escaped my razor sharp attention.

Unlike central government, the only way they can account for who lives in their respective rohe is property ownership. They have few alternative options for revenue gathering, as local councils provide more than just services, so they can't totally go to a revenue gathering system that's based on that.

Bollox. If they can define what they provide then they can cost it and charge accordingly, same as anyone else that wants my money. The sole reason for the current setup is...

Because the rich pricks have them. Duhh...!! :blink:

Ocean1

20th July 2011, 20:26

Sorry, I don't buy that.

Winston: Tax assets.

Ocean: Fuck off.

Pay attention.

Hitcher

20th July 2011, 20:52

If they can define what they provide then they can cost it and charge accordingly, same as anyone else that wants my money.

Charge whom, and on what basis?

Winston001

20th July 2011, 20:56

Winston: Tax assets.

Ocean: Fuck off.

Pay attention.

Ladies and Gentleman we would like to apologise for that last post, we’re sorry, we are really very sorry, we honestly so fucking sorry...

Ocean1

20th July 2011, 20:59

Charge whom, and on what basis?

Their customers. On the basis of reasonable value for money. And that's the sticking point, they're a monopoly, they wouldn't know what that means.

I once argued for flexible council boundaries, on the theory that if a majority in any given street / lump of dirt felt the neighbouring council offered a better deal they could simply redraw the map.

Can't think of any other way to introduce fair competition into that particular festering pit of waste that is local govt.

Hitcher

20th July 2011, 21:07

Their customers. On the basis of reasonable value for money.

No disagreement in theory, but in principle how? People don't want to pay for water usage, as some nongs believe that that is the first step to "privatisation" (some prats think it's currently "free"). Dog licenses, libraries, no problem. Rubbish collection, doable. Biosecurity (e.g. possum extermination), who pays? Flood protection, who pays? Public transport, who pays? Environmental monitoring, who pays? Economic development, who pays?

Ocean1

20th July 2011, 21:15

Biosecurity (e.g. possum extermination), who pays? Flood protection, who pays? Public transport, who pays? Environmental monitoring, who pays? Economic development, who pays?

The only elements not directly attributable to a consumer there are biosecurity and economic development.

Use the money saved from failing to arbitrarilly overcharge everyone for all of those that are.

I'm a tad gun-shy about the term user-pays. However...

Hitcher

20th July 2011, 21:18

The only elements not directly attributable to a consumer there are biosecurity and economic development.

What about flood protection? Who is the "beneficiary" of 1-in-440 protection on the Hutt River, for example, and what mechanism would you recommend to extract payment, if not through the blunt instrument of property rating?

Ocean1

20th July 2011, 21:22

What about flood protection? Who is the "beneficiary" of 1-in-440 protection on the Hutt River, for example, and what mechanism would you recommend to extract payment, if not through the blunt instrument of property rating?

I'm one of those beneficiaries. Charge me. If I don't like the council-imposed costs of living here then I wouldn't buy the place. Just make sure any changes in the plan are bloody well signalled and agreed by the clients.

Sorta like the real world.

Hitcher

20th July 2011, 21:26

I'm one of those beneficiaries. Charge me.

How should we charge you? I thought you were opposed to capital-based property rating? And don't you live on a hill or something?

Ocean1

20th July 2011, 21:30

How should we charge you? I thought you were opposed to capital-based property rating? And don't you live on a hill or something?

What's the propensity of my property to flood every 100 years got to do with it's capital value? Just send me an invoice for my share of the agreed work done, it's not difficult.

And no, no hill. Although I wll move to live on a modest hill in a couple of weeks.

BMWST?

20th July 2011, 21:58

What's the propensity of my property to flood every 100 years got to do with it's capital value? Just send me an invoice for my share of the agreed work done, it's not difficult.

And no, no hill. Although I wll move to live on a modest hill in a couple of weeks.

its got nothing to do with the capital value,as the propensity of my property to be flooded by the Hutt River is absolutely Zero.The Wellington regional council wants x dollars.It has been customary to divide that figure buy the total property value in the wellington region then apportion that charge directly proportional to the value of each property,probably an attempt to make the charge relative to the ability to pay,,which has some merit,...sorta like a non linear tax system,cos the rich pricks can afford to pay a bit more

Ocean1

20th July 2011, 22:17

The Wellington regional council wants x dollars.

That's my money you're talking about, the Wellington regional council can get off it's collective arse and work for it like everyone else.

Fucking customary? Tell you what, if you think there's merit in taxing based on your ability to pay then why isn't that OK in the real world? "The red Corolla Madam? Certainly, if' you'll just show me your payslip I'll work out the price."

Think I'll retire to one of those cruise ships registered as a Soverign nation, purely to avoid all the bullshit.

avgas

20th July 2011, 22:23

The marginal value of $1m to almost any 100,000 of the 1.4b people living on $1.25 a day or less is way closer to infinity, and such a windfall would lead to new businesses being created and many lives being improved. Almost nothing at the bottom end gets wasted on pointless consumption. Most is wasted at the top end. And yet many here would aspire to be wealthy. It's just stupid and unbalanced.

(For NZ, you have to scale my story above as our wages are low to start but not $1.25 a day low, so we have a misguided view of the problem).
What a lovely story.

So the big question is big man, would you cut your own pay so that others could live a better life.

Or are you the equivalent of a Labour Conan behind the keyboard. Words and no walk.
Because fact of the matter is you can do this right now......even without our blessing. CCF etc awaits your call.

avgas

20th July 2011, 22:31

Because the rich pricks have them. Duhh...!! :blink:
Yep.
Bit like the speeding tickets in south auckland........or lack there of.

Turns out asking for money from people who have none is a stupid idea.

Hitcher

20th July 2011, 22:35

its got nothing to do with the capital value,as the propensity of my property to be flooded by the Hutt River is absolutely Zero.

If you're not a resident of a flood risk area you don't pay rates for flood protection. A targeted rate is exactly that.

Winston001

21st July 2011, 11:42

No disagreement in theory, but in principle how? People don't want to pay for water usage, as some nongs believe that that is the first step to "privatisation" (some prats think it's currently "free"). Dog licenses, libraries, no problem. Rubbish collection, doable. Biosecurity (e.g. possum extermination), who pays? Flood protection, who pays? Public transport, who pays? Environmental monitoring, who pays? Economic development, who pays?

I made a submission some years ago to the Invercargill City Council urging uniform annual charges to flatten the rates burden. After all, why should a household of 5 in a low value home pay less than granny whose 40yr home has risen in value simply because of the street it is in. 5 people get a lot more benefit from their rates than 1 person.

In my naivety I then pondered aloud on the equity of a poll tax. Oh dear. You'd think I had released a stink bomb...:facepalm:

Needless to say I wasted my time.

Ocean1

21st July 2011, 12:02

If you're not a resident of a flood risk area you don't pay rates for flood protection.

Which is presumably why councils have been officially identifying previously unknown flood, earthquake and slip problems hand over fist.

It'd be interesting to compare the councils charges for protection work for a given zone with private quotes for the same work. When and if that work is ever done.

Friend down Blenheim way had the council there list his property as a bio-hazard site. Apparently some local octogenarian remembered that when he was a teen the farmer on who’s land his house was built had destroyed some cattle in the belief they were diseased and burying them “somewhere over there.”

This, of course affected the value of his house, (other than on his rates demand) and it took three years and several thousand dollars to demonstrate that there was no such burial site in the area.

rainman

22nd July 2011, 00:40

I honestly think this is an empty debate in NZ. Straw men set up by Labour/Greens etc to draw political support from the bitter and envious.

On what basis? Look at the income stats, even considering that's only declared income.

This e-mail turned up the other day:

Fucken hell you lot are like children.

So the big question is big man, would you cut your own pay so that others could live a better life.

Or are you the equivalent of a Labour Conan behind the keyboard. Words and no walk.
Because fact of the matter is you can do this right now......even without our blessing. CCF etc awaits your call.

Whoosh! That was my point flying past, way up there.

Oscar

22nd July 2011, 12:05

Fucken hell you lot are like children.

Be careful, you are in danger of confirming the humourless & politically correct left wing stereotype.

Winston001

22nd July 2011, 17:47

On what basis? Look at the income stats, even considering that's only declared income.

I genuinely do not believe we have obscenely wealthy groups in New Zealand - either in terms of income or assets. Yes, there are some families with hundreds of millions. Yes there are some people who earn $1 million+ per year.

Seriously - good luck to them.

But overall our collective wealth and income is spread in a broad band across most of the 2.3 million who work.

As for the very wealthy - my life experience is they die just like the poor. The next generation aim to conserve the assets. Then the third generation having no understanding of how hard it is to build up - spend it. At which point the assets are redistributed among the rest of the population.

Ocean1

22nd July 2011, 18:36

As for the very wealthy - my life experience is they die just like the poor. The next generation aim to conserve the assets. Then the third generation having no understanding of how hard it is to build up - spend it. At which point the assets are redistributed among the rest of the population.

Not universally true, but as far as generalisations go pretty close.

I’m deeply miffed that my grandfather wasn’t very wealthy, I’d have been a damn fine wastrel.

I plan on expressing my outrage by spending my last dime, (and anyone else’s I can get my grubby mits on) well before my various offspring get their hands anywhere near it.

Hitcher

22nd July 2011, 21:41

Governments of any persuasion should have observed from history that all new taxes never work out how they were intended. What should they have learned is simple: No. New. Taxes.

If tax was the answer, then Soviet Russia would now rule the world.

avgas

22nd July 2011, 21:52

Whoosh! That was my point flying past, way up there.
My bad then. But if you want me to grasp them stop filling the bloody things with hot air.

Still no call to the save the people of NZ foundation then?

rainman

23rd July 2011, 11:22

I genuinely do not believe we have obscenely wealthy groups in New Zealand - either in terms of income or assets. Yes, there are some families with hundreds of millions. Yes there are some people who earn $1 million+ per year.

Seriously - good luck to them.

But overall our collective wealth and income is spread in a broad band across most of the 2.3 million who work.

Obscene is a relative term.

I don't begrudge the hard-working and talented getting a fair shake, and earn above the median myself (and work bloody hard for it). But let's compare two cases:
1. a good, hardworking, loyal employee, maybe "unskilled" in the sense of not tertiary qualified, some years of experience. Say they earn about $50k per year, doing alright by NZ standards.
2. your suggested $1m+ a year person. Actually let's even wind that back, to "just" $500k. Maybe a high-flying lawyer, or a property developer, an advertising exec, a CEO? Self-employed, maybe, or even an employer.

One is clearly more educated, more entrepreneurial, might take higher risks, might employ some people... so deserves more reward. But ten times as much? On what basis?
Most of the people I have met that earn $300k or more are useless fools with big personalities and credentials in the old boys club, not Randian Atlases that labour hard to hold the place up for the rest of us. Some exceptions, but few and far between.

With regard to the last line of yours that I quoted, I'm afraid the facts are really not on your side. Of course it is spread - but highly unevenly and in a way that cannot account for simple hard work and application. I've quoted our parlous income distribution here before many times, and the data are available on the Stats and IRD sites for you to cross-check if you like. I sense that you're a bit bound to your worldview to let facts get in the way though, so if that's the case, good luck to you.

No. New. Taxes.

I'd be in favour of capping government spending based on sensible metrics (healthcare spend scaled with population growth etc, super on demographcs, and the like), but the problem you have is that won't work in a open globalised economy like we have (thanks to that vandal Douglas and his friends). If you can't control unemployment and need to be globally competitive, then you'll end up with lots of unemployed during recessions, and they either need support or it will get messy. Liberalised economies increase inequality, and that increases the stuff you need to spend tax on, like health, police, justice... and the stuff you should spend tax on, like education, welfare etc.

Can't have it both ways.

My bad then. But if you want me to grasp them stop filling the bloody things with hot air.

Still no call to the save the people of NZ foundation then?

Sorry, I'll try to use smaller words for you in future. How's this: rich people destroy wealth by wasting it on shiny shit, and we would all generally be better off by redistributing it. Libertarian capitalism is a failure and won't continue indefinitely. We First beats Me First, although many of us are still too immature to get that.

And I'm quite happy about how much of my life and money I give, thanks.

Ocean1

23rd July 2011, 13:24

How's this: rich people destroy wealth by wasting it on shiny shit, and we would all generally be better off by redistributing it.

So... exactly who's money is it?

And why on earth shouldn' they spend it however they fucking like?

And who's this "we" outfit?

And laet be clear, here; by "redistribute" you mean steal it.

rainman

23rd July 2011, 13:54

And laet be clear, here; by "redistribute" you mean steal it.

If that's the only option. Just like many of them did to get it in the first place.

"We" might be a bit of a big concept for you, but keep trying, you'll get there.

Ocean1

23rd July 2011, 16:44

If that's the only option.

But it isn't.

You could get a fucking job you lazy bastard!

And a haircut, you look fucking ridiculous.

Winston001

23rd July 2011, 16:48

One is clearly more educated, more entrepreneurial, might take higher risks, might employ some people... so deserves more reward. But ten times as much? On what basis?

Let me surprise you by saying I agree. You'll be aware there is an activist movement in the United States to curb CEO bonuses after the GFC exposed many of them to be incompetent. As to how much? Dunno. There is historical data suggesting 9x the average employees salary in a business is acceptable.

I sense that you're a bit bound to your worldview to let facts get in the way though, so if that's the case, good luck to you. I do hope not. One of the signatures of wisdom is to change your mind as you learn more. For example, until recently I was opposed to CGT etc. I still think Labour's plan is deeply flawed because of the exemptions but that aside, maybe its time to try it.

However if we want a tax system which forces people to make their wealth work - or maybe sell it - then an annual 0.5% tax on all assets (no exemptions) is far more logical.

Sorry, I'll try to use smaller words for you in future. You post good arguments and many more read this stuff than actually post. I suggest you avoid emotive taunts except in jest. You may feel they are deserved - fair enough - but the reader is immediately drawn away from valid points and instead focuses on the personal.

FWIW I struggle on KB to argue dispassionately. A bit of good humoured abuse can be fun. :niceone:

JimO

23rd July 2011, 17:33

If that's the only option. Just like many of them did to get it in the first place.

steal it from who??

rainman

23rd July 2011, 17:55

But it isn't.

You could get a fucking job you lazy bastard!

And a haircut, you look fucking ridiculous.

Funny! Doubly funny, in fact - except for those poor bastards who can't find employment, of course.

However if we want a tax system which forces people to make their wealth work - or maybe sell it - then an annual 0.5% tax on all assets (no exemptions) is far more logical.

Problem is that would force little old ladies with no income and high property values to sell up and move, so would really be the "third rail" and nuke any party that proposed it.

You post good arguments and many more read this stuff than actually post. I suggest you avoid emotive taunts except in jest.

But Mum... he started it!

Seriously, I post polite and reasonable responses to intelligent and reasonable people. 'Nuff said.

steal it from who??

Do you mean, who did they steal it from, or who would I steal it from?

slowpoke

23rd July 2011, 18:19

Most of the people I have met that earn $300k or more are useless fools with big personalities and credentials in the old boys club, not Randian Atlases that labour hard to hold the place up for the rest of us. Some exceptions, but few and far between.

Haha, you'd have to be the most well balanced individual I've met in quite a while....yep, got a chip on both shoulders.

And so wrong. They aren't a separate species like you make 'em out to be, it's just that with an attitude like yours the only wealthy dumb enough to let on around you are the type you speak of. The smart ones, 90% of 'em, would be flying well and truly under your radar.

Yep, good ol' NZ, god forbid you get ahead of the pack.

short-circuit

23rd July 2011, 18:28

Aspirational plebs :facepalm:

Winston001

23rd July 2011, 19:43

Do you mean, who did they steal it from, or who would I steal it from?

Oh no no that will not do at all. For shame!

WHOM - not Who. Tut tut. Lets try it:

"Do you mean, whom did they steal it from, or whom would I steal it from?"

Ah yes that is much better. A little clumsy but its Saturday...ok but no more of this sloppy construction please.

The BDOTGNZA rides again. Our work here is done. :sweatdrop

rainman

23rd July 2011, 19:52

And so wrong. They aren't a separate species like you make 'em out to be, it's just that with an attitude like yours the only wealthy dumb enough to let on around you are the type you speak of. The smart ones, 90% of 'em, would be flying well and truly under your radar.

Yep, good ol' NZ, god forbid you get ahead of the pack.

Nice turn of phrase - chip on both shoulders. Like it.

I'm not talking about chats down the pub with random people. I'm mainly talking about direct experience working with senior corporate types on $300k+, and people like the Act set. I don't personally know Alan Gibbs, Roderick Deane, and all of that lot, but looking at what they have "achieved" I can't say I'm impressed. In general, in NZ and Aussie, the shit floats to the top.

(Aside: And so many hard-working and decent.... well, fanbois, buy, and spin, the line that if only they worked a little harder, unlike those filthy lazy bennies of course, they too could be rich. And they get to be so absorbed by this fiction that all other mental functions seem to grind to a halt, particularly those that involve critical and independent thought. Many of them seem to hang out here).

Not always the case, of course - the exec team I'm currently working with are talented, principled, professional, hardworking, nice people, every man and woman of them. But they aren't in it for the money (which is convenient, 'cos it's not that kind of organisation). And I have, over twentysummat years, found a few others who would be well worth the bigger bucks. Not many though, and they are certainly outnumbered by the many shiny suits on $300 or 400k+ who are so effing incompetent that you have to wonder if they only hang on to their roles by virtue of having, as a former CEO of mine said, "pictures of the boss having sex with a goat". Or those that do socially useless functions like play with other people's money. (I think we should outlaw investment banking).

So yes I do know some deserving rich. Funny thing though is most of them aren't that rich. Might have a nice house and car, a bit of carefully shepherded wealth, an income well above average... but within reason. I can't see any real reason why, in NZ, anyone earns more than say $250k a year. That's $150 an hour, a solid 8 hours of every working day. Ten times minimum wage. Should be well enough to gain that psychological frisson we need to reward success.

Perhaps some would want to leave, and make more money elsewhere. OK by me.Don't need 'em, or shouldn't, had our clever and talented Atlases not flogged the whole damn country off and left us high and dry.

rainman

23rd July 2011, 20:31

One for Winston:

http://www.youtube.com/watch?v=RKeCMHi0ZY8&feature=player_embedded

Hat tip to The Standard.

short-circuit

23rd July 2011, 21:55

One for Winston:

Great clip Rainman - thanks for posting that

Winston001

23rd July 2011, 22:02

Or those that do socially useless functions like play with other people's money. (I think we should outlaw investment banking).

Perhaps some would want to leave, and make more money elsewhere. OK by me.Don't need 'em, or shouldn't, had our clever and talented Atlases not flogged the whole damn country off and left us high and dry.

Yeah I'm troubled by the effort put into complex financial systems too. I do not believe it adds anything to greater society and actually is a burden on savings.

But can't let you away with the hoary old "sold the country" stuff. Honestly - an infinitesimal part of our productive economy was sold under government privatisation. And a lot of that was to New Zealanders viz Contact Energy, Air New Zealand, BNZ, Telecom, Government Print etc.

Leaving that aside NZ's problems (small in the global sense) are that we produce little of high value, and even when we do, we are thousands of kms from the buyers.

Still, we live in a blessed country and it is worth remembering that.

And SOUTHLAND holds the Ranfurly Shield so there is a kind of natural justice after all. :niceone:

rainman

23rd July 2011, 23:21

Honestly - an infinitesimal part of our productive economy was sold under government privatisation. And a lot of that was to New Zealanders viz Contact Energy, Air New Zealand, BNZ, Telecom, Government Print etc.

Yeah, infinitesimal.
Air New Zealand, Auckland Airport, Bank of New Zealand, Electricity Corporation of New Zealand, Government Print, Ministry of Works and Development, Natural Gas Corporation (NGC), New Zealand Steel, The Post Office Savings Bank (POSB), Telecom New Zealand, New Zealand Rail Limited, and some other rats and mice. Nothing you'd notice, really.

Telecom alone was sold for 6% of GDP, according to Douglas himself. Infinitesimal.

And selling to NZers is irrelevant - they already owned it to start with, and had paid to build it with their taxes, so it was simply a theft and redistribution to those that had money to buy the shares. (This is how it seems to work in NZ. BTW how did Gibbs, Deane and the rest get the jobs they did during this time? Anything to do with the old boys network, I wonder?) And how much of the Telecom stock is still held by interests based here?

The history of this country is one of incompetence, short-sightedness and small-mindedness, at least since we got spooked by the first oil crisis. Think Big allegedly failed on account of it increasing debt levels (at least it built some shit), then we sold off a few infinitesimal things and opened our markets for little sane reason; some of the things we sold fell over so we had to throw more money at them, we've had the occasional winebox or H fee or Equiticorp or South Canterbury Finance or whatever other shonky business along the way - while we bicker endlessly with little forward progress. Politics has become a lesser-of-two-evils game, with limited options for either to fix our predicament.

Nett result is that we are in even a worse position, economically, politically and psychologically, to deal with the next oil crisis than we were first time round. And this one will be more of a problem than the 70s, by some distance.

It's a pretty place, no doubt, but hardly "blessed". (Blessed with successive generations of political and business numpties, maybe). Little wonder our kids are leaving.

Leaving that aside NZ's problems (small in the global sense) are that we produce little of high value, and even when we do, we are thousands of kms from the buyers.

Indeed. And the most compelling reason why Rogernomics was idiotic. We should not have knighted the bugger, we should have jailed him.

Patriotism in it's most vehement flagwaving tubthumping varieties gets squarely up my nose, but dammit, I want NZ to be a strong, successful, proud, self-reliant country. Not just another Argentina, but with worse weather. And the current course we are on will not do what we need.

mashman

24th July 2011, 09:14

You post good arguments and many more read this stuff than actually post. I suggest you avoid emotive taunts except in jest. You may feel they are deserved - fair enough - but the reader is immediately drawn away from valid points and instead focuses on the personal.

irk alert :shifty:

bit like rain stopping play at the cricket?

Passion/emotivity/hyperbole has no place in an "argument/discussion"... because that becomes the focus of the topic and the issue is ignored?

Not aimed at you Winston, just irked when I hear it.

I'd like to suggest that whoever (whomever?, Whomsoever? :)) has a problem with Passion/emotivity/hyperbole laced "arguments", goes and pays a visit to the Dr... you seem to be suffering from some form of attention deficit disorder. T'ain't someone else's problem that you focus on playing the man and not the ball, is it? (the first step to healing is admitting you have a problem :shifty:)

I hope our political system never becomes tainted with such weak mindedness.

sorry... as you were...

oldrider

24th July 2011, 13:30

One for Winston:

Video deleted.

Hat tip to The Standard.

Unimpressed, reminds me of the nursery rhyme:

Little Jack horner sat in the corner eating his Christmas pie,
he put in his thumb and pulled out a plumb, exclaiming, what a good boy am I.

Boring academic socialists playing at manipulating statistics while massaging their own ego's and practising mutual self admiration! :sick:

Statistics can be manipulated by all sectors of the political spectrum to support their own point of view.

short-circuit

24th July 2011, 13:35

Unimpressed, reminds me of the nursery rhyme:

Little Jack horner sat in the corner eating his Christmas pie,
he put in his thumb and pulled out a plumb, exclaiming, what a good boy am I.

Boring academic socialists playing at manipulating statistics while massaging their own ego's and practising mutual self admiration! :sick:

Statistics can be manipulated by all sectors of the political spectrum to support their own point of view.

Sorry? Didn't see any political affiliations mentioned at all. I do agree wholeheartedly with your assumption though as left wingers are generally smart and rightists are thick

rainman

24th July 2011, 15:03

Unimpressed
...
Boring academic socialists playing at manipulating statistics

It's always disappointing to see otherwise intelligent people resort to the "everything is relative, statistics can be manipulated, other viewpoints exist" mantra - with a healthy dose of ad hom, of course, when the facts don't align with their prejudices.

Me, I prefer truth and open inquiry to ideology, but YMMV.

avgas

24th July 2011, 15:25

Sorry, I'll try to use smaller words for you in future.
I checked, the words didn't get smaller. FAIL
Perhaps you should try SAYING IT LOUDER.

of course you could just try and portray what you are trying to say in a better (more acceptable) method.

Or you could just leave your swiss-cheese arguments around for people to poke their fingers in.

Sorry don't have much time (see its worth money if you earn it). So will make this quick:

Destroy wealth?
- Seen many unemployed, or low paid people with Iphones? I am sure that is creating wealth?
- Likewise those who "Invest" in flash mags when they don't own their own home.....

I have no doubt that the rich destroy wealth, but the poor aren't too flash at creating it. So therefore a redistribution via taxes is not the messiah law you expect it to be.

Winston001

24th July 2011, 15:33

So lets get back to this CGT question. The rationale is that some people increase their financial strength over time by owning property, allowing inflation to push the value up, and then sell for an untaxed profit. No argument.

The Labour proposal is to exempt the family home. That sounds nice and will encourage voters. Unfortunately that also removes 65% of property sales from CGT...which makes it an inefficient and skewed tax open to evasion (yes, ordinary people will evade tax if they can).

Another rationale for CGT is that the "rich" are not paying their share. Yet, the Tax Working group and other govt data show that 75% of nett tax is paid by 10-17% of the top taxpayers. In other words, the rich are paying for the rest of us.

From a social democratic perspective (which I support) it looks like our existing tax system is already working effectively. No new taxes needed.

rainman

24th July 2011, 15:36

Destroy wealth?
- Seen many unemployed, or low paid people with Iphones? I am sure that is creating wealth?
- Likewise those who "Invest" in flash mags when they don't own their own home.....

I have no doubt that the rich destroy wealth, but the poor aren't too flash at creating it. So therefore a redistribution via taxes is not the messiah law you expect it to be.

Now there you have a point. I was thinking poor like in (rural) Africa, India or Asia, rather than what passes for poor here. But give us time...

The Labour proposal is to exempt the family home. That sounds nice and will encourage voters. Unfortunately that also removes 65% of property sales from CGT......

Another rationale for CGT is that the "rich" are not paying their share. Yet, the Tax Working group and other govt data show that 75% of nett tax is paid by 10-17% of the top taxpayers.

Indeed, but CGT on the family home is unimplementable, doesn't mean what's on the table is bad. The perfect is the enemy of the good, and all that.

And as I've been telling you, the income and wealth distribution in NZ is skewed, so should tax be, even beyond normal progressivity. Or we could fix the distribution issues, although that's hard to do unless you use tax as the mechanism.

avgas

24th July 2011, 15:49

It's always disappointing to see otherwise intelligent people resort to the "everything is relative, statistics can be manipulated, other viewpoints exist" mantra - with a healthy dose of ad hom, of course, when the facts don't align with their prejudices.

Me, I prefer truth and open inquiry to ideology, but YMMV.
Ok I gave you the benefit of posting something interesting, and I have to wait for 5 minutes so watch your film you posted.
While it is a nice presentation......oldrider in this instance is actually right.

Where is China and India? I mean if you comparing world data on Wealth would you not include 75% of the worlds population and 50% of the worlds wealth?

Some other interesting points - Japan (which shows equal distribution) runs BUSINESS completely differently from most western societies. Its almost a mafia style basis (forgot the technical term sorry - all my International Business books are walking distance away). The Japanese Govt and taxing has NOTHING to do with this. Yet in your movie Japan is show as the hero statistic. Fact of the matter is if you don't have a Job in Japan - not only are you poor as a beggar. Your family will disown you.
Which is why Japanese workers not only are industrious, but hang onto jobs for dear life.
This would have shown if China was in their data, as I imagine that even while China has horrible child/slave labour laws, the distribution of income would mean that China would look better than us. This is due to business and culture in China......not tax.

Likewise India and China are full of wealth. But if you walked the slums you would not see it. Likewise if you went to some of the richest people in these countries, I suspect you also would not see it. People in these countries don't "waste" as you termed it. However this is changing as generations emulate American culture.

So while I think it was a good presentation, with some good advice. It is only HALF the story.
Simply redistributing the wealth never was going to be a solution - if it didn't work in Russia in the past it wont work now.

Likewise knee-jerk response for taking something off someone is they ask why? The tax payers (in NZ) have never been given an valid reason for this. Resting on the simple concept "Its better for the nation".....
In many situations this this has never been explained HOW.
e.g. we need the money to educate people to have less babies.
Shit I would pay $100 a week to support that.

They need Hans Rosling to setup distribution programs that works

http://www.youtube.com/watch?v=fTznEIZRkLg

avgas

24th July 2011, 15:58

back again.
Can someone explain to me why there is a secondary tax for a second job?

Surely this only hurts those NZ who are finding it hard with just one job (aka the lower workers).
I thought tax rates was to help them? e.g. tax the ones who can afford it.

Highlander

24th July 2011, 16:15

So IF Labour are able to acumulate enough votes to get this proposed tax in to play, hypothetically speaking, what is to stop my business from pushing any surplus cash flow into property then selling that property in a few years time, there by diverting Company Profit (30% Tax) into Capital Gains (15% tax) ? Assuming I have drawn enough income to live off in the mean time.

I live on a rural 1.5 hectares (about 4 acres) that grows meat and vege for our family. Not a comercial enterprise at all. Does that class as a family residence (which it is) and therefore exempt or classs as a farm and therefore subject to CGT?

I see Lawyers and Accountants as the real winners from the whole exercise.

Ocean1

24th July 2011, 17:23

So lets get back to this CGT question. The rationale is that some people increase their financial strength over time by owning property, allowing inflation to push the value up, and then sell for an untaxed profit. No argument.

I'm very much afraid there is. And it's a ripper.

See, inflation doesn't add value to property. Or anything else for that matter. So that "profit" you suggest they tax doesn't actually exist, all you're doing is using the numerical currency difference as a very poor excuse to add yet another layer of tax, aimed, of course at those who are percieved to be able to "afford" to pay it.

Big black dog up 'em.

Ocean1

24th July 2011, 17:30

And as I've been telling you, the income and wealth distribution in NZ is skewed

As well you should expect given the huge disparity in effort expended to achieve it. Duh.

Or we could fix the distribution issues, although that's hard to do unless you use tax as the mechanism.

There you go with the "distribution" thing again. Have the integrity to ditch at least the more obvious euphemisms. "Thieve" is the word you're trying to avoid.

Winston001

24th July 2011, 18:30

Indeed, but CGT on the family home is unimplementable, doesn't mean what's on the table is bad. The perfect is the enemy of the good, and all that.

And as I've been telling you, the income and wealth distribution in NZ is skewed, so should tax be, even beyond normal progressivity.

So a new unbalanced tax is good simply because it is politically achievable? The existing unbalanced tax burden is unfair - but not unfair enough?

With respect, that is hardy a principled position. Take what we can from the few because they get outvoted? Tyranny of the minority by the majority - that runs counter to any social democratic theory I can think of. The Treaty settlements wouldn't exist.

rainman

24th July 2011, 18:50

e.g. we need the money to educate people to have less babies.
Shit I would pay $100 a week to support that.

I agree, that would be a worthy goal indeed.

With regard to China or India, are you saying their high levels of inequality would not contribute to higher levels of the social ills that Wilkinson and Pickett describe? Of course there are multiple factors that drive societies and their performance, but ceteris paribus their argument seems to be quite sound. The correlations are robust for the nations under study. I'm sure they aren't claiming a universal truth, but for the countries under study, higher inequality correlates well with higher levels of social ills. If you think other factors would negate their thesis, feel free to research and publish a counter. You'd be famous.

As well you should expect given the huge disparity in effort expended to achieve it. Duh.

There you go with the "distribution" thing again. Have the integrity to ditch at least the more obvious euphemisms. "Thieve" is the word you're trying to avoid.

I''ve repeatedly explained that I don't mind higher reward for higher effort, within reason. If you persist in believing the only cause for income disparity is effort (with the handy corollary "beneficiaries are just lazy"), I'm afraid it will be very hard for me to take you even slightly seriously.

And as I've said before, "thieve" is a loaded term that ignores the way the wealth was generated in the first place. Taxing people to build assets, then selling them and installing your mates to preside over the sale is thieving plain and simple. Stealing from the commons (destroying the climate for private gain, for example) likewise. Bailing out bankers who sold crooked mortgages to people they knew could not pay, and sticking the consequences to the public - that's theft, too. And that's excluding plain old common-or-garden fraud, which we've had our share of along the way here in NZ.

So yeah, I'm cool with stealing from the obscenely wealthy and rebalancing distribution.

Even some on the right (http://www.telegraph.co.uk/news/politics/8655106/Im-starting-to-think-that-the-Left-might-actually-be-right.html) are figuring things out.

The rich run a global system that allows them to accumulate capital and pay the lowest possible price for labour. The freedom that results applies only to them. The many simply have to work harder, in conditions that grow ever more insecure, to enrich the few
...
hen the banks that look after our money take it away, lose it and then, because of government guarantee, are not punished themselves, something much worse happens. It turns out – as the Left always claims – that a system purporting to advance the many has been perverted in order to enrich the few. The global banking system is an adventure playground for the participants, complete with spongy, health-and-safety approved flooring so that they bounce when they fall off. The role of the rest of us is simply to pay.

Ocean1

24th July 2011, 19:28

I''ve repeatedly explained that I don't mind higher reward for higher effort, within reason. If you persist in believing the only cause for income disparity is effort (with the handy corollary "beneficiaries are just lazy"), I'm afraid it will be very hard for me to take you even slightly seriously.

Very generous of you I’m sure, most kind. The very next million I earn I’ll try to remember to thank you for allowing me to keep it.

Of course it’s more than just effort, intelligence plays a big part. It’s just that some people aren’t well endowed in that department.

And you don’t dare take me seriously, it’d involve some serious reigning in on that wonderful imagination of yours.

And as I've said before, "thieve" is a loaded term that ignores the way the wealth was generated in the first place. Taxing people to build assets, then selling them and installing your mates to preside over the sale is thieving plain and simple. Stealing from the commons (destroying the climate for private gain, for example) likewise. Bailing out bankers who sold crooked mortgages to people they knew could not pay, and sticking the consequences to the public - that's theft, too. And that's excluding plain old common-or-garden fraud, which we've had our share of along the way here in NZ.

So yeah, I'm cool with stealing from the obscenely wealthy and rebalancing distribution.

So all wealthy people are thieves, now. And that makes it OK to steal yourself. Do you have any idea how unattractive envy is?

I have no problem “redistributing” the proceeds of crime. Great idea. Thing is, the vast majority of wealthy people aren’t wealthy because they ripped someone else off or broke a bunch of laws, that’s your imagination at work again. They’re wealthy for one very simply reason: they spend less than they earn.

I approve of your crusade to lock up the crooks, just don’t let your imagination convince you that wealthy is synonymous with criminal.

rainman

24th July 2011, 19:31

So a new unbalanced tax is good simply because it is politically achievable? The existing unbalanced tax burden is unfair - but not unfair enough?

With respect, that is hardy a principled position. Take what we can from the few because they get outvoted? Tyranny of the minority by the majority - that runs counter to any social democratic theory I can think of. The Treaty settlements wouldn't exist.

That's a remarkably simplistic argument and adds nothing to the debate. Let's use it against the alternative to CGT (plus borrowing), which is asset sales (plus borrowing), more or less. Assume National get in, then is it OK to take from the few (who oppose National and asset sales) just because we are outvoted? (Yes I realise that the majority of us seem to oppose asset sales when polled, but many still support National. Or is that oppose Labour? But work with me here). This is how democracy works. And a bit of tax is hardly tyranny, don't be so melodramatic.

I don't have a problem with higher taxes for the very wealthy. I already pay tax in the highest bracket, doesn't worry me a bit. And although I appreciate the services my taxes buy, I'm under no illusion that I'm only paying for what I use. I'm happy to pay a disproportionate share, again within reason.

As I've said before, I'd put a higher tax bracket above the current top level. Gotta pay for those boomers somehow, and the kids are all buggering off to Aussie, so they aren't gonna. Not a single silver bullet, of course, needs to be a package of measures.

rainman

24th July 2011, 21:16

Of course it’s more than just effort, intelligence plays a big part. It’s just that some people aren’t well endowed in that department.

Indeed, kindly see below.

So all wealthy people are thieves, now. And that makes it OK to steal yourself. Do you have any idea how unattractive envy is?

I don't believe I said all, just that many business models have a measure of theft in them. And to be honest, I don't mind at all if you find me unattractive.

Actually, I have no envy for the wealthy: I don't particularly even want to be wealthy, it ain't all it's cracked up to be. Not what I'm on Earth for, anyway. I have not succeeded in making millions, but if I did I'd be happy to give most of it away. There is a long list of things I want ahead of money.

They’re wealthy for one very simply reason: they spend less than they earn.

You are confusing solvency with wealth.

Compare two not entirely hypothetical people:
Person A is from a poor background in rural NZ, parents have drug/alcohol/domestic issues, but thanks to a good education system A gets a good basic training. He's not exposed to any good role models though - his family only serve to inspire him to get out of Dodge as soon as he can. He's not particularly intelligent either, and keen to strike out on his own, so doesn't go to uni, but rather leaves school as soon as he can and gets a job working in a warehouse in a regional town. He works hard and spends carefully, so despite low wages manages to build up a modest savings balance for a rainy day. He gets some supervisory responsibilities, gets married, puts down a small deposit and buys a modest house, has two kids. His wife works part-time as well.

Some rich bankers far away get found out to be fraudsters and the GFC rolls in. The company he works for gets smacked by this and lays off most of their staff, including him. His wife manages to get a second job/some extra hours but try as he might there is no work in the town he lives in. His savings are rapidly eroding. He looks at moving to the nearest big city but life there is much more expensive, and he doesn't have the money to pay for a rental there while he tries to sell his house. WINZ won't help much because his wife is earning. After months of being unemployed he finally gets a part-time contract job with no benefits paying somewhat less than what he used to earn. For the rest of his working life he is permanently in and out of work as he moves from fixed term contract to fixed term contract. His wife moves to a new company in the hope of better wages/fewer hours but the new boss makes a pass at her which she rejects, and is dismissed under the 90 day fire at will provisions. She eventually finds more part-time work. They have no savings and are not wealthy, and struggle through until they get state super.

------------------------------
Person B is the son of wealthy professionals, mum's a lawyer, dad a CEO. They live in a multi-story house in the posh end of Auckland's North Shore, and he lacks for nothing while growing up. He attends a private school and has extra tuition when he encounters any difficulty with his studies. When he's a teenager he works student jobs in his parents companies and in those of their peers, which the parents help to arrange. He's well paid relative to Person A, but works hard and diligently. His parents pay for him to go to uni, where he studies law. When he is qualified he continues to live at home as there is plenty of space. His dad gives him a new car as a graduation present. Building on his and his mum's network of contacts he gets a junior job in a law firm, and works hard, making rapid progress and good money.

He has a few overseas holidays and buys some toys, but puts most of the money he earns into investments, buying first one flat, then another, which he rents out. In his late twenties he meets a young woman from a similar background who is a successful accountant also making good money. They marry a few years later and move into a nice house with a sea view. They increase their property portfolio as prices rise, making good profits with each sale. Rentals go up as well, but they write off some of their income against the rental losses and avoid some of their tax bill.

She starts her own accounting firm and over time hires a number of staff, making a good margin on their hourly billing. They move to an even bigger house, and buy a modern bach at the seaside. They lack for nothing but continue to accumulate wealth and investments. They retire worth millions and have a comfortable retirement with excellent private medical care and frequent overseas holidays.
--------------------------------------------------

Nothing wrong with either case, right? No overt fraud or even exploitation of the environment at the expense of the public good, no crony capitalist cushy government contracts through knowing the right people, no P lab running, gang affiliation, dole bludging either... can't fault either one. Both hard working, spend less than they earn, no nasty habits or criminal behaviour. Both people to be emulated. Yet quite different outcomes.

Accordingly, I submit you are incorrect: wealth is not simply the matter of spending less than you earn, or even just being intelligent. There are a whole bunch of factors, chief among which are luck and existing privilege. And this is just how things are, don't get me wrong.

One of these cases would likely scream blue bloody murder at the prospect of a CGT, even though he has more than enough money for everything he needs. The other wouldn't care, except in so far that he might see it as an alternative to asset sales, which would probably only make him finding work for decent wages even harder. Guess which way he's gonna vote?

Winston001

25th July 2011, 17:06

Compare two not entirely hypothetical people:

Person A is from a poor background in rural NZ...

------------------------------
Person B is the son of wealthy professionals...
--------------------------------------------------

Wealth is not simply the matter of spending less than you earn, or even just being intelligent. There are a whole bunch of factors, chief among which are luck and existing privilege. And this is just how things are, don't get me wrong.

One of these cases would likely scream blue bloody murder at the prospect of a CGT, even though he has more than enough money for everything he needs. The other wouldn't care, except in so far that he might see it as an alternative to asset sales...

Your above (highlighted) line is the essence of a free society. Life isn't fair. Social democracy aims at introducing a degree of fairness by the rule of law and taxation. Without moving to a communist model, that is the best we can do. Imposing a new tax on the savings of people is an impost on their efforts to be secure. Goodness knows we are told to provide for our retirement but now that will be taxed as well.

Your examples are unbalanced by the way. Person A appears to have ill fortune but Person B leads a charmed life. In the real world both face cancer, alcoholism, heart problems, dishonesty by other people. Some of the Bs don't make it to 60.

As an aside - lawyers/accountants/doctors etc are not interested in becoming landlords. They have enough stress and intensity during the working day. Plus their effort is far better rewarded doing what they are trained for.

Ocean1

25th July 2011, 17:35

Compare two not entirely hypothetical people:

Loverly story. More atypical than otherwise, of course, but if you feel the need to base your ethical outlook around them go for it. Far be it from me etc.

I'll observe, however, that most high performing people are at least partly the result of stress and appropriate feedback. Your sheltered, mollycoddled "B" dude didn't get that, so I'd expect him to fuck up fairly routinely TBH.

Amongst the real life stories I've known the primary driver of quality of life, (as defined by the achievment of self-imposed goals) is simply the result of choices made. Your "A" dude may have had fewer choices initially, but in my experience making good decisions and then making them work is far more effective than any possible head start wealth might bestow.

rainman

25th July 2011, 17:45

Life isn't fair.

I do believe I said that. My point was just that real life is a bit more complex than Ocean understands it to be, and the examples illustrate that.

Loverly story. More atypical than otherwise, of course
...
Your "A" dude may have had fewer choices initially, but in my experience making good decisions and then making them work is far more effective than any possible head start wealth might bestow.

Yet they are loosely based on (and extrapolated from) real world examples.

And, crap. Sorry, but it just ain't so, other than in a very narrow range of cases - at least for unequal countries like NZ.

Ocean1

25th July 2011, 18:12

Yet they are loosely based on (and extrapolated from) real world examples.

I don't doubt it, but that doesn't make them typical.

And, crap. Sorry, but it just ain't so, other than in a very narrow range of cases - at least for unequal countries like NZ.

Like I said, my experience indicates otherwise. Go find how many lottery winners remain wealthy. How many wealthy people who lose everything and do it again, sometimes several times.

It ain't the money, dude, it's the man behind it. And "redistributing" it is just treating the symptom.

Winston001

25th July 2011, 21:00

It ain't the money, dude, it's the man behind it.

10 characters

Spearfish

25th July 2011, 21:21

I know a few guys that fit "A" they have worked so hard that two now have rentals the third has sorta spoiled his kids a bit.(read- a lot) all on "warehouse" incomes.
Ask them if CGT is the best way to raise the down trodden and fiscally illiterate. Size twelve boot prints on backsides is part of their answer.

mashman

25th July 2011, 23:16

It ain't the money, dude, it's the man behind it. And "redistributing" it is just treating the symptom.

It's the money. no money, no dudes doing the things they do. And redistributing it :killingme

rainman

25th July 2011, 23:17

I don't doubt it, but that doesn't make them typical.

You're failing to follow the point of this exercise. They don't have to be typical, they just have to be feasible to show your original point is a load of crap.

Rather than hold the simplistic view that all you have to do to be successful (/wealthy) is work hard and spend less than you earn, perhaps you should contemplate the concept of karma, which I'll phrase as: (good) consequences tend to follow (good) actions, but not always.

It ain't the money, dude, it's the man behind it. And "redistributing" it is just treating the symptom.

Well, you clearly don't have any better ideas. Maybe we should try mine and see how we go. Besides, if it ain't the money, then why object so reflexively to paying a teensy bit more tax? The man behind it would be much improved by the addition of a greater degree of compassion and care for his fellows, I'm sure.

Winston001

26th July 2011, 09:59

...perhaps you should contemplate the concept of karma, which I'll phrase as: (good) consequences tend to follow (good) actions, but not always.

Well, you clearly don't have any better ideas. Maybe we should try mine and see how we go. Besides, if it ain't the money, then why object so reflexively to paying a teensy bit more tax? The man behind it would be much improved by the addition of a greater degree of compassion and care for his fellows, I'm sure.

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

Ocean1

26th July 2011, 10:45

You're failing to follow the point of this exercise. They don't have to be typical, they just have to be feasible to show your original point is a load of crap.

Yes, yes I get it, your aim isn’t to improve anyone’s lot, it’s to penalise success like the largely socialist governments of this country have been doing for decades. You’re correct, I don’t follow that at all.

You go on using fairytale characters to justify doing what you desperately want to. I’ll be over here with all the real people.

Rather than hold the simplistic view that all you have to do to be successful (/wealthy) is work hard and spend less than you earn, perhaps you should contemplate the concept of karma, which I'll phrase as: (good) consequences tend to follow (good) actions, but not always.

I never said it was a panacea, it’s simply the single most effective behaviour to achievement, and that’s not limited to making money.

And I’m acquainted with the concept of karma. Reckon I’m well in credit, but cheers for asking. In fact, although I don’t consider myself particularly well off, successful people are invariably not only in a better position to distribute largesse but they generally do it more often. And with better effect.

As for the consequences of such charity? You’re correct, they’re often not encouraging, especially when the recipients consider it their due.

Well, you clearly don't have any better ideas. Maybe we should try mine and see how we go. Besides, if it ain't the money, then why object so reflexively to paying a teensy bit more tax? The man behind it would be much improved by the addition of a greater degree of compassion and care for his fellows, I'm sure.

No thanks. We’ve tried your way, all it does is create dependence, resentment and a huge disincentive to success. It’s time to ask those who’s karma is in deficit to step up and help out.

avgas

26th July 2011, 14:54

Arrrggh too much reading.
Will check back here after work. When i have time to actually read what people have said before responding.

avgas

26th July 2011, 23:04

With regard to China or India, are you saying their high levels of inequality would not contribute to higher levels of the social ills that Wilkinson and Pickett describe? Of course there are multiple factors that drive societies and their performance, but ceteris paribus their argument seems to be quite sound. The correlations are robust for the nations under study. I'm sure they aren't claiming a universal truth, but for the countries under study, higher inequality correlates well with higher levels of social ills. If you think other factors would negate their thesis, feel free to research and publish a counter. You'd be famous.
Ok let me go though this bit by bit (I hate multiquote)
1) Nope. I am saying that if I was measuring something I have a tendency to take a sample of as many parts of the whole as possible. So if that sampling is for a WORLD scale, you generally have to measure the whole world.........not just the nice fluffy stuff.
If you fail to account for China or India in World calculations, it makes you look bad. Miss out on both - basically makes all your stats void.

2) Certus Paribus no longer exists. If it did:
- The nation with the least population per $ would hold the wealth. That got killed in 2008.
- The youth would outnumber the elderly. Clearly not the case in NZ.
- The richest nation in the world would have the highest valued $......
I could go on but I must allow time for sleep.

3) Correlation does not imply Causation. However this is irrelevant considering it was a world study missing 3/4 of the world.

4) Good point. However I would feel better finding ways to actually help mankind rather than finger pointing. I would rather win the peace prize for actually finding a way to help the poor, rather than addressing they are poor. I am yet to see these 2 even contemplate that. Frankly Stanley Milgram has done more - and he psychologically-mind-fucked-people. I am not saying these 2 don't have a point and a place. Far from it - we need to find what their point is, and where they place themselves.

rainman

26th July 2011, 23:13

The objection is that "capital" (savings) arise originally from tax-paid money. Now the government wants a second bite.

Many of your criticisms are quite valid (but the perfect is the enemy of the good, remember). This comment, though, I have issues with. The tax is on the capital GAIN, not the capital. It's the same as any investment: I pay my student fees with after tax money, but when the extra income I gain as a result of being qualified is taxed, that isn't double dipping.

Yes, yes I get it, your aim isn’t to improve anyone’s lot, it’s to penalise success like the largely socialist governments of this country have been doing for decades.

Au contraire, I'd like to improve the lot of many. Just not those whose lot doesn't need improving, because they already have what they need. They can step to the back of the queue, thankyouverymuch. Once we have basic needs met, a growing standard of living across the board, and have built a society where everyone can contribute, then they're welcome to get even richer, if they really really need to. Think of it as "trickle up", although my motive isn't moving benefits to the wealthy, per se.

Here's a clever bugger (http://www.matthewtaylorsblog.com/uncategorized/the-inequality-gap/) you may benefit from the reading of (or listening to some of the many and varied talks on their site). The report he quotes says this:

The share of national income going to the bottom half of earners in Britain has fallen dramatically over the last 30 years…..These ordinary workers have seen their share of GDP fall by a quarter, at the same time as the share going to the top 1% of earners increased by half.

Same story stateside, and there won't be much difference here either, I'll bet.

And I’m acquainted with the concept of karma. Reckon I’m well in credit, but cheers for asking. In fact, although I don’t consider myself particularly well off, successful people are invariably not only in a better position to distribute largesse but they generally do it more often. And with better effect.

People often think they understand karma but think it's some kind of good deeds banking system, that you can be "in credit". This is unfortunate, because:
a) it's complete rubbish (who are you "in credit" with? who dispenses the consequences?), and
b) the real concept of karma is much more instructive.You'd probably like it if you thought about it a bit, it's all about action and consequences, that should be right up your street.

(Skillful) consequences arise from (skillful) actions, but not always.

The "successful" people you refer to (I assume you mean wealthy; do you know, they aren't the same thing?) might "invariably" be in a better position to distribute largesse but they bloody don't "invariably" do so, as evidenced by the quote above. Gates and Buffett and the like aside, the rich aren't getting richer by giving it away, they're hanging on to their wealth with both hands.

Arrrggh too much reading.
Will check back here after work. When i have time to actually read what people have said before responding.

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?

Oblivion

26th July 2011, 23:19

Ok let me go though this bit by bit (I hate multiquote)
1) Nope. I am saying that if I was measuring something I have a tendency to take a sample of as many parts of the whole as possible. So if that sampling is for a WORLD scale, you generally have to measure the whole world.........not just the nice fluffy stuff.
If you fail to account for China or India in World calculations, it makes you look bad. Miss out on both - basically makes all your stats void.

2) Certus Paribus no longer exists. If it did:
- The nation with the least population per $ would hold the wealth. That got killed in 2008.
- The youth would outnumber the elderly. Clearly not the case in NZ.
- The richest nation in the world would have the highest valued $......
I could go on but I must allow time for sleep.

3) Correlation does not imply Causation. However this is irrelevant considering it was a world study missing 3/4 of the world.

4) Good point. However I would feel better finding ways to actually help mankind rather than finger pointing. I would rather win the peace prize for actually finding a way to help the poor, rather than addressing they are poor. I am yet to see these 2 even contemplate that. Frankly Stanley Milgram has done more - and he psychologically-mind-fucked-people. I am not saying these 2 don't have a point and a place. Far from it - we need to find what their point is, and where they place themselves.

Ceteris Paribus has been long gone as far as I'm aware. People who think it exist the world over are quit frankly, dreaming. Quite alot of rich people try their very hardest to maximise the amount of money they have. This means the classic things like putting money into family trusts and what not, writing of things as tax deductible. Currently, money is what makes the world go round. And it will continue that way for a while to come. There is too much money in the hands of too few people. That gap is increasing at a disproportionally large rate.

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.

But to most people that idea would be fecking stupid wouldn't it?:innocent: