A thought on taxes.

[Clockwork]

If the Government were to stop levying tax on benefits but reduced each benefit by the amount of tax previously paid (so that the benificiary recieved no less cash income), could it not then reduce regular income tax on wages, creating a bigger differential between benefit and wage income and thereby increase the incentive to move from a benefit in to a job? :spudwhat:

Is there a flaw in this line of thought?

(assuming of course that the Government has the ability/intent to cut taxes)

[jrandom]

Oh, look, it's an efficient idea.

Forget about implementing it, then.

Just vote for ACT. "A Bullet For Every Beneficiary!"

[Marmoot]

(assuming of course that the Government has the ability/intent to cut taxes)

I believe this is the key element in the issue? :confused:

[Mr Skid]

If the Government were to stop levying tax on benefits but reduced each benefit by the amount of tax previously paid (so that the benificiary recieved no less cash income), could it not then reduce regular income tax on wages, creating a bigger differential between benefit and wage income and thereby increase the incentive to move from a benefit in to a job?


My brain just exploded.







Can we start discussing beer now?

[ajturbo]

i think that, in my view, the govt should think more about the solo dads and less about the solo mums!!
we should be allowed more insentives for us dad's that are/have to stay at home...
i would like to be at home for luke when he gets here after school, htere for the govt. should invest more dollars into the motor bike of my dreams, so that i will have the ability to get home quicker, when i go on the rides :banana: :banana:
just taking the piss

but if i work for more than 4-5hrs a week i loose part of my benifit... so why should i work....(should go to school with luke to learn how to spell)

[Oscar]

If the Government were to stop levying tax on benefits but reduced each benefit by the amount of tax previously paid (so that the benificiary recieved no less cash income), could it not then reduce regular income tax on wages, creating a bigger differential between benefit and wage income and thereby increase the incentive to move from a benefit in to a job? :spudwhat:

Is there a flaw in this line of thought?

(assuming of course that the Government has the ability/intent to cut taxes)

No.
FIrstly because the difference between the net incomes would either be unchanged or the beneficarys' income would drop. The Gummint also uses allowances (housing for example) to reduce the amount of tax paid on the benefit thereby increasing the net income recieved.

[bondagebunny]

you should go to work

"but if i work for more than 4-5hrs a week i loose part of my benifit... so why should i work"
__________________
Give us a good reason Why we should pay for you not to ya lazy sod.

too many tossers like you think that because there is a safety net for people in trouble - that if you get in to trouble you have a god given right to stay there. Get a bloody job you bludger.

[Biff]

Is there a flaw in this line of thought?

(assuming of course that the Government has the ability/intent to cut taxes)

I think you've answered the question yourself. All nations needs to generate revenue. The amount of revenue that's generated should be set by the government based on what's really needed, and no more. If a government believes that they need to generate revenue, they hike up tax levels but they should be just as quick to lower them when there's a glut of money in the governments coffers (other than emergency funds that is).

Governments the world over are famous for promising to reduce interest rates just before (if they're in power) or as soon as they are voted into power. Just look at the mess the US is in at the moment thanks to the Bush administrations promises. They gave billions back to the public following his successful first term election, even though the government needed it in order to balance the next 12 months balance sheets. Taxation should be governed by an independent non-governmental organisation, divorced from political pressures and meddling.

Your opening remark re' halting taxation on benefits makes perfect sense to me. The 'give with one hand and take with the other' philosophy applied to state benefits is bonkers. I'd love to know why this is done. Other than keeping some IR people in jobs that is.

[Jackrat]

I know a woman that receives $500 pw from the state because she's a solo mum, plus she uses her mothers tax code to work an makes another $450 pw.
I want to know how to give this bitch up without anybody knowing it was me that done it. :spudwhat:

[Hitcher]

If the Government were to stop levying tax on benefits but reduced each benefit by the amount of tax previously paid (so that the benificiary recieved no less cash income), could it not then reduce regular income tax on wages, creating a bigger differential between benefit and wage income and thereby increase the incentive to move from a benefit in to a job?

Is there a flaw in this line of thought?
There is at least one flaw. One is that beneficiaries don't pay tax. The benefits they receive have been taxed before they get lodged in their account. So to reduce this sum you have to cut their benefit. The political backlash from such an act would surely test the resolve of any government.

[Hitcher]

I know a woman that receives $500 pw from the state because she's a solo mum, plus she uses her mothers tax code to work an makes another $450 pw.
I want to know how to give this bitch up without anybody knowing it was me that done it.
Just ring IRD. They will be more interested in her details than yours...

[Oscar]

There is at least one flaw. One is that beneficiaries don't pay tax. The benefits they receive have been taxed before they get lodged in their account. So to reduce this sum you have to cut their benefit. The political backlash from such an act would surely test the resolve of any government.

That is somewhat disingenuous. I pay taxes, even though my employer removes them before I see what’s left – I still pay the feckin’ things…

Beneficiaries pay taxes in exactly the same fashion. It seems a ridicoulas thing to do, but it gives the Gummint another option when it comes to regulating income.

[spudchucka]

I know a woman that receives $500 pw from the state because she's a solo mum, plus she uses her mothers tax code to work an makes another $450 pw.
I want to know how to give this bitch up without anybody knowing it was me that done it. :spudwhat:
I know a family that accounts for around $13,000 per week. About four or five generations of dole bludgers. I don't hesitate to use that term because not one of then has every tried to hold a job. They have taught their kids to be criminals and to bludge off the state, its their way of life.

[Hitcher]

That is somewhat disingenuous. I pay taxes, even though my employer removes them before I see what’s left – I still pay the feckin’ things…
It's not disingenuous, it's a reality. Beneficiaries' benefits are taxed but the beneficiary doesn't "pay" these. Similarly you don't "pay" taxes either -- to do this would require you to write out a cheque to IRD. If people had to "pay" their taxes they would take a much closer interest in on what they were spent...

[SPman]

We all know about the bludgers who work the system,but, for every one I know of that does, there are twenty that dont.Most of them would rather have a job and or decent income and most hate being hooked into WINZ, but they often have no option. Most I know cant wait for their circumstances to change to make the break!
Shame its always the bottom 5% that get touted around as examples and dragged out whenever its beneficiary bashing time!

[Oscar]

It's not disingenuous, it's a reality. Beneficiaries' benefits are taxed but the beneficiary doesn't "pay" these. Similarly you don't "pay" taxes either -- to do this would require you to write out a cheque to IRD. If people had to "pay" their taxes they would take a much closer interest in on what they were spent...


So why do I make a tax return then?
When I've done this, I'll write a cheque to the IRD (although in previous years its been the other way around).

[TwoSeven]

I know a family that accounts for around $13,000 per week. About four or five generations of dole bludgers. I don't hesitate to use that term because not one of then has every tried to hold a job. They have taught their kids to be criminals and to bludge off the state, its their way of life.

I'm going to have to say bullshit on this one. There are either 40+ members in the family over the age of 18 and under the age of 70, or someone is earning $150,000 per year. Given that the average income of the 3.6% of the population on a benefit is only $15,000 per year - I would suspect it would stand out a bit.

[Clockwork]

There is at least one flaw. One is that beneficiaries don't pay tax. The benefits they receive have been taxed before they get lodged in their account. So to reduce this sum you have to cut their benefit. The political backlash from such an act would surely test the resolve of any government.

I understand tax is deducted, what I'm suggesting is to make the benefit tax exempt but reduce it by the amount that was previously deducted, that way when income taxes were reduced on earned income beneficiaries would be no better or worse off, however wage earners would receive the benefit (sorry about the pun) :yeah:

I'm not beneficiary bashing here. Like all systems I'm sure it is abused by some but that's not what I am about. It seems that wage earners at the bottom of the scale are paid so little they may feel they would be better off on a benefit. Some employers have complained that they would find it easier to fill vacancies if benefits were lower. (Personally, I think it might be easier if they paid more :niceone: ) while some politicians have (disingenuously) suggested tax cuts would improve their lot, but of course beneficiaries would also receive the tax cuts. I'm just thinking that this might provide a practical (humane?) solution to providing an incentive to move in to the work force. :blink:

[Rainbow Wizard]

I know a woman that receives $500 pw from the state because she's a solo mum, plus she uses her mothers tax code to work an makes another $450 pw.
I want to know how to give this bitch up without anybody knowing it was me that done it. :spudwhat:

Get a hotmail address then email the dept concerned.
Send an anonymous letter.
Phone up Radio Pacific or Newstalk.
They'll find her somehow.

[Rainbow Wizard]

Just ring IRD. They will be more interested in her details than yours...
It's their job to be FAIR

[Rainbow Wizard]

I know a family that accounts for around $13,000 per week.
Feck, tell me their names and I'll spring 'em!

[TwoSeven]

I understand tax is deducted, what I'm suggesting is to make the benefit tax exempt but reduce it by the amount that was previously deducted, that way when income taxes were reduced on earned income beneficiaries would be no better or worse off, however wage earners would receive the benefit (sorry about the pun) :yeah:


If you did that, then about 150,000 people would end up starving and homeless within a week.

Not sure if you are aware of this but the benefit after the average rent allows a person to have between $5 and $10 per day for food and bills (such as power and phone).

If you reduced the amount they currently get, then the economy would have to be adjusted so that the CPI was affordable for lower income people. That wouldnt happen, so you would end up having to increase their income which would be a greater burden on the tax payers.

One of the reasons why beneficaries pay tax is because its used to offset their medical and other social costs. Its a round about way for the government to fiddle the books. Its the old trick of giving you money and taking it back to pay your social bills.

If you took the tax away, then the medical (and other costs) costs would rise across the board as the hidden costs were then distributed back to the rest of society.

[ajturbo]

you should go to work

"but if i work for more than 4-5hrs a week i loose part of my benifit... so why should i work"
__________________
Give us a good reason Why we should pay for you not to ya lazy sod.

too many tossers like you think that because there is a safety net for people in trouble - that if you get in to trouble you have a god given right to stay there. Get a bloody job you bludger.


hahah.. only thing wrong here is that i have only managed to get one ..dam i'm slipping.

i do want to work... but tell me, who would employ me between the hrs of 9>3? as a painter..( my trade).. and i will NOT work for shit pay, i'm too good.
but then again i could work slower.... to make it up...lol

andy !!

[ajturbo]

I know a woman that receives $500 pw from the state because she's a solo mum, plus she uses her mothers tax code to work an makes another $450 pw.
I want to know how to give this bitch up without anybody knowing it was me that done it. :spudwhat:


$ 500 a week!! PLUS $450.. how the fuck does she get that ($500)in the first place!!!!!???????
i get by on $332.00.. before rent is taken out.........

[Clockwork]

If you did that, then about 150,000 people would end up starving and homeless within a week.

Not sure if you are aware of this but the benefit after the average rent allows a person to have between $5 and $10 per day for food and bills (such as power and phone).

If you reduced the amount they currently get, then the economy would have to be adjusted so that the CPI was affordable for lower income people. That wouldnt happen, so you would end up having to increase their income which would be a greater burden on the tax payers.

One of the reasons why beneficaries pay tax is because its used to offset their medical and other social costs. Its a round about way for the government to fiddle the books. Its the old trick of giving you money and taking it back to pay your social bills.

If you took the tax away, then the medical (and other costs) costs would rise across the board as the hidden costs were then distributed back to the rest of society.

I'm not suggesting taking a single cent out of the pockets of beneficiaries. The cash amount they receive would be the same..... but as non-tax payers they wouldn't get any more money if taxes were then cut for everyone else. and that would provide an incentive for them to become a wage earner.

OK, forget benefits as a whole, maybe just do it to the dole. Shouldn't there be an incentive for people on the dole to find a job?

[bondagebunny]

"I do want to work... but tell me, who would employ me between the hrs of 9>3? as a painter..( my trade).. and i will NOT work for shit pay, i'm too good.
but then again i could work slower.... to make it up...lol"


I dont believe you want to work at all - Why do you need someone to employ you if you are a good painter, work for yourself, advertise your skills in the local paper - you could make a killing out of all the little jobs that other companies dont touch because they are too small - They should fit into your hours

Set an honest hourly rate - spend a few bucks on local advertising and get off your lazy fuckin arse.

I want spend my money on my bike not a sad, excuse making, tosspot like you. There is NO fucken excuse for being a lazy prick. Getting out from behind your keyboard would be a good start.

[ajturbo]

"I do want to work... but tell me, who would employ me between the hrs of 9>3? as a painter..( my trade).. and i will NOT work for shit pay, i'm too good.
but then again i could work slower.... to make it up...lol"


I dont believe you want to work at all - Why do you need someone to employ you if you are a good painter, work for yourself, advertise your skills in the local paper - you could make a killing out of all the little jobs that other companies dont touch because they are too small - They should fit into your hours

Set an honest hourly rate - spend a few bucks on local advertising and get off your lazy fuckin arse.

I want spend my money on my bike not a sad, excuse making, tosspot like you. There is NO fucken excuse for being a lazy prick. Getting out from behind your keyboard would be a good start.


ok ok ... i will concider myself being given a a swift kick up the butt, to get off it!
everyone has a story, mine is a good one..(well i think so! hahahah bit that's just me)..

i need things like that from time to time!...just to keep me alive! :niceone:

[Slipstream]

We all know about the bludgers who work the system,but, for every one I know of that does, there are twenty that dont.Most of them would rather have a job and or decent income and most hate being hooked into WINZ, but they often have no option. Most I know cant wait for their circumstances to change to make the break!
Shame its always the bottom 5% that get touted around as examples and dragged out whenever its beneficiary bashing time!

OK...I am now a solo mum and I am on the Domestic Purposes Benefit.
I do not like being on the DPB, but it is neccessary for me to be on one so I can care for my kids. I am currently enrolled in university and about to embarke on a degree in accounting, mainly so I can get out of WINZ's hair, pay my taxes and become a volunteer budget advisor...also to become a hot shot accountant and make oodles of dosh :D

Some comments out there are quite unresearched.
Solo dads have as much right to get the same ammount as solo mums! If you are a solo parent...you are a solo parent!

Also all it takes is a great case manager to get you on your feet and out there doing something about getting out of the dependancy of WINZ.
and that's what it is for some people, dependancy.

A good case manager will actually KNOW what benefits you are entitled to for starters, rather than you having to tell them. They will also be actually INTERESTED in helping you better yourself.
Their are WINZ workers out there who don't really give a shit and just want their pay packet, or love the feeling that they are somehow better than you and love the power they have over you, in the way of finance.

People who don't really know how to sell themselves as a worker, or haven't really found out what they really can do, regardless of education, are the ones who tend to become dependant on WINZ. They simply have not been encouraged, taught or simply have not learnt how to stand on their own two feet.
I know there will be people out there who will say...why don't they just get a job and stick with it.
These would be people who have never been in this situation before. I don't mean on the benefit. I mean in the situation where you have never known what it's been like to work for a good boss, or work in a job you love, or even for the feeling of accomplishment of a hard days work and EARNING your money.

I fully admit there are people out there who are sooooooo jipping the system. But it's less than you think and more than you'd realise.

I am on the DPB, but I don't consider myself a dole bludger...if anyone wants to call me one can go practise falling down over there and I'll be along in a minute.

[spudchucka]

I'm going to have to say bullshit on this one. There are either 40+ members in the family over the age of 18 and under the age of 70, or someone is earning $150,000 per year. Given that the average income of the 3.6% of the population on a benefit is only $15,000 per year - I would suspect it would stand out a bit.
Its not bullshit. The data was derived as part of an operation. From the oldest member, (grandad in his 80's) to the youngest members, (very young children but I can't recall their ages) they virtually all received some form of Govt benefit. (yes there are many members of the family, not just a mum, dad and a tribe of kids situation, I should have made that clear).

The total cost to the tax payer in benefits was in excess of $13K each week.

Obviously I can't produce anything to back it up but I assure you it is a fact.

[spudchucka]

I am on the DPB, but I don't consider myself a dole bludger...if anyone wants to call me one can go practise falling down over there and I'll be along in a minute.
You aren't a dole bludger. You are collecting a benefit that you are entitled to and studying to better your own situation, good on you. When your studies are complete and you re-enter the workforce you will repay the benefits that you have collected many times over. As far as I'm concerned this is a totally correct use of a Govt benefit that will benefit not only you and your child but also society as a whole.

[TwoSeven]

OK, forget benefits as a whole, maybe just do it to the dole. Shouldn't there be an incentive for people on the dole to find a job?

There doesnt need to be an incentive for people to work. Most people are not aware of how macro economics works - its not tought in NZ schools - but as an example:

Currently the government is saying that the unemployment rate is 3.6% the lowest in 40 years. However, we know that 'unemployment' only includes people drawing the unlemployment benefit. It does not include people on stand down (5 week period), students, DPB, sickness, or any other form of benefit - if you added all that up, the real rate would be nearly 40% of the population.

Focusing only on unemployment, its generally considered in current theory that a rate of about 4-5% of the population is ideal as a social policy. The reason is not because there are bludgers out there, but to provide the support mechanisms for people who are transitioning between jobs, casual workers, students looking for jobs, people who are in unfortunate circumstances etc.

With a population of 4.5 million, you would always expect some percentage to be in one of these states - so the government usually budgets for it. If the rate trends either side then its an indicator of an economic problem such as a recession or economic slowdown, or a policy problem, such as preventing apprentiships and other training mechanisms forcing the loss of skilled labour.

So going back to the current rate of 3.6 percent we realise that this number means that the majority of people (and i'm talking about 99%) actually are in one of the situations I listed above - rather than bludgers - so trying re-work the dole scheme is probably not a good idea.

On top of this, there is a skills shortage across the board, mostly caused by the high tax rate and social burden put on people thats driven most of the skilled labour overseas leaving only unskilled labour behind - skilled labour is able to fill jobs easier than unskilled, hence its so important. Since labour prevent high tech and corporate business from occuring in NZ, its unlikely that the skilled labour shortage will end in the near or medium term. Also note that skilled labour refers to jobs that require some form of training to perform - not just computer jobs, but fruit picking, machining, assembly etc.

This is compounded because NZ has incredibly short shop opening hours, and a policy against temp workers and other causual labour. What this means is that with shops shut, the number of jobs available is reduced, these are the types of jobs that would normally be filled by temp workers (solo parents while the kids are at school, students etc).

Finally, the current mechanism for the unemployment benefit prevents people from working, even if the job is marginal pay (about the same as what they get on the benefit). This is because when you work, you lose your benefit for a period of time once your job has finished - called standdown. This means that you have to earn enought to support your self now, and also for when you will have no income at all. Because marginal jobs dont pay this kind of money, many people are forced to stay at home, when they could be out doing one of the many temp jobs I listed above.

It doesnt help much having the rate down at 3.6% because it highlights the skills shortage and you get reactionary government policy, such as return to work schemes currently being considered by national and labour. What these end up doing is force people into unsuitable employment which in the long term damage the individual in both mental, health and skillset areas (making an individual work in one area can often mean they are unemployable in others because of the damage it does to the long term skill set - for example, making a computer engineer work on a farm would make them unemployable as a computer engineer because their skill set would be seen as redundant).

Personally with the rate down so low, I would say that now is the time to leave well enough alone, and start working on training schemes such as task force green and other skills building mechanisms.

[hobdar]

hahah.. only thing wrong here is that i have only managed to get one ..dam i'm slipping.

i do want to work... but tell me, who would employ me between the hrs of 9>3? as a painter..( my trade).. and i will NOT work for shit pay, i'm too good.
but then again i could work slower.... to make it up...lol

andy !!

Start your own business and work the hours you want...

[Skyryder]

If the Government were to stop levying tax on benefits but reduced each benefit by the amount of tax previously paid (so that the benificiary recieved no less cash income), could it not then reduce regular income tax on wages, creating a bigger differential between benefit and wage income and thereby increase the incentive to move from a benefit in to a job? :spudwhat:

Is there a flaw in this line of thought?

(assuming of course that the Government has the ability/intent to cut taxes)

I think I'll go back to the pot thread.

Skyryder

[Clockwork]

Thank you, Two Seven. That was very informative, particularly the bit about the stand down as a disincentive. :niceone: