GST going up, Personal and company tax going down, CGT in investment property

**mashman** · 21st January 2010, 11:42

Originally Posted by Drunken Monkey

Lots of people saw it coming, not just leading economists. Most people just ignored their warnings. The super rich didn't get super rich by jumping out of markets early all their lives.

ha ha ha, love it... quickly, a mouse just farted in Uzbekistan SELL SELL SELL... must be a bitch when yer down to yer last billion

**Pascal** · 21st January 2010, 11:45

Originally Posted by mashman

But, that being the case, where did all of the money go that caused the recession ...

Governmental interference in normal, capitalist systems. As to some of the earlier posts, far too few people are willing to accept personal responsibilty for their lives. Here in New Zealand governmental assistance has become endemic to the point that people are expecting it. It has become a culture and a lifestyle, rather than a safety net. You need only look at young people like dear old Dean to see the effect this has.

It wasn't always like that. My great grandfather made his living doing manual labour earning a pittance. His son became a train driver and did reasonably well for himself. And his son qualified as a mechanical engineer and my dad, whilst not rich, has taken good care of his money, invested where possible and worked hard at giving me the best possible chances. I'm a, if you believe my bussiness card, a "Bussiness Intelligence Specialist" and I would qualify as a "rich prick" according to Rainthingy's definition. Never mind that my disposable income is less than a $1000 a month and that has to include food, simply because I fall outside the brackets for "Working for Families" or any form of state assistance, even though I pay through the nose for it.

Getting a bit sidetracked here ...

I moved to NZ in early 2001 from South Africa. I came here with a bit less than $7000 in my pocket which was the sum total of my material wealth. That money was used to start a small business which has been ticking over reasonably well and earns me enough spare capital to invest in my children's future. I also work for a living, between 10 and 14 hours a day. Now in the process of paying off a house, don't have Sky TV, don't eat out, etc. But I'm managing my money to pay off one mortage and, whilst one of my ancestors started off as a manual labourer I'm hoping that the work that has happened from his generation through to mine will give my children a better starting point.

A step up on the ladder.

If all goes well my daughters will likely inherit between 2 and 4 properties from my father and me, have a reasonable amount of capital to get them started on their lives.

There is nothing stopping anybody in NZ with all the government funded programs, education funding, interest free student loans or anything else from taking that type of approach. It is a rare person that becomes filthy rich overnight and you rarely have that happen without an equal amount of risk. But over time everybody can improve the lot of their families. It just takes DAMN HARD work.

Something that few people are willing to take on.

**duckonin** · 21st January 2010, 11:52

Originally Posted by Drunken Monkey

Lots of people saw it coming, not just leading economists. Most people just ignored their warnings. The super rich didn't get super rich by jumping out of markets early all their lives.

Don-key has been jumping all his lfe, but only after others lead the jump..

**MisterD** · 21st January 2010, 12:00

Originally Posted by mashman

where did all of the money go that caused the recession,

The point with the "credit crisis" is that the money wasn't actually there in the first place...

**mashman** · 21st January 2010, 12:20

Originally Posted by MisterD

The point with the "credit crisis" is that the money wasn't actually there in the first place...

fair enough... but more and more i'm finding it hard to believe that virtual money doesn't exist (as backwards as that sounds)... otherwise how does it have such a dramatic effect on businesses and peoples livelyhoods (the money hasn't gone if it wasn't there)? how can the rich actually buy things if the virtual money doesn't exist (asset valuation/credit blah blah)? A few years ago we had a debt write off amnesty in NZ... who paid for that? How about a global debt write off amnesty? How about removing money from the economy full stop/period for our americanized viewers? If money is so virtual, then what's the down side of doing without it?

Virtual money must be very VERY real to touch people and in some cases in a very devastating way, no?

**James Deuce** · 21st January 2010, 12:31

Originally Posted by Pascal

Governmental interference in normal, capitalist systems. As to some of the earlier posts, far too few people are willing to accept personal responsibilty for their lives. Here in New Zealand governmental assistance has become endemic to the point that people are expecting it. It has become a culture and a lifestyle, rather than a safety net. You need only look at young people like dear old Dean to see the effect this has.

What a load of bollocks. Have you ever used it? Ever asked for it? Ever been part of the system? Ever been due something and tried to get it?

**steve_t** · 21st January 2010, 13:23

Originally Posted by MisterD

The point with the "credit crisis" is that the money wasn't actually there in the first place...

Did anyone else have mates that asked "Why don't they just print more money?" when the credit crisis first happened? First there was stunned disbelief and then a roar of laughter. I felt sorry for the girl that asked a question like that in front of a big group of guys

**Pascal** · 21st January 2010, 13:28

Originally Posted by James Deuce

What a load of bollocks. Have you ever used it? Ever asked for it? Ever been part of the system? Ever been due something and tried to get it?

Bollocks? Why? Because high levels of taxation under the previous government led to a whole new level of beneficiaries - effectively making normal, middle class familiies dependant on the state? (Working for Families)

**Ixion** · 21st January 2010, 13:39

Originally Posted by steve_t

Did anyone else have mates that asked "Why don't they just print more money?" when the credit crisis first happened? First there was stunned disbelief and then a roar of laughter. I felt sorry for the girl that asked a question like that in front of a big group of guys

Well, that is exactly what they have done. Of course, that was also what got us into the shit in the first place. That , and the March 2006 decision by the US Fed that they would no longer monitor M3. The graph says it all

EDIT. Very very crude explanation of graph : The grene and white curves represent real money. The stuff in your wallet. The grey and black curves represent money that never actually existed. Just numbers on paper. The black curve stops in march 2006 when the Fed stopped releasing figures. You can do your own extrapolation. Sooner or later the money bubble pops and the grey and black curves have to come back to reality.

**mashman** · 21st January 2010, 13:42

Originally Posted by Ixion

Well, that is exactly what they have done. Of course, that was also what got us into the shit in the first place. That , and the March 2006 decision by the US Fed that they would no longer monitor M3. The graph says it all

EDIT. Very very crude explanation of graph : The grene and white curves represent real money. The stuff in your wallet. The grey and black curves represent money that never actually existed. Just numbers on paper. The black curve stops in march 2006 when the Fed stopped releasing figures. You can do your own extrapolation. Sooner or later the money bubble pops and the grey and black curves have to come back to reality.

WTF is M3? ooooook, found the wiki and

**Shadows** · 21st January 2010, 14:55

Originally Posted by Str8 Jacket

Yes but the cost of everything will be passed on from the manufacturer, to the freight company, to the shop and then eventually to the customer so we'll more likely be paying almost double on some items than we would normally be doing say now....

Quite wrong. It doesn't snowball like that. A business claims the GST it is charged by it's suppliers back against the GST it charges on its sales, therefore reducing the business's overall GST exposure. GST is a tax on consumption - ie it only really impacts the consumer or businesses running at a loss (such as the LAQCs the Government is trying to target).

**Pascal** · 21st January 2010, 14:59

Originally Posted by Shadows

Quite wrong. It doesn't snowball like that. A business claims the GST it is charged by it's suppliers back against the GST it charges on its sales, therefore reducing the business's overall GST exposure. GST is a tax on consumption - ie it only really impacts the consumer or businesses running at a loss (such as the LAQCs the Government is trying to target).

What happens to Acme Inc. making Widgets and turning a big profit? The GST on the profit from their sales they have to pay back to IRD. It is a cost they will pass on to their consumers.

**James Deuce** · 21st January 2010, 14:59

Originally Posted by Shadows

Quite wrong. It doesn't snowball like that. A business claims the GST it is charged by it's suppliers back against the GST it charges on its sales, therefore reducing the business's overall GST exposure. GST is a tax on consumption - ie it only really impacts the consumer or businesses running at a loss (such as the LAQCs the Government is trying to target).

In theory.

**Shadows** · 21st January 2010, 15:08

Originally Posted by Pascal

What happens to Acme Inc. making Widgets and turning a big profit? The GST on the profit from their sales they have to pay back to IRD. It is a cost they will pass on to their consumers.

GST is not a tax on profits, but on transactions, collected on those transactions on behalf of the government. Whatever rate it is at is largely irrelevant until it reaches the end consumer.