Wouldn't a tax threshold make more sense?

[scott411]

Why didn't they just raise the trust rate to 38%?

because if you get the trust rate to far away from the company rate everyone just puts the income into a business,

[Motu]

They had a low income tax free bracket in Australia,in the '70's and '80's anyway,dunno about now.I know part timers enjoyed it (Kiwi's enjoying a working holiday).I think it would be an incentive to those people on benefits (solo mums,sickness beneficiaries and pensioners) who want to work....they do exist you know.But now if they do work they are no better off,or sometimes worse off for trying to help themselves.They don't need handouts at the bottom,that just makes them put two hands out....but incentives to get on with their lives that have been interrupted by circumstances.

[yachtie10]

Saw this and though it was a great explanation of our tax system:

This little gem might help some of you understand the tax system better, but only if you want to!

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.

The fifth would pay $1.

The sixth would pay $3.

The seventh would pay $7.

The eighth would pay $12.

The ninth would pay $18.

The tenth man (the richest) would pay $59.

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20.”Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share? They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man, like the first four, now paid nothing (100% savings).

The sixth now paid $2 instead of $3 (33%savings).

The seventh now pay $5 instead of $7 (28%savings).

The eighth now paid $9 instead of $12 (25% savings).

The ninth now paid $14 instead of $18 ( 22% savings).

The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

“I only got a dollar out of the $20,”declared the sixth man. He pointed to the tenth man,” but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got ten times more than I!”

“That’s true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

Love this explanation. saw it years ago and have been looking for it since

The tax system was not fair and it isnt now but it is a dam sight closer now than it was

Im all for helping the poor but you cant do that by tearing down rich

[Coldrider]

Remains to be seen how income sheltered to receive benefits and allowances (family tax credits, community card, student allowances) is going to investigated.

[F5 Dave]

As opposed to how it is now, where Fairfax (an Australian media company) owns it instead? . . .

well yeah, that was my point, it would have been offshore owned from the start.

You can never make it fair. Human nature won't allow it. The African nations mentioned is one extreme & supposed Communism is the other, but of course that cannot work for the same reason, Human nature will always make some pigs more equal than others, conveniently those with the power. All we can hope for is that as the pendulum swings that the amplitude is minimal, that it stays near center enough & that the do gooders don't wreck the environment that creates enough money to stop a country falling over.

In a depression the ones that suffer worse are of course the poor. And suffering can take on whole new levels we are lucky enough in our lifetimes not to have seen..

[SPman]

because if you get the trust rate to far away from the company rate everyone just puts the income into a business,

And that is bad...????????

[Winston001]

And that is bad...????????

No the money is already in a business, the accountancy skill is to derive the nett profit in the lowest tax vehicle - trust, company, partnership, or individual. The best answer is one flat rate across all of these so there is no incentive to waste time on trying to move to the lowest tax entity.

[cowpoos]

I really do love the irony of you calling me thick while in the same post using the adverb 'there' in place of the pronoun 'their'.

Umm...how is that a point?? You see...I see you as thick....because instead of learning how to go better your situation...you whinge about it...and make excuses for how unfair it is that someone else makes more money than you.

Because.....they are smarter!!!! who gives a fuck if you can spell/punctuate better....LMFAO!!!

I simply do not understand the idea that because someone earns more (often a huge amount more) than someone else, it is due to their 'hard work'. You cannot tell me that Sam Morgan worked 8730 times harder (227 million, his profit, divided by 26k, the amount earned on minimum wage) than a single mother working as a cleaner to support her kids. Just because someone earned more does not mean they worked proportionally harder. If nothing else, you need at least recognise that society could not function if the minimum wage jobs were not done by someone.

Nope....sam morgan worked 8730 times smarter....Because...minimum wage single mum...didn't know much about starting websites....and didn't come up with the trade me concept...nor did she come up with the marketing,promotion,etc

so whats the difference with Sam Morgan and minimum wage single mom...Please do explain your point???

In one of my POLSCI classes we looked at various governments which were run by the rich who then opted to keep their profits. The end result was mass starvation and lawlessness. (Many examples in Africa where a group would take power, run the diamond mines/[insert national resource here] using force to keep the population in check until they rebelled; the leaders then buggered off with the cash and the process was repeated by a different group.

Is that all you learn't about these african nations??? is that why you believe they have shit economies ???

Much of the difference between democracies and dictatorships is this redistribution of wealth and care of the worker.

and yet your beliefs fit a communistic type society....and you have the cheek to say that??? WTF???

You cannot tell me that a system whereby 10% of the population owns 90% of the wealth is 'fair'.

You can not tell me that its fair that the top 10 percent of earners in New Zealand pay 70% of the tax's...and pay for the life styles of poor useless people that have a welfare mentality...and think a benefit is their right...and hand outs are a must!! and at the same time being too dumb to know where the money comes from?? Where is the personal responsibility?? People need to learn to live off their own backs...not others.

Grow up and face the reality that we live in an imperfect world and if we didn't take something from the more fortunate, the less fortunate would suffer en masse.

Communism fails....go do some more study...capitalism works great...go and compare some country's...and think WHY??? don't try and justify your arguments...or ingrain beliefs...asks yourself what makes a poor person in Serra Leonie a slave who dyes of hunger....compared to a poor person in New Zealand who is a lazy and or dumb arse...that whinges the government doesn't give them enough???

[watermellon]

....compared to a poor person in New Zealand who is a lazy and or dumb arse...that whinges the government doesn't give them enough???

There certainly does seem to be a benefit culture in NZ. It's unsustainable, that much is certain.