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

[davebullet]

In the article

"...said English. "And given that we face another six years of Budget deficits, they need to be broadly fiscally neutral." "

And there in lies the goal. Overall, the Government wants more taxes out of us to cover the next 6 years of deficits forecast. It is that simple. Sure some might pay less, but the majority will pay more.

What is the "low rate land tax" proposal?

[ckai]

Most of it has some logic but one of the ideas of personal tax is to try and narrow the gap between the rich and poor. Raising GST will totally kick this is the ass. Because it's a "flat tax" poor people will pay a higher percentage of their income towards it compared with the rich. Off setting it with lower personal tax kinda seems like they're not changing much at all. "You give me 2x $1 and I'll give you a $2 coin". Of course , it's not gonna be like this.

The skeptic in me says they're telling us it's broke because they want me money. It'll be interesting to see what economists think of it. I remember, years and years ago, in economics at uni, looking into lowering the GST to 10% and seeing how much more money the gov't would earn from increase spending.

But most can't see how you can make more tax income from lower sales tax.

I'm open to change, as long as I'm not any worse off. Gotta feed the family and all.

[The Stranger:Me]

Pretend you're PM. What would you cut, and how would you deal with the consequences?

My contention is that the burden is always going to fall on Salary and wage earners no matter how they divy things up. If they (the govt) seek to make it (the burden) less unfair then it is up to them how they go about reducing spending.
It's not my problem to deal with, I'm not the one seeking to make things less unfair.

[rainman]

My contention is that the burden is always going to fall on Salary and wage earners no matter how they divy things up. If they (the govt) seek to make it (the burden) less unfair then it is up to them how they go about reducing spending.
It's not my problem to deal with, I'm not the one seeking to make things less unfair.

Problem is unfair is a relative term.

The low wage earner getting hit with more GST so that he can pay for the tax cut of the high wage earner (that's "neutrality") will say it's unfair.
The high wage earner paying more than the low wage earner for the "lazy knuckledraggers" or whatever will say that's unfair.
Both are, relatively, right.

Justice is complex, we've been arguing it for centuries. The right is more business friendly/employee unfriendly, so don't have a problem screwing the little guy to give more to the fat cats. The left doesn't like the rich pricks. Problem is that this is a sideshow conflict - between the middle class and the genuinely poor, hating on each other - when the real issue is the really, really, weathy elites. The middle class get a lot of smoke and sunshine blown up their arses along the lines of "you too can be one of the elites' (you can't, basically) and the poor are kept in line by having little power, a hint of the same bullshit dream about improving their lot, and panem et bloody circenses.

Market thinking makes us compete with our fellows for everything these days, and consequently desensitises us to our common humanity. It won't end well, I suspect.

[EJK]

Not a bad idea! Lowering income tax is definitely a goodie.

[Naki Rat]

Are high Sales tax Countrys the most successful?
Online sellers in America, will be one of the winners, from raising GST in New Zealand.
But on the brightside, of a recent 10 point state of the economy survey compaired to Australia,we beat them on one. More McDonalds per head than Australia!

Sure international online sales will benefit, but I suspect the current GST free import allowance may reduce. Much of our meager consumption is via Trade Me and the like from non GST-registered secondhand sellers (individuals) and their prices won't change appreciably.

As someone earlier said, GST increases are focussed on massed consumption and if one doesn't partake of the flood of consumerist crap that many seem to regard as 'necessities' then that person is on the gain when GST rises.

Less tax for both individuals and companies is the key to giving NZ's sluggish productivity a well deserved boot in the arse. Gets my tick.

[geoffm]

As a middle clas wage earner, i will get screwed over ... again. Along with all the taxes the Nats have put on (ACC, petrol, ETS adn any others i have missed) we now get the privildege of paying more GST on them as well.
Lower income tax? nice theory, but it won't work - fiscal drag (Cullen and Muldoons bestest friend) will take care of that. As the income tax bands aren't inflation indexed, inflation pushes everyone up until they are "rich pricks" and a few years down the track we ahve all the new taxes, and all the old ones too.
30,000 kiwis go to Oz each year - i wonder why? THis isn't going to change it.
Geoff

[The Stranger:Me]

Problem is unfair is a relative term.

Sure it is, but it wasn't "my" term.
As to the rest of your tale, I agree with much of it up to the point about the real issue being the really really wealthy elites. You kind of lost me there.
Why are they an issue. I mean, I know of a guy who bought a motor camp in the BOI, razed it and built 3 huge houses, put in a flood lit tennis court and a heli pad, built a floating dock and has more toys there than the average resort. And that's just a holiday pad.
I do know he provides employment for a great many people and thus many families are fed and it saves us having to pay out a stack of dole money instead. If he didn't provide that employment who would?
What harm is he doing?
Just wondering is all, hey shit, I sure wouldn't mind having his fortune, but I don't begrudge him it either.

[rainman]

Why are they an issue.

Good question, kinda depends on whether you view wealth as accumulation of monetary tickets or as something related to actual, finite, resources, and power over them. Difference then being one of these is a zero-sum game (albeit a bit fuzzy as we don't have perfect information about resources).

Here's a thought experiment:
Imagine we had a single world economy/currency, one central bank, etc. First day in business the shiny new world govt issues everyone a million billion trillion zillion credits - we'd all be rich, right? And, approximately, equally so - as any former wealth or lack thereof would fade into insignificance. Except we wouldn't, nothing much would change for the peasant or the investment banker, relatively speaking. Money alone does not make wealth.

Wealth is the abundance of (and possession, and control over) valuable resources. Now if you believe these are infinite, best of luck, we can leave this discussion here - but I'm sure you agree this is not the case. Therefore wealth accumulation is broadly a zero-sum game, and there is a need to establish what is a "fair share", particularly in a world of increasing population. If I take and control more than my "fair share", someone else loses out. My power and influence increases, theirs wanes... Rinse and repeat for several thousand years, add various levels of obscure cultural, religious, financial and societal abstractions, operated by creatures with brains that don't perceive space and time well at the large scale (we don't even relate to our fellows sensibly in large groups), and what you end up with is a world where very few massively exploit the rest. By which I mean, exercise their power over others for personal benefit, and not in recognition of the equality and freedoms of the exploitee.

It's a matter of degree. I'm sure there are lots of fundamentally decent rich folks who have earned their way to the top. But there are even more fundamentally decent poor folks who can never get there no matter what they do, and a metric shitload of the "entitled" who have ended up wealthy owing to the happy accidents of history, recent or distant.

1000 billionaires, 5 billion+ on $10 a day or less. Kids dying in poverty, all the problems we all know about and no-one wants to think about? Leaves me open to consider maybe obscene wealth does do more harm than good.

(I don't begrudge people being rewarded for genuine hard work, btw. How'd your mate come by his money?)

[Shadows]

you wont get any extra in your hand.................food will go up, fuel will go up, rates will go up. acc will go up

Only by 2.2% if GST increases to 15%. By comparision what was the CPI for last year? 2% or something?

One only loses if the full tax reduction is pissed against the wall. That's the whole idea.

[Shadows]

Leaving aside your stereotype about knuckledraggers, what would you do with said beneficiaries? Like it or not, there are circumstances when we don't have full employment (cough recession cough), and this is usually not the fault of the beneficiaries. What would you do to them and their kids then? How would you manage crime?

Work for the benefit on state run projects. Work fucking hard. Every other cunt is paying your way so they'd better get something for their money. Plenty of gorse covered hillsides around. Plenty of conservation / restoration projects on the go. Plenty of potholes / tagging / glass on the beach. I hear KiwiRail could use some track maintenance. Etc. etc. etc. you get the idea. A real job would be like a holiday which is plenty of motivation to get one.

Don't turn up to work when you aren't in possession of a medical certificate or at a job interview, you fend for yourself. Good luck with that, you get no help from the state for doing nothing in return and you'd better not get done for neglecting your kids as a result either. Do turn up, your kids get looked after for the whole 12 hours that you're working to benefit the rest of the community and you are granted your standard food parcel and petrol vouchers for the week. Your rent, electricity, insurance, healthcare etc. is invoiced directly to the state. Anything else that crops up you will need to apply for. No cash to waste on pokies or housie, to give to the fucking church, or send back to the islands - no cigarettes, no piss, no KFC, nothing but what you need to survive, have a roof over your head, and get to interviews for real jobs to earn money you then have the right to use as you wish.

Crime - if I was in charge, firstly there would be a number of law changes allowing freedom of choice, secondly there would be a number of law changes making penalties so harsh that people would be too terrified to commit crimes against others, and if they did, they would suffer the full penalty of law without exception. After a judge or jury delivered a verdict the resulting sentence would be mandatory and in the worst cases terminal. Convicted criminals not born in NZ would be deported along with their families.

[Str8 Jacket]

Only by 2.2% if GST increases to 15%. By comparision what was the CPI for last year? 2% or something?

One only loses if the full tax reduction is pissed against the wall. That's the whole idea.

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....

[PrincessBandit]

but not everyone that buys food has a job. Let alone getting the food from those fuckin vans that charge a fortune... in an ideal world, money wouldn't exist!

Welcome to Star Trek...

Sounds great to me.

The extra I get in my hand to use as I see fit instead of propping up the knuckledraggers in South Auckland is more than 5 times greater than the increase in GST I'll be paying on my current level of consumption.

I'm sick of spending so much of my time working to support useless cunts that the world would be better off without when I could be working to secure my own family's future. I've always wondered why I should work my fucking arse off and deal with all the stress so that they can sit around without a worry in the world, drink piss, protest about how hard done by they are, and beat their ever expanding menagerie of equally worthless children.

Ouch, that's a bit harsh on some of us who live in S A.


Generally I think the suggestions being put forward re tax, GST, etc are good. However there will always be those who know how to work the system to their advantage (and some of the "knuckledraggers" are right up there with the fat cats). No matter how many loopholes are closed in order to combat those rort-meisters, they'll come up with other ingenious ways to continue as they always have.

[James Deuce]

The majority of wage and salary earners won't be getting a tax cut. GST will go up. With a property tax and a GST increase rents will increase a minimum of 10%. If you think any Government anywhere will promote tax change that actually makes voters better off you're all barking mad. They'll tell you you're better off and you'll be left wondering why you're struggling a little bit harder than you were before.

The actual amount of money available to be spent by consumers will diminish significantly.

[The Stranger:Me]

Here's a thought experiment:
Imagine we had a single world economy/currency, one central bank, etc. First day in business the shiny new world govt issues everyone a million billion trillion zillion credits - we'd all be rich, right?

(I don't begrudge people being rewarded for genuine hard work, btw. How'd your mate come by his money?)

Why limit it to a thought experiment? It's been done before, albeit on a smaller scale.
Can't remember the exact details now as it was too long ago, but many many people wound up with shares in the power companies. In the area I was in at the time the brokers etc were valuing the power co at x. Within a very short space of time most had sold thinking they were doing ok at 2x, not long after it was 4x and if my memory serves me correctly it just kept going up, but very few had their shares after about 4x.
Point I am trying to make is, even with an even distribution of wealth opertunity, foresight, greed, dumb luck etc will ensure it's redistributed, you can't stop that, and you will never tax it "right" (assuming it is in fact wrong)

Interesting perspectives there though thank you rainman

The person to which I refer is not a mate just someone I know of as he bought the motor camp I used to go to a lot as a kid. He is a well known businessman, but that's his business.