Wouldn't a tax threshold make more sense?

[watermellon]

Is there an obvious reason why the Govt. don't just introduce, say, a $10,000 tax threshold?

It'd mean we'd all get the same saving and those on lower incomes would, proportionately, do better.

[Tank]

Is there an obvious reason why the Govt. don't just introduce, say, a $10,000 tax threshold?

It'd mean we'd all get the same saving and those on lower incomes would, proportionately, do better.

Im sure that they had their reasons. And (again) if you have a look at the figures those on lower incomes have indeed done better proportionately.

edit - see:

[MisterD]

Is there an obvious reason why the Govt. don't just introduce, say, a $10,000 tax threshold?

I'm guessing it's because that wouldn't allow for the alignment of the top tax rates with trusts etc, so we're stuck with "Working for other peoples families" for the time being. At least they've knocked the rort of well-off types taking rental "losses" off their income to qualify for it though...

[Milts]

Im sure that they had their reasons. And (again) if you have a look at the figures those on lower incomes have indeed done better proportionately.

edit - see:

Sorry, but no. While proportionally it looks like they're much better off, with 16% vs 13%, in reality it equates to next to nothing. As a working student, this really sucks.

http://www.stuff.co.nz/the-press/new...ax-down-GST-up

As you can see, the mighty 16% translates into.... $0.45 per week. Sweet deal huh. Furthermore, for someone on $120k the gain is $56 per week - 12 times the salary, 124 times the saving (in dollars). If that isn't discriminatory agains those on lower incomes I don't know what is.
Another interesting angle:
http://www.stuff.co.nz/dominion-post...attack-on-poor

[Robert Taylor]

Sorry, but no. While proportionally it looks like they're much better off, with 16% vs 13%, in reality it equates to next to nothing. As a working student, this really sucks.

http://www.stuff.co.nz/the-press/new...ax-down-GST-up

As you can see, the mighty 16% translates into.... $0.45 per week. Sweet deal huh.

Another interesting angle:
http://www.stuff.co.nz/dominion-post...attack-on-poor

So if they gave you more where would it come from? Thin air?
Im grateful we no longer have a Labour Government, it seems the more Conservative Governments often exist to restore a country to living within its means.
It was no different in my day when I was apprenticed, low income and working hard to get through it. Governments do not owe the world a living nor should they.

[Milts]

So if they gave you more where would it come from? Thin air?
Im grateful we no longer have a Labour Government, it seems the more Conservative Governments often exist to restore a country to living within its means.
It was no different in my day when I was apprenticed, low income and working hard to get through it. Governments do not owe the world a living nor should they.

Governments cop all the shit when crime goes up or people starve to death in the street.
Crime is higher in poorer areas and becomes unmanagable in areas of mass poverty. As a part of protecting their citizens governments should act to prevent crime and hardship - this is essentially what the benfit is intended for. It does get abused. It is also a hell of a lot better than having families starving in times of economic hardship as happened in the 20s and 30s.
As a result governments DO owe the worse-off citizens if not 'a living', a least adequate food and shelter.

[Morcs]

Agree with RT.
By getting the country back on an even keel, the government are going to piss a lot of people off.
Unlike labour who to try and keep people happy with lots of free hand-outs and stuff, ran the country into a lot of debt.

[Flip]

I'm guessing it's because that wouldn't allow for the alignment of the top tax rates with trusts etc, so we're stuck with "Working for other peoples families" for the time being. At least they've knocked the rort of well-off types taking rental "losses" off their income to qualify for it though...

This is just clever poor tax. It is also a way to transfer some investment money into the hands of the BRT ie the national party.

They have just put the price of a rental up 20% overnight. I just advertised a house I own in Wellington for what I believe is a fair rental and I got 200 calls in the 24 hours before I could kill the advert in Trade me. I had one woman in tears when I let it to another because there was nowhere to live. I know the market will dictate the rate but there seems to be bugger all out there to rent at the moment and its only going to be worse as another 5 or 10% disappear from the rental property pool. I think it's going to be a great time to be a landlord, there is almost a fixed number of tennants and the supply has shrunk by 10% in the last 2 years and will shrink again by another 10%. Its going to be like it was in the 70's and 80's when landlords were gods and could charge a fortune for a shitty old dive.

The ex rentals will go on the market but because there is already a shortage of properties for sale there will be little to no effect on the recovering property market.

Before you say bollox, rental's have been priced at about 7% of the value of the house for the last 20 years. Well without the LAQC status 7% wont cover the costs of servicing the debt, insurance, rates, and repairs.

Who is this going to hurt? People who have just got into the property market and have no capital and the poor whose rents are going up if they can find a place to live that is.

[Woodman]

Sorry, but no. While proportionally it looks like they're much better off, with 16% vs 13%, in reality it equates to next to nothing. As a working student, this really sucks.

http://www.stuff.co.nz/the-press/new...ax-down-GST-up

As you can see, the mighty 16% translates into.... $0.45 per week. Sweet deal huh. Furthermore, for someone on $120k the gain is $56 per week - 12 times the salary, 124 times the saving (in dollars). If that isn't discriminatory agains those on lower incomes I don't know what is.
Another interesting angle:
http://www.stuff.co.nz/dominion-post...attack-on-poor

Yea but the guy earning $120k is paying $33000 in tax.
Thats a lot of money for one person to pay whether it is a percentage or not. Why should one individual pay more actual dollars than another individual. That is discriminatory.

[Flip]

To all those good average kiwi people who voted National.

Dol!

Homer

[Winston001]

The New Zealand government is currently borrowing $250 million a week to fund government spending. We've just seen the cot-case of Greece and its riots - all because the government there spent freely on social welfare in the past. I think our latest Budget is too generous by far.

As for tax-free $10,000 income - tend to agree but I suspect there are inequities involved.

Incidentally Gareth Morgan advocates a govt guaranteed income of $10,000 each as one path to social equity. Someone somewhere though must take up the tax burden to supply the money.

[Ocean1]

Yea but the guy earning $120k is paying $33000 in tax.
Thats a lot of money for one person to pay whether it is a percentage or not. Why should one individual pay more actual dollars than another individual. That is discriminatory.

Yeah, sorta puts the lie to the common beliefs about which end of the socio-economic scale's overly concerned about the almighty dollar eh?

Incidentally Gareth Morgan advocates a govt guaranteed income of $10,000 each as one path to social equity. Someone somewhere though must take up the tax burden to supply the money.

The cost would be fuck all, income from that source is bugger all anyway. 70% of personal income tax is paid by the top 10% of income earners. The ones, that is, who's still resident...


...TAXI !!!

[rustic101]

Is there an obvious reason why the Govt. don't just introduce, say, a $10,000 tax threshold?

It'd mean we'd all get the same saving and those on lower incomes would, proportionately, do better.

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.

[Jantar]

Sorry, but no. While proportionally it looks like they're much better off, with 16% vs 13%, in reality it equates to next to nothing. As a working student, this really sucks.

http://www.stuff.co.nz/the-press/new...ax-down-GST-up

As you can see, the mighty 16% translates into.... $0.45 per week. Sweet deal huh. Furthermore, for someone on $120k the gain is $56 per week - 12 times the salary, 124 times the saving (in dollars). If that isn't discriminatory agains those on lower incomes I don't know what is.
Another interesting angle:
http://www.stuff.co.nz/dominion-post...attack-on-poor

You're looking at it the wrong way. Rather than getting something back, what the tax changes do is to allow each and every person to keep some of their own money. Money that they have earned.

By using that $0.45 figure you are being dishonest. For someone on the minum wage their annual income is $27000 or more, and they are better off by around $6.00 per week. Those earning less than the minimum wage are already being fully supported by the tax payer, but even they are better off.

[Hitcher]

See how your tax changes under the new regime here: www.taxguide.govt.nz