Capital Gains Tax finally on a major party's agenda

[Ocean1]

By the way, dude, those charts are complete bollocks. But I get the point you are trying to make.

The point being SMEs are avoiding tax?

That's bollox also.

The facts are rather different:

Table 5.2: Deadweight costs of different taxation
Taxation type Deadweight Cost
Corporate income tax: 40 percent
Labour income tax: 24 percent
GST: 8 percent
Municipal rates: 2 percent.


And the needy aren't getting their share of the tax spend?

No?

Year Ended March 2009
Percentage of GDP Central Govt Local Govt General Govt
Current outgoings
Collective consumption* 6.3% 1.9% 8.1%
Social assistance 22.2% 0.4% 22.6%
Other current spending 5.6% 1.1% 6.7%
Total current spending 34.1% 3.4% 37.5%

Source: http://www.2025taskforce.govt.nz/secondreport/31.htm


So not only do business pay the majority of tax they see almost none of the benefits.


Wish I was a wage slave.

[BoristheBiter]

The point being SMEs are avoiding tax?

That's bollox also.

The facts are rather different:

Table 5.2: Deadweight costs of different taxation
Taxation type Deadweight Cost
Corporate income tax: 40 percent
Labour income tax: 24 percent
GST: 8 percent
Municipal rates: 2 percent.


And the needy aren't getting their share of the tax spend?

No?

Year Ended March 2009
Percentage of GDP Central Govt Local Govt General Govt
Current outgoings
Collective consumption* 6.3% 1.9% 8.1%
Social assistance 22.2% 0.4% 22.6%
Other current spending 5.6% 1.1% 6.7%
Total current spending 34.1% 3.4% 37.5%

Source: http://www.2025taskforce.govt.nz/secondreport/31.htm


So not only do business pay the majority of tax they see almost none of the benefits.


Wish I was a wage slave.

You beat me to it.
I wish some of these idiots that think that if you own a business you are rolling in cash tried to start their own business.

If its that easy and you pay so much less tax then why don't they get off their arse and do the same...... Oh that's right they are full off shit.

Rant over.

[paturoa]

You beat me to it.
I wish some of these idiots that think that if you own a business you are rolling in cash tried to start their own business.

If its that easy and you pay so much less tax then why don't they get off their arse and do the same...... Oh that's right they are full off shit.

Rant over.

Nice rant - now engage your brain.

Well this full of shit idiot has known lots of people over the years (and currently knows a bunch) who have a really good life style (all the toys, overseas holidays etc etc etc) and pay bugger all net tax compared to myself (as a wage and salary earner). The one common thing about these people is that they all had successful small businesses (interestingly many were / are farmers).

Anyhow, my point is that, this needs to be resolved BEFORE CGT gets layered on top.

Your point about "if you own a business you are rolling in cash" is very valid. There is an exact equivalent for wage and salary earners, they are the ones on the low income / minimum wages, and they pay buger all net tax too (after working for families etc)

I'll make an assumption here, that your OK with wage and salary earners paying more tax as they earn more. If that is correct, then are you OK with small bus / self employeed who are doing OK, also paying a similar net tax?

My experience tells me they don't - or alternativly they all lied to me.

[paturoa]

The point being SMEs are avoiding tax?

That's bollox also.

The facts are rather different:

Table 5.2: Deadweight costs of different taxation
Taxation type Deadweight Cost
Corporate income tax: 40 percent
Labour income tax: 24 percent
GST: 8 percent
Municipal rates: 2 percent.

Well that's double double bollox.

The table you quote is "deadweight costs" which is defined in the link as "The marginal excess burden of taxation" or "Thus, for example, a 40 percent excess burden implies that for each dollar of additional revenue raised, the associated economic loss is 40 cents. With an excess burden of that magnitude, each additional dollar of revenue raised would need to yield a return to citizens of at least $1.40 in order to be worthwhile."

That in no way measures the relative net tax rates paid, it doesn't even extimate the gross tax paid.

[BoristheBiter]

Your point about "if you own a business you are rolling in cash" is very valid. There is an exact equivalent for wage and salary earners, they are the ones on the low income / minimum wages, and they pay buger all net tax too (after working for families etc)

I'll make an assumption here, that your OK with wage and salary earners paying more tax as they earn more. If that is correct, then are you OK with small bus / self employeed who are doing OK, also paying a similar net tax????

You know what they say about making assumptions.

I still pay tax probably more than a lot of people and i am fine with that as we all have to pay our way and that is not the point i am making.

If being is business, with all its perks, is so good why do so many people fail at it or fail to even give it a go?

What I actually think is the tax rate should be a flat tax across the board, no tax on savings and if you want a FBT then that should be on anything you sell at a profit.

[Oscar]

I was talking about the govt using urgency 20 times in two years.
Sale of state assets an election issue.... Tui moment.
It is a major con job.
The importance of protecting the security of our energy, food and water is of paramount importance to the future well being of NZ citizens.
An appreciation of the game playing involved in the current situation regarding energy illustrates the futility and fallacy of the private ownership models promoted by previous National governments.
"A competitive market will give us cheaper energy."
In hindsight that was clearly a load of horse manure.

As far as I'm concerned, I'll be happy to buy shares in NZ's energy.
Apart from that, you keep making statements that can't be proven one way or 'tother. How do you know that energy would have been cheaper under another model? Have you an alternative reality running somewhere's?

[Oscar]

Rather worrying when you consider that no previous Govts for the last 70 years felt the need to use "urgency as much....
As for them making it an election issue we'll here them going bla blah blah..... The have already made the decision I reckon,even more so now because of the credit downgrade.
I think we'll need to get out on the streets in force to stop it.

So just because you happen to disagree with the actions of one of the most popular Governments in a generation, you advocate revolution?

A wee bit patronising of you, no?

[Oscar]

... in this case I'm hoping that the public are just one trick pony voters and SOE sales are the stick.

I'd love to see more detail on Hone's proposal though

As I said earlier, I'm keen to invest in the SOE's - a brilliant opportunity.

[phill-k]

So just because you happen to disagree with the actions of one of the most popular Governments in a generation, you advocate revolution?

A wee bit patronising of you, no?

Just because National and JK are the most popular Govt in a generation does not mean they are governing with the interests of all NZ and its long term prospects as part of there fundamental principles - Read some of the comments being made by some of NZ's more free thinking economists like Bernard Hickey and Garth Morgan.

[Oscar]

Just because National and JK are the most popular Govt in a generation does not mean they are governing with the interests of all NZ and its long term prospects as part of there fundamental principles - Read some of the comments being made by some of NZ's more free thinking economists like Bernard Hickey and Garth Morgan.

I agree that these guys have some interesting view points, and that the Govt. is not perfect by a long chalk. But I am sick of left wing losers who, because they are not getting their own way label this Govt. as "anti-democratic".

[phill-k]

I agree that these guys have some interesting view points, and that the Govt. is not perfect by a long chalk. But I am sick of left wing losers who, because they are not getting their own way label this Govt. as "anti-democratic".

I have no issues with whether our Govt swings left or right, rather that they grasp the fact that we as a country need some very decisive decisions be made - Labour started it with talk of the CGT but we need more and further reform, our taxation system is failing NZ, as the chap on 60minutes said the other night those that have done well from life here in NZ have a moral obligation to willingly give back, it is a fact that there is a significant number of well healed NZers who are earning incomes that often exceed the average wage many times but who as a proportion pay very little towards the betterment of all NZ,
To suggest we sell off even parts of the businesses in NZ that provide essential services is just dumb, we have already had examples of this that demonstrate it patiently does not work, we need to overhaul our taxation system and those that have wealth in NZ need to have some empathy for those that don't. The continual slagging off at dole bludgers and welfare cheats needs to stop, they make up a relatively small proportion of our society by in large do not have much of a life but this bitterness towards these few gaining from others is breeding a generalised attitude of self interest rather than than an inclusive attitude something NZers had 20 - 30 yrs ago.

[Ocean1]

it is a fact that there is a significant number of well healed NZers who are earning incomes that often exceed the average wage many times but who as a proportion pay very little towards the betterment of all NZ,

So you'll have no trouble producing numerical references for this fact, then?

[rainman]

The point being SMEs are avoiding tax?

Um, no. The point that if you have a column chart showing percentage distributions (so, a "share of" graph, numbers that add up to 100%), if you just slap another 20% on every column you get the nonsense that the numbers add up to, in this case, 160%. This is then, to use the correct technical term, utter bollocks.

As to the OP's point, I have a small business and it costs me only slightly less than the equivalent earnings would in PAYE - although as I'm essentially a casualised employee that's about right I suppose.

I've spent a lot of time with various farmer's financials though, and I'll assure you it's not uncommon to find less in tax payments there than one might expect. There's a fair bit of risk in farming, of course, so some might see that as behaviour by design. Right up until they stick their hand out for drought relief, or climate subsidies, or whatever welfare scheme is in favour at the time, one would hope.

As to businesses in general, permit me to recycle some NRT links:

• Barclays - 1% of profits
• Ah, buggrit, I'll just link the original NRT article showing our captains of industry shouldering their fair share of the burden. Not. (between 1.9% and 10.9%)

Or maybe some others from overseas, from 5 minutes of cursory googling.

But wait on, I'm sure The Stranger or someone will be along presently to tell us all we have to do to solve our problems is lower company tax rates even further.

[mashman]

they're only looking into 350,000 "entities" in the UK, those who earn over (GBP)2.5 million...

They reckon the top footballers alone cost them (GBP)100 million and there's a couple of hundred max. ... wonder where they get that advice from, coz I doubt some of them figured it out themselves... bloody loopholes.

[Ocean1]

I have a small business and it costs me only slightly less than the equivalent earnings would in PAYE - although as I'm essentially a casualised employee that's about right I suppose.

As do I. Last quarter I earned more for the government than I did for myself. If that happens again I'm tearing up my bourgeoisie card.

I've spent a lot of time with various farmer's financials though, and I'll assure you it's not uncommon to find less in tax payments there than one might expect. There's a fair bit of risk in farming, of course, so some might see that as behaviour by design. Right up until they stick their hand out for drought relief, or climate subsidies, or whatever welfare scheme is in favour at the time, one would hope.

So benefit fraud isn't a problem because it's such a small percentage of GDP, but perfectly legal penny-pinching tax avoidance by a few cockies is economic disaster?

As to businesses in general, permit me to recycle some NRT links:

Which have what to do with NZ SMEs?