Labour tax policy

[fixed_truth]

Originally Posted by jrp

Yes. And if the business is valued at a certain amount to be taxed at a given amount, then it will be worthwhile the recipient paying the tax rather than selling the business or house.

Either way, the recipients of inheritance are still get getting something they have not worked for at all - so why shouldn't they be taxed?

With a CGT then they would be taxed when the capital gains are realised.

I take your point that the fairness of a tax is relative to what the particular society deems as such. Though imo a death tax wouldn't be seen as such atm because people may be forced to sell assets and comparatively it seems to be more of a disincentive to work hard and make sacrifices in the interests of your family (which rightly or wrongly I think society values).

[jrp]

Originally Posted by Lightspeed

If you put each person on a deserted island for a year to see what they produce, you wouldn't find that some have produced enough simply to feed themselves while others have produced enough to feed millions, regardless of how hard they work.

Yet this is possible in our society. Because of society. So it seems inherently fair that those whose care society has been placed in should take from those who most benefit from society, in the service of society. Not everything, nor with an attempt to distribute wealth evenly. But certainly enough to support society, if only so those that benefit so greatly from it can continue to do so.

I disagree. Tax may be necessary - but there is no way it can be fair.

It's like the school bully taking your lunch money and in return you don't get a smack in the face. But the bully isn't stupid, he only goes for the easy targets - governments and tax are the same.

In reality some poor fucker is going to be hit with more of tax then other people. Bullies aren't fair, and tax ain't fair.

[Ab]

Originally Posted by jrp

All good for the economy. Sucks for the person inheriting it though - but still good from NZs economic perspective.

So sensible people will take the necessary legal steps to prevent the loss of family property through forced sales - e.g., transferring assets into family trusts.

[jrp]

Originally Posted by fixed_truth

With a CGT then they would be taxed when the capital gains are realised.

I thought Labour were not going to hit family homes and inheritance with CGT - that would include if the kids sold family home or business (and future governments would not have to follow this - they would be free to add it).

Originally Posted by fixed_truth

I take your point that the fairness of a tax is relative to what the particular society deems as such. Though imo a death tax wouldn't be seen as such atm because people may be forced to sell assets and comparatively it seems to be more of a disincentive to work hard and make sacrifices in the interests of your family (which rightly or wrongly I think society values).

Often the inherited stuff is sold to divide it between more then one recipient anyway - or one recipient has to take loans to pay out the others.

In reality if an inheritance tax were implemented then (educated) people would plan in advance to get around it. The kids would become the shareholders of a company or farm, and they would be added to the title of (freehold) houses (with all debts forgiven in the will), possibly many houses and business shareholdings would be put in a family trust (if family trusts are still around then). People are very adaptable.

[jrp]

Originally Posted by Ab

So sensible people will take the necessary legal steps to prevent the loss of family property through forced sales - e.g., transferring assets into family trusts.

Absolutely. Wouldn't you? Everyone hates people taking their shit.

[Ab]

Sucks for the country's economic perspective - but still good for the families.

[jrp]

Originally Posted by Ab

Sucks for the country's economic perspective - but still good for the families.

Yep, I agree.

I would hate to see an inheritance tax. But it's funny that the reasons people give to implement the CGT are pretty much the same arguments that can be given for an Inheritance tax.

The one that makes me laugh the most is that NZ should have CGT because so many other countries do. Well most other countries have inheritance tax too.

The CGT would not be so bad either if it was just an across the board type one where everyone pays it - with no exceptions for family homes, farms etc etc. All the exceptions will mean is that there will be loop holes, and so not everyone will pay. Exceptions will also make it expensive to administer and collect (but easier for the voter to think it is a good idea because they think it will not effect them).

GST - why put in exceptions like fruit and veggies - just plain stupid on so many levels.

It pisses me off that property developers use GST refunds (ie taxpayers money) then don't pay it back. Why not stop businesses that buy property from claiming the GST back. All they are doing is using the GST money to do a development - then not paying the GST on the sale of that property. The company then closes up and IRD have trouble chasing it up - a.k.a. David Henderson and friends. At the very least the government should make the director or shareholders personally liable for the GST repayment.

I think I'll finish my rant now.

[Lightspeed]

Originally Posted by jrp

I disagree. Tax may be necessary - but there is no way it can be fair.

It's like the school bully taking your lunch money and in return you don't get a smack in the face. But the bully isn't stupid, he only goes for the easy targets - governments and tax are the same.

In reality some poor fucker is going to be hit with more of tax then other people. Bullies aren't fair, and tax ain't fair.

I agree that the tax system may never be agreeably equitable to everyone, but I don't think your analogy is accurate at all. Bullies don't take your lunch money, but leave you enough to buy lunch. Bullies don't use the lunch money they take to try and provide breakfast for the kids who don't get it at home.

[xor]

Originally Posted by TD

Have you heard of a country called Greece? They spent money they didn't have and thought taxes were optional. So far it isn't working out to well for them.

Originally Posted by jrp

You are already taxed multiple times on your money as it is. When you buy something you are taxed GST on it, when you have already paid Income Tax on it. Alcohol and tobacco tax you twice after you've already paid tax on it. Shit, they even charge GST on a tax - your council rates are a tax that has GST charged on it.

When you're dead you don't even know you're being taxed.

You can't get a less painful tax than that.

That was the train of thought I was going for with the first 5k being tax free, TD.

[Charismo']

interesting thread. After having lived in sweden for the last 2-3 years where the tax brackets are like this:

<33000 euros = 30-35% tax
>33000 euros = 50% tax
>55000 euros = 55% tax

and, seeing a lot of wastage and not really feeling like I benefit out of this higher tax vs what I had in NZ or even what my friends have in UK (granted, I am not old and in need of the health system, but we have one of those in NZ, right?), I think 33% as a top tax bracket is LOW.

That said - that kind of tax bracket (33% at the top), is something that I consider "fair" - i.e. I will not attempt to avoid it. Somewhere around 38 and upwards I start to think I have to do something about it.

I'm for the 5000 dollar tax free thing, because for low income earners, that amount of money makes a huge difference. For a mid/upper income earners it makes %-wise a far smaller difference and is not likely to impact life quality. Remember, it's good to have happy(er) people around you so you can walk safely to the shop to buy stuff ;-).

I'm for the CGT on investment properties, I mean.. honestly... NO CGT? NZ is certainly one of the few countries in the western world not taxing this. It's a form of income, tax it for god's sake. Otherwise it's just a way of avoiding tax. It should be aligned with the top tax bracket (33%).

All of that said, I'm still going to vote National. I don't know if they will cave and implement CGT anyway but I hope they do. Labour have just done a bit too much pandering in the past for my taste .

[crocos]

Inheritance tax vs CGT, a simplistic view:

Lack of CGT encourages foreign nationals to buy property and funnel any money gained from that back overseas.

Lack of Inheritance tax encourages wealthy folks to move their families to NZ.

[blynk]

Don't forget though. If you are on the top rate, its only income from that point on that gets charged that that rate.

So if you were on 160k, you would be paying an extra 9% on 10k a year.

I wouldn't magically get to the top rate and decide I have to avoid it.

[Anthony.S]

All good, including the cut on GST. Might make healthier living more appealing for low income families and their children. God knows they've been squeezed to next to nothing with National.

[Golden Teapot]

Originally Posted by Anthony.S

All good, including the cut on GST. Might make healthier living more appealing for low income families and their children.

Why do you think the cut in GST does this?

I can't see it myself. Prices are set to maximise profit. If more people can afford vegetables then the price of vegetables will go up. Hell prices will go up even if more people can't afford vegetables since labour is imposing extra costs on businesses that sell vegetables.

This stuff is taught in fourth form economics right?

[blynk]

Ok fine. Lets not take GST off fruit and veges. We just need to start taxing foods that have high sugar or fat.

[Anthony.S]

Originally Posted by Golden Teapot

Why do you think the cut in GST does this?

Potentially you could be right, adding GST has always been a sign for people to hike their own prices up on goods on under the cover of a GST increase, I'll be interested to see what happens with the reverse when people are expecting a decrease. Perception and how things are executed matters a great deal, it will be as much marketing as it is economics.

Gains either way would be debatable, raise prices and maintain (or loose) current volume in sales, maintain GST reduced price and increase volume. Guess it all depends on how far forward they end up thinking.

My concerns would largely be with those that Key and co have choked with current policies making the basics somewhat of a luxury, if the GST cut on fruit and vege goes as intended and the knuckle draggers stay in the minority, then it'll go a long way for those families.

[Anthony.S]

Originally Posted by blynk

Ok fine. Lets not take GST off fruit and veges. We just need to start taxing foods that have high sugar or fat.

If we did that we may as well just go the whole hog and make food in general an exclusive and luxury item.

[CCS]

Breaking: Labour wins election by narrow margin, declares removal of GST from fresh fruit and veges.

Also in this news hour: growers and sellers hail tax break.

[Charismo']

Originally Posted by blynk

Don't forget though. If you are on the top rate, its only income from that point on that gets charged that that rate.

So if you were on 160k, you would be paying an extra 9% on 10k a year.

I wouldn't magically get to the top rate and decide I have to avoid it.

Blynk, I think *most* people are well aware of how a tiered tax system works.

You are right, when you get to 170k etc. it won't give you much incentive to pack your bags and move. Actually the 150k+ and 39% tax isn't that bad at all relatively (c.f. swedish tax rates where you hit 50% @ > approx 60-70k NZD).

I think tiered tax systems are fine so long as the levels are appropriate. In this case, what labour are proposing isn't unreasonable as a top tax bracket.

Right now I view the NZ tax system as extremely attractive (33% as a top bracket is v. low). The UK implement a 40% rate above 37k pounds (which at the moment although not really comparable translates to 74k nzd). Below that it's 20%. Personally I think the NZ system is nicer .

[Golden Teapot]

So if we use the historically extremely unusual Uk NZ cross rate or compare to an extremely unusual country then things look okay?

Also, I think the UK allows income splitting for tax purposes. Something labour aren't interested in. So if you like the top UK rate under normal conditions doesn't apply until more like $250k NZ.

[MrTTTT]

We should have a cunt tax so that we can take all of GTs money.

[Golden Teapot]

Oh don't worry - there are plenty of envious people and plenty of pretty stupid people all of whom will think labour are magical for suggesting this. In the first category we have the evil people who hold this country back (your traditional left voters) and in the second category those who have been taken advantage of by despicable politicians who'll promise anything to get power.

[Charismo']

Originally Posted by Golden Teapot

So if we use the historically extremely unusual Uk NZ cross rate or compare to an extremely unusual country then things look okay?

Also, I think the UK allows income splitting for tax purposes. Something labour aren't interested in. So if you like the top UK rate under normal conditions doesn't apply until more like $250k NZ.

extremely unusual is an interesting way of putting it. Either you think that things should always return to their historical norms (not sure I think that's wise), or you accept that the world is a changing place.

I'm not sure we will see the pound at 3:1 against the NZD anytime soon .

In any case - the cross rate doesn't really matter in this comparison I think because we're talking about %s of earnings (edit: yes, I did a quick conversion using 2:1 simply for illustration but it wasn't relevant). What is more interesting is the tax bracket setup. New Zealand, vs. most other western countries has quite a low top tax bracket. I think you can argue that it's high all you like but you'll probably earn only scoffs from anyone from outside NZ.

[Anthony.S]

Originally Posted by Golden Teapot

Oh don't worry - there are plenty of envious people

By your statement it's obvious that your perspective is a little old fashioned and narrow. The 'oh they're just jealous of me' thing is an easy way of not looking at reasons beyond yourself and nullifying any sense of responsibility or guilt for how you approach things, it gives you a nice quick and tidy retort for being a 'cunt'. If that's what you're happy with being then that's you choice, but don't catergorise others inaccurately to makes yourself feel 'right'.

The better for the economy thing is also questionable, it is generally used in a very self orientated way and has nothing to do with the country or its peoples well being as a whole a great deal of the time. It's an overused term in local politics that I find akin to how the American politicians use 'God' and 'the land of the free' for rallying the masses, its generally delivered hollow with little actual substance.

I'm doing well enough for myself but I'm not that self orientated that I can't see what current direction is doing from the ground floor up. I find it appalling that grown adults think it's okay for children to suffer and saddening the reasoning's they come up with to make it so.

[Lightspeed]

Hahah, I see you've met GT, Anthony.

[CCS]

Originally Posted by Anthony.S

By your statement it's obvious that your perspective is a little old fashioned and narrow. The 'oh they're just jealous of me' thing is an easy way of not looking at reasons beyond yourself and nullifying any sense of responsibility or guilt for how you approach things, it gives you a nice quick and tidy retort for being a 'cunt'. If that's what you're happy with being then that's you choice, but don't catergorise others inaccurately to makes yourself feel 'right'.

You think GT is a cunt for being rich?

[chubby]

no, cunt.
he's a cunt for being a cunt.

[CCS]

Oh... So people are jealous of his riches because he's a cunt? Makes sense I suppose. After all, Alan Hubbard was rich as hell but everyone liked him because he was such a swell guy.

[cEvin]

Originally Posted by blynk

Ok fine. Lets not take GST off fruit and veges. We just need to start taxing foods that have high sugar or fat.

doesn't make sense. taxing highly processed foods does though.

[chubby]

http://publicaddress.net/onpoint/its-real/

It's more than a credibility issue for Labour, it's a credibility issue for the plan – they've gone out of their way to prove that CGT is an absolutely credible way to bring our fiscal situation back in order.

The fact that this plan will bring about more debt in the next few years is (still) completely irrelevant. Let's get this message through: It's not a short-term problem. There is no short-term problem.

They miss the point because they never got what the point was in the first place, back in 2008. When the recession hit and people started to freak out, there was no plan. Not from Labour, not from National. They just changed the rhetoric: Instead of pork barrel spending and vote-buying, they called them “stimulus packages”, and instead of “I hate those dicks”, they called it “cutting back on waste in these tough times”.

[Golden Teapot]

Originally Posted by Anthony.S

By your statement it's obvious that your perspective is a little old fashioned and narrow.

Don't play stupid - on an internet forum when you do this people end up believing you're for real.

[Lightspeed]

Yeah, well, I suppose it's easier to believe he's playing stupid than to accept you're a archaic asshole who thinks people disagree with you only because they're envious.

[Golden Teapot]

Originally Posted by Charismo'

(edit: yes, I did a quick conversion using 2:1 simply for illustration but it wasn't relevant).

Of course it's relevant - otherwise you're getting away with a labour lie. You've made a comparison at a time when the NZD equivalent amount is much lower than it has ordinarily been for many decades; and I doubt anyone supposes it will stay this way for very long (which is a pity since it makes holidays much cheaper for us). And, you've decided to ignore that the real limit is about twice what you claim since most families would benefit from splitting income for tax purposes.

What you should really have claimed is that the top tax limit is not reached until something equivalent to $250k NZ of income. Here the proposition is to hit the limit at just $150k.

It's the usual nonsense - a single income family on $200k will be worse off then a two worker family where each earns $100k.

[Lightspeed]

Originally Posted by Golden Teapot

Oh don't worry - there are plenty of envious people and plenty of pretty stupid people all of whom will think labour are magical for suggesting this. In the first category we have the evil people who hold this country back (your traditional left voters) and in the second category those who have been taken advantage of by despicable politicians who'll promise anything to get power.

Geez, I just read this post. Look at the judgmental language. People who see things differently than GT are envious, stupid, evil and despicable.

In my opinion judgmental thinking and rational thinking aren't exactly things that go hand-in-hand...

[GRiM ReeFer]

I'm against a CGT because it is interference in the market, inteference creates volatility and uncertainty, we commonly know this as a bubble, end result? the small investors lose, wealth gets concentrated into the hands of a few as the market adjusts and all the small players get shaken out, then things carry on as usual with house price increases paralleling mortgage interest costs.

Labour and National are tag teaming us once again.

Asset sales or Tax your Assets

All politicians should be issued trench-coats and lollies


The government should let individuals loan money from them at OCR+admin cost, fuck the banks and we all win.

peg "inflation adjusted wage increases" to OCR. not some fictional figure.

[Lightspeed]

Originally Posted by GRiM ReeFer

Labour and National are tag teaming us once again.

Yeah, pretty much, hence the drive to move away from a political system composed of two major parties.

[A Corpse]

You mean the push to get back to FPP? Who organised that referendum, National?

[fidgit]

Originally Posted by Lightspeed

Geez, I just read this post. Look at the judgmental language. People who see things differently than GT are envious, stupid, evil and despicable.

In my opinion judgmental thinking and rational thinking aren't exactly things that go hand-in-hand...

He's like an evil Steve Jobs (in his turn of phrase at least)

[Lightspeed]

I think he's an excellent example of modernistic thinking (and why we live in a post-modern world.)

[Charismo']

Originally Posted by Golden Teapot

Of course it's relevant - otherwise you're getting away with a labour lie. You've made a comparison at a time when the NZD equivalent amount is much lower than it has ordinarily been for many decades; and I doubt anyone supposes it will stay this way for very long (which is a pity since it makes holidays much cheaper for us). And, you've decided to ignore that the real limit is about twice what you claim since most families would benefit from splitting income for tax purposes.

What you should really have claimed is that the top tax limit is not reached until something equivalent to $250k NZ of income. Here the proposition is to hit the limit at just $150k.

It's the usual nonsense - a single income family on $200k will be worse off then a two worker family where each earns $100k.

GT, I was considering a single earner not a single income family.

However, I agree that we should allow income splitting in New Zealand. Unlike higher taxes, income splitting doesn't seem that prevalent in Europe (certainly not in the nordics).

And, I think given the euro crisis and the state of british affairs, I'm not convinced we will see such a strong british pound again in the near term (within 5 years). Perhaps on a longer term but anybody's guess is as good as the next on that.

You can pick on my currency rates if you like. To take the UK right out of the equation I'll just state that I think 39% on every dollar above 150k NZD is not unreasonable and would probably be happy paying it (as an individual), with the proviso that income splitting would also be allowed.