If National wins ...

[Daytr]

Good point, but proportionally lower income people still pay more in GST than higher income people.

I assume you mean lower income people spend a higher proportion of their income, thus pay proportionally more GST than higher income people.

That would hardly ever be the case for people who are paying rent or mortgages as neither of these attract GST. And as we are frequently told, many lower income people spend a high proportion of their income on housing.

[fungus pudding]

Except hat NZ electricity prices are among the highest in the world.

That's interesting. Evidence?

[elZorro]

Electricity is no different than shoes, bicycles, visits to the dentist or going to the movies. The consumer pays for all these things. That's hardly acting like a tax.
The big hole in govt. tax revenue is the black economy - small traders and service industries not declaring all, or in some cases, any of their earnings.

Except that our govt, the state, owns a great deal of these electricity generating assets, (less than before National was in), paid for by taxes from previous generations. So the state is in a good position to make a profit from the sale of energy. There is a massive markup on gas, for one. Electricity, often generated by hydro for about 3c, is sold for 25c per kwHr. Great markup. GST gets added on top, another clear 15%.

Unfortunately FP is partly right, the energy consumed by households is about $2,000 p.a. each, 1.5mill homes, it's only $3bill or so of costs (but homes only use about 13% of all energy). The black economy might be as big as $7bill of more taxes due, per year. It's every "No sale" press on a cash register, the cashies by tradies, it all adds up. I can't see how it applies to businesses with many staff though.

http://www.stuff.co.nz/southland-tim...-black-economy

I like Sgt Pepper's idea, people who forward a clue about such practices get 10% of the IRD's return. If it has been done before and was electable, Labour should try it as a policy.

[artemis]

Good point, but proportionally lower income people still pay more in GST than higher income people.

How do you know that? My point about rent and mortgages stands.

[westerly]

Of course it was. It's complete nonsense. We all know that, just as we know lowering taxes stimulates the economy - raising them stifles it. (apart from shifting activity to the black economy) Subsides rarely end up where intended. In the case of housing grants, the vendor, not the purchaser, will benefit.

"Subsides" rarely do end up where intended. "Lowering taxes stimulates the economy" although frequently quoted is up for debate, studies in the US having shown the opposite is true.

westerly

[fungus pudding]

Except that our govt, the state, owns a great deal of these electricity generating assets, (less than before National was in), paid for by taxes from previous generations. So the state is in a good position to make a profit from the sale of energy. There is a massive markup on gas, for one. Electricity, often generated by hydro for about 3c, is sold for 25c per kwHr. Great markup. GST gets added on top, another clear 15%.

Unfortunately FP is partly right, the energy consumed by households is about $2,000 p.a. each, 1.5mill homes, it's only $3bill or so of costs (but homes only use about 13% of all energy). The black economy might be as big as $7bill of more taxes due, per year. It's every "No sale" press on a cash register, the cashies by tradies, it all adds up. I can't see how it applies to businesses with many staff though.

http://www.stuff.co.nz/southland-tim...-black-economy

I like Sgt Pepper's idea, people who forward a clue about such practices get 10% of the IRD's return. If it has been done before and was electable, Labour should try it as a policy.

Why not get them to promote it as policy then? That should finish them off once and for all - put a dying party out of its misery.

[elZorro]

Why not get them to promote it as policy then? That should finish them off once and for all - put a dying party out of its misery.

Well we all know National or ACT wouldn't do it, FP, most of their core voters will be running some kind of a tax dodge, surely. Legal or not.

It's probably not the sort of policy you'd campaign with. Very good idea though, it would put some tape over the no-sale buttons around the country, and force those offering cash jobs to have a harder think about it, when they try it on with new customers.

You have to put it in the perspective of possible Labour voters, who often don't own their own homes, do all their own handyman work, have little spare cash, get taxed on every bit of income (overtaxed if it's casual), and a lot of their household spending. Their opportunities for tax dodging are very limited, so they would see the idea as very fair.

It is also the IRD's job to be fair, as they say.

Bill English on The Nation, transcript. Some tough questions he needed to bat away, and although he's on very shaky ground, he did sound plausible. He's good, I'll give him that. National's handling of the economy hasn't been as impressive.

http://www.scoop.co.nz/stories/PO150...ll-english.htm

[artemis]

Black economy - I see IRD has started a cashies pilot campaign of 'it's not OK' in some Auckland suburbs.

Good thing too. Our small property maintenance business often unsuccessfully quotes against possible tax avoiders. Maybe they can somehow manage to be profitable charging $20 an hour and paying tax on it. Unlikely. (Right, back to finalising the GST return!)

http://www.stuff.co.nz/business/mone...hies-crackdown

[winner69]

EZ, recall what I said "A consistent narrative and perception go hand in hand."

Great example is Nick Smith talking on the Auckland Housing Accord and how successful it is. Same words every time.

Load of bollocks but gee a hell of a story.

But Labour seem unable to counter it

[fungus pudding]

Well we all know National or ACT wouldn't do it, FP, most of their core voters will be running some kind of a tax dodge, surely. Legal or not.

That's an absurd claim.
Incidentally it is not the IRD's job to be fair. If I remember correctly the fair trading mob stopped them from using that slogan. Rationale being their job is to collect taxes as set by the government of the day - fair or not.