Will the government impose a wealth tax to raise capital?

[Playa]

What could it potentially look like?and what is the best way to protect yourself from this?

[SBQ]

What could it potentially look like?and what is the best way to protect yourself from this?

1) NZ by comparison to our larger OECD nations are not so wealthy. The only aspect I could think of if they want more taxes is a) raise GST to 18% or 20% and or b) a Land Tax on real estate properties (as if property rates aren't already high enough).

2) To protect yourself and the best way? That would depend how far would you go in terms of sending your funds abroad. For as long as the wealth is on NZ soil AND as long as you are a NZ tax resident, then there's no real way of protection from NZ taxes. NZ like many places imposes taxes on a "World Wide Basis" so you have to report what you make abroad. To get around this is to consider setting up offshore "foreign trusts" and 'gift' the money to it. But I highly doubt most Kiwis would feel comfortable sending their $ aboard to be held and managed by some overseas broker and lawyer; as the possibility during the lifetime of the trust could come with mismanage and embezzlement of the funds. I often hear of tax haven places in the Carribean Islands and Cook Islands, etc. where clients have sent large sums there, but had difficulties getting the funds back to the country where they live. I mean we're talking decades of unknown situations ; people's circumstances change and so do their investments.

[macduffy]

Perhaps New Zealanders will have to thank their lucky stars and pay up their share if the government imposes higher/additional taxes. Either that, or emigrate if one has the necessary skills to persuade some other "more desirable" country to welcome them!

[Bjauck]

1) NZ by comparison to our larger OECD nations are not so wealthy. The only aspect I could think of if they want more taxes is a) raise GST to 18% or 20% and or b) a Land Tax on real estate properties (as if property rates aren't already high enough).
...
According to this table in 2018 the net financial wealth per person is similar in Australia, NZ, the UK and Canada https://en.wikipedia.org/wiki/List_of_countries_by_financial_assets_per_capita

Property Rates, like fuel tax, are a user-pays charge. Rates pay for local government services and all households end up paying them, whether directly by owner occupiers or indirectly through rent paid to the landlord.

GST is a regressive tax insofar as it places a greater percentage burden on those with lower incomes. It should really have been levied in conjunction with a income tax 0% band and a CGT and/or financial transaction tax/stamp duties. So NZ has scope to broaden the tax base without increasing the burden on GST and lower income groups.

[SBQ]

According to this table in 2018 the net financial wealth per person is similar in Australia, NZ, the UK and Canada https://en.wikipedia.org/wiki/List_of_countries_by_financial_assets_per_capita

Property Rates, like fuel tax, are a user-pays charge. Rates pay for local government services and all households end up paying them, whether directly by owner occupiers or indirectly through rent paid to the landlord.

GST is a regressive tax insofar as it places a greater percentage burden on those with lower incomes. It should really have been levied in conjunction with a income tax 0% band and a CGT and/or financial transaction tax/stamp duties. So NZ has scope to broaden the tax base without increasing the burden on GST and lower income groups.

You need to compare averages of the middle class (or the bulk of the people that pay taxes). When you look at Elon Musk, Jeff Bezo, Bill Gates, etc (who vastly pay a lot less tax as a %). their enormous wealth will distort the figure in that 'asset per capita wealth' Wiki link. It's really pointless. There will be 1% outliars that distort the majority that get slammed to pay more taxes as % of income.

I look at the kind of house the middle class person in Auckland lives in and what type of vehicle they own. Then I look at in America or Canada and see the size and comfort of middle class homes and their ability to afford vehicles like a Tesla Model 3 car or a Ford F150 ute (compared that a Ford Ranger cost wise and size?). There is a remarkable difference.

and since taxation is directly responsible for the level of disposable income left, this Wiki link will give you the better picture:

https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_income

NZ is way down at 17th place below the EU averages. Again, the outliars of the 1% wealthiest will overshadow the whole figures so this should only be taken as a grain of salt. I prefer to look with my own eyes.

Around 15 years ago NZ looked at broadening taxes. I could not the believe the input from advisors saying it was better to raise GST from 12.5% to 15%. I met accountants that said the same thing. It was like the gov't didn't pay attention how a 'consumption tax' hits the poor the hardest but who cares? Oh and the idea of removing GST on essentials and food was "too complicated of a system for NZ to use" (while Australia and Canada have managed to exempt GST on essential items ; needlessly I must say their accountants and financial advisors must be smarter).

The bigger issue is, at what level of taxation does NZ need to do before the wealth leaves the country? It's clear the NZ gov't won't touch real estate by taxing it because that is the only asset left going for the country. If they slam taxes on real estate like other nations, then perhaps we will see a much greater movement of NZ wealth to abroad. Also, there's no need to verify the difference. All one has to do is look at the foreign exchange rates. If more $ leaves the country than coming in, then you're going to see a weaker NZD.

[fungus pudding]

According to this table in 2018 the net financial wealth per person is similar in Australia, NZ, the UK and Canada https://en.wikipedia.org/wiki/List_of_countries_by_financial_assets_per_capita

Property Rates, like fuel tax, are a user-pays charge. Rates pay for local government services and all households end up paying them, whether directly by owner occupiers or indirectly through rent paid to the landlord.

GST is a regressive tax insofar as it places a greater percentage burden on those with lower incomes. It should really have been levied in conjunction with a income tax 0% band and a CGT and/or financial transaction tax/stamp duties. So NZ has scope to broaden the tax base without increasing the burden on GST and lower income groups.

The tables here are a few years old, but show that just 10% of households pay most of the income tax. It's still around that, but can't find a later chart at present. Higher earners also tend to be bigger spenders, so pay more GST as well.

https://www.kiwiblog.co.nz/2011/07/net_taxpayers.html

[Mr Slothbear]

You need to compare averages of the middle class (or the bulk of the people that pay taxes). When you look at Elon Musk, Jeff Bezo, Bill Gates, etc (who vastly pay a lot less tax as a %). their enormous wealth will distort the figure in that 'asset per capita wealth' Wiki link. It's really pointless. There will be 1% outliars that distort the majority that get slammed to pay more taxes as % of income.

I look at the kind of house the middle class person in Auckland lives in and what type of vehicle they own. Then I look at in America or Canada and see the size and comfort of middle class homes and their ability to afford vehicles like a Tesla Model 3 car or a Ford F150 ute (compared that a Ford Ranger cost wise and size?). There is a remarkable difference.

and since taxation is directly responsible for the level of disposable income left, this Wiki link will give you the better picture:

https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_income

NZ is way down at 17th place below the EU averages. Again, the outliars of the 1% wealthiest will overshadow the whole figures so this should only be taken as a grain of salt. I prefer to look with my own eyes.

Around 15 years ago NZ looked at broadening taxes. I could not the believe the input from advisors saying it was better to raise GST from 12.5% to 15%. I met accountants that said the same thing. It was like the gov't didn't pay attention how a 'consumption tax' hits the poor the hardest but who cares? Oh and the idea of removing GST on essentials and food was "too complicated of a system for NZ to use" (while Australia and Canada have managed to exempt GST on essential items ; needlessly I must say their accountants and financial advisors must be smarter).

The bigger issue is, at what level of taxation does NZ need to do before the wealth leaves the country? It's clear the NZ gov't won't touch real estate by taxing it because that is the only asset left going for the country. If they slam taxes on real estate like other nations, then perhaps we will see a much greater movement of NZ wealth to abroad. Also, there's no need to verify the difference. All one has to do is look at the foreign exchange rates. If more $ leaves the country than coming in, then you're going to see a weaker NZD.


SBQ i agree that simply comparing incomes or wealth will not give you a complete picture, better to try find purchasing power parity numbers but even these are probably a little off but the best yardstick.

in economics you will find GST is one of the most efficient possible taxes which is probably why it was so highly recommended and for good reason. If you try to create exceptions and ringfence certain catagories, you remove a lot of economic efficiency.

i get what you’re saying about it being regressive and you’re correct but tobacco taxes are also regressive and yet still a very good idea.

Anecdotally if I compare my household with that of extended family in Germany who I visit around once a year I would say we are very much on equal footing living standard wise and they pay significantly more in tax than we do.

I would really like to see more environmental based taxes and congestion traffic charging.

[SBQ]

SBQ i agree that simply comparing incomes or wealth will not give you a complete picture, better to try find purchasing power parity numbers but even these are probably a little off but the best yardstick.

in economics you will find GST is one of the most efficient possible taxes which is probably why it was so highly recommended and for good reason. If you try to create exceptions and ringfence certain catagories, you remove a lot of economic efficiency.

i get what you’re saying about it being regressive and you’re correct but tobacco taxes are also regressive and yet still a very good idea.

Anecdotally if I compare my household with that of extended family in Germany who I visit around once a year I would say we are very much on equal footing living standard wise and they pay significantly more in tax than we do.

I would really like to see more environmental based taxes and congestion traffic charging.

GST is only effective if there are people that can pay the tax - when disposable incomes are low, so will the GST intake. NZ citizens are frugal so the only added benefit I see with GST is it catches a portion of the underground untaxed income. I do feel there's more resentment in the way NZ wants to tax things differently, I mean the excuses I hear are weak when they don't question and LOOK how larger nations have become effective at exempting GST on ie essentials foods. While on the same hand, we have importation of goods in NZ that is subjected to all different rates of taxes and fees (excise tax, zero rated items, GST, MAF, Biosecurity, you name it). A whole lot of excuses if you ask me.

When Obama thought of bringing in VAT to the US, where were the economists saying "how effective and efficient GST is? From what I read, the problem with consumption base taxation is it deters wealth elsewhere as the initial tax take from GST will be large and then over time, the amount of GST collected erodes as the cost of the compliance and tax enforcement businesses make it inefficient.

You may not be comparing apples with apples with your inlaws in Germany. The living standards are clearly different. I mean if you want to compare the cost of living in both places, try looking at the quality of houses. Germany, like Canada experience cold winters so their homes would have comfortable central heating. The problem in NZ is what a person that pays $500/month in electricity is not the same $500/equivalent spent in Germany. In Canada, people heat large 4000sft size McMansion homes and do not pay $500/month for that constant whole house comfort. My friend in Chch was paying over $1,000 a month trying to central heat his home because his elderly parents needed constant healthy room temperatures through winter. There's an issue with this scenario ; the person in Canada is not worried about a $500/month heating bill in their large home because that's considered.. 'middle class' while in NZ, it seems the people are ever so frugal when it comes to home comfort. Heating 1 room at a time in conservation. This tells me middle class Kiwis don't have that disposable income.

Just keep in mind if the gov't goes on the path in raking more taxes, they need to be sure about the exodus of wealth that would leave NZ. We had a time where there was "Gift Duty" and at the end, the gov't couldn't manage it and neither could the lawyers. If the current gov't goes in a step in that direction, dictating those where they could give their after-tax money to (such as a foreign trust), then I would see a more gradual erosion of NZ's standard of living. From where I grew up, the Canadians that wonder about Carbon Taxes ask their gov't, has a carbon tax done anything to change the climate? and here's the irony, the whole world is in shutdown because of COVID19 and gov'ts are printing money like crazy by handing out $$ to everyone in need. LOL.. I mean that's the exact opposite of what 'carbon tax' was suppose to achieve. They wanted reductions in CO2 emissions... and the whole world did that.. but gov'ts didn't expect paying trillions of $ to keep people alive and out of anarchy.

[jr1973]

What could it potentially look like?and what is the best way to protect yourself from this?
That would depend on your ability to move. I recently moved from Australia to NZ post selling a company and shifting assets. That legally saved me 25% in capital gains on a large portion of shares due to trust structures so a) optimise your tax structure b) be willing and able to move to a "lower cost" jurisdiction. There is an overhead however... tax audits are going to come your way because the tax authority will want to validate that what your advisor told you stacks up. That brings me to another point... have a good tax lawyer/advisor and do what they say. You may receive a ruling against you ie "pay the tax they reckon you owe" but you will not get hit with penalties and interest.
Nomad Capitalist on youtube has some interesting idea's on being a 'global citizen'. I have friends in the Philipines that run all funds through Singapore and pay basic wages to his staff in Cebu which by they way is a great lifestyle. Like most things, what do you want from life? 183 days in a foreign jurisdication makes you a non-resident. Most countries have flexible citizenship options for the right level of investment.

[SBQ]

That would depend on your ability to move. I recently moved from Australia to NZ post selling a company and shifting assets. That legally saved me 25% in capital gains on a large portion of shares due to trust structures so a) optimise your tax structure b) be willing and able to move to a "lower cost" jurisdiction. There is an overhead however... tax audits are going to come your way because the tax authority will want to validate that what your advisor told you stacks up. That brings me to another point... have a good tax lawyer/advisor and do what they say. You may receive a ruling against you ie "pay the tax they reckon you owe" but you will not get hit with penalties and interest.
Nomad Capitalist on youtube has some interesting idea's on being a 'global citizen'. I have friends in the Philipines that run all funds through Singapore and pay basic wages to his staff in Cebu which by they way is a great lifestyle. Like most things, what do you want from life? 183 days in a foreign jurisdication makes you a non-resident. Most countries have flexible citizenship options for the right level of investment.


Bravo! yes as i've been hard hitting this forum, taxation is the key but no one seems to question it.

The reason why the wealth tax has not been taken seriously is more to do with NZ's trust structure - any wiff of a wealth tax and you'll see all the lawyers rubbing their hands forming trust left / right / & centre. As I recently conveyed with my accountant, after a long hassle dealing with NZ's FMA, AML, & police checks ; the law does not prevent a person from 'GIFTING' their assets away. However! if the gifting can be proven intentional for the sole purpose of avoiding taxes, then IRD would have a go at you. But as you say, lawyers and tax accountants are much more smarter than that and no one in NZ should get's hit by IRD as long as they DO what they say (equally important, DON'T do the things that gets you in trouble).

I'm quite familiar with Canada's tax residency laws and during my studies, Canada has a well proven reputation internationally at taxing non-residents living abroad. One can not assume 183 days is a rule; it's 'just ONE' of the requirements. In recent years, have a look at the real estate market in Vancouver and question why so many of the rich Chinese have essentially laundered their $ through Vancouver real estate? When Trudeau was elected, he allocated a significant budget to go after these 'tax cheats' and liars claiming tax free capital gains owning Vancouver real estate when they don't live in the country nor, some even claim social benefits, medical care, education, the list goes on. You are correct! it all depends on the person's "ability to move" and for most, they won't meet that criteria of being truly non-resident. You only need a few 'ties' on a list of 20 things the CRA goes after to deem a person a tax resident in Canada. I'm am 100% certain, NZ's IRD follows a similar rule. Dependents like children are usually the easy ones they use to deem a wealthy non-resident to be a tax resident. (it's quite common for Asian families to send their children abroad for schooling, but easily cross the line when they buy a house instead of renting, when the student obtains a driver's license, medical care access, member of a church organisation, various bank accounts, and so many ticks on the list that would 'deem' a person a tax resident.

When I left Canada some 20+ years ago, all that was required was to fill out a 2 page form declaration of non-residency, the date when I would leave Canada, and a check list of things that would deem me still a resident ; they never bothered to take the time to verify things and you just filled it and away you go. Typically, giving up a driver's license, medical care card, local memberships, were usually difficult for those wanting to make that declaration. I'm quite certain today, these 'ties' are enforced more closely than ever. Especially with the recent introduction of the CRS (Common Reporting Standard) put out by the OECD where some 110 nations around the world have forced their banks to implemented it. Ironically the USA is not part of the CRS so any non-resident holding a bank account there will have no concerns of their bank sharing information to relevant tax authorities.

As for how will the NZ gov't shore up more funds? My guess would be a rise in GST from 15% to say 18% or even as high as 20%. CGT has been tried last year and because of the 3 way coalition party in gov't, there was no way CGT would pass. Jacinda Ardern even specifically said, "There will be no CGT for as long I am in gov't" Yet her election platform originally said she would bring in CGT.

[Panda-NZ-]

As for how will the NZ gov't shore up more funds? My guess would be a rise in GST from 15% to say 18% or even as high as 20%. CGT has been tried last year and because of the 3 way coalition party in gov't, there was no way CGT would pass. Jacinda Ardern even specifically said, "There will be no CGT for as long I am in gov't" Yet her election platform originally said she would bring in CGT.

It needs to be fair for everyone not just some who pay 0% now.

For a young person they will be paying GST, PAYE, student loan repayments and rents that are very high. They gave up their jobs so others could have a bit more time. It's time to have a relook at something which is fair for everyone across age and other groups.

I'm thinking PAYE cuts bundled in with a CGT, a tax which every country already has in place so you can't go anywhere.

[iceman]

. Like most things, what do you want from life? 183 days in a foreign jurisdication makes you a non-resident. Most countries have flexible citizenship options for the right level of investment.

Becoming a non tax resident in NZ is a whole lot more complicated than that

[blackcap]

It needs to be fair for all parties.



What does that actually mean? It needs to be fair? I hear that word bandied about so often, normally by those envious of others. But it is never explained to me what fair actually means in quantifiable terms.
What do you mean, young people gave up their jobs? What bunkum. They did not give up anything so others could have more time.

[fungus pudding]

What does that actually mean? It needs to be fair? I hear that word bandied about so often, normally by those envious of others. But it is never explained to me what fair actually means in quantifiable terms.
What do you mean, young people gave up their jobs? What bunkum. They did not give up anything so others could have more time.

Flat tax would be a step towards fairness: i.e. one percentage rate only, levied on every dollar earned. It is ridiculous that someone may have to earn more to buy a jug of beer than the person she is drinking with.

[blackcap]

Flat tax would be a step towards fairness: i.e. one percentage rate only, levied on every dollar earned. It is ridiculous that someone may have to earn more to buy a jug of beer than the person she is drinking with.

A flat tax has always appealed to me as it is the most equitable. Another fair system would be everyone pays $10,000 in tax irrespective of earnings and post that gets to keep the rest. That way everyone pays the same. That sounds fair to me too.

[Bjauck]

A flat tax has always appealed to me as it is the most equitable. .... A flat tax on capital or capital gains or transactions or real estate and asset purchases? Otherwise a flat tax just on income or on income and goods and services is arbitrary and inequitable.

[SBQ]

It needs to be fair for everyone not just some who pay 0% now.

For a young person they will be paying GST, PAYE, student loan repayments and rents that are very high. They gave up their jobs so others could have a bit more time. It's time to have a relook at something which is fair for everyone across age and other groups.

I'm thinking PAYE cuts bundled in with a CGT, a tax which every country already has in place so you can't go anywhere.

Need to distinguish what category of tax we're talking about, which are basically 2 camps ; Consumption Tax and Income Tax.

Gov'ts like to increase consumption taxes as it's less hassles, regulations, paperwork etc and most important of all, it captures the underground economy (that is undeclared cash, when it's spent, the GST gets a % of it).

NZ's Income Tax system in it's current state is inequitably fair. We have this "Working For Families Tax Credit" but it's not helping much in getting such families into their own home. I do believe NZ needs to look what other countries have donen to address household income inequality. Note I mention 'household' because it's important that spouses should not be penalised in the same way as individuals living alone. There needs to be consideration for a person that works 40 hrs a week and having to support a spouse that has to take care of their children. The strategy, like most NZ gov't tax initiatives are blunt in that they use few hard figures to determine people's criteria for getting such benefits. This is the problem we constantly see for all occupations across the country. Why is a school teacher's salary not much more living in Auckland than in small rural places where house prices would only be fraction what a house costs in Auckland? In Canada, where you live in regional locations determines the tax take (ie. Northern Living Allowance). Want to live in the big cities? expect to pay more income tax, more insurance, more for everything. So before one can determine what is an equitable tax system, you have to look at the whole picture.

CGT certainly needs to be addressed in NZ. While many say IRD already has a system in place for taxing those that 'frequently speculate on an asset / albeit shares or rental properties', the vast majority of them pay no tax.

Over in America i'm a big fan of their "Earned Income Tax Credit". It may be similar to NZ's Working for Families Tax Credit but it differs in that it's more effective in reducing income inequality. What did the NZ Labour Party do to address income inequality? Well they raised minimum wage. Why doesn't the NZ gov't consider the other approach of keeping wages low but tax credit the low income earner in other ways? We know labour costs are a big issue for employment in any industry so elevating the cost would just simply deter more businesses to operate and encourages more of the behaviour where workers are 'contracted' on a B2B basis.
If you want to increase productivity, don't tax it out of the entrepreneurs or businesses. How about start taking it from those that have the assets, such as the many many politicians that own real estate and wanting that tax free capital gain?

As for a 'flat tax' system on income? Well that doesn't work so well if there's a high % of unproductive labour force. It's also far from being equitable as it does not address the 'haves and the have nots'. The 'have nots' are rioting in America for this simple reason, as Warren Buffet has said, a person merely being born from a wealthy family has all the advantages than the minorities that have a culture of low unproductive habits.

https://finance.yahoo.com/news/warren-buffett-ideas-to-end-inequality-134650421.html

“If you go back to 1800 and 80% of the people were farmers, and you were the best farmer in Omaha and I was the worst, the difference in our value might be two to one,” he says. “You might be worth twice as much if we're out there picking corn, or whatever we might be doing or planting.”

Today? “If you're in the top 1/10 of 1% in basketball ability, or football ability, or baseball ability, you aren't worth anything,” Buffett says by way of example. “If you're in the top 100th of 1%, now you're worth millions. Sports is an easy example, because we all like to watch them. We don't want to watch a bunch of guys like you and me play basketball. So that's where the money is. But that didn't exist 200 years ago.

“And so you get this pushing of extreme rewards to people who are very, very good at something the market demands. And people demand entertainment. They demand people apparently that arbitrage securities. There's certain specialties.”

So what Buffet is saying, there needs to be more taxes for those on the extreme end of the income. This is not what i'm seeing in NZ. It maxes out at 33% on over $70K of income. Perhaps we need to start seeing a 60% or 70% take for those earning over $1M per year like all these executive CEOs we have in NZ? Canada has similar tax rates for those earning nearly $500K / year and certainly, those CEOs or high income folk aren't complaining about that high tax take.

[Panda-NZ-]

Need to distinguish what category of tax we're talking about, which are basically 2 camps ; Consumption Tax and Income Tax.

It is slightly bad for small business though (tax on every $1 of revenue). Imagine how quickly it would be cut if it was applied to all property income. Though I like the fact that it catches more overseas services now whereas that was mostly being avoided (another loophole in GST) until recently.

The high end earn currently non-taxed income from shares/property and not so much wages so subjecting that to tax will be better. They would get to keep all of the existing gains presemuably since it can't be applied retrospectively which is highly fair even from their own perspective.

[blackcap]

It is slightly bad for small business though (tax on every $1 of revenue). Imagine how quickly it would be cut if it was applied to all property income. Though I like the fact that it catches more overseas services now whereas that was mostly being avoided (another loophole in GST) until recently.

The high end earn currently non-taxed income from shares/property and not so much wages so subjecting that to tax will be better. They would get to keep all existing gains presemuably since it can't be applied retrospectively which is highly equitable even from their own perspective.

Is it GST you are talking about? GST does not affect small business at all. Small business does not pay the tax. The consumer does. All business does is act as the collection agency for the government.

[Panda-NZ-]

Is it GST you are talking about? GST does not affect small business at all. Small business does not pay the tax. The consumer does. All business does is act as the collection agency for the government.

How so? It is a revenue tax that can't be avoided (one of its virtues some have said).

Despite some of the holes I brought up of course.

[fungus pudding]

How so? It is a revenue tax that can't be avoided (..which is one of its virtues apparently).
Surely you know that it is you who pays it.
Have you never noticed?

[SBQ]

It is slightly bad for small business though (tax on every $1 of revenue). Imagine how quickly it would be cut if it was applied to all property income. Though I like the fact that it catches more overseas services now whereas that was mostly being avoided (another loophole in GST) until recently.

The high end earn currently non-taxed income from shares/property and not so much wages so subjecting that to tax will be better. They would get to keep all of the existing gains presemuably since it can't be applied retrospectively which is highly equitable even from their own perspective.

Well if you look at the UK they have VAT at 20%. Many places in Europe have a high import duty rate like 33% (which essentially ends up as a consumption tax). Small businesses aren't stung with the GST (they simply pass it on to IRD as an accounting / auditing measure) ; UNLESS the small business is not GST registered, for which they will be stuck paying the GST; but many unregistered businesses don't bother to do proper account or remit taxes).

I do believe NZ has lost it's unique tax advantage of the pre 2000 era. (such as no tax on foreign investments and residents could buy / sell houses without pay any tax on the gains more frequently). In recent years (ie with the media exposure of the Panama Papers etc), NZ is no longer a place where one can hide their wealth. So rather than the gov't trying to make NZ unique, they might as well go all in and tax everything like they do in the EU. But will the NZ gov't do so? As you say the wealthy make their earnings from capital gains through real estate and shares.... what repercussions would we see if such assets were hit with CGT at a higher level? Something tells me the NZ gov't is afraid as I think there's already a fine line where the rich start moving their assets abroad. You kill the only investment left for NZ, what incentive would there be left to live in NZ?

[Panda-NZ-]

what repercussions would we see if such assets were hit with CGT at a higher level? Something tells me the NZ gov't is afraid as I think there's already a fine line where the rich start moving their assets abroad. You kill the only investment left for NZ, what incentive would there be left to live in NZ?

NZers would probably move in with improved retirement saving policies. Not a small elite, foreigners or US/aussie banks. They are in a small way but not enough. :\

[blackcap]

A flat tax on capital or capital gains or transactions or real estate and asset purchases? Otherwise a flat tax just on income or on income and goods and services is arbitrary and inequitable.

Well on income of course, but what is the definition of income. That is what may need to be looked at. I have no problem with a CGT if it is inflation adjusted.

[artemis]

...
The high end earn currently non-taxed income from shares/property and not so much wages so subjecting that to tax will be better. They would get to keep all of the existing gains presemuably since it can't be applied retrospectively which is highly fair even from their own perspective.

All income is taxable regardless of its source.

[SBQ]

Well on income of course, but what is the definition of income. That is what may need to be looked at. I have no problem with a CGT if it is inflation adjusted.

Definition of 'income' has been spelled out quite easily in the tax books abroad. When I was doing tax courses at uni in Canada, the ITA had all sorts of definitions for incomes / scenarios. But the most interesting aspect i've found was there was no definition for a 'person' in the book. They intentionally left it out to allow for the future trend (as we see today 'virtual bodies'? which can be taxed). It would not take much for IRD to follow similar rules and copy the wording nearly word for word.

Inflation adjusted CGT has been tried in Australia for many years... it didn't work and was complex - having all sorts of inflation rate tables that could be scrutinized as the inflation rates of certain assets varied from year to year from asset to asset. At the end they simply copied the Canadian method of taxing CGT by simply taking half of the gain as being taxable income. The result overall is still a lot less tax paid as the 1 half of the gain is tax free in the person's pocket. I can't see how this would not work in NZ - it's only a question if the NZ politicians want to pay their fair share too?

[fungus pudding]

Well on income of course, but what is the definition of income. That is what may need to be looked at. I have no problem with a CGT if it is inflation adjusted.

Me either, a long as it applies to all real property, including the family home, and collectables; e.g art, cars, antiques, jewellery and a few other bits. Currently they fall under the same 'intent' rules. A CGT needs to be comprehensive and well designed or it's useless, or even worse than useless as it redirects activities.

[Bjauck]

Well on income of course, but what is the definition of income. That is what may need to be looked at. I have no problem with a CGT if it is inflation adjusted. All gains, income and capital, should be taxed. If there should be an inflation adjustment, then it would make more sense instead for investment income or fixed interest to have an annual inflation adjustment before income from the investment is taxed. Then any gains should be taxed when the asset is sold.

The equity in the family home should be included as a taxable asset too, with imputed rent and taxable capital gains with the annual allowance for inflation offset against imputed rent.

Perhaps there should be a threshold before the flat tax applies.

[SBQ]

Here's an article I came across today:

https://www.interest.co.nz/news/104644/brian-fallow-looks-where-government-getting-money-its-dramatic-increase-spending

[fungus pudding]

All gains, income and capital, should be taxed. If there should be an inflation adjustment, then it would make more sense instead for investment income or fixed interest to have an annual inflation adjustment before income from the investment is taxed. Then any gains should be taxed when the asset is sold.

The equity in the family home should be included as a taxable asset too, with imputed rent and taxable capital gains with the annual allowance for inflation offset against imputed rent.

All gains, income and capital, should be taxed

"All gains, income and capital, should be taxed"

So along with that I presume you think all capital losses should be deductible.

"All gains, income and capital, should be taxed"

Then it would no longer be a flat tax.

[Bjauck]

"All gains, income and capital, should be taxed"

So along with that I presume you think all capital losses should be deductible.

"All gains, income and capital, should be taxed"

Then it would no longer be a flat tax.

All net gains...so yes losses would be deductible or be able to be carried forward...

Of course it would still be a flat tax if all gains were taxed at say 20%. It is an arbitrary decision to tax all income and not all capital gains.

However you may be talking about a poll tax? Every person (or adult?) taxed the same dollar amount? Which of course takes no account of career progression and would end up with a gerontocracy with most young adults and families in tenements owned by the one percenters?

[waikare]

[QUOTE=SBQ;822988]Need to distinguish what category of tax we're talking about, which are basically 2 camps ; Consumption Tax and Income Tax.

If Labour should be returned to office after this coming election, more than likely there will be an increase and additional taxes applied. Call what ever you wish, but in the end it's just another tax.








[

[SBQ]

[QUOTE=SBQ;822988]Need to distinguish what category of tax we're talking about, which are basically 2 camps ; Consumption Tax and Income Tax.

If Labour should be returned to office after this coming election, more than likely there will be an increase and additional taxes applied. Call what ever you wish, but in the end it's just another tax.

Yep and in the grand of schemes... how much taxes is enough we should be paying? That's why when I look at an investment, I need to understand how much tax the corporation pays, how much tax the managed fund pays, how much tax the client pays and their income tax they pay. Then you go on to the consumption side like GST, rates, wow too many to list.... Is there a point where taxes are too high already? As I told my wife this morning, there needs to be another level of tax on the ultra high income earners - those around $70K / year income pay the same level of tax on an extra $1 earned than those CEOs earning $500K to $5M a year !!

[JBmurc]

[QUOTE=waikare;824753]

If Labour should be returned to office after this coming election, more than likely there will be an increase and additional taxes applied. Call what ever you wish, but in the end it's just another tax.

Yep and in the grand of schemes... how much taxes is enough we should be paying? That's why when I look at an investment, I need to understand how much tax the corporation pays, how much tax the managed fund pays, how much tax the client pays and their income tax they pay. Then you go on to the consumption side like GST, rates, wow too many to list.... Is there a point where taxes are too high already? As I told my wife this morning, there needs to be another level of tax on the ultra high income earners - those around $70K / year income pay the same level of tax on an extra $1 earned than those CEOs earning $500K to $5M a year !!

I agree ....could bring one it @ $125K>> 39% tax.......that along with reducing Council-Govt wages and numbers + cutting back on wasting of Tax payers funds would help ..

[Bjauck]

[QUOTE=SBQ;824842]

I agree ....could bring one it @ $125K>> 39% tax.......that along with reducing Council-Govt wages and numbers + cutting back on wasting of Tax payers funds would help .. Increasing income tax rates for higher incomes will make investing in those assets that earn little income but potentially tax free capital gains even more tax efficient and appealing.

Some people say that capital gains taxes are iniquitous if they do not allow for the inflationary aspect of maintaining the capital asset. So why shouldn’t an individual (income earning personal capital if you like) be allowed to earn a minimum tax-free income that is necessary for maintaining that individual. If for example $35000 is the current annual amount needed for an individual adult to subsist (food, shelter and nutrition) in NZ, then there should be a threshold of $35,000 before the tax rate is applied. That would help avoid the double taxation of income tax and GST on non-discretionary subsistence expenditure. Of course different areas if NZ have different costs of living, so maybe a regional subsistence threshold would be needed.

[SBQ]

[QUOTE=JBmurc;825215] Increasing income tax rates for higher incomes will make investing in those assets that earn little income but potentially tax free capital gains even more tax efficient and appealing.

Some people say that capital gains taxes are iniquitous if they do not allow for the inflationary aspect of maintaining the capital asset. So why shouldn’t an individual (income earning personal capital if you like) be allowed to earn a minimum tax-free income that is necessary for maintaining that individual. If for example $35000 is the current annual amount needed for an individual adult to subsist (food, shelter and nutrition) in NZ, then there should be a threshold of $35,000 before the tax rate is applied. That would help avoid the double taxation of income tax and GST on non-discretionary subsistence expenditure. Of course different areas if NZ have different costs of living, so maybe a regional subsistence threshold would be needed.

If you look at places like Australia & Canada & the US, you'll find their tax system has address all these issues.

Canada as a personal 'exemption' limit of around $10K a year before ANY income tax is paid (in NZ? nope). Canada also has a comprehensive tax credit scheme for the disadvantaged / those on disabilities / those that endured hardship (in NZ? this is done though WINZ with limited success).

Australia's original method for determining CGT had an inflation factor table. As I mentioned before, it was grossly inaccurate as so many different asset classes have different inflation rates (ie. house price inflation is different than shares). At the end, Australia just copied the Canadian tax method of CGT which is 50% of the gain is in your pocket (you don't declare), and the other 50% is what you put down as taxable income. That 50% free bee gain pretty much accounts for inflation without the complex inflation tables that they had before.

Despite NZ's existing no tax on share price gains, there still is the expectation by NZ investors to have 'dividends' paid for their investment. Basic accounting shows that once the profits of the company is paid out in dividends, the book value (equity) of the company remains the same and therefore.. the share price will remain the same, netting NO share price appreciation and thus no capital gain on sale of the shares. If you believe higher income tax brackets would change people's approach to investing into more assets with capital gains - i'm afraid there are not many in NZ (buy more residential properites?). What has to be done to bring a more fair tax system in NZ is BOTH CGT (specifically at multiple ownership of houses) and more income taxes on the higher end brackets. This is the way it's done in Canada.

[fungus pudding]

[QUOTE=waikare;824753]

If Labour should be returned to office after this coming election, more than likely there will be an increase and additional taxes applied. Call what ever you wish, but in the end it's just another tax.

Yep and in the grand of schemes... how much taxes is enough we should be paying? That's why when I look at an investment, I need to understand how much tax the corporation pays, how much tax the managed fund pays, how much tax the client pays and their income tax they pay. Then you go on to the consumption side like GST, rates, wow too many to list.... Is there a point where taxes are too high already? As I told my wife this morning, there needs to be another level of tax on the ultra high income earners - those around $70K / year income pay the same level of tax on an extra $1 earned than those CEOs earning $500K to $5M a year !!

Certainly there should be another level for those on 500k to 5M per annum. These individuals have certainly made their contribution and should pay a reduced rate of tax after, say, 200k. What a boost to the economy if high earners were encouraged to earn more - rather than wasting time and energy on 'tax planning'. And what an insult to tell a man who has paid $1 million in tax that he now must pay a higher rate because 'he can afford it!' I'm glad you can see the folly of the present system, and good on you for pointing it out to your wife. My wife is far too busy stuffing the mattresses with banknotes to listen to me.:p

[artemis]

[QUOTE=JBmurc;825215] .... So why shouldn’t an individual (income earning personal capital if you like) be allowed to earn a minimum tax-free income that is necessary for maintaining that individual. If for example $35000 is the current annual amount needed for an individual adult to subsist (food, shelter and nutrition) in NZ, then there should be a threshold of $35,000 before the tax rate is applied. That would help avoid the double taxation of income tax and GST on non-discretionary subsistence expenditure. Of course different areas if NZ have different costs of living, so maybe a regional subsistence threshold would be needed.

What you suggest is pretty much done already (and more) but in a much less efficient way through government transfers. Those transfers have a massive bureaucracy behind them. Your suggestion is a much simpler alternative, but in practice how long would it be before those transfers crept back in. And up. Especially where families with children are concerned - they make great front page copy.

There have been attempts here to reduce welfare benefits or increase work responsibilities when households have additional children while on benefit. Failed.

A UK scheme though was implemented in which certain child tax credits were restricted to 2 children. Uproar, then settled down and funnily enough an increase in working parents.

[GTM 3442]

Will there be a Wealth Tax? Almost certainly.

Will it be called a Wealth Tax? Almost certainly not.

Will it cover non-financial and non-property assets? Initially not.

Will there be scope creep? Oh Yes!

[artemis]

Will there be a Wealth Tax? Almost certainly.

Will it be called a Wealth Tax? Almost certainly not.

Will it cover non-financial and non-property assets? Initially not.

Will there be scope creep? Oh Yes!
Probably correct on all points. On past form rental properties will be first cabs off the rank. I wonder if they will first check out the costs and benefits. Housing in general is a complex beast with many levers including rather importantly individuals with assets acting in their own interests.

Wonder if anyone has ever developed a NZ econometric model. Like assessing impacts if any of the levers change.

[SBQ]

Probably correct on all points. On past form rental properties will be first cabs off the rank. I wonder if they will first check out the costs and benefits. Housing in general is a complex beast with many levers including rather importantly individuals with assets acting in their own interests.

Wonder if anyone has ever developed a NZ econometric model. Like assessing impacts if any of the levers change.

I'm just curious, every other OECD nation that has CGT always targets housing as the key primary motive to discourage speculation in this asset class. Why is it in past gov't in NZ, they have avoided this issue? Housing is not complex - you realise it's probably the most reliable, easy method to impose CGT because all land title transfers are recorded. Rates valuations are recorded. Who and how the property is owned is also recorded. The computer system at IRD can easier do checks and impose CGT as soon as the property changes hands. The beauty thing about CGT is 'a gain is a gain'. The seller can't dispute how much they sold the property at and they also can't dispute the purchase price.

[fungus pudding]

I'm just curious, every other OECD nation that has CGT always targets housing as the key primary motive to discourage speculation in this asset class. Why is it in past gov't in NZ, they have avoided this issue? Housing is not complex - you realise it's probably the most reliable, easy method to impose CGT because all land title transfers are recorded. Rates valuations are recorded. Who and how the property is owned is also recorded. The computer system at IRD can easier do checks and impose CGT as soon as the property changes hands. The beauty thing about CGT is 'a gain is a gain'. The seller can't dispute how much they sold the property at and they also can't dispute the purchase price.


It's also a useless tax if private residential properties are excluded. And political parties who favour CGT know that unless applied as an envy tax, i.e. excluding owner occupied dwellings, they will get booted out.

[GTM 3442]

I'm just curious, every other OECD nation that has CGT always targets housing as the key primary motive to discourage speculation in this asset class. Why is it in past gov't in NZ, they have avoided this issue? Housing is not complex - you realise it's probably the most reliable, easy method to impose CGT because all land title transfers are recorded. Rates valuations are recorded. Who and how the property is owned is also recorded. The computer system at IRD can easier do checks and impose CGT as soon as the property changes hands. The beauty thing about CGT is 'a gain is a gain'. The seller can't dispute how much they sold the property at and they also can't dispute the purchase price.

Assuming of course that the property is not owned by a company, and the company changes ownership while the property does not.

[GTM 3442]

deleted. Pushed "save" twice or some other dumb mistake

[SBQ]

Assuming of course that the property is not owned by a company, and the company changes ownership while the property does not.

?? From the view of the tax dept. it makes no difference what entity owns the property. The longer the corporation or trust that holds the property, the more tax they will collect when the time comes, that the property changes hands.

In fact, the shareholder of a corporate is disadvantaged from a tax point of view as the entity pays corporate tax on earnings. When dividends are issues, the shareholder is stung with RWT (unless partially imputed tax credited - which in most cases is not). In the case of large publicly traded corporations, the shareholders have absolutely no bearing if the hard assets (such as buildings) are sold off for a major capital gain (ie because they're moving locations? etc.).

[Bjauck]

It's also a useless tax if private residential properties are excluded. And political parties who favour CGT know that unless applied as an envy tax, i.e. excluding owner occupied dwellings, they will get booted out.
Of course excluding net capital gains whilst taxing ALL net income is arbitrary favouritism. Introducing a CGT would be an attempt to redress that even if the benefit of occupation and the capital gains from owner-occupied equity in the primary residence remained untaxed.

if you like a flat tax, then there is no logical consistency to tax all net financial gains from human capital (wages from Labour and toil) whilst leaving out net financial gains from non-human capital. All gains should be taxed for consistency. It comes down to political power and influence. In NZ, The owners of non-human capital have greater influence and clout, hence this inconsistency continues.

[GTM 3442]

?? From the view of the tax dept. it makes no difference what entity owns the property. The longer the corporation or trust that holds the property, the more tax they will collect when the time comes, that the property changes hands.

In fact, the shareholder of a corporate is disadvantaged from a tax point of view as the entity pays corporate tax on earnings. When dividends are issues, the shareholder is stung with RWT (unless partially imputed tax credited - which in most cases is not). In the case of large publicly traded corporations, the shareholders have absolutely no bearing if the hard assets (such as buildings) are sold off for a major capital gain (ie because they're moving locations? etc.).

That was in response to your point that "The computer system at IRD can easier do checks and impose CGT as soon as the property changes hands."

If the property does not change hands, there is no transfer registered at LINZ, and thus nothing for the IRD system to "find". In this scenario, there is no need for the property to ever change hands, and thus no tax liability.

There may have been a change in beneficial ownership, but this is not captured by the Title Registration system.

As far as dividends go, there is an interesting scenario in the U.K. At the moment. Small companies wher the owners pay themselves by dividends are not able to access various forms of government support. In the U.K., dividends are taxed at a lower rate than wage or salary income, so there is a tax incentive for the owners to pay themselves by dividends.

Interesting, eh?

[SBQ]

That was in response to your point that "The computer system at IRD can easier do checks and impose CGT as soon as the property changes hands."

If the property does not change hands, there is no transfer registered at LINZ, and thus nothing for the IRD system to "find". In this scenario, there is no need for the property to ever change hands, and thus no tax liability.

There may have been a change in beneficial ownership, but this is not captured by the Title Registration system.

As far as dividends go, there is an interesting scenario in the U.K. At the moment. Small companies wher the owners pay themselves by dividends are not able to access various forms of government support. In the U.K., dividends are taxed at a lower rate than wage or salary income, so there is a tax incentive for the owners to pay themselves by dividends.

Interesting, eh?

Show me a piece of property (of value) that does NOT change hands (describe what scenario)? Even in a family trust there's a vesting period of 80 years. Deemed disposition will always apply when an individual dies, or a company is wound up - why? Because people don't live forever and sooner or later, the stakeholders will want some sort of change in the 'possession' of the asset. I'm beginning to sound like a broken record player where no one is hitting my question dead on. Why is it in previous NZ gov'ts, they have not addressed the taxing of residential properties? A poll way back when the Labour Party was winning the votes showed majority of people in NZ wanting some sort of taxation on those owning multiple residential properties & or those that are in the business of making a profit; but still walk away without paying a dime on CGT when they sell the houses? To do such a thing in say Canada would be like murder according to the tax dept. Even changing the use of your principal resident house attracts tax issues (ie. renting out the basement which may be 1/2 the size of a 2 story house = only HALF of the capital gain is tax free, the rented out portion attracts CGT). Anyways, i'm not buying weak excuses in NZ ; even the TWG advised of some form of CGT.

So instead, they pick on issues like ; how about a wealth tax? or don't stop raising GST from 10% to 12.5% to 15% - let's go all the way by putting in a 'consumption' tax GST at 20%. Not many places around the world have such a tax on consumption in the +20% range.

Again, the different tax treatment on dividend income is nothing new. Canada & the US so happens to treat dividend income at a lower marginal tax rate. Hardly unique (but the impression I seem to hear in NZ is locals find it 'unusual'). Our tax prof back in Canada when I studied taxation at uni said the key reason for having a lower tax treatment on dividend income? - well, it's simply to address double taxation. Just so the individual that owns a Llt corporate company they've setup, is not taxed twice (1 by corporate tax) & (2 when the company issues a dividend). There's nothing wrong with this scenario. But in NZ, we seem to have a corporate tax that is excessively high at 28% - then the shareholders have to wonder if the NZ company has some form of 'imputation tax credit or not or a partial or a weebee.. etc'. I'm quite certain the overall tax load is much higher than what a Cdn or US corporation would pay + the dividends they issue.

[GTM 3442]

Oh, OK.

"Why is it in previous NZ gov'ts, they have not addressed the taxing of residential properties"

Because, as the furore during the first Arden demonstrated, it's not a popular policy. And politicians place greater emphasis on being in office than they place on the design of the tax system.

[GTM 3442]

Oh, OK.

"Show me a piece of property (of value) that does NOT change hands (describe what scenario)"

The scenario I described.

[GTM 3442]

Oh, OK

"Again, the different tax treatment on dividend income is nothing new. Canada & the US so happens to treat dividend income at a lower marginal tax rate. "

So does the U.K., as I pointed out - along with an amusing little twist where a tax-driven decision on how business owners decide to pay themselves has led to a tax-minimizing strategy having an unintended consequence.

[SBQ]

Oh, OK.

"Why is it in previous NZ gov'ts, they have not addressed the taxing of residential properties"

Because, as the furore during the first Arden demonstrated, it's not a popular policy. And politicians place greater emphasis on being in office than they place on the design of the tax system.

I said, the majority of voters at the time did support some form of CGT. NZ politicians had no problems raising GST so many times or other forms of taxes ; all having a greater impact at widening the wealth gap.


Oh, OK.

"Show me a piece of property (of value) that does NOT change hands (describe what scenario)"

The scenario I described.

?? what scenario? I did mention how real estate can not be held on indefinitely.


Oh, OK

"Again, the different tax treatment on dividend income is nothing new. Canada & the US so happens to treat dividend income at a lower marginal tax rate. "

So does the U.K., as I pointed out - along with an amusing little twist where a tax-driven decision on how business owners decide to pay themselves has led to a tax-minimizing strategy having an unintended consequence.

You mean in NZ people want dividends from their NZ share investment instead of 'the CHOICE' of having tax free capital gain (+ the luxury of not being forced into paying tax when the company issues a dividend). There's a direct correlation between book value and share value; when you pay out dividends, you drain the book value of the company and therefore the share price remains flat (a good example is The Warehouse Group for 30 years has remained around the same price when they 1st went public). The tax minimising strategy for the NZ investor should always be for tax free capital gain ; but that's not how NZ brokers and financial advisors explain it.

Perhaps it's the same attitude I see in NZ that "if it's not from NZ, then it must not be good". Look at the examples of the difference in building standards here vs abroad? Just because Australia, Canada, US, & UK have worked out a more fair tax system for their people ; does not mean NZ has to go on a stupid path of reinventing the wheel by regurgitating facts and figures and pros and cons and countless of excuses.

[macduffy]

Settle down, SBQ. Different countries have different ideas, different conditions, different standards. Incidentally, I doubt whether The Warehouse Group had a better use for the millions it paid out in dividends over the years. Some companies reach maximum/optimal size once they saturate their markets and become steady income paying stocks. Best not to force them to retain profits and to set off in a new direction which they may be unsuited for!

[GTM 3442]

I said, the majority of voters at the time did support some form of CGT. NZ politicians had no problems raising GST so many times or other forms of taxes ; all having a greater impact at widening the wealth gap.

As I said, if it were popular, it would have ben implemented. That's called "politics".

<snip>

?? what scenario? I did mention how real estate can not be held on indefinitely.

I simply demonstrated a scenario where your "IRD data-matching scenario" would fail. What was all that stuff about trusts, anyway?


<snip>

You mean in NZ people want dividends from their NZ share investment instead of 'the CHOICE' of having tax free capital gain (+ the luxury of not being forced into paying tax when the company issues a dividend).

No, that's not what I meant. I simply pointed out that in the UK, choosing to take income as dividends rather than as salary has had unforeseen consequences under the current UK business support measures..

<snip>

[SBQ]

Settle down, SBQ. Different countries have different ideas, different conditions, different standards. Incidentally, I doubt whether The Warehouse Group had a better use for the millions it paid out in dividends over the years. Some companies reach maximum/optimal size once they saturate their markets and become steady income paying stocks. Best not to force them to retain profits and to set off in a new direction which they may be unsuited for!

Yes i've heard that rubbish many times. In the NZ building industry I hear "for NZ conditions" implying that the weather here is unique to the rest of the world. When it can be demonstrated that almost all OCED nations have somewhat a more equitable tax system ; are you saying NZ should be allowed to be different because previous gov'ts have failed to address the issue? The OECD countless of times has addressed this problem to NZ (extremely un-affordable cost of housing and a lack of a more equitable tax system). NZ has been ahead on many fronts on different things - the small 5 million population competes very well in sporting, NZ has been a good testing ground for new innovations like EFTPOS.

As for the Warehouse Group - i've seen it done too many times since the day they went public, and where my aunt bought their shares at the time. I've witness during their expansion of setting up red sheds all over NZ, they continued to pay dividends (evaporating all it's after tax profits), and then borrowed what they could from the banks and issued junk bonds (this was during 1995 - 2005 era). Even worse, they continued to issue more shares to raise capital, which caused share dilution. Any CFP in N. America can see the difference and impact share dilution (question being, is it appropriate for a retail company to do this?); so no it's not about better use of their $ but rather, the management doesn't know better how to use their $. Warren Buffet has been critical that if the shareholders are not in alignment with the corporate views and direction, then the long term outcome would be worse. But no need to take my view. My cousin's husband worked for The Warehouse Group between 2008 to 2016 in corporate management responsible for setting up their digital online sales deployment. He had nothing good to say in terms of their management. They just only pushed him to get the most sales online in any way possible yet the most common complaint was their poor product lines and most of their products not even worthy to have online for sale.