Just because something is law does not make it fair.
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But of course. We are all allowed an opinion. However, irrespective on whether or not I think a law is fair, I must still adhere to it. I may think that it is unfair that large parts of Central Auckland have a speed limit of 30km/hr, but tough, I must follow the law.
zacman
So going back to Artemis's discussion point - what "your 'fair share' of what someone else has worked for" depends on what you feel is a fair income, taking into account what you think are fair laws, fair share of local and national infrastructure, expenses, security, and fair health, social and environmental responsibilities.
A democratic society probably has a legal framework that approximately hits the "mid-point" of the spread of opinions on what is fair.
It is the wrong question, or it has the wrong or too narrow a focus. Social justice includes much more than is what your fair share of what someone else has worked for. Implicit in that question is that others are not entitled to any or much of what someone else has worked for. The question is also about an individual and we are all part of society whether we are in paid work or not, with obligations and responsibilities to each other. The question is about capitalism and ignores the social aspects.
The questions we ask need to include words like social justice, social welfare, social wealth, social labour, social inequality, social media, social movements, social discontent, social security, social services, social value, society, socialism. Yes, even that much maligned and discredited word socialism. And not in the sense of either socialism or capitalism, but an acknowledgment that we have a system or society that includes the characteristics of both socialism and capitalism.
Why do we need further Wealth Transferring Taxes anyway ?
Think everyone's Super & Kiwisaver funds may well also be caught by mutations of this, in the same way as failed CGT hoped
to capture it's target & kneecap everyone from all walks in process
What of initiatives to simplify Tax processes ?
Have these been thrown out with the trash due Politician's excessive spending / wasteful initiatives - in their soul digging to find a convenient target audience to inflict to try to fill the coffers for the wasted billions under their terms ?
What will this potentially do to the country's productivity / retirement planning / people's savings investing habits ?
It is no secret that there is a small bunch of high / middle earners shelling out a sizeable portion of "Net Taxes" at one end
and a vast raft at the lower end, all in the "Net Tax Refund / receiving Tax Credits spectrum throwing in top ups, W4F etc
Seeing this sort of collect from one & seeing where it gets disbursed & the vast extent of 'subsidy' to another sector never ceases to amaze year in year out, with ever increasing levels for the net tax refund / credit group
The drag on the economy at lower end of the spectrum increases every time gleeful politicians pursuing their self serving
goals elect to ramp up W4F etc etc
Should the Lower Spectrum on the receiving end not be more productive to justify the vast pool of 'Net Tax Refunds/Credits' they pocket each year ?
No. However if there is a debate about what is fair to deduct by way of tax from someone's income or other gains then there is an equally valid discussion about what constitutes fair income or gains in the first place.
For example if you think teachers are underpaid then you are more likely to think it is "unfair" to deduct as much tax from them as someone else who has the same income.
Also you may think it unfair if someone's income from their business does not fully account for the costs (for example) on the environment and for which the current government does not insist on compensation. In other words you may think it unfair that some of the true costs of an activity are socialised, whereas the exaggerated profits are privatised.
A further context is '2 workers for every 1 beneficiary'. Some interesting discussion and official numbers by Lindsay Mitchell at the below link, noting that the beneficiary number includes those on super. If the impost on workers continues to rise we should not be surprised if some of those workers make economic adjustments.
As they say - time is the new money.
https://lindsaymitchell.blogspot.com...neficiary.html
So definitely time to tax capital gains as other countries in the OECD do. If the impost on workers' incomes rises but capital gains generally remain untaxed, then the economic change taxpayers will try to do will be to structure their affairs to enable more untaxed capital gains, further burdening those who earn taxable incomes?
It is not either / or. And appears unlikely there will be a capital gains or wealth tax for at least the next 3 years. Yet as a smaller economy and higher debt $$ need to come from either increased revenue or reduced spending or of course both.
For example -
- productivity increase - probably means increased automation, fewer jobs in those sectors.
- spend less tax / rates revenue - some stupid expenditure out there that should be examined. And canned.
- new industries supported but limited support so sink or swim.
- less regulation unless supported by rigorous benefit cost analysis and post implementation reviews with consequences if results are nothing like projections.
Of course there will be no CGT as vested interests have blocked that. So it looks like investment continues to favour Real estate (see the latest REINZ figures) and not into productivity improving business investment. So NZ will have to continue to rely on immigration and not productivity improvements for any GNP growth. And increased tax revenue to pay for covid will have to be squeezed out of workers, income earners and GST...
Has anyone else wondered whether the only way to deal with the "housing crisis" is to wait 30 odd years? And even if that helps, Gen X'ers and Millenials are largely screwed?
- Those that own a large proportion of the houses are, let's say, 50 years or older (yep, it's an assumption, that I haven't had time to find supporting information for... yet... but if I'm onto something, I do have 30 odd years)
- In 1996, only 23% of the population were 50+. As of 2018, it was closer to 32%.
- When the boomers start pushing up daisies there should be an increased level of supply
- In the meantime, a large proportion of Gen X'ers and Millenials probably need to come to the realisation that home ownership is not going to be the norm for their generations. Their job is to stop procreating - which has been helped by slow wage growth relative to house price growth - i.e. large families (say, 5+) are unaffordable
- Therefore, in 30 years time we have less people, more houses and prices go down
I know it's very simplistic and that the government can and will tweak around the edges but, as we've seen, all governments (regardless of colour) have struggled to make much of an impact.
The variable in there that needs some attention is wage growth. And by wage growth I mean, productivity driven wage growth, not wage growth driven by government intervention (minimum wages) which just leads to price increases and inflation. At the moment, it seems like our pollies are throwing darts at the board with things like fees-free university, etc.
Hard not to feel sorry for millenials. I reckon many of them are pretty f*cked. Doesn't help that they're been encouraged to behave in ways that don't necessarily foster much self-responsibility... and did I mention robots. Robots are coming for them and their jobs too.
There is an even simpler solution, if there is a housing crisis at all. It is ECON101 - supply and demand. Not much ordinary folk can do about demand, but certainly can do something about supply.
But first governments, central and local, need to step out of the way. Sort the RMA, sort the rural urban boundary, sort consents process and costs, stop interfering in the rental market more than with other businesses.
Realistically there are going to be some limits, but need be nowhere near as many as there are now. But if people in the supply chain can make a decent buck from building, they will. And if cheap, people will buy or rent. Might mean cookie cutter or imports in containers from China. Might mean permanent trailer parks.
Might be like an idea Rodney Hide wrote about a few months ago, a small trial subdivision where people could buy a section and build what they like with minimal or no consents or comebacks. Every buyer agrees.
People put up basic baches for generations and just got on with life. Worked well.
True, but they were holiday homes. Not one's pride and joy permanent res.Quote:
People put up basic baches for generations and just got on with life. Worked well.
;)
Actually they were not all holiday homes. Some permanent, some rented. Family used to stay in one back in the day and others in the street were similarly basic but lived in. No longer allowed to be rented out even to existing long term tenants without big bucks to upgrade, followed by rent increases.
Time to time some of these little enclaves are in the media because long term residents have to leave.
If home ownership is not going to be the norm then it should not be treated as a special case. Net imputed rent should be taxed just like the interest from a term deposit is taxed or non-cash or fringe benefits are taxed.
Immigration not natural population increase has been a big driver in creating the demand for the limited supply. Boomers were happy to see this result in a surge in prices for their homes and rental investments often enjoying more in this untaxed capital gain than from employment or business.
They have been kicking the can down the road.Quote:
I know it's very simplistic and that the government can and will tweak around the edges but, as we've seen, all governments (regardless of colour) have struggled to make much of an impact.
Productivity growth requires capital investment in business - why invest into business when you have gotten so much untaxed leveraged capital gain in real estate? Successful NZ companies have so often had to relocate their listings to Australia to access capital...Quote:
The variable in there that needs some attention is wage growth. And by wage growth I mean, productivity driven wage growth, not wage growth driven by government intervention (minimum wages) which just leads to price increases and inflation. At the moment, it seems like our pollies are throwing darts at the board with things like fees-free university, etc.
Offering meaningful change makes Parties unelectable in NZ?
That's a simplistic and skewed point of view. Have you read the Healthy Homes standards?
If there is a shortage of rental housing, people will be much more likely to bunk up together. And there does seem to be a shortage atm, though perhaps mainly for those the private sector is not at all interested in offering a tenancy to.
If a rental does not meet all the current and coming soon standards landlords are in for huge fines. It does not mean the property is dangerous, or a slum. It might mean the insulation met the standard 3 years ago but no longer does. But might well mean the insulation does not get topped up, tenants get kicked out, move in with the rellies and the place goes on the market
"University of Otago public health professor Philippa Howden-Chapman said overcrowding was the single biggest housing-related cause of poor mental and physical health."
https://www.stuff.co.nz/life-style/h...ing--economist
Slum housing for some seemed to be the inevitable consequence of what you were suggesting. So it is just that you want standards not to improve (for rental properties) - for them to be stuck in a time warp? So we need to provide more social housing to replace the gap left by landlords who would only have provided the sub-standard rental properties.
Over-crowding is the biggest cause. Government (local and national) have failed to ensure housing supply (and other infrastructure) has been able to keep up with its immigration settings. That s the trouble when the only way (under current policies) to boost the economy is by boosting the population.
Presumably there are other causes too. All those crowded boarding houses at private schools had better watch out!
Like I said above, have a read of the Healthy Homes regulations, not really for homes, just for rentals. And the long list of fines in the Residential Tenancies Act. If a landlord has to pay average $8k to meet the standards, the rent increase for a 2 bedroom townhouse in Parnell might work well. A rural 2 bedroom rural cottage not so much.
The HH standards are highly prescriptive and some very complex. Plus a range of new measures from Minister Faafoi. Yes they might improve conditions for tenants and actually good for landlords that stick around as they upgrade and raise rents so the tenants pay.
Landlords can make other decisions, because they can. 37% increase in house sales in September yoy - wonder where those come from?
Consequences.
As we have previously discussed rentals tend to accommodate more people, so a substandard house with just one owner-occupier would be less hazardous to them than if they had four additional house-mates. However I agree, higher standards should be phased in for all NZ housing.
Anyway we are highlighting the need for whatever government comes into power to introduce housing policies to relieve the housing shortage that has accumulated over the years if not decades. Housing has not kept up with immigration.
Thousands and thousands of rental vacancies advertised right now.
Maybe all of the above and more. Even so, 20,000 waiting for heavily taxpayer subsidised housing can apply for them. And the taxpayer will still supply the Accommodation Supplement, TAS, bond and initial rent. Hard to keep talking about housing shortage with thousands of rental vacancies.
If landlords decide not to reduce rent they will have their reasons. And if they are forgoing income the reasons will be acceptable to them.
Covid recession and covid tourism restrictions means a change in employment opportunities. Some regions are more heavily impacted. I would say that that since lockdown restrictions were eased there would also be population movement - so perhaps there could also be quite a few tenants looking for accommodation too. A jump in available accommodation at the moment, may not necessarily mean there are not still many people who are living in overcrowded conditions.
Also with fewer foreign students, and fewer inward arrivals generally, there may be previously rented out accommodation looking for new tenants.
Green Party candidate Ali Hale Tilley says middle salary and wage earners carry more than their fair share of the tax burden and that if we want the country to prosper as a whole, the wealthy need to embrace paying tax instead of finding ways to hide it.
"It's the nation's mindset that needs changing," she said. "It's a privilege to pay taxes. When it gets reinvested, everybody is lifted up."
https://www.nzherald.co.nz/nz/politi...XFKMRF53WWG44/
Treasury states that the top 3% pay 24% of income tax. I'm paying more than my fair share.
https://www.treasury.govt.nz/informa...ays-income-tax
With the increase in top tax rates will there be a shift to growth stocks away from those that pay divvies?
In the debate, Chloe Swarbrick from the Greens argued for the wealth tax, pointing out that wealth in property is created by taxes spent on infrastructure.
I heard from a man this week who objected to the way a wealth tax would penalise people who bought a bach in Coromandel back when the road trip took six hours, and now owned valuable property but were not rich.
But Swarbrick is right. Those baches are now worth a fortune in part because the roads, paid for by taxes, now make the journey so much quicker.
https://www.nzherald.co.nz/nz/politi...3U4PAG56BF4UY/
Shia Navot from Top, however, argued against the Greens' wealth tax, but not because wealth shouldn't be taxed. Top thinks there are better ways to do it.
Perhaps they're right. Greens co-leader James Shaw has said many times, if other parties don't like their proposal, he would welcome them coming up with something better.
Labour's David Parker, the trade minister, told an OECD conference this week there is a growing gap between the wealthy who can leverage their assets at very low interest rates, and the young and others without assets. "There is a problem with this status quo around the world," he said, "and we need a conversation about what the remedy might be."
You are not paying more than your fair share.
Your fair share takes into account your ability to pay, not what you pay in relation to anyone else.
A fair tax system means that the costs of contributing to tax revenues are shared in a way that takes into account the ability to pay.
From each according to their ability, to each according to their needs" Karl Marx
The phrase 'From each according to his ability, to each according to his needs' means, that ideally, each person should contribute to society according to his or her best efforts to do so, and should nonetheless receive from society what he or she requires to survive in relative health and safety.
A flat tax, where everyone pays the same percentage on their earnings is the fairest way in my view, Big earners pay a lot - low earners pay little. Yet the socialists scream that that is unfair, because the high earners can afford more, so argue for a progressive system. And that sums up the problem in a nutshell. 'Fair' is impossible to define, making it a pointless and senseless word in relation to tax given there is no acceptable agreement.
Absolutely a flat tax is the fairest by a country mile but will never happen under a Socialist/Communist Govt, their agenda will always be to take from those that have and redistribute to those that have not, the fact that many of the have not's don't want to get ahead if it takes self effort is of no consequence.
That is one rabbit hole I would avoid going down. It will result in never-ending arguments.
I do recall Twyford suggesting that land owners near major transport projects would be required to fund their development as they were viewed as disproportionately benefiting from them, so perhaps we will have no choice but to address this argument in the longer term.
Out of curiosity, if a CGT has as a goal to steer money to productive investments does anyone know what these investments are for the average retail investor? The sentiment is bandied about and certainly has some logic but assuming the money isnt headed offshore (the FDR tax complexity is disincentive enough on that front) quite what are people supposed to buy instead, a coffee franchise?
We've just seen the hunger for longish bonds at about 2% so there appears to be no shortage of money seeking some sort of investment home and i dont see a lot of biotech or invention type funds. The lack of NZX listings suggests something is amiss but is it as simple as blaming untaxed housing?
Some good questions there, dibble. The Labour CGT policy originally covered some assets but not others. Your de Kooning and heirloom diamond tiara were not included, nor were the family bach or small business if and only if sold under strict rules to fund retirement. Don't think those small businesses included rentals though. The last couple were tweaks based on negative feedback.
Along came the Tax Working Group with an increasing level of complexity. Finally it seeped into the voter's mind that their shares, their Kiwisaver, their farm, their lifestyle block were up for grabs. Not to mention their coffee franchise if sold. Idea dumped.
What Labour really wanted was to tax private rental housing and encourage it out of the market into 100,000 affordable homes and taxpayer subsidised social housing. When the CGT didn't work they changed tax rules for private rentals and brought in a lot of extra cost and compliance. Possibly get the desired result over time. Ms Ardern seems to think 2030 would be about right though as there is not much money in the kitty 2030 looks optimistic.
I’m sure you’d quickly come up with a definition of fair (or unfair) if the government started taxing you at 100%. When you are advantaged by a situation fair is supposedly impossible to define, and that would change if you were disadvantaged.
If you believe in the greed is good ideology you would say fair is impossible to define. But if you wanted a tax system that was considered fair by most of the citizens then fairness would be seen as social justice and people would be taxed according to their ability to pay.
However there is lots of money to be made by lawyers and accountants advising the rich how to minimise, avoid and evade taxes, so plenty of propaganda in the media saying fair is impossible to define, and advocating for a flat tax.
If the consequence of an offence against the law of the land is both punishment and deterrence. Do you think that fines should be levied at amounts according to the transgressor's ability to pay?
Otherwise for one person $80 is petty cash but for another it means no food for a week. The punishment would not necessarily fit the infringement?
What Is Fairness? It depends on the situation. Ideologues believe that only their notion of fairness is correct.
1. SAMENESS: There is the fairness where everything is equal. So everyone pays the same price for a theater ticket, whether a child, an adult or a senior citizen. No one has more than another. Everyone eats or no one does, for example. Logically, then, an infant and an adolescent will receive the same amount of food. It doesn’t matter that one needs more than the other. Fairness is finding the average and applying it across the board. This is fairness as equality of outcome.
2. DESERVEDNESS: In this notion of fairness you get what you deserve. If you work hard, you succeed and keep all that you earn. Fairness means keeping what you deserve and deserving nothing if it isn’t earned. The hardest working, most diligent, smartest and most talented should have more because of their attributes; the lazy, indifferent, stupid and inept deserve to have less. Fairness is a rational calculation. This is fairness as individual freedom.
3. NEED: The third idea of fairness is that those who have more to give should give a greater percentage of what they have to help others who are unable to contribute much, if anything at all. Fairness here takes into account the facts that humans have obligations to one another and the more one has the more is demanded of that person to contribute to the common good. Fairness and responsibility are linked. Compassion plays a role in the calculation of fairness. This is fairness as social justice.
https://www.psychologytoday.com/us/b...at-is-fairness
Actually it is labour that does the work to produce the goods or services, while the capitalist does not need to do any work.
Profits from capital invested don’t need to involve work, so labour should get most of the income because they do the actual work while the capitalist sits on the couch. But that is not how it works because capitalism is based on exploitation due to the imbalance of power between capital and labour.
But it is like the myth of the self-made man. Does he grow and cook his own food? He uses the resources of society like roads, electricity, buildings, knowledge, and other people, including his customers.
He is successful because he uses the “common wealth” of society which has been built up by others including previous generations.
True, ability to pay must be a factor in levying taxes.
However the main function of taxes is social investment, or public investment. And tax is the foundation of a civilised and fair society.
The more investment in society, in infrastructure, education, health and other public services the wealthier the society which is of benefit to everyone. You would think capitalists would understand how necessary investment is and therefore be willing to pay their fair share of tax, but it seems that many don’t see it that way.
Why is there an estimated 20 billion dollar black economy in NZ if its fair then? Change to a flat tax rate of 20% and watch a lot of that 20 billion make its way back into the system.
There is a black economy because unfairness and exploitation are part and parcel of capitalism. It is normal business practice. Changing to a flat tax rate of 20% would not change the behaviour of those who operate in the black economy.
Winning and success are what matters and honesty and integrity are secondary and are surrendered in order to get what you want.
Predatory capitalism is encouraged. Predatory capitalism is where a country’s trade and industry are controlled by private owners for profit, rather than by the state. Predatory capitalism refers to cultural acceptance of domination and exploitation as normal economic practice.
The appropriation and accumulation of wealth occur in two different ways.
There is a vast array of extra-legal activities such as robbery, thievery, swindling, corruption, violence and coercion along with a range of suspicious and shady practices in the market (monopolisation, manipulation, market cornering, price fixing, Ponzi schemes etc.)
Secondly, individuals accumulate wealth by legally sanctioned exchanges under conditions of non-coercive trade in freely functioning markets.
The first sort of activities are typically excluded as external to the “normal” and legitimate functioning of the capitalist market. This is a misleading fiction. It is stupid to seek to understand the world of capital without looking at the drug cartels, traffickers in arms and the various mafia and other criminal forms of organisation that play such a significant role in world trade.
There is a vast array of predatory practices e.g. falsification of assets, money laundering, Ponzi finance, and interest rate manipulations revealed by the GFC and by the Australian Royal Commission into Banking. We are talking mainstream organisations here, not “criminal organisations.”
An economy based on dispossession lies at the heart of what capitalism is foundationally about. Bankers do not care in principal whether their profits and excessive bonuses come from lending money to those who exploit others.
The desire for money as a form of social power becomes an end in itself which distorts the neat demand –supply relation of the money that would be required to simply facilitate exchange.
Here is what Albert Einstein had to say about predatory behaviour and socialism in 1949.
http://monthlyreview.org/2009/05/01/why-socialism/
Why Socialism?
But historic tradition is, so to speak, of yesterday; nowhere have we really overcome what Thorstein Veblen called “the predatory phase” of human development. The observable economic facts belong to that phase and even such laws as we can derive from them are not applicable to other phases.
Since the real purpose of socialism is precisely to overcome and advance beyond the predatory phase of human development, economic science in its present state can throw little light on the socialist society of the future.
But the personality that finally emerges is largely formed by the environment in which a man happens to find himself during his development, by the structure of the society in which he grows up, by the tradition of that society, and by its appraisal of particular types of behavior. The abstract concept “society” means to the individual human being the sum total of his direct and indirect relations to his contemporaries and to all the people of earlier generations.
The individual is able to think, feel, strive, and work by himself; but he depends so much upon society—in his physical, intellectual, and emotional existence—that it is impossible to think of him, or to understand him, outside the framework of society.
It is “society” which provides man with food, clothing, a home, the tools of work, language, the forms of thought, and most of the content of thought; his life is made possible through the labor and the accomplishments of the many millions past and present who are all hidden behind the small word “society.”
It concerns the relationship of the individual to society. The individual has become more conscious than ever of his dependence upon society. But he does not experience this dependence as a positive asset, as an organic tie, as a protective force, but rather as a threat to his natural rights, or even to his economic existence. Moreover, his position in society is such that the egotistical drives of his make-up are constantly being accentuated, while his social drives, which are by nature weaker, progressively deteriorate.
All human beings, whatever their position in society, are suffering from this process of deterioration. Unknowingly prisoners of their own egotism, they feel insecure, lonely, and deprived of the naive, simple, and unsophisticated enjoyment of life.
Man can find meaning in life, short and perilous as it is, only through devoting himself to society.
I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals.
Well, everybody is entitled to their opinion, but if you consider e.g. James Shaw as economical inept, then you might be in a minority position. I had some interaction with him and consider him as highly intelligent and economically ept.
I guess what you really want to say is that you don't like what they say, but this does not mean that they are wrong and you are right.
Throwing around unproven generic statements like "they are all ... inept" is a sad reflection on the person making this statement. I know you can do better.
I am not sure how any Party can avoid being concerned about the environment these days. That is unless they want humans to be part of a man-made mass extinction event. The longer things are swept under the carpet, the more we will have to become "obsessed with" the environment.
True, not all backforms of words exist. Online American dictionaries may not have all defintions. However"ept" has an entry in my SOE (New Shorter Oxford English Dictionary) with the meaning of adroit, competent, appropriate, effective.
What do they say...a little bit of knowledge is a dangerous thing ;) (Edit - I mean that in relation to the online dictionaries!)
Whilst I don't like the idea of a capital gains tax, as I just don't want any more taxes...I do think that a flat income tax and flat capital gains tax, applied to all capital gains, no exemptions, will level the playing field. This must still leave room for a minimum amount of income that is not taxed at all, so that those starting out in life can get the basics sorted for themselves, rather than relying on nanny state to look after them
I have just checked the official scrabble dictionary 'scrabblewordfinder.org' , and surprisingly it's still not there. I'm not sure how 'official' the online one is - I'd never seen or used it before. I used to have the official one that listed all words that were acceptable, English or American, a compilation from all dictionaries - and I'm sure it wasn't in there - but that's going back a while. But yes, it doesn't take much to realise what is meant - so I would not argue that it is not a legitimate word; just that it is not universally accepted.
Post deleted.
Deleted - too tangential.
.. and if the environment (as we need it to economically survive) goes extinct due to some dinosaurs deciding that we need to continue with its destruction, what do you think would this mean to our NZ economy?
Climate change has arrived, the only question is whether humanity as we know it gets through it with limited damage, with lots of damage or not at all.
One third of our economy (at the moment probably more) is dependant on agriculture. Just consider what the rapidly increasing frequency of draughts, extreme flooding and increased storm intensity will do to our economy?
Just compare the insurance premiums for your house with the premiums you payed a decade or two ago. What happened to them? They went up steeply, didn't they, and that's not for insurance companies getting rich.
Same thing (only worse) for farmers. Many find it already difficult to pay the premiums to insure their crops ... it won't take long anymore until many farmers are not able to insure their crop against adverse weather events. An increasing number of big weather disaster impacting on our agriculture will do our economy under these circumstances well, won't it?
But this is just one example ... infrastructure cost will go steeply up with climate change, new pests and diseases are coming into the country and need money to fight, the pressure from climate change refugees will go up world wide.
Maybe the Greens are the better economists after all? Always good to look at the big picture rather than focussing solely on the next quarters earnings ...
Not according to this environmentalist:
On behalf of environmentalists everywhere, I would like to formally apologize for the climate scare we created over the last 30 years. Climate change is happening. It’s just not the end of the world. It’s not even our most serious environmental problem.
I may seem like a strange person to be saying all of this. I have been a climate activist for 20 years and an environmentalist for 30.
But as an energy expert asked by Congress to provide objective expert testimony, and invited by the Intergovernmental Panel on Climate Change (IPCC) to serve as Expert Reviewer of its next Assessment Report, I feel an obligation to apologize for how badly we environmentalists have misled the public.
https://environmentalprogress.org/bi...-climate-scare
'AGW' turned into 'climate change' for a reason.
17 year old & 14yo buy a ChCh investment property using money they inherited. They plan to hold then sell for the capital gains. They already know the how the best tax free money is made in Aotearoa. Labour is keeping this intact. Labour may have their work cut out encouraging post covid investment in business and employment preservation.
https://www.stuff.co.nz/business/pro...-rising-prices
I presume you read that article. Those young buyers will be taxed on that capital gain. Their admitted intention is to profit from selling, and you can bet your bottom dollar the IRD will have noted that purchase.
You may remember some years ago a purchaser made a similar statement on a TV program. I can't remember the details, but I can remember the screams of protest when he discovered he had revealed his intention was to profit from selling and that the IRD, after viewing the program, had stated he would be taxed.
They said they may live in their investment. Will their expressed intent to sell (for the capital gain) result in any gain being taxable, whether they live in the property as owner-occupiers or not? If this is their first property, would that make a difference?
If someone states when buying a house, which they occupy or leave empty in case they occupy it in the future , that they are buying it to live in and also with the subsidiary intention of selling it for the capital gain, is the capital gain on sale taxable as it was an intent when the house was purchased? Would the capital gain only be taxable if it were decided that the main intention of the owner-occupier was to sell for a capital gain?
The statement I made that I have been thinking about is below.
I did a bit more research and other thinking people agree with me.
Good graph in the article showing worker’s incomes have flat-lined for half a century but their productivity, which is roughly the profit that they earn for capitalists, has skyrocketed since 1974.
https://eand.co/how-capitalism-taugh...n-5db12d3a6e93
So exploitation is so routine, so normal in America that it’s an everyday, commonplace affair — which people are quite invisible to.
And that is because capitalism’s foundational belief, which it has been long taught, maybe even indoctrinated, into Americans, is that if we each exploit everyone that we can, beginning with ourselves, as ruthlessly and mercilessly as possible, then everyone will be better off, not just the capitalists. (Because the strong will survive — and even the weak will benefit, by becoming a little more selfish, tough, independent, and less of a burden upon the strong.)
The person at the bottom has contributed in a very real, and very significant way, to the billions that Bezos has amassed.
Predatory capitalism made “work” largely the execution and perfection of exploitation. Instead of labour being the expression of the human possibility (like, say, discovering antibiotics, building a healthcare system, making it affordable to get an education), it became the predation upon human vulnerability (like, say, fine-tuning the algorithm for maximum revenue, with horrific clickbait videos, looting pension funds, overcharging students for debt, hiking up drug prices thousands of percent, and so on.)
At age of 17 and younger can a minor actually own the house? Presumably there is an adult or trustee behind them to take legal ownership? So in this case "the owner's" intent may be different from that of the minors/beneficiaries?
https://www.nzherald.co.nz/property/...M7W6X6QJIGDYY/
I imagine in a housing market with rising prices, that there may be many owner-occupiers buying a primary residence to live in, with another intent to sell the house at a higher price on their way "up the property ladder." With such a high priced property market, many first home buyers must buy intending to sell to trade their way "up" from a small apartment to a family sized house in a safe neighbourhood, taking advantage of boost to deposits from leveraging and extra income from any career promotion?
I guess the first capitalist was the ace hunter gatherer caveman who was rewarded with the best and biggest portion of the day's kill. He did not want it, so he traded it for an extra spear.
Eventually he had a cave full of spears. By then, he was old and couldn't hunt. If the others used his amassed spears then it would mean hunters could hunt instead of making spears instead. The band of humans would be more productive. If they decided not to simply steal the spears from the old alpha hunter, how much would this extra productivity be worth and should they still give hum the choicest cut of mammoth or sabre-tooth?
On the other hand, the retired alpha hunter is a wily old codger. His old wife came from a different band of humans. Their lands are now impoverished and they are facing hunger. Their young men would be willing to hunt the land of the Alpha hunter's band and give him meat plus half the antlers and ivory.
So capital, saving and specialisation make labour more productive. How much they are relatively worth is the question
https://thespinoff.co.nz/politics/20...e-transformer/
Take tax reform. Ardern didn’t just abandon capital gains tax because of the Peters brake. She banned it from Labour policy while she is leader, thereby telling us that Labour accepts it is OK some people don’t pay tax on some of their income. (should that be capital not income?)
Same for tax on wealth, a major determinant of generational material inequality.
Labour’s campaign tax policy was skimpy: a 6-point rise in tax on the incomes of a tiny few at the top. No move down a path Robertson endorsed in private when in opposition: to reduce the heavy reliance on taxing incomes and instead tax environmental degradation and privatisation of natural resources for profit.
Ardern banned capital gains tax because, she said, there was no public mandate for it. But true mandates are built, not given. Ardern in essence said she would not try to build a mandate for taxing income from capital gain.
Don't forget all that fancy $ that went into paying the Working Tax Group, for which their recommendation WAS for NZ to have some form of CGT, particularly on real estate (where the top 1% have locked in their wealth). Then the following week Ms Ardern made that statement on TV - "No CGT for as long as she is politics".
I met with my new bank manager earlier in the week and I expressed the same issue. Why is it only wealthy have done so well in real estate while the middle class struggle in their Kiwi Saver? The 5 year stand down 'bright line test' is a joke and again it shows Ms Ardern not being serious about a 'fair tax policy' for NZ.
Windfall tax anyone?
"NZME is now in the process of returning $15m in cash to shareholders through share buy-backs and special dividends. It is not the only one. Fletcher Building received $68m in wage subsidy cash during 2020 and has refused to repay it, despite an increasingly robust profit and balance sheet. It paid $140m of cash dividends to shareholders in April this year after reporting solid profit growth and a strong outlook because of a boom in house building and building materials sales. NZME and Fletcher Building are just two among many large and small New Zealand companies that have refused to repay the cash, despite reporting profit growth and higher cash reserves."
https://www.interest.co.nz/public-po...y+26+July+2022
You know when I first came to NZ 20+ years ago I thought; small country = easier to implement BETTER policies than the larger countries ; more remote from other major trading nations = less negative influence, etc.
The gov't handout of $$ directly to companies was never a good thing. They don't do it that way in Canada where the subsidy payments are only given to the individual. When I see the NZ subsidy payment system where the EMPLOYER is filing the application for their EMPLOYEEs.... I knew this would be nothing but a freebee handout to the benefit of the corporations. In America, individuals there received a cheque (even more decentralised compared to Canada where the individual's tax return is tied to the subsidy payment; which on most part is received directly into their bank account). US has a similar model tied to the individual's tax return. If they earn more than $90K (if I recall correctly that figure), then they receive no Coivid cheque payment. Why did our NZ gov't not have the smarts or knowledge to see that companies in NZ would take advantage of the situation? All this trying to do things different because we are NZ only hurts us more. Can't reinvent the wheel enough times to make a statement.
Oh I should add, one of the wishes I look for in the NZ gov't is to truly implement a capital gains tax. We need to align our taxation that is similar to Australia, Canada, US, etc. Throw out FIF and start taxing assets AT TIME of disposal. The more closely we tax in the same way as in other western nations, the less distortions and (evasion?) will happen.
I am confused the Sapere report on taxes and the wealthy concluded
households earning more than $500,000 a year would have an effective tax rate of 29% to 31%, if they were not receiving NZ Super. An older retired couple living in their own home with the same level of economic income had an effective tax rate of 6%..
Not sure what the last sentence means, but do they mean the wealthy claw back their tax in old age through national superannuation?
https://www.stuff.co.nz/business/300...-really-paying
The IRD and David Parker have concluded
high wealth families pay a median effective tax rate of just 8.9%, as they earn significant income from untaxed capital gains.
Bit of a gap between 29% and 9%.
OliverShaw principal Robin Oliver, former deputy commissioner of policy at Inland Revenue, said the [sapere] report was commissioned out of concerns about the methodology of the Government’s work, which he said could give a misleading picture of the tax system.
Treasury also came up with 12%. I assume the difference between Sapere and IRD is ignoring capital gains.
Sapere also notes.
People earning between $70,000 and $180,000, 18.8% of all taxpayers, paid 42% of all tax. The 2.4% of people earning more than $180,000 a year paid 26.6% of all tax.
So the wealthy can always threaten to leave NZ, hopefully they do not have too much in real estate as this is not that portable. Most manufacturing has already left.
Scary that so few people pay so much of the tax. 50% probably pay nothing after you take into account health, education, roads etc.
Also scary that so few people hold so much of the wealth and income in NZ and this has been a trend that has got a lot worse under Labour.
Maybe we should take the word "fair" out of the debate and focus on what might work best. Personally I do not think ignoring capital gains is right hence starting this thread in 2011. 12 years and another report and still no closer to a capital gains tax.
I did not read Michael Cullens report on capital gains tax but understand it included few concessions such as lower tax rates for capital gains. Start with something simple and palatable to the boomers and crank it up as time goes on.
GST has increased 50% since it came in, in 1986 and that is a regressive tax.
@Aaron: The problem is income is not defined to include capital gains. I've been pounding the table that there's a huge difference on where capital gains are derived from, by NZ resident. The biggest out-liar is the ownership of multiple houses, while those in Kiwi Saver that choose to make an ownership in overseas shares, are paying tax on the capital gains under FIF, every year (but conveniently no credit on CG LOSS on years like last year). Why does the working class and those on lower incomes, are only left with a tax paying scheme called Kiwi Saver (which also is hit with management fees), while those that could leverage in buying another house or rental property (because they have excess incomes and the bank will allow them to), gets away with tax free capital gains if such houses are held for more than 10 years?
The tables need to be turned around and if I have not mentioned many times before, IRD needs a hard look at what Canada has done. Justin Trudeau has done a lot more for the working class in this area than any previous NZ PM has done. I'll repeat, the disadvantaged (those on disabilities mental and physical) get the better tax advantage, likewise with those wanting to save for education when the child is born, or a TFSA for ALL residents over age 18 ; ALL of these plans with the incentive to save and invest as it grows 100% tax free. At any moment the wealthy choose to buy houses as rental income, then the full force of taxation will apply to them. There is no differentiation on capital gains if derived from houses or from the stock market. But in NZ we seem to have a very very strong preference of leaving out houses as part of the taxable take. If there are so many that are leaving NZ for Australia, I can completely understand why because to me it seems the working class, teachers, nurses, etc are getting a bad deal by living in NZ (as the wealthy that participate in owning more and more houses, distort the housing prices in NZ).
There is so much wrong in NZ that politicians here don't want to address. Last week the JW knocked on my door and I gave them an earful in regards that the people in NZ have better things to be concerned about than some faith based religion they're spread about.
I wish hipkins would grow a spine.
Luxon gave a very poor response (like he often does when he doesn't get the interview questions in advance)... Almost angry that the wealthy are being made to pay even that
The better response would have been his usual trite "give the peasants an education so they can be one of them" (..or go to Australia on the NZ taxpayer*) but he doesn't have the political skills necessary.