Quote Originally Posted by Mr Slothbear View Post
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.