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  1. #51
    Ignorant. Just ignorant.
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    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.

  2. #52
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    Quote Originally Posted by GTM 3442 View Post
    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.

  3. #53
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    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!

  4. #54
    Ignorant. Just ignorant.
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    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>

  5. #55
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    Quote Originally Posted by macduffy View Post
    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.

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