Tax - What is it for?

[jonu]

After seeing the discussion mainly on the Act thread regarding tax, I thought it deserving of its own thread.

The problem as I see it, is people are approaching the issue without a clear reference point. What is tax actually for?

IMHO there appears to be two main points of view.

Tax is either to redistribute income (very much a socialist POV) or to provide the essential services expected of a State ie Security, Justice, Education and Health. (probably in that order, and using the US as an example, the last two are debatable. Whereas many other democratic states would include them to some level.)

It appears self-evident that governments only increase in their reach and size. Feel free to give examples of a government that willingly shrunk and removed powers of influence and intervention.

My own view is that a redistribution of wealth model is doomed to failure and abuse. Many argue that Socialism and Christianity are closely aligned, but the critical difference is that Socialism demands charity of the State, whereas Christianity demands charity of the individual. In my view that is one area where we are failing as a society.

Anyway, hopefully this is a catalyst for a respectful and engaging discussion.

[fungus pudding]

It appears self-evident that governments only increase in their reach and size. Feel free to give examples of a government that willingly shrunk and removed powers of influence and intervention.

My own view is that a redistribution of wealth model is doomed to failure and abuse. Many argue that Socialism and Christianity are closely aligned, but the critical difference is that Socialism demands charity of the State, whereas Christianity demands charity of the individual. In my view that is one area where we are failing as a society.

Anyway, hopefully this is a catalyst for a respectful and engaging discussion.

'Socialism demands charity of the state?'Hardly. 'The state' can't think or reason. It can simply legislate to redistrbute what it has taken from others. That's hardly charity. Was Robin Hood a giver - or was he a bandit?

[jonu]

'Socialism demands charity of the state?'Hardly. 'The state' can't think or reason. It can simply legislate to redistrbute what it has taken from others. That's hardly charity. Was Robin Hood a giver - or was he a bandit?

Au contraire fungus. If the State can legislate it can reason. ie those elected to represent the State.

So is the state a bandit if it taxes you?

[Baa_Baa]

Au contraire fungus. If the State can legislate it can reason. ie those elected to represent the State.

So is the state a bandit if it taxes you?

The trap you've fallen into imo is by introducing the word 'socialism' into an otherwise valid and reasonable question "Tax - What is it for", and then comparing it to a religion? Confused conflations, not helping considered conversation.

It is immaterial to your question whether the government of the time is socialist, liberalist, conservative, communist or whatever, let alone religion, is 'what is tax for'?. But you skewed the question in a certain direction and muddied it as well.

I'm a taxpayer who pays imo a large amount of money per annum as a percentage of my earnings, in the 1% as some measure it, to the government. Certainly my taxes are a lot more money than I can save for myself and my family after other expenses. They get a lot of my earnings in tax. And that's not including anything additional like the consumption taxes, GST, sewerage, rubbish, transport, liquor, water etc etc.

It is more than enough to cover the costs of multiple beneficiaries, dependents, infrastructure considerations and others relying on taxpayer funding. I would hope that my contribution is a societal responsibility that is reasonable, but more importantly reasonably spent.

My opinion is that every individual should pay a tax to contribute to society (although many don't pay anything), but the amount of the tax they pay should not be proportional to the amount that they earn. That is a ridiculous proposition, that depending on what one earns, determines what they should contribute to the taxable income of the country. It invites avoidance (legal) and evasion (illegal).

My concern is that I am disproportionally taxed based on how much I earn, and, that it is not reasonably spent by the government.

[jonu]

The trap you've fallen into imo is by introducing the word 'socialism' into an otherwise valid and reasonable question "Tax - What is it for", and then comparing it to a religion? Confused conflations, not helping considered conversation.

It is immaterial to your question whether the government of the time is socialist, liberalist, conservative, communist or whatever, let alone religion, is 'what is tax for'?. But you skewed the question in a certain direction and muddied it as well.

I'm a taxpayer who pays imo a large amount of money per annum as a percentage of my earnings, in the 1% as some measure it, to the government. Certainly my taxes are a lot more money than I can save for myself and my family after other expenses. They get a lot of my earnings in tax. And that's not including anything additional like the consumption taxes, GST, sewerage, rubbish, transport, liquor, water etc etc.

It is more than enough to cover the costs of multiple beneficiaries, dependents, infrastructure considerations and others relying on taxpayer funding. I would hope that my contribution is a societal responsibility that is reasonable, but more importantly reasonably spent.

My opinion is that every individual should pay a tax to contribute to society (although many don't pay anything), but the amount of the tax they pay should not be proportional to the amount that they earn. That is a ridiculous proposition, that depending on what one earns, determines what they should contribute to the taxable income of the country. It invites avoidance (legal) and evasion (illegal).

My concern is that I am disproportionally taxed based on how much I earn, and, that it is not reasonably spent by the government.

Thanks for the thoughtful contribution Baa Baa, but I don't think you have addressed the fundamental question as to what tax is for? You say we should pay tax to contribute to society. What does that mean? Why does "society" need tax? What is it providing for society?

[ValueNZ]

My opinion is that every individual should pay a tax to contribute to society (although many don't pay anything), but the amount of the tax they pay should not be proportional to the amount that they earn. That is a ridiculous proposition, that depending on what one earns, determines what they should contribute to the taxable income of the country. It invites avoidance (legal) and evasion (illegal).

I like GST since it is mostly unavoidable and is proportional to the amount you consume as apposed to the amount you earn. Given the choice to significantly slash income tax for higher GST, I think I would prefer that.

[jonu]

I like GST since it is mostly unavoidable and is proportional to the amount you consume as apposed to the amount you earn. Given the choice to significantly slash income tax for higher GST, I think I would prefer that.

But what is GST for ValueNZ?

[Baa_Baa]

Thanks for the thoughtful contribution Baa Baa, but I don't think you have addressed the fundamental question as to what tax is for? You say we should pay tax to contribute to society. What does that mean? Why does "society" need tax? What is it providing for society?

Nice diversion, but it should be obvious what tax pays for. It pays for the things that cannot or is not provided for by commercial enterprise, like state funded things like transport, education, health care, law and order, and numerous government interventions like dependents on the state, immigration, customs, and so forth.

Commerce would forsake any and all of these for profit and/or sustainable growth. Quite a conundrum for investors in a capital market.

In any event, tax is not a pathway to prosperity for any country and imo NZ is well behind contemporary thinking, by taxing disproportionately the wealthy.

[jonu]

Nice diversion, but it should be obvious what tax pays for. It pays for the things that cannot or is not provided for by commercial enterprise, like state funded things like transport, education, health care, law and order, and numerous government interventions like dependents on the state, immigration, customs, and so forth.

Commerce would forsake any and all of these for profit and/or sustainable growth. Quite a conundrum for investors in a capital market.

In any event, tax is not a pathway to prosperity for any country and imo NZ is well behind contemporary thinking, by taxing disproportionately the wealthy.

Not a diversion at all Baa Baa. As I said when I started this thread, the fundamental question of what tax is for is overlooked. Once a clear reason for gathering tax is established it becomes justifiable. If the expenditure extends beyond those reasons it becomes unjustifiable. Where are the limits? What is tax for?

[Baa_Baa]

Put yourself in the shoes of the legislature, you need money, income, so who do you go after? Those that have money. Doh. It's 101 money grabbing.

The NZ tax system is fundamentally biased toward penalising those that have, while justifying it against those that have not.

It is not a long bow to draw to suggest every person in NZ has a responsibility to pay a fair tax, but it is not imo fair to suggest that responsibility is aligned to how much they earn.

A simple flat tax rate on all income, by anyone, under any circumstances, would be be fair and reasonable.