Capital Gains Tax

[Bjauck]

I am simply saying it's impossible to argue with the conclusion of the curve. Consider an increase in income tax rates to 99%. Result - no income for govt. because the economy would be driven to underground, or barter. At 1% - nobody would avoid either earning or declaring it. Absurd examples, but that does emphasize the logic. You are correct - logic does feature in my reasoning.

An additional point to consider for NZ conditions is that unlike the USA, NZ does not have a CGT. So the NZ version of the "Laffer Curve" always has a leaky valve to those investments that rely on capital gains for most of its return.

So tax cuts for the wealthier will tend to lead usually to increased investment, not into taxable income producing investment but mostly into investment producing tax-free capital gains.

Any total tax return effectiveness, if there is one, from the Laffer theory is significantly reduced in the NZ tax environment?

[westerly]

A GST increase captures the black and grey economies so produces more revenue than projections based on the legit books.

There is also the option to reduce expenditure. Management mantra - there is 30% waste in every process. I have certainly worked in and alongside jobs just like that. And that's not counting the useless or failed projects and initiatives.

National tried reducing expenditure resulting in Labour inheriting many problems that should never have occurred.
GST increases may capture the black economy but has more effect on the lower paid.
A return to death duties would be one way to increase revenue and despite FP’ s abhorrence would be a good substitute for CGT.
The Nordic system of open tax paid availability would be interesting if introduced. Reputedly many wealthy people in NZ pay no tax at all which may be legitimate, but would certainly raise a few eyebrows if there names were freely available.

westerly

[fungus pudding]

National tried reducing expenditure resulting in Labour inheriting many problems that should never have occurred.
GST increases may capture the black economy but has more effect on the lower paid.
A return to death duties would be one way to increase revenue and despite FP’ s abhorrence would be a good substitute for CGT.
The Nordic system of open tax paid availability would be interesting if introduced. Reputedly many wealthy people in NZ pay no tax at all which may be legitimate, but would certainly raise a few eyebrows if there names were freely available.

westerly

Perhaps you'd like to enlighten us on their* names. Or even better - their* methods. You can't of course-don't believe everything you hear; especially from your envious mates who moan and grizzle rather than going and earning a buck.

* N.B. correct spelling.

[iceman]

National tried reducing expenditure resulting in Labour inheriting many problems that should never have occurred.
GST increases may capture the black economy but has more effect on the lower paid.
A return to death duties would be one way to increase revenue and despite FP’ s abhorrence would be a good substitute for CGT.
The Nordic system of open tax paid availability would be interesting if introduced. Reputedly many wealthy people in NZ pay no tax at all which may be legitimate, but would certainly raise a few eyebrows if there names were freely available.

westerly

The comparison between NZ and Nordic countries is an interesting one. I put it to you that the big difference is the large proportion of people in NZ that either do not want to work or are unemployable. Until we fix that, any dream of a Nordic type social system is just that, a dream. A CGT or a wealth tax will not fix it. We need to fix attitudes first.

[Balance]

The comparison between NZ and Nordic countries is an interesting one. I put it to you that the big difference is the large proportion of people in NZ that either do not want to work or are unemployable. Until we fix that, any dream of a Nordic type social system is just that, a dream. A CGT or a wealth tax will not fix it. We need to fix attitudes first.

NZ's productive sector is screaming out for workers.

Despite tens of thousands on social welfare (thanks to Cindy's breeding beneficiaries' policies), the productive sector, especially the horticultural sector, faces disaster because of lack of workers.

[Bjauck]

The comparison between NZ and Nordic countries is an interesting one. I put it to you that the big difference is the large proportion of people in NZ that either do not want to work or are unemployable. Until we fix that, any dream of a Nordic type social system is just that, a dream. A CGT or a wealth tax will not fix it. We need to fix attitudes first.

What if part of the solution "to fix attitudes" is to broaden the tax base to include those taxes (and maybe others you also dislike?) to encourage investment into taxable income producing and employment stimulating areas. You have already excluded that part of any solution?

Have you got links to the studies that conclude that NZ has higher proportion of people who do not wish to work or are "unemployable" compared with the various Nordic countries?

However I agree. NZ does need to look at the appropriate and relevant education and vocational training, underlying socio-economic causes, underlying taxation issues and other systemic issues behind any non-engagement in NZ society. It would be great to have actual policies that address these issues head-on instead of their coming to grief against the powerful block of vested interests?

[Bjauck]

NZ's productive sector is screaming out for workers.

Despite tens of thousands on social welfare (thanks to Cindy's breeding beneficiaries' policies), the productive sector, especially the horticultural sector, faces disaster because of lack of workers.

Is this related to CGT?
Instead of relying on low pay and poor conditions that only workers from poor countries are prepared to put up with, Maybe pay more and improve conditions to attract more NZers?

[Balance]

Is this related to CGT?
Instead of relying on low pay and poor conditions that only workers from poor countries are prepared to put up with, Maybe pay more and improve conditions to attract more NZers?

Or reduce welfare payments and get people to actually work?

[fungus pudding]

Instead of relying on low pay and poor conditions that only workers from poor countries are prepared to put up with, Maybe pay more and improve conditions to attract more NZers?

And import more from countries that pay lower wages? Does that really make sense - or is it easier said than done? Remember, it's the consumer that ultimately dictates what the employer can pay.

Every increase in the minimum rate risks sending jobs overseas.

[Bjauck]

And import more from countries that pay lower wages? Does that really make sense

If they have a comparative advantage in producing a particular product, yes it makes sense. If kiwifruit for example can be grown and harvested more efficiently overseas then it is a win-win for NZ consumers and the country concerned. NZ then could concentrate on industries and products for which it has a comparative advantage.

Every increase in the minimum rate risks sending jobs overseas.

(Satire) So globalism was really about a race to the bottom for workers conditions and wage rates after all? All so those nasty capitalists could import desperate and poor labourers from desperate post-colonial countries and then enjoy their capital gains off the backs of downtrodden workers and inherit daddy's wealth tax free. (/satire) I tried to make it relevant to CGT.