Should we run a wasteage list for the Labour govt ?

[777]

The parrot is rattling his cage again.

westerly

That is because you are slow in accepting that he is correct.

[tim23]

That is because you are slow in accepting that he is correct.

There are at least 777 reasons you made the wrong call with that post. Balance correct - you are having a lend!😀

[777]

There are at least 777 reasons you made the wrong call with that post. Balance correct - you are having a lend!��

You are correct, I should have included you with westerly.

[Bjauck]

It would be a start Blackcap, but realistically, even that is just 'tinkering'. If we keep doing the same stupid things, we are going to keep getting the same stupid outcomes. As a country we need to be bold, brave, innovative & revolutionary with our fiscal set-up. As dramatic as it sounds, the harsh reality is we are on the slow, winding, bumpy pathway to Banana Republic status; if we aren't careful.

- "Flatten the (tax bracket) Curve".
- Standardise Individual, Company & Trust tax rates (& Lower!)
- Implement a Gross Revenue/Turnover Tax which will capture ALL economic activity. Which through implication will also capture 'capital gains' for non-productive transactions, e.g. casual residential property speculators.

The highlighted would be a transaction-type tax, as with GST ? That would equally capture loss-making activity too. You would also need to tax capital profits at the same rate as income profits and salaries, if you want to try to further eliminate tax system bias.

[FTG]

The highlighted would be a transaction-type tax, as with GST ?

I think I know what you are getting at, but Mmmm no, not really.

GST/VAT is a consumption (Indirect) tax, where the 'final consumer' in the Goods/Services chain 'pays the tab'. IOW, the provider of the Goods/Services charges their price and then adds the tax (GST) to the bill; collecting the tax from the end 'user" on behalf of the State.

IMO GST is not a good tax. In fact it is hideous. For a start, the Compliance, Administrational, Regulatory costs to the broader economy are disproportionately high.

A 'Turnover' Tax on the other hand is far more straightforward/direct. If a TT was introduced, then in unison, one would best remove the GST tax regime. Plus eventually dismantle the INC TAX system. It would also allow the the nominal rate to be much lower (as in <10%) and flatter across the board. Regardless of the Turnover/Gross Income quantum of the Individual, Company, Family Trust etc.

Examples:

- Minimum Wage/Salary Earner (from 1st April) - $48,000 pa @ 7% = $3,360 TT payable. As opposed to $7,420 at the moment, but then having monetary & admin double handling happening by getting back various benefits/tax credits. e.g. WFF, Accom' Sup, etc

- Salary Earner on $100,000 pa @ 7% = $7,000 TT payable. As opposed to $23,920 currently payable, but then getting back benefits/tax credits, e.g. WFF

- Sole Trader (e.g. Tradie) - Gross T/O = $500,000 @ 7% = $35,000 TT payable. As opposed to where they currently try to make their taxable profit as 'efficient' as possible, so say $150,000, so $40,020 (+net GST collected) tax currently paid.

- SME (e.g. retail, manufacturer etc) - Gross T/O = $6,000,000 @ 7% = $420,000 TT payable. As opposed to say 10% EBITDA ($600K, so say $500K EBT) = $140,000 (+ Net GST collected) tax currently paid

- Briscoes Group - Gross T/O = $745m (FY22) @ 7% = $52m TT payable. As opposed to $34m (+ Net GST collected) Tax paid currently.

- Sale of an asset class e.g. House. Punter buys house in 2010 for $500K. Sells it in 2020 for $1.2M so hence a Gross Income (via capital gain) of $700K. @ 7% makes $49,000 TT payable. As opposed to Zilch, Zero, Nada currently.!

[Bjauck]

Turnover is gross sales. As I understand it, your TT would be tax levied without deduction of input costs and whether a business is profitable or not. Whereas you allow House owners to deduct the input cost purchase price of the property. So your system would still be biassed in favour of real estate owners, and would further discourage investment in business.

[FTG]

Yes, in the ideal world the State should not use tax policy to encourage/discourage economic activity for particular sectors and asset classes. Do that and the more the tax-payer will attempt to "game the system". Ultimately this leads to damaging economic distortions that in turn artificially inflate/suppress the targeted sector/asset class. Moreover, it inevitably produces a raft of 'unintended consequences" (economic & social) that politicians fail to anticipate and of course recognise & take responsibility for, when they inevitably hit.

Sadly, the current Labour Government are recidivous offenders at attempting to 'screw the scrum', through tax policy. Tremendous amounts of financial waste can be found littered in all corners of the NZ economy currently. That reckless & negligent behaviour is and will continue to negatively impact us all.

The good news is that a Turnover Tax is far more difficult to 'game', much easier to administer and treats each Gross income earner the same (No corporate socialism!).

Bjauck, you make comment about a TT system not referencing whether a business is profitable or not. Agreed, but surely you recognise that this situation already exists with the current Tax framework?

- A Salary/Wage earner currently pays PAYE on the Gross Income/"Turnover". That tax is deducted at source, at the prescribed rate, regardless of whether the taxpayer's household "P & L' is 'profitable' or not.
- A business can show a P & L loss but still be a significant net payer of tax (GST).

As an aside, I here one ask, "what about for a high-growth mode entity that may be showing large cash-burn due to having no/low income?" Simple, under a TT regime, little/no tax would be payable!

[whatsup]

Polytechs amalgamation and how much wasted money has been spent on this ? 50 mil ?

[fungus pudding]

Some kindly soul sent me this nice little poem.........

Dear Jacinda:

You may have run away
From your five years in the sun
But I will not forgive you
For the damage you have done
Our beautiful New Zealand
Can it ever be the same?
Now ravaged by division
And you alone to blame.
You've left us with so much to fix
You've made things so much worse
Your reckless overspending
Has drained the public purse.
Children still in poverty
Criminals running rife
Race based legislation
Set to ruin Kiwi life.
You grasped your socialist dagger
And you plunged it in our heart
Creating vile apartheid
Which will tear us all apart.

So I'm glad you're gone, Jacinda,
But does Hipkins wear your smile?
I fear the face of innocence
Just masks the crocodile.

[whatsup]

I see in todays news via News Hub that the Polytech rejig fishheads have asked for a $300,000,000 interest free advance from the govt as part of a $425,000,000 costings !!