Cracker by Damian Christie

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Cracker: Another Capital Idea...

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  • Graeme Edgeler,

    I don’t know of any party that won an election promising higher taxes, but I’m sure to be proven wrong on that.

    Labour, 1999. As you note.

    But I’d rather see it as another tool in the box, with a corresponding drop in something else, than an increase in the pile.

    This is perhaps how they afford to pay for their first $5000 tax-free.

    Wellington, New Zealand • Since Nov 2006 • 3009 posts Report Reply

  • Damian Christie,

    Yes, although as NZIER notes here, the 'rich-prick' tax is enough to cover that and the fresh fruit and vege.

    http://nzier.org.nz/publications/getting-real-on-a-tax-free-threshold-nzier-insight-24

    And good to note that my first comment would prove me wrong. Although to play the pedant, I don't know that they won because they promised a high marginal tax rate...

    Wellington • Since Nov 2006 • 1130 posts Report Reply

  • Hilary Stace,

    Trevor Mallard seems to be enjoying the media response in a way that suggests the 'leak' was carefully stage managed.

    Wgtn • Since Jun 2008 • 2099 posts Report Reply

  • Russell Brown,

    If the introduction of a CGT results in people leaving the housing market, or holding on to their second or third houses rather than selling them for a quick profit, okay. Far more likely is that people will add the tax they will pay into their rational decision-making process to sell at any given time, the same as they might do with real estate agent fees. And if paying a bit of tax means they’ve got less money to buy the next house with, well that’s okay, because the deflationary effect will mean that next house’s price isn’t juiced up on the promise of quick profits.

    That is very nicely put.

    Auckland • Since Nov 2006 • 18969 posts Report Reply

  • steven crawford,

    One of the lousiest arguments against CGT, is that people might try to avoid paying it.

    As always with tax, if you are paying a lot of it you are clearly earning lots of money. I will gladly pay fifteen percent of any money I earn by doing absolutely nothing other than happening to already have more than enough of it.

    The argument that humble and ordinary people that own more than one house shouldn’t have to pay tax on the retirement investment profit, is also foul, when part of that plan is to receive gold cards, health care and a pension. Yet thats the argument thats being presented from the Key Government. But its not political suicidal.

    Since Nov 2006 • 2751 posts Report Reply

  • Felix Marwick, in reply to Hilary Stace,

    Trevor Mallard seems to be enjoying the media response in a way that suggests the 'leak' was carefully stage managed.

    It was

    Wellington • Since Nov 2006 • 198 posts Report Reply

  • Hilary Stace,

    How many people have tax accountants?

    Wgtn • Since Jun 2008 • 2099 posts Report Reply

  • giovanni tiso, in reply to Damian Christie,

    Although to play the pedant, I don’t know that they won because they promised a high marginal tax rate…

    Are you sure you are in favour of proportional taxation? I'm asking because currently we have teachers in the same bracket as Telecom's CEO. That doesn't sound right to me.

    Everybody says that they are against trickle down economics, but few people seem in favour of reinstituting the tax brackets we had before Reagan, Thatcher and Douglas, adjusted for inflation. Our system *is* trickle down economics - we let the rich keep more of their money because we think it will benefit the economy. How's that been working out?

    Wellington • Since Jun 2007 • 7386 posts Report Reply

  • Islander, in reply to giovanni tiso,

    Piss-poor or piss-pour!

    Big O, Mahitahi, Te Wahi … • Since Feb 2007 • 5643 posts Report Reply

  • Moz,

    giovanni: having teachers in the same tax bracket at the CEO of Telecom sounds like an excellent plan to me.

    Oh, you don't mean they should get a pay rise?

    Maybe not then.

    Sydney, West Island • Since Nov 2006 • 491 posts Report Reply

  • giovanni tiso, in reply to Moz,

    having teachers in the same tax bracket at the CEO of Telecom sounds like an excellent plan to me.

    Now that you mention it, to me too.

    Wellington • Since Jun 2007 • 7386 posts Report Reply

  • DeepRed, in reply to Graeme Edgeler,

    This is perhaps how they afford to pay for their first $5000 tax-free.

    And Prostetnic Vogon Joyce has just announced several Holiday Highway’s worth of pet projects. On top of the Holiday Highway itself. Anyone notice the 4.5:1 imbalance in favour of truck-only lanes, oops sorry, motorways? And the public transit figure includes broadband. The Jiyū Minshutō would be proud.

    The southernmost capital … • Since Nov 2006 • 4355 posts Report Reply

  • Damian Christie,

    @Giovanni - since you ask, yeah I'm absolutely in favour of the CEO of Telecom being in the same tax bracket as a teacher. Because under a proportional system, the CEO of Telecom pays a SHITLOAD more than the teacher, approximately $300,000 more for each million dollars he earns.

    Hate to sound like I don't belong on Public Address, but I have a few issues with your phrase "we let the rich keep more of their money...", as it suggests it was never theirs to start with, that it's impossible to earn more than, say, $100,000, without your salary effectively ceasing to be yours, to be distributed at the whim of others.

    I'm sure we both think people should pay their fair share, I just think my share happens to be fairer.

    Wellington • Since Nov 2006 • 1130 posts Report Reply

  • Damian Christie, in reply to DeepRed,

    And Prostetnic Vogon Joyce has just announced several Holiday Highway’s worth of pet projects.

    Ahh, nothing like a Hitchikers reference to make me smile on a Friday morn...

    Wellington • Since Nov 2006 • 1130 posts Report Reply

  • giovanni tiso, in reply to Damian Christie,

    @Giovanni – since you ask, yeah I’m absolutely in favour of the CEO of Telecom being in the same tax bracket as a teacher. Because under a proportional system, the CEO of Telecom pays a SHITLOAD more than the teacher, approximately $300,000 more for each million dollars he earns.

    That’s not proportional taxation. Unless the alternative to proportional taxation was something like “everybody pays $10,000 a year into this coffer, regardless of how much they earn”. It seems that your against levying a poll tax and GST as the only means of raising revenue, which is not exactly terribly progressive of you. We’re talking the current system at best, which is neoliberal trickle down, ACT’s flat rate at worst.

    (Answer to the second point you raise coming later this morning as regrettably I have to leave the house).

    Wellington • Since Jun 2007 • 7386 posts Report Reply

  • Craig Ranapia, in reply to Hilary Stace,

    Trevor Mallard seems to be enjoying the media response in a way that suggests the ‘leak’ was carefully stage managed.

    Of course it bloody was, and if I hear another journalist say "Labour refuses to talk publicly" I'll bloody bottle someone. What Labour is actually doing is refusing to answer any questions about policy - and the media are playing along.

    North Shore, Auckland • Since Nov 2006 • 12034 posts Report Reply

  • Danielle, in reply to Damian Christie,

    I’m absolutely in favour of the CEO of Telecom being in the same tax bracket as a teacher

    So, what, as soon as someone hits some magic ‘shitloads of money’ threshold proportional taxation no longer applies to them? “The rich are different from you and me”, indeed.

    Charo World. Cuchi-cuchi!… • Since Nov 2006 • 3661 posts Report Reply

  • Damian Christie, in reply to giovanni tiso,

    That’s not proportional taxation.

    Uh yeah, that’s *exactly* what proportional taxation is. Ditto Danielle, proportional tax applies at all levels of income, even “shitloads”.

    http://en.wikipedia.org/wiki/Proportional_tax

    I think what you’re confusing it with is Progressive tax. The opposite of which is regressive tax (i.e. a poll tax).

    And yes, that’s what I’m in favour of (proportional) – I think the more money you earn, the more tax you should pay, but other than some low threshold levels to help with a minimum standard of living, I don’t agree with higher and higher rates at the upper levels. I simply don’t see what’s so evil about that.

    And because of tax creep, even under Labour’s rich prick tax, in 2008 both many teachers and Telecom CEOs were being stung at the 39c rate. I dunno how many of those teachers felt they were earning “shitloads of money”

    Wellington • Since Nov 2006 • 1130 posts Report Reply

  • Damian Christie, in reply to Craig Ranapia,

    @Craig - but i still think it was a bad decision to leak it and let the opposition lead the conversation.

    Wellington • Since Nov 2006 • 1130 posts Report Reply

  • Craig Ranapia, in reply to Damian Christie,

    DOUBLE POST DELETED.

    North Shore, Auckland • Since Nov 2006 • 12034 posts Report Reply

  • Craig Ranapia, in reply to Damian Christie,

    @Craig – but i still think it was a bad decision to leak it and let the opposition lead the conversation.

    Quite - but I think the real risk is that Labour may forget Helen's favourite mantra: Under promise and over-deliver. What's smart politics/strategy this week, could turn turtle very quickly if Goff has another one of his attacks of foot-in-mouth disease or analysts (even though who support the idea of CGT) find serious design flaws, or fiscal holes, in the policy itself. (Labour certainly weren't shy about taunting Key with his, shall we say, somewhat over optimistic tax cut promises three years back.)

    North Shore, Auckland • Since Nov 2006 • 12034 posts Report Reply

  • Rich of Observationz,

    Ok, so I've just looked up tax rates and teachers pay scales for 2008.

    The top tax rate came in at $70,000. Maximum base salary for a teacher, even today, is $68,980. Allowances add an average $5,600 to this, but 97% of teachers (being in salary group 4 or below) make less than $50k base, so are very unlikely to get to $70k.

    So the "teacher paying top rate tax" is pretty much a myth.

    (Sure, *principals* can make big dollars. Even more if they manage to run a few little scams and fiddles. But not classroom teachers.).

    It'd be nice if teachers *could* make enough money to pay higher rate tax. But that would involve government raising more money to pay them. And it doesn't help that the wealthy are able to use their lightly taxed wealth to buy their kids into expensive schools that isolate them from the main ordinary system.

    Back in Wellington • Since Nov 2006 • 4463 posts Report Reply

  • giovanni tiso, in reply to Rich of Observationz,

    but 97% of teachers (being in salary group 4 or below) make less than $50k base, so are very unlikely to get to $70k.

    There are teachers in the top tax bracket. Like I said.

    Wellington • Since Jun 2007 • 7386 posts Report Reply

  • Rich of Observationz,

    Giovanni, even if the top tax bracket came in at $250,000, you'd find that there was somebody working as a teacher who had a multi-million dollar trust fund and was paying top rate tax on the interest.

    A tiny minority of teachers paid top rate tax under the last Labour government's rates.

    Back in Wellington • Since Nov 2006 • 4463 posts Report Reply

  • James Butler, in reply to Damian Christie,

    Attachment

    And yes, that’s what I’m in favour of (proportional) – I think the more money you earn, the more tax you should pay, but other than some low threshold levels to help with a minimum standard of living, I don’t agree with higher and higher rates at the upper levels. I simply don’t see what’s so evil about that.

    I think the gut feeling of a lot of people who tend left is that a) unrestrained market capitalism allows salaries at the top end to grow beyond the bounds of what is instinctively reasonable, and b) progressive taxation provides an easy counterbalance to this tendency, by decreasing the marginal utility of pay increases at the top end.

    I’m uneasy about the rigorousness of a, but I wonder if it’s a function of people who earn higher incomes being, on the whole, the same people who have the most influence on pay rates (sometimes I want to do an economics degree just so I can win arguments on the Internet). I also think that if a, then b is reasonable.

    (Unrelated: w00t! Attachments on comments! Just because I can…)

    Auckland • Since Jan 2009 • 801 posts Report Reply

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