Cracker by Damian Christie

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Cracker: Another Capital Idea...

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  • Danielle, in reply to giovanni tiso,

    Attachment

    I fully realise that middle class New Zealand liberals are past masters at not giving a shit about any of that

    Charo World. Cuchi-cuchi!… • Since Nov 2006 • 3623 posts Report Reply

  • Stephen Judd, in reply to Damian Christie,

    You wanna see the people already paying by far the lion’s share of the tax all fuck off overseas?

    Assuming that were to happen, and I think to a great extent it wouldn’t, what do you think would happen next?

    Would Telecom operate without a CEO? If the remaining capitalists who are still resident for tax purposes fled, would they sell their businesses here? Who would buy them? Would they go unsold? Really, how do you see this flight of tax haters playing out?

    Do we miss Douglas Myers?

    Wellington • Since Nov 2006 • 2919 posts Report Reply

  • giovanni tiso, in reply to Stephen Judd,

    Do we miss Douglas Myers?

    I don't, but then all I have to do is look at his poster on my wall, so.

    Wellington • Since Jun 2007 • 7320 posts Report Reply

  • Rik,

    why should *any* teachers be in the same tax bracket as Telecom’s CEO? It’s nutty.

    This does not appear nutty to me. Doesn't matter what line of work you are in really - whatever you earn, there is a scale of income tax applied progressively increasing as your income gets higher to the top bracket of over $70,000.

    Whether this is fair or not probably depends whether you earn a lot less or a lot more than $70,000 but it is roughly the system that has been in place in this country for quite some time.

    So in my opinion it is "fair" in that we are all aware of the system and choose to inhabit this country and abide by its rules and taxation system.

    Whereas making tax free capital gains on houses as their prices spiralled upwards wasn't really all that fair.

    As for all the "rich pricks fucking off" it might be worth noting that their contributions to the tax take would fuck off with them and make it that much harder to fund social welfare, health, etc.

    I'm pretty sure there were similar discussions along these lines on PAS a while back and emotions ran high. I just can't figure out why some people seem intent on biting the hands that feed the nation.

    Damian - agree 100% with all you have said in this post and comments. You appear to be one of the voices of reason. Look forward to seeing some blogs once your little one arrives - they are so much fun!

    Since Jun 2007 • 124 posts Report Reply

  • Hilary Stace,

    I think this is a good time to remember NZ's welfare state, particularly Giovanni's consideration of it.

    Wgtn • Since Jun 2008 • 2009 posts Report Reply

  • Tim Hannah,

    I miss Keith, where's he at? He used to post some excellent stuff

    Wellington • Since Jan 2007 • 223 posts Report Reply

  • James Butler, in reply to Rik,

    As for all the “rich pricks fucking off” it might be worth noting that their contributions to the tax take would fuck off with them and make it that much harder to fund social welfare, health, etc.

    Really, would they? Surely someone, somewhere has some data from a country where the introduction of an extra top tax rate caused the total take to drop, as all the Atlases shrugged their way overseas? Anyone?

    Auckland • Since Jan 2009 • 799 posts Report Reply

  • Stephen Judd,

    it might be worth noting that their contributions to the tax take would fuck off with them

    How does that work, exactly?

    Suppose I have a lot of assets, and a lot of income, and I decide to leave in disgust.

    We don’t have a wealth tax, unless you count rates. And if you are thinking of rates, property is something I can’t take with me. So NZ loses nothing there. Any loss of tax contributions must be about my income.

    If my income was from salary, presumably someone else will be employed to do my job, and they will pay the income tax I can’t stomach.

    If my income was from business dividends, the business will still be taxed, and as a non-resident, I will no longer be able to claim imputation credits, so the govt will actually keep more. If I sold the business, the new owners will be in the same position.

    So I’m scratching here. What exactly is the effect of tax refugees fleeing on our tax base?

    Wellington • Since Nov 2006 • 2919 posts Report Reply

  • Rich of Observationz,

    people already paying by far the lion’s share

    I questioned the assumption that these are the wealthy $150k+ taxpayers. The treasury has a page which shows totals of taxable income in bands.

    I've crunched that into a spreadsheet which I've shared through Google Docs. (I would have attached it, but hey..)

    The green zone shows people earning half the total taxable income ($121bln/2 = $61bln) of NZ: that's everyone with an income up to $25k a year.

    The green red and blue zones show people paying half the income tax ($23bln/2 = $11.5 bln): that's everyone with an income up to $39k a year.

    What happens if you take GST into account? The total GST take ($11bln) is approx 9% of total taxable income - the difference between this and the GST rate is accounted for by a range of things, like savings, houses and foreign holidays). If you apportion this between all taxpayers, you get the columns on the right.

    Basically if you include GST, half of all personal tax is paid by people on less than $34k a year.

    So the "lions share" is not being paid by the wealthy, but by ordinary working stiffs.

    Back in Wellington • Since Nov 2006 • 4362 posts Report Reply

  • DeepRed,

    Income tax rates aside, it's a well-busted myth that high taxes make NZers emigrate. The real reasons are that NZ is a small fish in a big sea, and that there aren't enough specialist or otherwise interesting jobs for the most talented NZers (because all the investment money has gone into housing speculation).

    The southernmost capital … • Since Nov 2006 • 4064 posts Report Reply

  • Stephen Judd,

    Incidentally, do Swedes emigrate much these days?

    Wellington • Since Nov 2006 • 2919 posts Report Reply

  • giovanni tiso, in reply to Hilary Stace,

    I think this is a good time to remember NZ’s welfare state, particularly Giovanni’s consideration of it.

    "To place the claims of welfare before those of wealth". Those were the days, huh?

    Wellington • Since Jun 2007 • 7320 posts Report Reply

  • uroskin, in reply to Stephen Judd,

    Incidentally, do Swedes emigrate much these days?

    You may be thinking about the punitive tax rates of the 60s and 70s (99% rate bands, from memory) but Sweden is now only slightly out of step with the average OECD in tax to GDP terms (http://en.wikipedia.org/wiki/File:Tax-Revenues-As-GDP-Percentage-%2875-05%29.JPG). The reason it is higher at 50% is because both employees and employers pay income tax on the employee's salary. In other countries, such as the UK, the employer's portion is labeled as social security contribution. So, no, Swedes don't emigrate much for tax reasons. If a low (or no) tax rate is the main attraction for migration, why aren't all the Randians on a Greek beach?

    Waiheke Island • Since Feb 2007 • 178 posts Report Reply

  • James Butler, in reply to uroskin,

    If a low (or no) tax rate is the main attraction for migration, why aren’t all the Randians on a Greek beach?

    Because they'd have to elbow their way through all the drunk English retired taxi drivers?

    Auckland • Since Jan 2009 • 799 posts Report Reply

  • Rik, in reply to Stephen Judd,

    So I’m scratching here. What exactly is the effect of tax refugees fleeing on our tax base?

    There only change would be that a different bunch of "rich pricks" would be taking crap about not paying enough tax (to support all the poor teachers, as it appears in this thread!).

    My point was this - we all enter the workforce in full knowledge of what the tax rates are. We all make choices as to the education and careers we take up. Some of us end up teaching, some of us end up CEO of a big company - it's errelevant to the IRD, they don't care what line of work you are in, they just arbitrarily apply the tax rates to your income and ping you for the amount of tax you owe. For someone to be horrified that we live in a country where a teacher could be on the same tax rate as the CEO of Telecom NZ is ridiculous.

    Let's think about that. Let's say the teacher is earning $80k - so for the last $10k of their income they are paying the same tax rate that the CEO of Telecom is paying on the (roughly) $1.7mil he earns above the top tax rate. Without including bonuses. At 33% that comes in at $561,000 in tax for Paul Reynolds and $3,300 for the teacher. So who got stiffed?

    Since Jun 2007 • 124 posts Report Reply

  • Martin Roberts,

    Nobody seems to have questioned the idea that the President has to be paid the mostest. That seems unlikely to always be sensible if pay is based on value produced, and/or difficulty in filling the position. But it is surprisingly common thinking that managers can't be paid less than their staff.

    Auckland • Since Nov 2006 • 88 posts Report Reply

  • Matthew Poole, in reply to Rik,

    the IRD, they don’t care what line of work you are in, they just arbitrarily apply the tax rates

    uh, the IRD work very hard to apply tax rates in the least-arbitrary fashion possible. If you want someone to take the blame for arbitrary, you want to be pointing your finger at the Beehive and the residents thereof.

    The pit from whence crawl… • Since Mar 2007 • 3889 posts Report Reply

  • giovanni tiso, in reply to Rik,

    At 33% that comes in at $561,000 in tax for Paul Reynolds and $3,300 for the teacher. So who got stiffed?

    Neither. The teacher can afford to pay the taxes levied from her, and should. The CEO of Telecom can afford to pay a lot more taxes than he does, and still be super-rich, and should. Because redistribution of wealth is good, because being part of a society than can look after the weakest is good for Paul Reynolds as well. And because we just passed tax cuts for the rich so that we could raise GST and make groceries more expensive to those at the bottom. It's elementary decency.

    Wellington • Since Jun 2007 • 7320 posts Report Reply

  • giovanni tiso, in reply to Martin Roberts,

    Nobody seems to have questioned the idea that the President has to be paid the mostest.

    Good luck disabusing people of that notion.

    Wellington • Since Jun 2007 • 7320 posts Report Reply

  • Damian Christie, in reply to Stephen Judd,

    Would Telecom operate without a CEO?

    No, but if the salary was capped at $361,000 or whatever arbitrary figure we decide is 'enough', they might be quite a shitty CEO.

    The idea that there is someone to replace everyone ignores the fact that some people actually create jobs and draw money into NZ by the businesses they create. And not all their wealth is created on the blood of exploited workers. Sometimes its created by having a fucking good idea that lots of people want, hopefully lots of overseas people. And we could use more of these types of people, and we could use more of them staying here too I reckon. And I don't think any of the ideas I've heard further either of these goals.

    Wellington • Since Nov 2006 • 1127 posts Report Reply

  • giovanni tiso, in reply to Damian Christie,

    Sometimes its created by having a fucking good idea that lots of people want, hopefully lots of overseas people. And we could use more of these types of people, and we could use more of them staying here too I reckon.

    And this justifies taxing them less than the entreprenurs of thirty years ago? Why? Were has slashing their taxes got us? Are our CEOs better, our companies substantially smarter? Does the economy as a whole do better? Have we kept pace with Australia, where neoliberal reforms weren't pursued as aggressively?

    Wellington • Since Jun 2007 • 7320 posts Report Reply

  • Rik, in reply to giovanni tiso,

    You are welcome to opinion, however I do not share it.

    I believe that if an individual pays anything like $561,000 in tax that he (or she) have contributed enormously.

    I see no reason to gouge them for more just because of your beliefs,

    You, however, are more than welcome to give up as much of your income to the state as you desire.

    Since Jun 2007 • 124 posts Report Reply

  • Rich of Observationz,

    they might be quite a shitty CEO

    I was working to list the various failures of Telecom management - but hey, I don't need to - it's all on their own website: http://www.telecom.co.nz/content/0,8748,200633-1548,00.html

    First Media, Ferrit, AAPT, CDMA, Yahoo!Xtra, Yellow Pages....

    Back in Wellington • Since Nov 2006 • 4362 posts Report Reply

  • Rik, in reply to Rich of Observationz,

    Fair point! I wondered when this would come up. :)

    No-one ever said that all highly paid execs were actually worth the money they are paid!

    I don't begrudge them their income though - if they can convince some foolish company to pay them "shitloads" then why not?

    Since Jun 2007 • 124 posts Report Reply

  • Damian Christie,

    So I’m scratching here. What exactly is the effect of tax refugees fleeing on our tax base?

    Let me help you find that itch – you’re assuming that the business isn’t portable, because it is either bricks and mortar and must be sold, or services New Zealanders. The businesses we can least afford to leave overseas aren’t.

    Also, can I point out that my arguments are being reduced rather illogically here. I spoke of Atlas Shrugged in relation to capping salaries at $360,000, not of the reintroduction of a 39c tax rate. There are plenty of reasons why it’s more attractive to move overseas already, and plenty of reasons why it’s great to live here, I simply see higher tax rates as adding another “con” to the list.

    And as @Giovanni seemed to agree with Rik above, regardless of whether Telecom CEO is in the same bracket as the teacher, he already pays shitloads more tax than the teacher. Everything Giovanni says, about Reynolds paying more $$ because it’s decent and so forth, applies under PROPORTIONAL taxation. I don’t see why making it even steeper at the top is objectively the “right thing to do”.

    FWIW, and while I’m certainly not in their camp, Douglas policy is not just flat tax – it also includes a guaranteed minimum income. This has the same (general) effect as a lower marginal tax rate, or $5000 tax free and so forth. And if that guaranteed minimum income is set at a decent level, then I’m not opposed to that, even if, shock horror, it’s something ROGER DOUGLAS agrees with. He also voted for homosexual law reform and supports medical marijuana… should I change my views on that too?

    Wellington • Since Nov 2006 • 1127 posts Report Reply

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