OnPoint by Keith Ng

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OnPoint: Why does the top 10% paying more tax? (An interactive story)

61 Responses

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  • BenWilson, in reply to Rob Stowell,

    Like race or gender, ‘class’ doesn’t limit the ability to think or imagine.

    That’s right. Those things only limit the ability to directly experience. Thinking and imagining experiences goes some way to developing empathy, but it’s way easier to have empathy with experiences that are actually your own. So I can fully appreciate, having been there, what it is to have earnings in the top decile, and yet still struggling to save up enough for a dead average house, and still having 30 years ahead of me in paying it off. To people who lived through times where a house was affordable to even poor families, was paid off rapidly, and people in the top income decile were uniformly rich, it’s harder to comprehend (whilst still, of course, not completely incomprehensible). That’s why I bang on about it. To help people comprehend my experiences, which are not the same as their experiences. I can personally only imagine what it must be like to be in the situation Matthew describes – instead of hanging on to the bottom-but-one rung as I do, to be actually left on the ground. My imagining of that is that it would be extremely demotivating, and it would make me really angry. It might motivate me to make an enormous leap. Or it might make me feel like I should just give up and re-evaluate whether I’m even in a society that will give me a genuine chance at class mobility.

    Auckland • Since Nov 2006 • 10596 posts Report Reply

  • Matthew Poole, in reply to BenWilson,

    instead of hanging on to the bottom-but-one rung as I do, to be actually left on the ground

    It's worse still when one's household income is in that 9th decile but you still can only dream about owning a 3+1 in your current not-inner-suburbs-and-not-Grammer-zoned suburb of residence; one just up the street from us, on a full section that's half blocked for development by scheduled natives, went for $1.035m a couple of months back. That kind of thing is devastating.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Moz, in reply to Matthew Poole,

    It's worse still when one's household income is in that 9th decile but you still can only dream about owning a 3+1 in your current not-inner-suburbs-and-not-Grammer-zoned suburb of residence

    Even for the young-but-earning there are a bunch of catch 22's. "affordable" houses tend to be a long way out and poorly served by public transport, making two cars almost mandatory. If you add that cost in, the inner city looks less awful... but in Australia all that's done is pushed up the cost of apartments and "densification" projects, so now instead of paying $1.2M+ for a house 20 minutes by train from the CBD, you can pay $900k for a half block "house" in the same area (bedroom sizes starting from 2.5m x 3m!), or slightly less for a livable apartment (but strata fees!). Of course "investor" apartments are much cheaper, down to about $500k, but you probably don't want to live in one of those long term (like the bottom half of the income scale have to).

    We're looking at buying for the first time hopefully before my partner turns 30. But since she's just started her first full time job in her qualified field her ability to contribute is low (admittedly architecture is 4 year bachelor plus 2 years work plus 2 year masters = 8 years minimum before you can start "professional employment" and begin the 3 year registration process. Less any time spent working for money to survive studenthood or being unable to find professional work to get that all-important experience between degrees).

    My expectation is that those without "family resources" will be lucky to buy before they're 30, so they'll be tossing up kids vs house about then. Or like a few are doing, graduating, having kids, and just accepting that they'll be in debt, renting and moving flats every few years just like the poor people do (poor, again, meaning "lower half of the income scale... like they are). Hopefully only until they're in their 40's and have got their incomes up above the median, paid off student loans and saved a deposit, but who knows what will have happened by then.

    Sydney, West Island • Since Nov 2006 • 1142 posts Report Reply

  • Matthew Poole, in reply to Moz,

    graduating, having kids, and just accepting that they’ll be in debt, renting and moving flats every few years just like the poor people do (poor, again, meaning “lower half of the income scale… like they are). Hopefully only until they’re in their 40’s and have got their incomes up above the median, paid off student loans and saved a deposit, but who knows what will have happened by then.

    We’re kind of in that position. Mid-30s with established careers that pay us reasonably well. Her SL is paid off, and mine will be in a year’s time. We have a one-year-old (so we now care about local schools, too) and want another sooner rather than later. Having to save a six-figure deposit whilst also raising a child and paying rent (and our rent is quite cheap, though the house is very average) is like being a paraplegic and being told that one must summit Mount Cook.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Moz,

    We’re kind of in that position. Mid-30s ...

    We're in the even better position that I'm in my 40's with a top-quintile income and no net debt 5 years ago when we started seriously saving. What I'm concerned about is that the situation just keeps getting worse. My loan after post-grad was smaller than most just-a-bachelor's 10 years later, and it's grown since then. House prices keep going up faster than inflation, which in turn is more than wage growth.

    As with a number of other long-term problems I could mention, the main obstacle to fixing it appears to be a small number of extremely wealthy people.

    Sydney, West Island • Since Nov 2006 • 1142 posts Report Reply

  • BenWilson,

    None of us are going to break any hearts with our tales of mere privilege. But I think it's worth hearing that that privilege just isn't what it once was. That's a message that might appeal to people who aren't particularly socialist in outlook. You don't have to believe in a flat wealth distribution to think that a hockey stick isn't good.

    Auckland • Since Nov 2006 • 10596 posts Report Reply

  • Sacha, in reply to Matthew Poole,

    We have a one-year-old

    Congrats.

    Ak • Since May 2008 • 19573 posts Report Reply

  • Sacha, in reply to Matthew Poole,

    like being a paraplegic and being told that one must summit Mount Cook

    just for morale, you understand.. :)

    Ak • Since May 2008 • 19573 posts Report Reply

  • Angela Hart,

    I've just read through the posts on this topic. The picture painted is of a dysfunctional society where a tiny proportion are causing enormous deprivation to the majority. It can't last. History shows what will happen unless change is made voluntarily.
    And telling people that "12% of households pay 76% of net taxes" is so ridiculous in terms of the wealth distribution problems our society faces that it could be a line in a sick comedy routine. Who will have the last laugh?

    Christchurch • Since Apr 2014 • 614 posts Report Reply

  • Matthew Poole, in reply to Sacha,

    Cheers. We all survived :)

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Matthew Poole, in reply to BenWilson,

    I think it’s worth hearing that that privilege just isn’t what it once was.

    Being white, educated and heterosexual sure ain't getting us onto the housing ladder.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

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