Posts by Keith Ng
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None of which does you any good if your fund is run by a crook. Which is what happened in 1987, and more recently with finance companies.
You're right. It's hard to appreciate the impact of these things when I didn't live through it.
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On this morning's RadioNZ news an item about how a capital gains tax will hurt the 'most vulnerable' -- in this case it's renters, since landlords will have to increase rents to cover increased tax liability.
Hmmm, I got distracted and didn't get to this point in the post.
Landlords will have to pay tax - and may try to pass it on to renters - but at the same time, property prices will fall, making purchasing more viable. If interest rates are hitting rock bottom and property prices fall, landlords need to stay competitive and won't be able to raise their rent very much, if at all.
I'm not sure if it's PR crap or whether they're actually delusional, but they seem to think that are the sole provider of housing in New Zealand, and that if they sold their properties, it'll stop housing people or something. They don't seem to consider "not renting" as an option.
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If you want safe, there's gilts.
Doesn't protect you against the collapse of the economic system though. Nor does gold.
Ammo and Tamiflu, that's where it's at.
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But if you invest in a property you actually get a property, which has some value; if someone tries to rob the house or burn it down you can call the police. If you invest in a New Zealand company the directors can just take all of your money and give you back nothing and there's really no legal recourse.
Well they can't *really* do that. But that's the point of investing in funds anyway, that the risk is spread among many investors, many companies and many assets, so that when low probability events strike (such as a company going completely bust), it doesn't wipe out your savings. Many eggs, many baskets, etc.
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Personal income tax makes up the lion's share of revenue collected by the Government - income taxes account for $28.5 billion or 53 per cent of all tax revenue, company taxes make up 17 per cent, GST raises 21 per cent of all tax revenue and excise duty such as petrol and tobacco taxes raised a further $4.8 billion or 9 per cent of all tax revenues.
Would it be fairer if 40% came from income tax, 40% came from corporate tax, and the remainder 20% came from GST/petrol/tobacco? Or perhaps a 33/33/33 split?
They talked about this in Nudge. If you made a list of four things and assigned numbers to each of them, people would naturally drift towards the conclusion that a fair distribution would be equal assignment to each item.
What's are the items? What are you distributing? Meh. Doesn't matter. Because they are part of the same list, cognitively they carry the same significance by default.
Split the item in two, and suddenly their fair share doubles. Combine two? Their fair share halves.
The fact that income tax is 53% of tax revenue means nothing on its own. Compared with the OECD, this is high... but that's because we don't have a separate social security tax. Include that, and we're middle of the range.
Can't be arsed screencapping out of the PDF, but it's on figure 3, page 23 of the TWG report.
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Obviously you'd want to pair it with the introduction of another tax, so you'd be revenue neutral.
Problem is that the tax free bracket applies to everyone, so to offset it, you'd need to either tax the whole of the middle-class a bit more (which is politically unpopular), or you'd need to take a pretty massive punt at the rich, which is actually quite problematic because they can rearrange their affairs into trusts etc., and because they can just pick up and leave.
It's hard to explain when you have such a massive cost, and *by definition* 50% this tax cut will go to the top 50% of taxpayers, who don't particularly need it, and will barely notice it.
And because it's not the kind of shift that you can let fiscal drag do for you, because it's too damn big.
See what you've done? You've broken the nutshell.
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Surely the attraction of Australia isn't the tax rates, it's just that incomes are higher? Which is much more of a hard job for the government (or indeed anyone) to do anything about.
In a nutshell: Yes.
I'd love it if we had the first 5 thousand tax free in NZ. It probably wouldn't help beneficiaries much, as their benefit would probably be adjusted to cover, but low income earners on minimum wage or similar would suddenly find an extra $20+/week in their wallet, which would be big.
In a separate nutshell: Been costed. Too expensive. (Because you have to pay every single taxpayer $20+/week.)
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2025 taskforce report... proposes to raise our income to the level of Australia by drastically reducing our social spending...
The theory is less public spending means more efficient private provision, which is more cost-effective and frees up resources for more profitable activities. Then we'll all be rich!
That's the theory, anyway.
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You've ignored the thresholds that those rates come into force.
...which matters for those on low and middle incomes (hence, they're better off), but matters far less for those on high and very-high incomes - i.e. The highly skilled, highly mobile workers.
For workers at the top end of the income spectrum, effective tax rates are higher in Australia.
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Hmm, yes and no.
Sure, it's a tax burden, but it's not something that comes out of their taxable income, so to compare it with a place that doesn't have payroll tax, you'd need to determine what income would be if the payroll tax was just income tax... and then you're on to purely theoretical territory.