point taken thanks,

OK, so my comment should have read “our tax rates are not causing the best and brightest to leave for Australia – this was covered in depth by frog earlier” and not mentioned “not broken”.

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Stuey

I don’t think I could prove why people who can earn good money elsewhere or here decide to do it elsewhere. I just look at the numbers and it looks to me like a decent incentive. Keeping only 10 cents on the dollar is a hell of a hit.

I DO think I can prove to you, or to Frog, if either of you pay attention to what I say, that a tax and benefits system that has an effective rate of zero up to 20000 or so, rockets to 90% between 30000 and 60000 and then drops back to 40% at 70k to 100k is broken. That’s what our taxes do. It isn’t intentional, it is simply not coordinated.

I’m not asking for the taxes to be lowered. I am asking that they and the benefits be rationalized so that the increases are gradual, not abrupt, and so that the guy on 300K is paying more on his next buck than the guy on 30K. That’s how its supposed to work. I pointed out Sweden as an example. It is not impossible to fix… and it doesn’t have to cost a dime overall.

I am simply asking that the LAQC law be amended to allow me to bid for the home I want to live in on the same basis as the guy who’s bidding on it to rent it out, or the LAQC’s be shredded as it really ought to be. That can’t happen easily because too much of NZ middle class has already structured itself around this single tax break that makes such a huge difference in that 90% hit that EVERYONE wants to be a landlord.

Stuey… I am NOT asking for a tax cut. I am asking for tax to be equitably scaled along with benefits to eliminate the wall. If Sweden can tax as high as it does and manage with a max of 57% then we can do the same. I’d be happy if the max stayed less than 65%… but it shouldn’t go there until the income gets pretty damned extreme. The point is that we have a hump, not a proper progressive tax structure. That IS broken by my definitions.

respectfully
BJ

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our tax rates are not broken, and they are not causing the best and brightest to leave for Australia – this was covered in depth by frog here:
http://blog.greens.org.nz/index.php/2005/05/11/more-taxing-questions/
http://blog.greens.org.nz/index.php/2005/05/12/more-taxing-questions-revisited/
http://blog.greens.org.nz/index.php/2005/05/22/kiwis-flying/
cheers

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Letting people spend their own money

The Green Frog has started labelling as liars anyone who says they think people are better at spending their money than the Government is, because neither are National (nor ACT) proposing to eliminate all Government spending.

Frankly this sort of na…

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Zoe

The highest effective marginal tax in Sweden is currently 57%. I am going through their tax code a bit, but I don’t see that their tax rates are a lot higher than ours. They have rates of 18% 27% 31% and 42% – they have a 12% GST on stuff you have to have (like food), 6% on books and newspapers, and 25% on everything else. Rent and houses are exempt. I can’t say better or worse except that they do NOT appear to have a hump in the income brackets. They don’t hit 90% for anyone.

NZ does hit 90% and that is why I am a mite upset. It isn’t like it can’t be fixed, and FIXING it would probably pull the teeth of the Nats on the subject without lowering the overall tax receipts at all.

I apologize, but this is broken. It is breaking the country. It is driving the best and brightest off to Oz and over the damned rainbow.

respectfully
BJ

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One thing I find mildly amusing is that the Scandinavian countries are praised so highly for their wealth, equality, quality of services and so on
But look at their tax rates – closer to double ours mostly
I don’t know what to think about our taxes. I was surprised Labour brought it up at all. I wonder if it would have been better politically not to change it at all than to promise a small cut in the future

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Stuey

I haven’t “lumped them together”, I’ve rubbished them both but for different reasons.

Green policy is OK as far as it goes, but it does not go very far in several critical respects, chiefly in analysis and specifics. There’s no indication of what rates would be applied, only that the emphasis would shift on ecological grounds, and there’s even less of an indication of how to get there from here. That’s been my complaint about the policy as written and I have yet to see any more detailed analysis or proposals to analyze. Green policy is fuzzy, feels-good and totally incapable of immediate implementation. Nobody AFAIK, has a clue how the numbers would be made to work. I am pretty sure they COULD be, but in my business “pretty sure” is just a degree of “I don’t know”. I want to take Green policy seriously, but it has to be seriously analyzed first. Time and effort has to be taken to make tax revenue match expenditure within the new structure, and the transition to the new system has to be planned.

Labour gets rubbished for an entirely different reason. Huskynut has pointed me at a good link which shows that there isn’t really a “surplus” as reported by various news media. I wasn’t aware of that… and unlike any keynesian or more usual businessdork, I don’t believe in government being in debt. Silly me… I want my son and daughter to be able to make it without having to pay off Papa’s lack of frugality. HOWEVER….

As far as I’m concerned, anyone who expects me to continue to work at my full capacity for 10 cents out of every dollar, can go hang. This problem could be solved by rebalancing things so that the reductions of benefits happened slower or the tax rates came in a few more incremental levels. At 65K the effective marginal rate is about 90%, but at 90K it is merely 50%… which is IMHO not unreasonable. Hell, you could actually increase the overall tax take and still fix the problem I am talking about.

I have the care and feeding of 2 children and 3 adults on my salary. I know what I spend, what I have to insure and where every dime is going.

If you want to blame ME for my problem you’re going to have to work out how taking the bus is a frivolous expense, how patching my own clothes instead of buying new is over-consumption, and how wanting to keep more than 10 cents out of every extra dollar I manage to earn is greedy.

I don’t think you can.

Rantz… Is there anything online about that analysis? I can’t afford to buy books here Stuey thinks I’m an over-consumptive person

respectfully
BJ

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bj, I don’t know why you constantly attack the greens tax policy and lump it in with the labour tax policy. as has been explained to you multiple times, the green tax policy is to reduce personal income tax, which is what the stupid greedy masses are going on about and what you are going on about, hence you should be supporting and singing the praises of the greens tax policy and encouraging Labour to steal some green ideas.

as far I’m concerned anyone in the 50-70K tax bracket who says repeatedly shouts “i can’t make ends meet” or “i’m paying too much tax” is a greedy self-centred over-consumptive person – try reducing your consumption and you’ll find you don’t need to spend as much.

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rantz,
Please are you able to give me a snapshot of the key point in that chapter? I am a maths failure since 1959 when I scored only 35 marks in School Certificate maths.

Maths was compulsory, but physics I did not even study. All I do know is that to provide basic infrastructure and an inclusive safety net of government services, the populace must be taxed. Where to find the balance is the question so many of us ask.
Joy.

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There is a great chapter in Philip Ball’s book “Critical Mass” which discusses the mathematical justification for tax in a society.

He uses a statistical physics approach to the complex nature of society and economics.

I recommend it. Don Brash should read it.

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Jordan

Ignoring the middle class and the tax burden being carried by people in the 50 – 70k income bracket will inevitably eventually cost us the majority. We (the people in that income bracket) do vote and we are getting more numerous as inflation pushes more wages higher… and we are more than a little P.O.d by the repeated dismissal of the punishing tax burden. What happens is that the tax cuts become “inevitable” because the change of leadership becomes inevitable. The public likes its services and I like providing as much as I can, but damn it, the marginal tax rate in that range is not much different from 90% and THAT is enough to push even a NY Liberal like myself to revolt. If I were making $100K or more I’d be more accepting of the load AND THE MARGINAL RATE WOULD BE LESS!… but I can’t service a loan to buy a house and feed my kids at the same time… not on these rates. ( I could afford a house for someone else to live in.. funny that THAT interest and depreciation is all deductible. That’s why I have to bid against people who are “investing” all the time.)

That’s what’s getting to us. Now there’s just two ways to deal with it. Either stretch some of the benefits UP so that we get something back, or drop taxes in some manner.

But if you think doing nothing is going to win votes and elections you’re sadly mistaken…. and if you lose the election by stubbornly clinging to this rape of the middle class the tax cuts and the service cuts are going to be COMPLETELY out of our control.

Mind you… I AM planning to vote Green in this election. That doesn’t mean that I agree to being skinned alive. A good tax policy shears the sheep without skinning them.

respectfully
BJ

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Frog, of course he got angry. Your post comprehensively rebuts the framing National have been putting around tax cuts. If you take away the “inevitable” nature of their arguments framed in their language, they just look dumb.

Keep on doing it. And here’s hoping the Labour Party keeps on doing the same.

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Frog – You don’t need to go anywhere else to be abused.

There’s a couple of things you have to explain. The first one is How Much Is Enough? You don’t answer, neither does labour. The government is in SURPLUS and won’t lower rates? It makes me think you don’t care about the people who are paying excess.

You’d better get the Marijuana legalized, cause I’d have to be stoned to accept that.

The second problem is that nobody is proposing the sort of straw-man cuts you and Dr Whyte are yammering about.

Face Facts. Labour has dropped in the polls and the principle reason is that it told the voters, “No Tax Cuts” and voters who make 45K-80k can’t side with Labour OR Greens. An effective 80-90% marginal tax rate? It’s suicidal.

You want to transfer wealth and have social programs? I agree. I came here because I DO believe in the social contract. The problem is that you are killing the horse. But this horse is not so stupid as Boxer.

People aren’t running away from labour because they buy the Libertarian BS you presented as the alternative. They’re doing it in self-defense. Your most productive, best educated workforce is leaving for JUST ABOUT ANYWHERE ELSE, because they can do better there. Not stupid people Frog. The attitude of labour and green parties is driving us away.

What attitude?

You don’t care about us. That’s makes it really hard for me to be where I am right now, or to care about how Greens do in this election.

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fwwog, i agree with that balance thing Farrar talk about, and that we accept a level of taxation, but how much, and for what, though you correct he make donkey of himself by looking for trouble where it was not, thats what we fascists keeps saying to yous get yo budget out for the clean river, cwicket is a conscience issue, we need you expenditure commitment, Bwash will follow sensible directives, and we can easily sell him specific valid projects, ACT collapse leave gap, good, we make new costitution for fascists, get yo bright team like chipper sending out valid green things to do, not social things, except for obvious things like Maori TV, green things,

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Well said Frog. Thank you. Being old as I am, I still have very clear memories of hearing my parents talk about the first Labour Govt and what the social contract meant to mum and dad. They also discussed with me what it was like for many people before that time.

If NZ voters are responding to the Nats undefined “tax cut” message, then it seems clear to me that those same people are not thinking through the whole issue, i.e., core public service, overseas debt and the like.

I suspect another thing that some tax swing voters may not realise is that for the broad ‘middle’ NZ to receive attractive tax cuts, ( and what would you or I or they consider attractive?), the govt of the day would have to find billions and other than through gst, never recoup them. AH, is that what the Nats plan, to increase gst? Joy.

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nice one frog but I despair that a whole lot of ACT types or libertarians will suddenly use this thread to argue against governments taxing us.

Your post is not really about that, more about the decitefulness of nationals tax cuts campaigning.

Of course the other point is that their simplistic we’ll give you tax cuts message ignores the fact that they don’t explain that they will probably not cut the overall tax burden but will simply redistribute it onto other forms of taxation, or that alternatively that they will increase the countries level of debt to pay for it.

Of course if the public is receptive to a simplistic tax cuts message then the Greens should play that game too and point out that we will also cut personal income tax and that we actually explain how we will do it!

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Absolutely. As someone who has lived and worked in Russia for a period, I can only confirm your view of what happens when the social contract collapses. It is ugly.

It is my view that many, but by no means all, people are intellectually dishonest with themselves. When times are bad they will squeak and squeal and look to “gummint” handouts to solve their problems, and yet the same people when times are good, declare to themselves “how clever they are” and determine that tax is theft and they don’t want to pay it any more.

Hence their gulllibility when the RightWing con job comes along, promising them what they want to hear.

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