Christopher Luxon, New Zealand Prime Minister 2023

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Forums › Politics › Christopher Luxon, New Zealand Prime Minister 2023

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#3165568 29-Nov-2023 11:01

sir1963:

Wealth does not mean income , we tax income.

Capital gains is not income, no matter how much you want it to be so.

If I own a billion dollars worth of property, take out a loan of $100M against it and spend that money on hookers & blow while rent on the property pays back the $100M, that should be considered income. Right now you pay bugger all tax on it because the rent is just paying back a loan, so there is no profit.

If you can use it as leverage to buy more stuff with, you should pay tax on it as if it was income. The concept of income as we know it is nothing more than a sentence in the tax code. It isn't General Relativity. We can change it whenever we want.

I pay tax on goods and services I buy. But that's not income. So why do I pay tax on it? Because we made a law that says I have to.

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GV27

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#3165569 29-Nov-2023 11:04

sir1963:

Wealth does not mean income , we tax income.

Capital gains is not income, no matter how much you want it to be so.

Plenty of other places tax capital gains, but they do it sensibly (i.e. at a set flat rate, not marginal ones) and some allow for indexing.

The TWG report presided over by Cullen (lmao) absolutely stuffed this up and their proposal was so garbage that it isn't fit for purpose, but it's become the default talking point for what a CGT in NZ should look like and the frustrating thing is we can absolutely do better than that.

GV27

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#3165572 29-Nov-2023 11:05

SaltyNZ:

If I own a billion dollars worth of property, take out a loan of $100M against it and spend that money on hookers & blow while rent on the property pays back the $100M, that should be considered income. Right now you pay bugger all tax on it because the rent is just paying back a loan, so there is no profit.

You cannot claim the principal repayments on a loan as a deduction, only the interest/financing costs. The net income would be taxable.

(Edited to correct spelling).

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#3165576 29-Nov-2023 11:07

National choose who they got in bed with.
I don't understand why so many people are up in arms.
National had the right to stay no thank you, we can't work with Act and NZ first.
However the have more common ground than not and they have worked out a way to work to.

We don't have first past the post and I am glad for that.
Making National out to be this underdog is pretty delusional.
Sure National gave up some items/policies but that's what happens when collation come together.

We shouldn't be asking small parties to give in just because one is a major party. They have a responsibility to their voters.
The Maori Party that went with John Key back in the day basically destroyed there party because they were not representing what their voters wanted. I don't want a 2 party system, there is more than red and blue.

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#3165578 29-Nov-2023 11:08

GV27:

You cannot claim the principle repayments on a loan as a deduction, only the interest/financing costs. The net income would be taxable.

Principal.

sen8or

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#3165579 29-Nov-2023 11:09

sir1963:

SaltyNZ:

When the richest 311 families - so less than 10,000 people - own more wealth than the bottom 2.5M people and pay less than half the effective rate of tax as a teacher or a fire fighter, it isn't 'Robin Hood' to suggest they aren't pulling their weight. They benefit from this society that we have setup. They benefit from the police and courts and the roads and the water and the passports and all those other things.

The only people who think it is "theft" that they might have to pay even the same rate of tax as a teacher, are the wealthiest 311 families in New Zealand.

You have billions of dollars and don't want to contribute your fair share to the country? Leave. Nothing's stopping you. The rest of us work for a living.

Wealth does not mean income , we tax income.

Capital gains is not income, no matter how much you want it to be so.

Its worse than "capital gains is not income", they report also used unrealised gains in their assessment, it was a hatchet job written to support a view point and is of little more value in the real world than toilet paper. It also ignores the actual level of $ of tax paid. % rates are all well and good, but which would you prefer, 20% of $100k as an "effective rate", or $300k from the same person (even if the effective rate was only 5%)?

And if they do leave, as you say, what do you think will happen with their wealth (much of which is tied up as capital in NZ businesses), they'll leave that in NZ too? Or is it more likely the capital base of NZ would be decimated, job losses will be in-calculable, and the overall negative impact on the economy catastrophic.

SaltyNZ

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#3165581 29-Nov-2023 11:12

GV27:

You cannot claim the principle repayments on a loan as a deduction, only the interest/financing costs. The net income would be taxable.

OK, sure, I'm an engineer not an accountant but either way the super rich pay a much lower tax rate than the ordinary working person and the only reason why is that they are free to arrange things so that they can buy all the toys they want without having any "income". So we either expand the definition of income - which is a made-up word that parliament can literally define to mean whatever they want it to - or they can keep the definition of "income" as is and just say that a bunch of other things that are not income are taxable anyway. I don't care how they do it.

I really don't understand why so many people work so hard to defend the ultra-low tax of the super-rich. The super-rich don't give a shit about you.

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#3165582 29-Nov-2023 11:13

SJB:

Maybe the rule should be that only the party with the most seats can form a coalition.

I dont follow that as if a party needs to form a coaltion that means there is a smaller party. If we avoid that and go back to the ballot box that's essentially FPP

While many won't support ACT or NZF. National got barely above 1/3 of the vote, they cannot govern on that, no mandate. At least with this coalition that is over 50%.

But I do follow your overall issue

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#3165584 29-Nov-2023 11:15

sen8or:

And if they do leave, as you say, what do you think will happen with their wealth (much of which is tied up as capital in NZ businesses), they'll leave that in NZ too? Or is it more likely the capital base of NZ would be decimated, job losses will be in-calculable, and the overall negative impact on the economy catastrophic.

OK, so the first step is to introduce a 95% tax for money leaving the country. Then they can either stay and pay a fair amount of tax or leave and pay an unfair amount of tax.

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SaltyNZ

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#3165587 29-Nov-2023 11:18

tdgeek:

I dont follow that as if a party needs to form a coaltion that means there is a smaller party. If we avoid that and go back to the ballot box that's essentially FPP

While many won't support ACT or NZF. National got barely above 1/3 of the vote, they cannot govern on that, no mandate. At least with this coalition that is over 50%.

But I do follow your overall issue

Yes, as horrible as this government seems if they aren't your team, it's a far better system than FPP. If this government isn't your team, imagine how horrible it would be if it was FPP and David Seymour was PM?

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#3165588 29-Nov-2023 11:18

GV27:

I think normalising the huge inflated tax take without a correlating increase in the availability of public services is probably the worst hang-over the current government has to deal with. I'm not sure they're equipped to deal with it. They're also not bold enough for a slash-and-burn approach that provokes difficult conversations about what you can afford to fund and designing the tax system to collect revenue to fund it.

To give you some inkling of how likely that is, I understand the Minister of Revenue is Simon Watts who is a CA (good start) but sits outside cabinet.

So to say I am fairly disappointed is a massive understatement.

They are slashing and burning aren't they? 6.5% of public service costs, added onto Robertsons cuts, now adding in ACTs policy of 2017 public service costs. So that is a promise that has been made

Once that's been achieved we will be back to 2017 funding levels, but benefiting from a larger tax take?

GV27

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#3165589 29-Nov-2023 11:20

freitasm:

GV27:

You cannot claim the principle repayments on a loan as a deduction, only the interest/financing costs. The net income would be taxable.

Principal.

Thank you, fixed.

SJB

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#3165590 29-Nov-2023 11:20

tdgeek:

Agree, Robin Hood stole from the rich and gave to the poor, we need a fair redistribution. A poor person has a PDI of zero. a wealthy person after having his say 25% tax taken still has a massive PDI

I wonder who's going to decide what is fair?

And the really wealthy can simply decide to take themselves and their fortune elsewhere so zero tax take from them then.

sir1963

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#3165598 29-Nov-2023 11:27

SJB:

tdgeek:

Agree, Robin Hood stole from the rich and gave to the poor, we need a fair redistribution. A poor person has a PDI of zero. a wealthy person after having his say 25% tax taken still has a massive PDI

I wonder who's going to decide what is fair?

And the really wealthy can simply decide to take themselves and their fortune elsewhere so zero tax take from them then.

Worse, the loss of investment in NZ = loss of jobs = further loss of tax.

And then on top of that we lose educated, skilled, needed people who will leave the country too.

sen8or

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#3165599 29-Nov-2023 11:27

SaltyNZ:

GV27:

You cannot claim the principle repayments on a loan as a deduction, only the interest/financing costs. The net income would be taxable.

OK, sure, I'm an engineer not an accountant but either way the super rich pay a much lower tax rate than the ordinary working person and the only reason why is that they are free to arrange things so that they can buy all the toys they want without having any "income". So we either expand the definition of income - which is a made-up word that parliament can literally define to mean whatever they want it to - or they can keep the definition of "income" as is and just say that a bunch of other things that are not income are taxable anyway. I don't care how they do it.

I really don't understand why so many people work so hard to defend the ultra-low tax of the super-rich. The super-rich don't give a shit about you.

These "toys" that the rich buy, do you suppose that they are produced by a magical genie somewhere and there is no benefit to the wider economy?

The manufacturer of "the toy" no doubt employed staff, pays wages, purchases machinery, pays suppliers for parts to manufacture the toy, pays tax on their profits etc. The staff of the toy manufacturer then also go into the community and spend their money on things, the circle of money goes on.

The "super rich" should be encouraged to continue to invest in NZ and to spend as much money as possible in the NZ economy, especially if part (or most) of the wealth is generated from offshore (exports, overseas investments etc).

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