Our new coalition government.

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Awrrr
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#2311775 6-Sep-2019 14:16

Mahon:

We are already one of the highest taxed countries in the western world.

Is that in fact true? What is the actual figure? I would be willing to bet that the country I come from (The Netherlands) and certainly the Scandinavian countries, have higher taxes than New Zealand does. Maybe you are correct. I don't know and I can't be bothered to look it all up. But this kind of statement gets tossed around all too glibly when people are trying to make an argument. If you are right, then quote a figure. Otherwise go easy on these kinds of sweeping generalisations. They don't add anything and just murkify the discussion.

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#2311794 6-Sep-2019 14:42

Rikkitic:

Mahon:

We are already one of the highest taxed countries in the western world.

Is that in fact true? What is the actual figure? I would be willing to bet that the country I come from (The Netherlands) and certainly the Scandinavian countries, have higher taxes than New Zealand does. Maybe you are correct. I don't know and I can't be bothered to look it all up. But this kind of statement gets tossed around all too glibly when people are trying to make an argument. If you are right, then quote a figure. Otherwise go easy on these kinds of sweeping generalisations. They don't add anything and just murkify the discussion.

And when they say taxes, what do they say about what the tax payers get back.

For example we could go the US route for healthcare... pay less taxes, but then pay even MORE for dodgy health coverage.

I think overall we get reasonable value for money, which is why I am opposed to tax cuts.

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#2311899 6-Sep-2019 17:26

Rikkitic:
Mahon:

We are already one of the highest taxed countries in the western world.

Is that in fact true? What is the actual figure? I would be willing to bet that the country I come from (The Netherlands) and certainly the Scandinavian countries, have higher taxes than New Zealand does. Maybe you are correct. I don't know and I can't be bothered to look it all up. But this kind of statement gets tossed around all too glibly when people are trying to make an argument. If you are right, then quote a figure. Otherwise go easy on these kinds of sweeping generalisations. They don't add anything and just murkify the discussion.

Nope, not true. As a percentage of GDP New Zealand is taxed slightly below the OECD average. We’re pretty much on par with Canada and the UK.

https://www.oecd.org/tax/tax-policy/revenue-statistics-highlights-brochure.pdf

GV27

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#2311941 6-Sep-2019 19:06

sir1963:

And when they say taxes, what do they say about what the tax payers get back.

For example we could go the US route for healthcare... pay less taxes, but then pay even MORE for dodgy health coverage.

I think overall we get reasonable value for money, which is why I am opposed to tax cuts.

I don't mind paying tax if things like vital infrastructure don't just disappear into a Wellington black hole, never to emerge or be be built. If they can't deliver what they said they would then they should tax less. Easy.

tdgeek

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#2311953 6-Sep-2019 19:26

GV27:
sir1963:

And when they say taxes, what do they say about what the tax payers get back.

For example we could go the US route for healthcare... pay less taxes, but then pay even MORE for dodgy health coverage.

I think overall we get reasonable value for money, which is why I am opposed to tax cuts.

I don't mind paying tax if things like vital infrastructure don't just disappear into a Wellington black hole, never to emerge or be be built. If they can't deliver what they said they would then they should tax less. Easy.

That does align with National so a fair point. Don’t spend so they can offer tax cuts. I’m ok with that as long as we can ban complaints about transport health etc

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#2311956 6-Sep-2019 19:30

Handle9:

Nope, not true. As a percentage of GDP New Zealand is taxed slightly below the OECD average. We’re pretty much on par with Canada and the UK.

https://www.oecd.org/tax/tax-policy/revenue-statistics-highlights-brochure.pdf

Did you check out of the other data in that table or just that one column? Look at our portion of income tax revenue made up of taxes on individual incomes as opposed to companies. We also collect substantially more VAT/GST as a portion of tax revenue than other nations.

That's before you even look into the relative portion of our incomes that go towards things like housing and accommodation and other costs of living compared to other OECD nations - our price index movements since 2015 (125) would suggest our living costs are getting higher faster than many other OECD nations (100 average).

So we collect more tax from individuals and from them spending what money they do have, but people spend far more just to get by than they do in other places. We are also extremely reliant on a small group of high earning (and based on the above, high spending) taxpayers.

I'll let people make up their own mind whether this is sustainable or not.

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#2311962 6-Sep-2019 19:42

You need to separate income tax from tax credits. The tax credits are social spending . Which means we may tax fairly BUT do we spend too much on social welfare?

GV27

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#2311980 6-Sep-2019 20:45

tdgeek: You need to separate income tax from tax credits. The tax credits are social spending . Which means we may tax fairly BUT do we spend too much on social welfare?

I'd say we take too much from people at an individual level to begin with which requires extensive tax credits in order for people to get by. Of course, this requires a huge amount of resource, just to redistribute a lot of the tax people paid already back into their pockets. Perhaps the simplest answer is to just take less to begin with?

Again, if your overall tax rate compared to other countries is about the same, but people have to pay far more as a portion of their incomes just to get by and living costs inflate at a faster rate than other countries, you're asking people to do far more with the same portion of their income that other people have.

At some point, you have to wonder whether the blunt bracket system we have is the fairest and best way to fund the state. At the very least, the brackets are hugely out of date as a result of inflation alone; they're the way they are because they've pretty much just always been that way, and no one has said "Hey, you can't even pay a mortgage on $70K anymore in our biggest city".

Yet we're taxing dollar $70,001 at the same rate we'd tax someone's dollar $1,000,001.

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#2311993 6-Sep-2019 21:55

GV27:
Handle9:

Nope, not true. As a percentage of GDP New Zealand is taxed slightly below the OECD average. We’re pretty much on par with Canada and the UK.

https://www.oecd.org/tax/tax-policy/revenue-statistics-highlights-brochure.pdf

Did you check out of the other data in that table or just that one column? Look at our portion of income tax revenue made up of taxes on individual incomes as opposed to companies. We also collect substantially more VAT/GST as a portion of tax revenue than other nations.

That's before you even look into the relative portion of our incomes that go towards things like housing and accommodation and other costs of living compared to other OECD nations - our price index movements since 2015 (125) would suggest our living costs are getting higher faster than many other OECD nations (100 average).

So we collect more tax from individuals and from them spending what money they do have, but people spend far more just to get by than they do in other places. We are also extremely reliant on a small group of high earning (and based on the above, high spending) taxpayers.

I'll let people make up their own mind whether this is sustainable or not.

I am unsure what your point is? The statement was made that we are one of the most highly taxed countries in the world which is untrue.

The falling standard of living and lack of productivity in our economy is a different issue. The neoliberal dogma of cut taxes and we'll all be better off hasn't translated into a better standard of living in New Zealand for the median group.

There is an argument that our low wages actually inhibits investment as it is cheaper to hire more people than it is to boost productivity.

Fred99

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#2312063 7-Sep-2019 08:18

For income tax on the first million annual income, you'd pay about $320,000 in NZ, but about $420,000 in Aus or the UK.

It's delusional to claim that "the rich" are taxed unfairly in NZ compared to other developed social democracies.

You could still argue (as many do) that a progressive tax system is inherently unfair, but NZ is criticized by economists for having a comparatively too-flat tax system compared to OECD average, and if you wanted to justify making it even flatter, you'd probably end up having to invent theories about how making the rich richer benefits the poor.

tdgeek

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#2312432 7-Sep-2019 18:03

GV27:

tdgeek: You need to separate income tax from tax credits. The tax credits are social spending . Which means we may tax fairly BUT do we spend too much on social welfare?

I'd say we take too much from people at an individual level to begin with which requires extensive tax credits in order for people to get by. Of course, this requires a huge amount of resource, just to redistribute a lot of the tax people paid already back into their pockets. Perhaps the simplest answer is to just take less to begin with?

Again, if your overall tax rate compared to other countries is about the same, but people have to pay far more as a portion of their incomes just to get by and living costs inflate at a faster rate than other countries, you're asking people to do far more with the same portion of their income that other people have.

At some point, you have to wonder whether the blunt bracket system we have is the fairest and best way to fund the state. At the very least, the brackets are hugely out of date as a result of inflation alone; they're the way they are because they've pretty much just always been that way, and no one has said "Hey, you can't even pay a mortgage on $70K anymore in our biggest city".

Yet we're taxing dollar $70,001 at the same rate we'd tax someone's dollar $1,000,001.

Issue 1. Tax Creep.

That happens. In ny view tax tax rates should be inflation adjusted annually.

Issue 2. Are taxed too much? If so reduce it, just remember that taxes are a Govts Salary, if you want to reduce it, dont complain about things that fall behind.

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tdgeek

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#2312433 7-Sep-2019 18:04

GV27:

I'd say we take too much from people at an individual level to begin with which requires extensive tax credits in order for people to get by.

That is not tax related

GV27

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#2312774 8-Sep-2019 11:59

tdgeek:

Issue 1. Tax Creep.

That happens. In ny view tax tax rates should be inflation adjusted annually.

Issue 2. Are taxed too much? If so reduce it, just remember that taxes are a Govts Salary, if you want to reduce it, dont complain about things that fall behind.

Therein lies the rub though - if we are taxing inflation (which the Govt requires the RBNZ to maintain) and the Government services are still falling behind, then are we not taking enough or is the problem actually with how/what the Government is doing? You could tax people at 100%, but if you're going to turn a blind eye to incompetence or poor governance then you'll still end up going backwards.

OECD figures are all well in good if you want to look at one piece of the puzzle, but tax needs to be considered in the context of the costs of living where you're collecting it. People only earn so much to start with, and money paid in tax is money they don't have to pay for things like rent, food and transport. There's no getting around that.

E: In addition, once you've got so many people reliant on redistribution like WFFTC and accommodation supplements, it becomes too politically sensitive to talk about things like how WFFTC keeps wages low or accommodation supplements end up forcing up rents in supply-constrained markets. There's no separating these from tax because the simplest answer unless is to not take money from low-income earners that you just have to give back to them straight away - the aim of the exercise is actually to service the massive mechanisms that facilitate redistribution instead of actually achieving something by doing it.

But yea, at that point you're getting way off the actual "how tax works" and into the politics of "why am I taxing people" and it's a giant mess from there-on in.

tdgeek

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#2312869 8-Sep-2019 12:26

1. Are we taxed too much?

2. Does the Govt waste that much?

3. Does the Govt spend our taxes for the collective good, or do they spend to satisfy their voters?

4. Do we spend too much on benefits?

I'm sure if we voted in a kind, strong, wise leader, for an election term of 20 years, he/she would maximise the income and expenditure. Just like most companies do, and most individuals do. As its just a case of being a good manager of your finances. But Governments dont work that way. Even if they were not wasteful and did not make poor decisions, it will still be a very inefficient management of income and expenditure.

So, I have no idea how you can address how any Government can manage a country to keep everyone happy and to stay in power. Its a conflict of interest.

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#2313086 8-Sep-2019 16:10

If you want to talk about wasting tax payer money...

As predicted:

A third of tertiary students who took up the Government's flagship fees-free policy failed or withdrew from at least one of their courses last year, Ministry of Education data shows.

The Tertiary Education Commission (TEC) did not have details on how much the Government had spent on courses students failed or withdrew from.

But based on the 13,770 students who failed to complete at least one course, and the average course cost of $2800 for Student Achievement Component, the figure could be as high as $40 million.

From the NZHerald article (premium so no point in posting it's link here).

Since Ardern made such a big deal about how it was going to help our under-resourced apprentice based industries it will be interesting on the follow up to see how many more "trades" people there are. I'm going to predict the number to be low to non-existent.

Yet another policy failure. People don't value what they get for free. Just waiting for Labours inevitable annoucement they are going to write off all student debt.

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