Chris Hipkins, New Zealand Prime Minister 2023

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#3027089 25-Jan-2023 18:31

SJB:

I've never come across a politician who was even remotely capable of doing that.

Devil's Advocate. Many can. But as someone here stated earlier, to get that power you need votes. Votes come at a cost of compromise. Peters is the obvious example, but its more nuanced than that.

tdgeek

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#3027090 25-Jan-2023 18:35

mudguard:

The problem with a flat tax is that it generally penalises someone on a lower income. Take two single people, one earns $40k, the other earns $80k. They need the same accomodation, say one bedroom apartment, and eat the same amount of food etc. Have a flat tax of 20% and it's more penal on the lower income earner as they have less overall than the higher earner to live on. That's where GST is a little murky for me, on the one hand it's brilliantly simple, but on the other it penalises those who need to spend a bigger percentage of their income just to live. Now I now if Mrs $80k can save her money the government will get it's GST eventually.

As someone has alluded too, if you took the progressive tax rates away and had a flat rate, you might not like the look of the required flat rate. I have no idea what it could be. It could be worked out.

In short, GST is regressive. It penalises the poor who pay the same tax as the rich. WFF helps that, but there are many poor (or more correctly, lower socio-ecnomic) that probably miss out if they are single. No one wants a career beneficiary, but we have that. And we encourage that IMO.

Not easy.

sir1963

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#3027170 25-Jan-2023 21:25

tdgeek:

In short, GST is regressive. It penalises the poor who pay the same tax as the rich. WFF helps that, but there are many poor (or more correctly, lower socio-ecnomic) that probably miss out if they are single. No one wants a career beneficiary, but we have that. And we encourage that IMO.

Not easy.

First 60K tax free, after that a flat 50%

Simple.

Just think how rich Howard Hughes got and he was paying 90%

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#3027211 26-Jan-2023 07:16

sir1963:

First 60K tax free, after that a flat 50%

Simple.

Just think how rich Howard Hughes got and he was paying 90%

Yes that sounds good, and a very simple tax table :-) No idea how close it might be to revenue neutral, but it may not be far off. Company Tax used to be 45%, you could probably increase the current 28% upwards a tad or two if need be, if there was a gap to be bridged. The more I think about it, we need to just accept lower taxes, accept that Govt surplus will be less, and just potter away with health, education and infrastructure, and hope that the more active economy will add to overall tax take by way of profits. So many variables though.

Plus if your plan was enacted tomorrow it would be inflationary. But its a nice plan

mudguard

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#3027212 26-Jan-2023 07:17

From some 2020 figures the total income tax take was $36,850M from 3,850,000 taxpayers. So an average of $9.5K per taxpayer. What would a flat tax rate need to be in order get to that figure?

Or does one need to gross incomes earned in order to work it out? Maths is not a strong point for me.

GV27

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#3027214 26-Jan-2023 07:39

tdgeek:

In short, GST is regressive. It penalises the poor who pay the same tax as the rich. WFF helps that, but there are many poor (or more correctly, lower socio-ecnomic) that probably miss out if they are single. No one wants a career beneficiary, but we have that. And we encourage that IMO.

Not easy.

GST is a beautiful tax. If you spend more, you pay more GST. High price stuff attracts higher GST. Lower-priced goods mean less GST added. It doesn't get more simpler than that.

GV27

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#3027218 26-Jan-2023 07:54

SJB:

That would be an interesting discussion.

Seems like the right place to start if the point of the exercise is making sure people who are working full time have an acceptable standard of living.

If you're going to spend hours commuting and then work a 40 hour week, and two of you combined still can't afford a house, then the appeal and expense of actually going to work doesn't stack up that well.

I don't see why the tax system should be exempt from such considerations, people can only live off their net pay, not their gross.

Sharesies

Trade NZ and US shares and funds with Sharesies (affiliate link).

tdgeek

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#3027219 26-Jan-2023 07:55

GV27:

GST is a beautiful tax. If you spend more, you pay more GST. High price stuff attracts higher GST. Lower-priced goods mean less GST added. It doesn't get more simpler than that.

Its regressive, you know that. Yes it is simple. Income Tax can be simple too, and give relief to low and medium earners, and the wealthy also get the same relief, but its more targeted

sen8or

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#3027224 26-Jan-2023 08:09

tdgeek:

In short, GST is regressive. It penalises the poor who pay the same tax as the rich. WFF helps that, but there are many poor (or more correctly, lower socio-ecnomic) that probably miss out if they are single. No one wants a career beneficiary, but we have that. And we encourage that IMO.

Not easy.

Lower socio economic groups may pay more GST as a percentage of earnings on basics, but I'd bet my left nut, those in higher income gaps pay more GST overall, it may not just be on groceries and petrol. Talking about percentages is all well and good, but percentages don't pay for education, health, justice and welfare, they require actual $ and that only comes from higher income earners (as pointed out elsewhere, the top few % on income earners pay a significant portion of the actual $ income tax take).

As for the tax free threshold of $60k, do we want to boost the accounting profession? If its perceived that "the rich" avoid tax now by employing smart accountants, imagine what will happen when you give them a target to work under where they don't pay tax at all (for the record, with the exception of a very small fraction of a %, I don't buy the "rich avoid taxes" thing).

Do I want a tax cut? Sure, more $ in my pocket will help repay debt quicker

Do I need a tax cut? Not really, but I accept that many others are in a different position.

Will a promise of a tax cut influence my vote? No. Spending priorities and a plan that shows sound financial management will far more influence my decision than an extra $10-20 a week in the hand.

tdgeek

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#3027228 26-Jan-2023 08:17

I don't think anyone is disputing that the rich pay more tax

johno1234

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#3027233 26-Jan-2023 08:45

It is a nice idea but... A tax gaming industry already exists. Introducing a $60k tax free threshold would make this industry an empire.

The other end of this equation is government expenditure. Every dollar that the gummint doesn't spend is a dollar it doesn't need to take in taxation. Many billions are being spent or planned to spend on polytech mergers, media mergers, water centralisation, underground light rail for a start. Nobody believes in zero government spend, obviously. But there's a lot of ideology spend underway that needs to be trimmed back.

tdgeek

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#3027236 26-Jan-2023 08:52

johno1234:

It is a nice idea but... A tax gaming industry already exists. Introducing a $60k tax free threshold would make this industry an empire.

The other end of this equation is government expenditure. Every dollar that the gummint doesn't spend is a dollar it doesn't need to take in taxation. Many billions are being spent or planned to spend on polytech mergers, media mergers, water centralisation, underground light rail for a start. Nobody believes in zero government spend, obviously. But there's a lot of ideology spend underway that needs to be trimmed back.

Agree. Hipkins says he will do that. The other issue is that no matter what any Government does, we scream for this and we scream for that. So, it needs buy in from the voters that Govt spending will be cut right back, in favour of tax cuts, and that any extra tax produced by extra economic activity will bridge that gap. That is also ideological as its an idea and a hope, with no tangible result to aim for.

As I stated earlier, it needs a complete reset, taxes and spending and what the public will accept

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#3027237 26-Jan-2023 08:52

Hipkins has indicated there's a few policies/projects he'll look at cutting back/removing:

https://thespinoff.co.nz/politics/26-01-2023/a-policy-checklist-for-our-new-prime-minister

GV27

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#3027320 26-Jan-2023 09:50

tdgeek:

Its regressive, you know that. Yes it is simple. Income Tax can be simple too, and give relief to low and medium earners, and the wealthy also get the same relief, but its more targeted

We have other ways of targeting relief for lower-income earners.

Realistically the regressive nature of GST is hugely outweighed by the benefits of keeping it as simple as it is.

Frankly the most pressing regressive issues in our tax system revolve around abatements of supplemental payments like WFFTC and accomodation supplements, although the courageous discussion would be whether that system is still working in anyone's favour. At this point I suspect not.

ockel

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#3027799 27-Jan-2023 11:23

Another member of the Labour Party that doesnt think they'll win their electorate seat this year....

https://www.rnz.co.nz/news/political/483193/grant-robertson-goes-list-only-will-not-contest-wellington-central

Sixth Labour Government - "Vision without Execution is just Hallucination"

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