Tax Cuts

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Forums › Finance and wealth management › Tax Cuts

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MikeAqua

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#1793049 1-Jun-2017 12:39

Reading the treasury report (which the bargraph comes from), it specifically defines fiscal impact as: services received minus tax paid.

So a positive value means services received > tax paid

In the line graph: Kids (who use services but don't pay tax) have a negative fiscal impact. So a negative value must mean services received < tax payments

Mike

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#1793064 1-Jun-2017 13:07

shk292:

Are those graphs opposite in sense? Ie, the bottom one indicates that middle-aged men are strong net beneficiaries of the system if it's the same sense as the one above

Yes - the graphs are effectively opposites. But your interpretation is back-to-front. The bottom one indicates that middle-aged men are strong net contributors to the system, and benefit from it for a much lower percentage of their lifespan.

This graph is actually taken from the research report that the Treasury report was based on. (ie. not the link provided in my first post)

Quote from the research:

Regions above the $0 line x-axis are cohorts that, on average, are paying more in tax than they are receiving in transfers and in services (valued at cost). They write:

The data illustrated in the figure suggest that, on average, males start having a positive net fiscal impact—per capita tax revenue exceeds the (allocated) expenditure they receive—in their early 20s. Women, on average, do not pass this “break even” point until their mid-40s. This is due to a combination of lower workforce participation, higher health and education spending, higher income support, and lower direct and indirect taxation.

A possible causal link may lie behind the high value of per capita education expenditure observed for women aged 30–44 and the lagged increase in per capita market income and direct tax for females in the 45–49 year age group. One possible hypothesis is that retraining during child-rearing years that precedes re-entry to the labor market results in an increase in market income and consequently higher direct taxation. The net effect of decreased education expenditure and increased direct taxation increases the net fiscal contribution of women in the 45–49 year old age group.

MikeAqua

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#1793072 1-Jun-2017 13:18

So are middle aged men: -

- Privileged over-earners?

- Beasts of burden everyone else is sponging off?

Mike

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#1793090 1-Jun-2017 13:47

MikeAqua:

So are middle aged men: -

- Privileged over-earners?

- Beasts of burden everyone else is sponging off?

That's a matter of subjective opinion.

But the facts seem to suggest that they are the ones paying the $12, $18 & $59 share of the $100 bill in sen8or's analogy.

MikeAqua

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#1793111 1-Jun-2017 14:00

6FIEND:

MikeAqua:

So are middle aged men: -

- Privileged over-earners?

- Beasts of burden everyone else is sponging off?

That's a matter of subjective opinion.

But the facts seem to suggest that they are the ones paying the $12, $18 & $59 share of the $100 bill in sen8or's analogy.

Also fewer years on super for men.

Mike

shk292

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#1793179 1-Jun-2017 15:16

Thanks for the clarification - that all makes sense. I couldn't work out why two "Y axes" with the same label were effectively opposit in sense though.

This confirms the commonly held "right wing" view about who are the net contributors

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MikeAqua

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#1793191 1-Jun-2017 15:23

shk292:

Thanks for the clarification - that all makes sense. I couldn't work out why two "Y axes" with the same label were effectively opposit in sense though.

This confirms the commonly held "right wing" view about who are the net contributors

If we focus on the cash flow and assume the benefits of social services are exclusively captured by their recipients. I'm not sure that's true.

For example the social welfare system could be argued to have a wider societal benefit. Society also benefits from kids being educated.

Mike

shk292

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#1793198 1-Jun-2017 15:47

MikeAqua:

shk292:

Thanks for the clarification - that all makes sense. I couldn't work out why two "Y axes" with the same label were effectively opposit in sense though.

This confirms the commonly held "right wing" view about who are the net contributors

If we focus on the cash flow and assume the benefits of social services are exclusively captured by their recipients. I'm not sure that's true.

For example the social welfare system could be argued to have a wider societal benefit. Society also benefits from kids being educated.

Agreed - and as said above, I have no problem with the tax "burden" in NZ. As a govt employee I don't have much of a leg to stand on anyway

Geektastic

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#1793363 1-Jun-2017 22:03

6FIEND:

...if anyone is interested, the underlying data is also informative.

Eg. This prime example of "Middle Aged Male Privilege"

Anyone interested in the Treasury Report itself can find it here (courtesy of Victoria University)

Hey - where's this 'gender pay gap' they are always whining about?

Looks more like a 'gender contribution gap'....

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