Tax Cuts

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Forums › Finance and wealth management › Tax Cuts

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#1788512 26-May-2017 08:39

dickytim:
This $20 a week should be used for schools and hospitals.

Surely this would be of better benefit to everyone?

2,000,000 x 20 x 52 = 2,080,000,000

No. Why is my money better spent by people other than me?

More money should have been allocated to larger tax cuts.

Geektastic

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#1788513 26-May-2017 08:41

sleemanj:
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And what does it tell us?

tdgeek

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#1788527 26-May-2017 08:53

Dunno, I can't see the rest of the post as the ad column to the right is blocking it off

allio

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#1788528 26-May-2017 08:54

Fred99:

That "bracket creep" is not much of an issue IMO these days as CPI and wage inflation has been very low since brackets and rates were last adjusted.

Income tax rates and brackets are very low for high earners in NZ - the maximum rate may kick in at a lower threshold - but the maximum rate is very low for a social democracy - especially when some of the major expenses are drawn from general tax revenue - not funded by separate levy (ie separate healthcare levy etc). Net result of this is that high income earners should probably STFU about supposed high income tax in NZ.

Agreed. Can't believe anybody is complaining when our top marginal tax rate is just 33%. For comparison: Australia = 45%, UK = 45%, USA = 39.6%. Australia has a 32.5% bracket that kicks in on earnings over 37k!

NZ is virtually unique in having such a large proportion of the population paying the top marginal tax rate. That's not a good thing, but the solution isn't to raise the level at which the 33% threshold kicks in to 200k - it's to add higher tax brackets at 150k+.

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#1788529 26-May-2017 08:55

dickytim:
This $20 a week should be used for schools and hospitals.

Surely this would be of better benefit to everyone?

2,000,000 x 20 x 52 = 2,080,000,000

Donate your $20 to your local school or hospital? Becomes a win win as donations are tax deductible. ;-)

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Geektastic

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#1788531 26-May-2017 08:56

allio:

Fred99:

That "bracket creep" is not much of an issue IMO these days as CPI and wage inflation has been very low since brackets and rates were last adjusted.

Income tax rates and brackets are very low for high earners in NZ - the maximum rate may kick in at a lower threshold - but the maximum rate is very low for a social democracy - especially when some of the major expenses are drawn from general tax revenue - not funded by separate levy (ie separate healthcare levy etc). Net result of this is that high income earners should probably STFU about supposed high income tax in NZ.

Agreed. Can't believe anybody is complaining when our top marginal tax rate is just 33%. For comparison: Australia = 45%, UK = 45%, USA = 39.6%. Australia has a 32.5% bracket that kicks in on earnings over 37k!

NZ is virtually unique in having such a large proportion of the population paying the top marginal tax rate. That's not a good thing, but the solution isn't to raise the level at which the 33% threshold kicks in to 200k - it's to add higher tax brackets at 150k+.

The solution is never to charge more tax. The solution is to leave people with more of their own money to spend on their families.

NZ has a very small percentage of people paying a very large amount of the tax - and that is never a good idea.

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#1788532 26-May-2017 08:56

Dingbatt:
dickytim:

This $20 a week should be used for schools and hospitals.

Surely this would be of better benefit to everyone?

2,000,000 x 20 x 52 = 2,080,000,000

Donate your $20 to your local school or hospital? Becomes a win win as donations are tax deductible. ;-)

Quite: your money, your choice. That's freedom for you.

reven

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#1788540 26-May-2017 09:09

you earn more you pay more tax, the only fair system is a fixed tax rate IMO. and i'll vote against anyone who wants to change that.

in auckland, 150k a year doesnt mean you're rich, it probably means you have a large mortgage.

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#1788544 26-May-2017 09:12

Geektastic: And what does it tell us?

It shows the way that current IETC earners (independent people between 24 and 48k income who get no other benefits) are treated by the changes to the tax brackets and removal of the ietc. You can see that for everybody in that class of people, earning right up to 44k, you get a meaningless tax cut (a less than 1% cut), but then from 44 to 48k the cut rapidly shoots up to a quite significant amount (a more tha 7% cut equivalence at 48k).

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#1788551 26-May-2017 09:21

Geektastic:
dickytim:

This $20 a week should be used for schools and hospitals.

No. Why is my money better spent by people other than me?

Because you won't pay for schools or hospitals, which we all need.

Geektastic

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#1788557 26-May-2017 09:32

frankv:

Geektastic:
dickytim:

This $20 a week should be used for schools and hospitals.

No. Why is my money better spent by people other than me?

Because you won't pay for schools or hospitals, which we all need.

Happy to pay for medical care from my money and make the choice as to which ones etc. provided the tax system leaves me with more of what I earn with which to do it. It's just a different political position.

Schools I am not really qualified to comment on. I have never set foot in a state funded school in my life and I have no children, so no skin in that game.

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#1788558 26-May-2017 09:34

sleemanj:
Geektastic: And what does it tell us?

It shows the way that current IETC earners (independent people between 24 and 48k income who get no other benefits) are treated by the changes to the tax brackets and removal of the ietc. You can see that for everybody in that class of people, earning right up to 44k, you get a meaningless tax cut (a less than 1% cut), but then from 44 to 48k the cut rapidly shoots up to a quite significant amount (a more tha 7% cut equivalence at 48k).

It's still not much though, is it? $48k after tax is not enough to pay a big mortgage even if you devote 100% of it to doing that!

blackjack17

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#1788562 26-May-2017 09:43

Geektastic:
frankv:

Geektastic:
dickytim:

This $20 a week should be used for schools and hospitals.

No. Why is my money better spent by people other than me?

Because you won't pay for schools or hospitals, which we all need.

Happy to pay for medical care from my money and make the choice as to which ones etc. provided the tax system leaves me with more of what I earn with which to do it. It's just a different political position.

Schools I am not really qualified to comment on. I have never set foot in a state funded school in my life and I have no children, so no skin in that game.

You might be able to now. But what about the future? What happens if you suffer a series of misfortunes? What about low income people that for no fault of their own develop a serious illness or have a child that does?

Infrastructure, giving people a small tax cut doesn't help fund bridges, roads, public transport, universities,and schools.

You don't have children but you need other people to have children to produce doctors nurses cooks cleaners engineers etc. These children all need to be educated.

Police, firefighters, scientists etc all need to be funded.

There are countless things that need funding. It makes sense for the government to pay for it rather than individuals simple due to economies of scale.

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#1788577 26-May-2017 10:02

Geektastic:

It's still not much though, is it? $48k after tax is not enough to pay a big mortgage even if you devote 100% of it to doing that!

I think we are on the same page but you misunderstand my point maybe, being that, people (who are independent earners not eligible for other benefits) who are earning more than about 48k are getting a tax cut of relatively significant proportion of the tax they previously paid, and people under 44k are not (and between these it ramps up).

Effectively a class of lower wage earners proportion of the total tax paid increasing (higher wage earners tax goes down, and lower wage earners tax stays the same).

Which to me, just seemed like something that should be a bigger talking point in the media than it was, and that Joyce quietly brushed it under the carpet with words like "fully compensated".

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driller2000

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#1788589 26-May-2017 10:10

Geektastic:
dickytim:

This $20 a week should be used for schools and hospitals.

Surely this would be of better benefit to everyone?

2,000,000 x 20 x 52 = 2,080,000,000

No. Why is my money better spent by people other than me?

More money should have been allocated to larger tax cuts.

Personally as long as taxes are appropriately spent and we as a society benefit I have no problem with how they currently are.

I am even happy with paying even MORE tax if delivers better value outcomes - health, education, inequality etc.

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