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  Reply # 1124311 8-Sep-2014 13:48
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charsleysa:
mattwnz:
charsleysa: 

The problem with your flat rate tax is that it means you will lose more of your income to tax since a flat rate will need to be a lot higher to keep the amount total of tax the same.


Will also probably mean higher tax on other things, such as GST will need to be raised up to 17.5 or 20%. Also other taxes would need to be introduced, like CGT, so effectively people will still be paying that tax, but in different ways. I do get a little annoyed when people who earn high wages think they are paying too much in tax, because our tax rates in NZ for wages are relatively low compared to other countries, and that tax has to come from somewhere. Also some of those people who do earn the highest wages tend to pay less in tax because they structure their earnings by offsetting them against expenses, to minimise the tax they pay.


Well my father complain that the highest tax level is too high because that starts at 70k and he has 6 mouths to feed. 70k is too low to be considered a high earner, it needs to be pushed up.


Depends what your outgoings are. I mean people can make do on less than 20k on Super. 

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  Reply # 1124313 8-Sep-2014 13:48
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charsleysa:
Geektastic:

1) We have a different definition of luxury then! To me that is Patek Phillipe, Rolls Royce, Luis Vuitton etc etc
2) PWC is merely an example. A partner would earn over $1million a year in a decent year, easily.
3) As an illustration, if you leave university with a First Class Honours in Law and get a job at a top London firm, you will be starting on $100,000 a year straight out of University. That is how far behind we are here in our view of what is 'rich'.
4) In NZ you can earn a lot - I know a number of people who earn well over $250,000 a year who are contracting in areas like Change Management and other specialised business management consultancy areas. 
5) It is odd to me that aspiration in NZ is quite muted. In most places I am familiar with a PM who started as a State House child of a single mother, went on to make himself $50 million and then came back and achieved more or less the highest office in the land would be held up as a shining role model, not denigrated as a 'rich pr**k' etc. If we do not value success and wealth creation it will not assist the country in becoming a richer and better paid place.


I would consider a luxury item to be anything you would not be able to afford on a regular, or even periodic, basis such as a flat screen TV or a new car. What you mention I would consider to be items of extravagance.

There are workers who earn quite a lot but the majority of the workforce earns less than 60k yet it is this workforce that works the hardest since companies would fail without the.

You say we should value success and wealth creation but what about valuing the hard work of your employees that made you wealthy? If you don't even value your employees enough to give them a decent wage/salary that reflects how much value they put towards the company then you are the problem. (not directing it at you, just using you in the general sense).


You assume (wrongly) that many of the companies that would fail with out the apparently heroic efforts of their workforce could not, if so minded

1) Replace more staff with automation
2) Move off shore and use labour that costs less.
3) Remain in NZ and simply train the next willing person to do the job

This assumption that company owners owe their staff a living is just nonsense unless and until the company cannot exist without those exact and specific staff individuals. That is why successful merchant bankers earn so much - if you can make your bank $10 billion a year through your skills, paying you a piffling $20 million bonus is pocket change in return.

The way to make money in employment is to become unique - or as close to it as you can get. More or less anyone with an IQ of 100 can paint a house. The same is not true of being a surgeon. The value of labour is related to the value of the skills you have. Below a certain skill level, staff are merely robots that need to eat and sleep.







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  Reply # 1124316 8-Sep-2014 13:55
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mattwnz:
charsleysa:
mattwnz:
charsleysa: 

The problem with your flat rate tax is that it means you will lose more of your income to tax since a flat rate will need to be a lot higher to keep the amount total of tax the same.


Will also probably mean higher tax on other things, such as GST will need to be raised up to 17.5 or 20%. Also other taxes would need to be introduced, like CGT, so effectively people will still be paying that tax, but in different ways. I do get a little annoyed when people who earn high wages think they are paying too much in tax, because our tax rates in NZ for wages are relatively low compared to other countries, and that tax has to come from somewhere. Also some of those people who do earn the highest wages tend to pay less in tax because they structure their earnings by offsetting them against expenses, to minimise the tax they pay.


Well my father complain that the highest tax level is too high because that starts at 70k and he has 6 mouths to feed. 70k is too low to be considered a high earner, it needs to be pushed up.


Depends what your outgoings are. I mean people can make do on less than 20k on Super. 


True, he has a big mortgage, lots of debts from buying furniture and such from when we moved into our first (and only) home and built another storey to fit everyone when we migrated to new Zealand some odd 14 years ago.




Regards
Stefan Andres Charsley

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  Reply # 1124320 8-Sep-2014 14:00
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Geektastic:
charsleysa:
Geektastic:

1) We have a different definition of luxury then! To me that is Patek Phillipe, Rolls Royce, Luis Vuitton etc etc
2) PWC is merely an example. A partner would earn over $1million a year in a decent year, easily.
3) As an illustration, if you leave university with a First Class Honours in Law and get a job at a top London firm, you will be starting on $100,000 a year straight out of University. That is how far behind we are here in our view of what is 'rich'.
4) In NZ you can earn a lot - I know a number of people who earn well over $250,000 a year who are contracting in areas like Change Management and other specialised business management consultancy areas. 
5) It is odd to me that aspiration in NZ is quite muted. In most places I am familiar with a PM who started as a State House child of a single mother, went on to make himself $50 million and then came back and achieved more or less the highest office in the land would be held up as a shining role model, not denigrated as a 'rich pr**k' etc. If we do not value success and wealth creation it will not assist the country in becoming a richer and better paid place.


I would consider a luxury item to be anything you would not be able to afford on a regular, or even periodic, basis such as a flat screen TV or a new car. What you mention I would consider to be items of extravagance.

There are workers who earn quite a lot but the majority of the workforce earns less than 60k yet it is this workforce that works the hardest since companies would fail without the.

You say we should value success and wealth creation but what about valuing the hard work of your employees that made you wealthy? If you don't even value your employees enough to give them a decent wage/salary that reflects how much value they put towards the company then you are the problem. (not directing it at you, just using you in the general sense).


You assume (wrongly) that many of the companies that would fail with out the apparently heroic efforts of their workforce could not, if so minded

1) Replace more staff with automation
2) Move off shore and use labour that costs less.
3) Remain in NZ and simply train the next willing person to do the job

This assumption that company owners owe their staff a living is just nonsense unless and until the company cannot exist without those exact and specific staff individuals. That is why successful merchant bankers earn so much - if you can make your bank $10 billion a year through your skills, paying you a piffling $20 million bonus is pocket change in return.

The way to make money in employment is to become unique - or as close to it as you can get. More or less anyone with an IQ of 100 can paint a house. The same is not true of being a surgeon. The value of labour is related to the value of the skills you have. Below a certain skill level, staff are merely robots that need to eat and sleep.




A company does owe it's employees a living as that is what the fundamental of a job is, to earn a living.

A company does require it's employees and should pay them as such because if they all suddenly stopped working the company would eventually fail, ever heard of going on strike?




Regards
Stefan Andres Charsley

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  Reply # 1124325 8-Sep-2014 14:05
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charsleysa:The problem with your flat rate tax is that it means you will lose more of your income to tax since a flat rate will need to be a lot higher to keep the amount total of tax the same.


Also, this surely wouldn't be necessarily true if rules and laws were put in place to ensure everyone really did pay their fair share. So whatever ever the percentage have the the same for rich, poor, individuals, businesses, and close all the loopholes.

You earn money in NZ, you pay x% tax on it, period.




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  Reply # 1124334 8-Sep-2014 14:21
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Paul1977:
charsleysa:The problem with your flat rate tax is that it means you will lose more of your income to tax since a flat rate will need to be a lot higher to keep the amount total of tax the same.


Also, this surely wouldn't be necessarily true if rules and laws were put in place to ensure everyone really did pay their fair share. So whatever ever the percentage have the the same for rich, poor, individuals, businesses, and close all the loopholes.

You earn money in NZ, you pay x% tax on it, period.


Just some numbers used as an example:

Flat rate tax 20%

Basic requirement income 20k

Low income of 10k at 20% is 8k with 2k tax.
High income of 100k at 20% is 80k with 20k tax.


So you see that while the high income earner is fine the low income earner will need 3 jobs at that low income level to meet that 20k basic requirement instead of the current 2 jobs.

In order to have a flat rate tax which would be fair, you need to have most of your work force earning a living wage which is currently not the case.




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Stefan Andres Charsley

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  Reply # 1124354 8-Sep-2014 14:30
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charsleysa:Just some numbers used as an example:

Flat rate tax 20%

Basic requirement income 20k

Low income of 10k at 20% is 8k with 2k tax.
High income of 100k at 20% is 80k with 20k tax.


So you see that while the high income earner is fine the low income earner will need 3 jobs at that low income level to meet that 20k basic requirement instead of the current 2 jobs.

In order to have a flat rate tax which would be fair, you need to have most of your work force earning a living wage which is currently not the case.


Sure, but the low income earner who only makes 10K would still be entitled to benefits to supplement his income. There will always need to be extra help for those who need it, and I am not suggesting that stops.




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  Reply # 1124356 8-Sep-2014 14:41
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Paul1977:
charsleysa:Just some numbers used as an example:

Flat rate tax 20%

Basic requirement income 20k

Low income of 10k at 20% is 8k with 2k tax.
High income of 100k at 20% is 80k with 20k tax.


So you see that while the high income earner is fine the low income earner will need 3 jobs at that low income level to meet that 20k basic requirement instead of the current 2 jobs.

In order to have a flat rate tax which would be fair, you need to have most of your work force earning a living wage which is currently not the case.


Sure, but the low income earner who only makes 10K would still be entitled to benefits to supplement his income. There will always need to be extra help for those who need it, and I am not suggesting that stops.


IMO if a flat rate were to be introduced I would also impose that the minimum wage be placed at the living wage level, that way the less tax that the IRD is receiving would be offset by the declining number of people reliant on supplementary benefits.

I know there will be those who complain that raising the minimum wage will cause the end of the world (dramatization) but it has been seen time and time again that raising the wage has not caused economies and businesses to fail and in fact the opposite has become true in that people have more to spend, they work harder and economies flourish. All this happens when your workforce at the low end can afford to go out and spend money.




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Stefan Andres Charsley

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  Reply # 1124374 8-Sep-2014 14:52
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Paul1977:
charsleysa:The problem with your flat rate tax is that it means you will lose more of your income to tax since a flat rate will need to be a lot higher to keep the amount total of tax the same.


Also, this surely wouldn't be necessarily true if rules and laws were put in place to ensure everyone really did pay their fair share. So whatever ever the percentage have the the same for rich, poor, individuals, businesses, and close all the loopholes.

You earn money in NZ, you pay x% tax on it, period.


Tell that to some of these big global companies that earn hundreds of millions from NZers but hardly pay any tax at all. If the government were harder on those companies we would give tax cuts. There are always ways for people to get around paying tax. I am a firm believer  in paying my fair share of tax, but it is the middle income people who are paying more than their fair share compared to some of the very rich.

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  Reply # 1124384 8-Sep-2014 14:59
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mattwnz:Tell that to some of these big global companies that earn hundreds of millions from NZers but hardly pay any tax at all. If the government were harder on those companies we would give tax cuts. There are always ways for people to get around paying tax. I am a firm believer  in paying my fair share of tax, but it is the middle income people who are paying more than their fair share compared to some of the very rich.


I agree completely. To be fair it needs to be the same for everyone, including global companies.




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  Reply # 1124402 8-Sep-2014 15:26
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Id be keen to see government run mega hostels is each main centre. Basically if you dont have a job\income and need to be on a benefit you are required to live in one of these hostels.

Be far cheaper to the taxpayer to run and better for the unemployed person.

- food provided
- warm shelter in one bedroom dorm (or family units)
- access to internet
- onsite job boards and job finding assistance
- onsite training (budgeting, basic job skills)
- alcohol and drug free
- small allowance for personal items (hostel could even buy in bulk)

At the moment we just give out dole money which is spent on booze, smoke, junk food, power, rent etc etc.

 

This scheme would give better control on how money is spent and make the welfare money go further than letting beneficiaries go it alone.

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  Reply # 1124410 8-Sep-2014 15:34
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heylinb4nz: Id be keen to see government run mega hostels is each main centre. Basically if you dont have a job\income and need to be on a benefit you are required to live in one of these hostels.

Be far cheaper to the taxpayer to run and better for the unemployed person.

- food provided
- warm shelter in one bedroom dorm (or family units)
- access to internet
- onsite job boards and job finding assistance
- onsite training (budgeting, basic job skills)
- alcohol and drug free
- small allowance for personal items (hostel could even buy in bulk)

At the moment we just give out dole money which is spent on booze, smoke, junk food, power, rent etc etc.
This scheme would give better control on how money is spent and make the welfare money go further than letting beneficiaries go it alone.


I'm inclined to agree that a giant complex would be a safer, more effective environment while still giving people freedom. You're not forcing them to stay there, it's not a prison, it's just a place with some more strict rules in order to keep everyone there safe.

In saying that I doubt it's going to happen, people in NZ think they require a big spot of land with a garden and such and wouldn't go for living in a large high rise complex, just take a look at Auckland (that's a topic for another thread).




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Stefan Andres Charsley

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  Reply # 1124411 8-Sep-2014 15:35
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heylinb4nz: Id be keen to see government run mega hostels is each main centre. Basically if you dont have a job\income and need to be on a benefit you are required to live in one of these hostels.

Be far cheaper to the taxpayer to run and better for the unemployed person.

- food provided
- warm shelter in one bedroom dorm (or family units)
- access to internet
- onsite job boards and job finding assistance
- onsite training (budgeting, basic job skills)
- alcohol and drug free
- small allowance for personal items (hostel could even buy in bulk)

At the moment we just give out dole money which is spent on booze, smoke, junk food, power, rent etc etc. This scheme would give better control on how money is spent and make the welfare money go further than letting beneficiaries go it alone.


We had those in Victorian times - they were known as Poor Houses or Work Houses.

I agree they would be an excellent idea. They could also be attached to workshops that produce things as part of training that the government would otherwise have to spend tax dollars on. For example, road signs, armco barriers and so forth. 





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  Reply # 1124412 8-Sep-2014 15:36
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Paul1977:
mattwnz:Tell that to some of these big global companies that earn hundreds of millions from NZers but hardly pay any tax at all. If the government were harder on those companies we would give tax cuts. There are always ways for people to get around paying tax. I am a firm believer  in paying my fair share of tax, but it is the middle income people who are paying more than their fair share compared to some of the very rich.


I agree completely. To be fair it needs to be the same for everyone, including global companies.


But why does it need to be 'fair'?





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  Reply # 1124418 8-Sep-2014 15:40
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