tax

Why We Need A Low Flat Tax Political Party

I don’t care about¬†any other policy when I vote than the comparative taxation rates. ¬†The rest of the election issues are woolly woofter nonsense to me. ¬†The lower the tax rate the better, which is counter-intuitive for someone in my industry as the size of my wallet depends entirely on people wanting to find solutions to paying these higher taxes. ¬† Lower tax makes us redundant.

Bill English loves tax.  He must do as in his time as Finance Minister he has not once looked like making the slightest amount of tax reform that New Zealand needs to make it more internationally competitive.

So when ACT released their company rate policy to slash company tax from 28% to 12.5% it was immediately poo-pooed by the farmer from Dipton.

“You can’t open up too big a gap between the company tax rate and the personal tax rate. You just invite people to dodge taxes by setting up structures that make them look like companies instead of people.”

Right.

So the top tax rate on individuals is 33% and the company tax rate in New Zealand now is 28%.  The trust rate is 33%.  There currently is a 5% differential between a company rate and the top individual rate.

Thing is, all his farming mates (including himself) actually can and have paid less taxes by setting up structures that make them look like companies instead of people.  You know, the married couple on a small farm who operate it themselves.  Everyone knows what they are doing when they set up a structure in this way.  It is to pay less tax.

But Bill of course doesn’t want anyone else to be able to do this.

Well I have news for him.  Everyone who can do this already is.  And the salary and wage earners in New Zealand cannot actually tell their bosses they want to be contractors and set up companies so they never will be able to take advantage of it.

ACT of course needs to now come out and say that they have taken the Finance Minister’s fabulous advice and propose that company and individual tax rates should be the same – 12.5%. ¬†That’s what their policy at the last election was and it was a damn good one. ¬†A growing proportion of New Zealanders are not even net taxpayers at all. ¬†Why should the already beaten up middle classes take the brunt of excessive government spending. No matter if it is packaged in Bill English blue or David Parker red?

Cunliffe’s Tax Stazi

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Will he be embedding them in trade unions that avoid tax or otherwise misappropriate tax?

Labour will have to change the law to achieve this – tax avoidance is still legal.

One of our readers, Bart67, fixed the poster: ¬† Read more »

Labour plans to let local bodies tax you even more

Now this has to be an election winning strategy….for National.

Labour is going to let local councils tax ratepayers even more than they do now under their local body proposals.

Labour plans to reinstate the power for local bodies to raise revenue through extra levies such as a ‘pillow tax’ on visitors and regional petrol taxes.

Labour’s Local Government policy will also require a referendum to be held before any local council amalgamations can go ahead.

Local communities would also have to be consulted before council services were contracted out or privatised.

Local Government spokesman Sua William Sio said Labour was not opposed to amalgamations, but did not believe they were appropriate in all cases.

He said the Auckland supercity model was opposed by many Aucklanders “and designed to take control away from the hands of the many and vest governance in the hands of the few.”

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The majority of NZs want to pay more for their food? Really?

The NZ Herald has a poll result today where the headline claims that Kiwi want a ‘fat tax’.

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Except that was not was originally asked in the poll.

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The question is rather clumsy. Imagine the result if they had asked “Do you think it is a good idea to tax ALL¬†Kiwis with a sugar tax, increasing food and drink prices across the board, when it is only fat bastards who should be taxed?”.¬† Read more »

Labour already tried that Winston, wasn’t a winner

Winston Peters is channelling Labour with his silly GST suggestions.

Removing GST from food never worked for Labour, despite them claiming that was a game changer policy.

NZ First has announced a plan to remove GST from food, as part of several policies announced at its party conference.

Leader Winston Peters also said the party wanted GST removed from rates on residential property calling it a “tax on tax deceit”.

“This bold policy aims at the heart of the inequality undermining our society,” Peters said.

Labour had a policy of removing GST from fresh fruit and vegetables going into the 2011 election but it has since been dropped by the party. Last week Peters accused the Conservative Party of plagiarism because it believed the party was lifting its policies.

Peters said the policy was estimated to cost $3 billion a year, and would be funded by a clamp down on “tax evasion and the black economy”, which it estimated to cost $7 billion a year, and what Peters said was “drawing on the projected surplus of billions in the years ahead that result from running a sound economy”.

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The insanity of sugar and fat taxes

Katherine Rich pushes back against the health nazis who want to put a tax on sugar and fat.

Sugar taxes will extract more money from citizens’ wallets for governments but do nothing to curb obesity.

While sugar is seen by some as the current food demon, it’s important to dial back the hysteria for a fact-based discussion.

Sugars are an important part of people’s diets, providing energy for the body and brain. Over the past decade, sucrose consumption in New Zealand has declined, and reports suggest most people consume at moderate levels.

All this while obesity has been rising. The remaining part of the energy-in, energy-out equation is physical activity, but anti-sugar activists prefer to blame food companies.

The food companies just sit there like stunned mullets as their customers and products are demonised. They thought that it would never happen to them if only they just kept quiet while tobacco companies were bashed.

They were wrong.

The inconvenient truth for those wanting to scapegoat full-sugar carbonated drinks – fizzy – is that there has been a dramatic drop in sales in the past 15 years as consumers turn to the growing array of zero calorie and diet fizz options now available.

With Kiwis eating less sugar and drinking less sugary fizz at a time of rising obesity levels, it’s nonsense to pretend fizz taxes are going to magic away the obesity problem.

So long as the health nazis promote the food pyramid that is heavy on carbohydrates and low on proteins then we will continue to get fatter, especially if we don;t exercise to burn those calorie loadings. Taxing sugars and fats won’t work. ¬†¬† Read more »

An economic lesson for Labour they seem to have forgotten

The Labour party wants to raise taxes, add in the Greens tax increases and their fondness for keynesian stimulus spending, you really wonder if they understand basic economics.

You simply cannot tax a nation to prosperity.

Who better to explain the Laffer Curve than the guy who it named after, Arthur Laffer:

The IEA was delighted to host¬†renowned economist Dr Arthur Laffer on 27th June. He was in the UK advocating lower and flatter taxes as the key to economic growth. He suggests high tax rates alter people’s behaviour and act as a disincentive to work.

Laffer Curve from Institute of Economic Affairs on Vimeo.

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Tweets of the Day

Megan Campbell shows up teh stupidity of Su’a William Sio:

Cactus Kate points out the glaring deficiency of Labour’s tax plans. labour-tax Read more »

How many Tax Commissars and Stasi operatives will Labour need?

Labour's new tax commissars line up outside IRD's Stasi HQ

Labour’s new tax commissars line up outside IRD’s Stasi HQ

Labour’s newest great idea is to establish a Tax Stasi, filled with Tax Commissars who will be “embedded” in businesses that Labour thinks are bastards.

They will be observing what is going on and reporting back to the Tax Stasi Gruppenfuhrer

This is an outrage…you can’t tell me that once the Tax Stasi have finished doing over multi-nationals that Labour won’t suddenly decide to implement more snitches and stasi agents and lower the threshold and rules down to businesses with say $30 million turnover.

What is more of an outrage is labour have exempted banks from the snoopy activities of having Tax Stasi agents roaming the corridors looking for evasion.

If National had done something like that Labour would be accusing them of cosying up to bankers, and corporate cronyism…like they do now over insurance companies?

You do have to wonder though if one of labour’s aor David Cunliffe’s major secret donors is bank or someone associated with banks.

There are serious questions though…surely if they are targeting tax dodgers and rorters then the unions should have Tax Commissars assigned to them, in particular Unite Union, with their history of non-compliance. Or will Labour except unions from having Tax Stasi Agents sitting in their offices.

In other matters you can tell they don’t know what to do about almost everything because they have retained their promise for us to trust them, they know what they are doing, look we will appoint an Expert Panel.

Expert Panel : An Expert Panel will be established to deal with issues that are technical in nature and involve areas where a high degree of specialised knowledge is required before a final decision can be reached.

This policy will raise an additional $25 million in its first year, growing in outyears to reach $1 billion a year by 2020/21.

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Sin taxes and stealth taxes affect the poor more

All sorts of people are proposing taxes on sugar, fat and other supposedly bad things.

They are modelling their taxes on tobacco taxes without thinking through that in the case of tobacco it is the smoker who pays With sugar taxes it will be everyone who pays and the burden for these stealth taxes falls disproportionately on the poor.

Chris Snowden explains this very well in this video:

[T]he IEA‚Äôs Director of Lifestyle Economics Chris Snowdon examines the extent of the burden of indirect taxes and government sin taxes on the poorest groups in society and how these have changed over time. This film is an excerpt from a recent IEA panel debate event on the ‚ÄėCost of Living‚Äô crisis, in which Chris was outlining the findings of his recent paper¬†‚ÄėAggressively Regressive‚Äô.

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