Taxation

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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When you pay more tax under a Labour government, you will merely be returning what was theirs in the first place

Jamie Whyte draws attention to something about New Zealanders:  that we’re in some kind of hostage situation with our governments, and that we are definitely suffering from Stockholm Syndrome.

I was interviewed on Radio NZ’s Morning Report by Guyon Espiner. He asked why ACT wanted to give money to well off New Zealanders. I replied that we were giving them nothing. On the contrary, we were planning to take 24% of their incomes from them.

Espiner apparently believes that all income really belongs to the state, and that any it allows you to keep is its gift to you. When you are taxed at 33%, you should not see this as having something taken from you; you should see the 67% that you keep as a gift from the government. How else could Espiner think that a government that reduces tax rates has thereby given people money?

It is fortunate that a man with such ideas is only a journalist, you may think. Alas, some of our most important politicians agree with Espiner. David Cunliffe yesterday announced Labour’s plan to increase the top rate of income tax. According to the Herald, Cunliffe said the tax hikes would mean wealthier New Zealanders being asked to “return a small part of the very large tax cuts they received from the current Government”.

Those successive years of Helen Clark have left a foul stain on the nation’s psyche as its ‘children’ keep looking at the government to take care of it.   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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Rodney Hide demolishes Russel Norman and his Carbon Tax

Rodney Hide tears apart Russel Norman and his unwanted Carbon Tax.

Financial whiz Dr Russel Norman is promising a new tax, one that will make us rich. His CO2 emissions tax will make “New Zealand households … several hundred dollars better off every year.”

Cool. A tax to make us rich. I don’t know why other political parties haven’t thought of it. Their old-fashioned taxes only make us poor. They, too, should be doing a Russel-Norman.

I also don’t know why Dr Norman isn’t doubling his tax. Why be stingy? Doubling it would make us thousands of dollars better-off. If he quadrupled it, we could all retire.

But maybe that’s his plan. He says his tax will “initially” be set at $25 a tonne.

Politicians normally deliver a new tax promising it won’t go up. But not Dr Norman. His only promise is for the initial rate. He clearly has a higher rate in mind.

Good. The higher he cranks it, the richer we get.

Fascinating isn’t it. In the old days people who made promises like Russel Norman were called snake oil salesmen.

I don’t profess to understand how his tax works. Somehow he taxes us on our CO2 emissions but then gives us back the money through tax cuts. I sort of get that bit.

But I am struggling to see how he gives back more than he takes. That’s what he promises. There’s something about the Russel-Norman that multiplies the money as it passes through government.

It could be that taxing CO2 is special or that Russel Norman himself is special. Certainly, no other tax returns more than it taxes. But the Russel-Norman does.

All other taxes also distort prices leaving us making poorer decisions than otherwise.

Income taxes discourage investment and employment. Capital gains taxes discourage trade, investment and entrepreneurship. And so on.

The resulting cost is what is known as the deadweight cost.

But it seems there’s no deadweight with a Russel-Norman. Sure, it changes our behaviour. That’s its point. It’s to make us give up the V8 in favour of the bike. And to plant trees where we once grazed cows. Read more »

A massive tax on NZ and the Greens reckon each household will save a measly $319p.a.

new zealand green taliban logo

The Green party is going into this election proposing a carbon tax…the exact same thing that cost Julia Gillard her job.

They even burned up quite a few carbon miles shipping in Lucy Lawless to say inane stuff like this:

Lawless flew down from her home in Auckland this morning to hear the speech.

She was given details of the policy days ago, but admitted she doesn’t understand the details.

“But I think it’s very energising. It’s a great relief to me that someone is taking some leadership towards mitigating the effects of climate change,” she said.

“I think fair has got to be fair.”

She admitted she flew down at the last minute but doesn’t fly “frivolously.”

She came as “a mother” but is not a party member. Lawless wouldn’t say if she will play a role in the election campaign.

“Somebody has got to say these hard truths and the Green Party is doing it.”

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Plain packaging call for Coca-Cola now in NZ

ColaBeer

I have spoken many times about this, directly to producers and suppliers as well. I have told them that even though they hate tobacco and tobacco companies, they need to join in the fight against plain packaging because if they don’t they will be next.

Things are moving pretty fast on them now…and there are calls for plain packaging on products containing sugar now. This shows how emboldened the health jihadists have become and they believe that despite the legislation still before the house they can and will start lobbying against “Big Sugar”.

An unflattering report into the soaring rate of obesity around the world has sparked debate over whether sugary foods should have plain packaging in New Zealand.

The report, which analysed data from 188 countries, revealed that the proportion of men classified as obese in this country has increased more than anywhere else – rising from 13% to 28% between 1980 and 2013.

The overall proportion of New Zealand adults considered overweight or obese rose from 50% to 66% – an estimated 2.2 million people, including 960,000 who were obese.

The statistics have sparked debate on whether plain packaging for sugary food products should be introduced, like that being argued for tobacco products.

Speaking to TVNZ’s Breakfast, Auckland University marketing expert Dr Mike Lee says plain packaging for sugary drinks could come into play over the next ten years.

The proposal for plain packaging for tobacco products has caused an uproar with concerns it could spill over into fast food and alcohol products, says Mr Lee.

“There is the worry from companies that we are going to become more and more of a nanny state,” he told the programme.

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Wake up! You’re already living in a communist country

This week’s The Letter from ACT has some good reading in it

The idea that people are entitled to other people’s money is now so widely believed, that when ACT questions the morality of entitlement neither voters nor politicians nor commentators can imagine any other way.

Jamie Whyte says he meets people who ask, “What are you going to do for me?”.  Students want him to take money from others whose circumstances they cannot know about to pay for their degree.  People who “believe that living in a democracy was something akin to being born into a mafia family. You get a say in who is going to be extorted and you can get your hands on a share of the proceeds”. 

“On The Nation it became clear that all my opponents, with the possible exception of Peter Dunne, did not believe in private property. On the topic of Auckland house prices, Winston Peters claimed that “we are selling our houses to foreigners”.

When I pointed out that houses are not collectively owned and that individual New Zealanders were selling their houses to whomever they chose, he insisted that I was wrong about this.

And, as you can imagine, Russell Norman and John Minto agreed that the government should decide who you may sell your house to – or, in other words, they agreed that it is not really your house.”

Such is the sense of entitlement in our politicians that they have little or no respect for anyone’s property.  It is all “our”, all communal, and all subject to their own political whims.   Read more »

Tobacco tactics now being used in debate over sugar

ChocFrog copy

As I predicted the same tactics used against tobacco interests are now being deployed the food industry and the use of sugar.

And now it has come to pass.

It is the same tactics of demonisation, glib negative tags, and a lack of evidence to support their beliefs. It is highly political and worse it is taxpayer funding political lobbying.

The Taxpayers’ Union is slamming the taxpayer funded political advocacy by a group of academics featured on TV3’s The Nation this weekend. Their efforts to promote a sugar tax appear to be politically motivated rather than based on science. Sugar and similar fat taxes around the world have failed to curb obesity and have turned into revenue gathering tools.

Taxpayers’ Union Executive Director, Jordan Williams, says:

“Denmark’s tax on saturated fat introduced in 2011 was an economic disaster. The Danish tax was abandoned 15 months later and did little, if anything, to reduce harmful consumption. Worse, it was estimated to have cost 1,300 jobs. Why would New Zealand want to repeat this mistake?”

“Taxing the Kiwi tradition of a warm pie and can of cola won’t reduce obesity. The overseas experience tells us that it just leads to compensatory purchasing and brand switching.”

In the item, Dr Gerhard Sundborn stated that fizzy drinks have similarities to tobacco.   Read more »

Cunliffe gets a kicking for his CGT mistruths

in-your-money

At last someone has pointed out that David Cunliffe’s capital gains tax solution isn’t.

Property speculators do face a capital gains tax already and a CGT applies to a lot more than just property.

The association representing Kiwi landlords is disappointed the Labour Party is misleading the public about their proposed capital gains tax, which they plan to apply to all asset classes except the family home.

Mr Cunliffe told TVNZ’s Q&A programme it’s ‘lunacy’ that property speculators get tax-free capital gain.

“It is wrong to say that property speculators or traders get tax free capital gains. Those who buy and sell property are already taxed on the income from this activity. Kiwi landlords are not property speculators.” says NZ Property Investors’ Federation Executive Officer Andrew King. “They are ordinary Kiwis offering a service to people who want somewhere to live, but don’t always want to invest in bricks and mortar”.   Read more »

Map of the day

Tax Time

 

This map indicates the time, in hours per year, it takes to prepare, file, and pay (or withhold) three major types of taxes: the corporate income tax, the value added or sales tax, and labor taxes, including payroll taxes and social security contributions.