Taxation

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.

Hosking points out the obvious flaws in Labour’s wood policy

Mike Hosking sees right through Labour’s wood policy…another that they will no doubt claim is a “game changer”.

In what the Labour Party will hope is some sort of turning point in their poll run, they’ve started talking wood. They’re pro-wood. They’re getting into and involved in the wood industry.

The potential upside of this is it differentiates them from the Government. It gives them a point of difference. What they’re up to is incentivising the industry – there will be tax breaks for it.

Now the immediate problem I had with the idea is that it originated from their manufacturing inquiry they held a couple of years ago. That was the cross party ‘crisis’ inquiry where Labour, the Greens and NZ First wandered around the country listening to people complain about manufacturing. The big problem being that while they were all in a room together wringing their hands and moaning, manufacturing was going gang busters. Manufacturing has been expanding for the past 18 months in a row and across all sectors. Manufacturing levels are at record highs.

The single best thing Labour could do is declare that the wood industry in crisis and hold an investigation into it.  Read more »

Maybe we should have a ‘luvvies tax’ here

There is some merit in implementing a ‘luvvies tax’ like that suggested by Toby Young at the Telegraph after a bunch of ‘luvvies’ made a video chastising the government for not implementing a Tobin Tax.

[T]he most objectionable thing about this video is the notion that a bunch of luvvies possess the moral authority to chastise bankers, politicians and the rest of us for not giving even more money to the European Union. David Yates, the film’s director, was at the helm for the last four Harry Potter movies and has a “first-look” deal with Warner Bros. I would conservatively estimate his total earnings over the last decade at over ÂŁ25 million. Very few “greedy” bankers earn that kind of money. If Yates and other Hollywood types are genuinely concerned about “extreme poverty” and “climate change”, why not campaign for a Luvvie Tax? Better yet, why not cut out the middle man and simply donate 0.5 per cent of their earnings directly to the EU? I’m sure JosĂ© Baroso can find a good use for it. A new fleet of Mercedes S400 BlueHybrids for European Commissioners, perhaps.

I’ve never understood why showbusiness types think their political views should be taken seriously simply by virtue of their fame and fortune. What insight do members of the entertainment industry possess that members of the financial services industry lack? What’s the chain of reasoning here? I’m on telly a lot, therefore I’m wise? You may disagree with the Chancellor’s views about the Financial Transaction Tax, but at least he’s a member of the elected government of Great Britain and Northern Ireland. Who elected Bill Nighy to speak for the people of Britain? I mean, apart from Richard Curtis?

Do me a favour Nighy, Yates and all the other Labour luvvies involved in this “campaign”. If you want to create jobs, take early retirement.  Read more »

Green solar scam is a “dishonest subsidy”

The Green party launched their now thoroughly discredited solar power plan on the weekend.

It involved ‘loans’ in order to buy and retro-fit your house with solar power. It is a bizarre policy that will directly undermine their support for the joint Green/Labour power policy, but that isn;t the worst aspect of the whole scam scheme.

Jamie Whyte, the new Act leader, explains.

“The Greens’ Energy Policy announced today shows how dangerous they are to the New Zealand economy,” says ACT Party Leader-Elect Jamie Whyte.

“Cheap loans for solar panels are actually a dishonest subsidy.  The subsidy is hidden in the terms of the loan.  More honest would be to simply subsidise the panels, but in that harsh light people would see the policy for what it is – an election bribe ultimately funded by the taxpayer.

“Policies of subsidising biofuels have failed around the world – economically and  environmentally. There is no reason to think that subsidising solar panels will be any more successful.  Read more »

Fairfax columnist recommends Fairfax be shut down

Dave Armstong has written a column that is online at Stuff.co.nz.

He thinks that, though loony, Labour’s Facebook Ban is actually on the right track. apparently the new standard for corporate tax isn’t the law, it is some sort of arbitrary moral code dreamed up by leftists.

Labour’s revenue spokesman, David Clark, a bright young star under David Shearer but a supernova under Mr Cunliffe, decided that if Facebook didn’t pay its fair share of tax (it paid $28,000 tax in 2012 – less than is paid by a demoted backbench Labour MP), a “back pocket” threat would be to shut them down.

Mr Clark’s Facebook facepalm quickly had the libertarians up in arms – avoid all the tax you like but banning internet sites only happens in despotic Third World regimes. New Zealand does far more civilised things like helicopter raids on residents we think may have breached US piracy laws.

Mr Clark was quickly defriended by his colleagues, who doubted Labour would take such draconian action. His relationship status within Labour quickly dropped from “liked” Dunedin MP to “single”.

Mr Key found Mr Clark’s comments “interesting” and Bill English called them “nuts”. However, the finance minister conceded that multinational companies like Facebook should “pay their fair share”.

At present many multinationals don’t. They avoid tax by various legal ways, including creating subsidiaries in low-tax places like the Cayman Islands. It is these subsidiaries that receive most of the company’s revenue, on which they pay negligible tax. The company’s expenses are channelled to relatively high-tax countries like New Zealand, where a loss is made.

Like Fairfax? When did they last pay tax in New Zealand?   Read more »

Sunday afternoon revenue gathering

Whaleoil Ground Crew reports in:

As you know, the East Coast Rd,  opposite Winsor Park down the hill from Rangitoto College is a real death trap, especially on a Sunday afternoon during a long weekend.

These people are only interested in saving your life.

whaleoil.co.nz // supplied

whaleoil.co.nz // supplied

Herald hypocrites busted again

hypocrites

The NZ Herald likes to point the finger at other companies and accuse them of being tax cheats.

They did it last year in March and I busted them then. Their IRD dispute is still ongoing and IRD reckon they owe $48 million. Then there is the $611 million of accumulated losses meaning that they pay bugger all tax in New Zealand anyway.

Yesterday David Farrar came out of the blocks and kicked them fair in the cods too.

The Herald editorial:

Many firms that practice tax avoidance probably do feel wretched about it. But they owe it to their shareholders to pay no more tax than their lawyers and accountants say they must, and they transfer the blame to the legislators who leave loopholes for them, or who set taxes too high or spend the revenue unwisely. With the company tax rate at 28 per cent in New Zealand, lower than the top personal income rate, it is hard to justify corporate avoidance here.  Read more »

Why not simply outlaw obesity?

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Off to jail with you…fatty boomsticks

With all this talk by Boyd Swinburn about controlling obesity via fat taxes and sugar taxes and other methods lifted from the anti-tobacco industry he seems to have overlooked the obvious…why not simply make obesity illegal.

It is funny then in the debate over cannabis legalisation we find a solution to the obesity problem…ban fatness.

But why go after marijuana for its second-order effects? Why not just ban stupidity, laziness, obesity, unambitious taste, or whatever social ills are of concern to national opinion columnists? As Brooks asks, “Laws profoundly mould culture, so what sort of community do we want our laws to nurture?” If the answer is “one where people are thin,” the obvious answer is to ban fatness.

Fat is an ideal menace to be targeted with a criminal law. To some extent, it’s a subjective matter who is lazy or stupid, but it’s pretty easy to figure out who’s guilty of being fat. A law against fat would scare people into losing weight. Even independent of actual legal penalties, it would set a strong norm, showing that society is opposed to fatness and wants people to stay at healthy weights. It would lead to improved cardiovascular health, higher labour productivity (fewer sick days!), and longer life expectancy.   Read more »

Guest Post – Lindsay Mitchell on Working For Families

WFF

Yesterday I blogged about a reader’s experience with Working for Families. I asked Lindsay Mitchell, being an expert on welfare, to write a guest post about it.

“My husband earns a low salary, it’s a family choice we make because he works for a charity that supports people in poverty to lift themselves out.  He loves his job, it’s very rewarding.

I was recently offered some work, a small part time job.  I am a SAHM of two little ones.  I knew that some of our working IRD tax credits and WINZ benefits would drop but when I did the calculations I was staggered.  For every dollar I would earn I will lose (in tax or via drop in funding) 70 cents in the dollar.    

It was a disheartening discovery.”

Labour’s 2005 Working For Families vote-buyer began the process of transferring annually $2 billion plus of taxpayer money to families with children. Their incomes were boosted and greater lifestyle choices were also enabled.

Whale Oil’s  correspondent illustrates this. WFF allowed her husband to choose spiritually rewarding work over economically rewarding work. That choice came with a sting though. Financial assistance – or tax credits – has to cut off at some point. If the total family income rises through either her taking a job, or him getting a rise or working more hours,  a high ‘effective marginal tax rate’ will be incurred. A substantial portion of any extra earnings will be lost

What would a WFF system that let them keep 70 percent of extra earnings look like? One that cost a lot more than $2 billion! One that would impose higher taxes on, amongst others, the childless.   Read more »