Taxation

The lunatic left all promote a ‘Robin Hood’ tax, aka a Tobin Tax or Financial Transactions Tax. Matt McCarten, himself a stranger to paying tax, even promoted it in the Herald on Sunday.

The problem with such a tax is that it doesn’t work, and it has been tried before with disastrous consequences..

James Tobin, a Nobel-prize-winning economist and disciple of Keynes, first proposed the idea of a global transactions tax—on foreign exchange—in 1972. This newspaper has regularly criticised it on two counts: it would be unworkable unless all governments signed up to it (and perhaps even if they did); and a levy would harm the liquidity of financial markets, making asset prices more volatile. Now there is a third, equally valid objection: that a Tobin tax is a poor solution to the problems in banking—too much leverage, too little care taken in assessing risks and banks that are deemed too big to fail.  Read more »

Cactus Kate knows tax…especially how to pay as little as possible. She makes a few changes to tax cheat Matt McCarten’s tax regime:

Matt doesn’t like paying tax or dealing with the IRD so he is a poster-child for the changes suggested.

1. Abolish 15 per cent GST. Replace with 1 per cent financial transaction tax as recommended by the New Zealand Bankers Association. Same money.

2. Abolish PAYE on wages and salaries. Replace it with a wealth tax and a capital gains tax when shares, businesses, land and property are sold. People are taxed when they’re cashing up, not when they are making it.

3. 90 per cent Death Tax. You can’t take it with you. Grown-up kids should earn their own money anyway. And what a fabulous run on trust and estate planning this would be as well as retail spending.

4. Rent-to-buy Housing NZ homes underwritten by banks the state. Limiting children in current state funded homes to two a family and having a capital gains tax will keep welfareprices affordable.

5. State-created work schemes for all long-term jobless. Even if they dig a hole and fill it up again.

6. A living wage set at $20 an hour minimum. It would be a stimulus package. Especially when abolishing welfare for families and state housing.

7. No tax on all funds profits kept in a business or trusts.

8.Free public transport in Auckland major cities. That would get people out of their cars but not as much as congestion charging and tolls.

9. Victims get 100 per cent state compensation for loss or injury. Offenders will work it off if necessary.

10. Make KiwiSaver a state-owned fund and sell buy all the Government’s non-core commercial assets.

Matt McCarten has a column in the Herald on Sunday where he claims his budget would do the trick. What would he know about budgets, he doesn’t even pay his taxes, or even file his tax returns.

There is a slight problem with Matt McCarten suggesting any sort of budget…he can’t even run his own union, stealing PAYE and Kiwisaver contributions which as far as I know he hasn’t yet paid back. If we all ran our households and businesses like Matt McCarten runs his union there wouldn’t be a cent in tax for him to spend in his budget.

A real game changer would be to get all tax cheats like Matt McCarten and lock them up in a debtors prison, until they cough up what is owed. Until he pays what is owed Matt McCarten should really shut the fuck up.

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via the tipline:

See attached screen shot from my rates bill for a car park.
That’s right, a car park…

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Len Brown claims his rates increases are “dropping” and that they average only 2.9% across the city.

The rate of inflation alone is 0.8% and Len Brown promised to hold rates increases to the rate of inflation…he broke that promise a long time ago.

Now he is lying about rates increases across Auckland.

The tipline has bee flooded with extortionate rates demands all at the capped rate of 10%.

Hi Cam

Sorry about the poor quality – can take another one if you like

Our rates went from  $2533.44 to $2980.65 – an increase of over 16%.

They knocked it back to 10%, but its still total bullshit. Theft!

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Len Brown is in the press again today claiming rates are only going up 2.9%.

Auckland rates will rise on average by 2.9 per cent this year – an election year for local politicians – under Mayor Len Brown’s inflation-sensitive budget to be put to the council tomorrow for approval.

Mr Brown said that overall rates increases have come down in each of his three years as the Super City’s first leader.

This had been done without compromising council services.

He said the draft annual plan for 2013-14 published in late January was aimed at a 2.9 per cent average rise.

Departmental heads had since pared back the amount of rates revenue needed by $7.8 million but the number of new budget items requested far outweighed the relief.

“In the current, difficult economic times I am committed to maintaining that level of overall increase as a maximum.

“This means there has to be the difficult process of selecting some requests for funding and refusing others.”

Looks at the sneaky, weasel words…only Len Brown could claim that rates INCREASES have come DOWN.

He is a liar. I spoke to my old man this morning, and he was enraged at hearing Len Brown crowing about this. He read out his rates notice which has an increase of 17% which has generously been capped at 10%, a far cry form Len Brown’s claimed 2.9%. Len Brown is hiding the truth by claiming an average increase of 2.9%.

What rate increases are you receiving from Len Brown’s council?

Send me a copy of your rates notice, I will remove any personal details and start proving that Len Brown is lying about his rates claim.

It is time to make a stand, it is obvious the media will just print his press statements without verifying details.

Time to put a stop to that.

Bob Dey has an interesting article about Auckland Council and stormwater.

Cameron Brewer also raises some interesting points.

Today’s heavy downfalls and surface flooding around Auckland is a reminder of just how much investment Auckland needs to make to improve its stormwater network. Yet Mayor Len Brown has not committed the necessary money despite pleas from experts, says Auckland Councillor for Orakei Cameron Brewer.

Auckland’s stormwater network needs a financial investment of $9.9 billion over the next 50 years according to an official report presented to Auckland Council in 2011. However in the council’s 10-year budget, or Long Term Plan signed off last June, the council only ‘plans to spend up to $768 million on capital (stormwater) projects’ over the coming decade.

“Despite all the issues that heavy rain causes this council is only spending less than 10% over the next 10 years of what’s actually required. It’s not good enough. We need to address Auckland’s inadequate underground infrastructure.

Both articles are interesting. But here is a question for you:

Council collects depreciation of its infrastructure assets in rates as depreciation. This is a cash collected revenue stream. Currently Council and Watercare depreciate assets at 17% per annum based on an annual replacement valuation of its assets with each asset in each catchment having a line in the ledger and depreciation carried for each asset. Some assets have been carrying depreciation for the life of the asset.

Some infrastructure is 80 years old.

So where has all cash gone?

If the ratepayers have already paid for replacement assets through depreciation in cash – where is the money?

Answer: Council has spent it.

So what?

Well that means they have mis-managed income and funds. And they are now asking for ratepayers and developers to pay them again so that they can replace assets that are over capacity.

Given the length of time and the direct income source associated with infrastructure assets there should be billions available in accrued CAPEX income to spend on upgrades.

So where is the cash?

APN/The Herald have an article covering that Apple NZ paid 0.4% tax on TURNOVER of $541 million – a story pushed by Labour and David Cunliffe.

Apple’s New Zealand division made sales of $571 million last year but paid only 0.4 per cent of that in tax.

Labour’s Revenue spokesman David Cunliffe said that’s akin to paying nothing at all, and letting a corporation get off “scott free” is something New Zealand taxpayers shouldn’t have to stomach.

Apple’s New Zealand sales topped the half billion dollar mark in 2012 after rising to $414 million in 2011, according to its financial results for the 12 months ended September 29. Apple is the world’s biggest tech company and makes iPads and iPhones.

Its local unit recorded a tax paid profit of $5.5 million in the year, down 40 per cent from its 2011 earnings. Income tax fell to $2.5 million, amounting to 31 per cent of pretax earnings, from $5.1 million a year earlier.

Nowhere in the story does it state want percentage of profit was paid in tax. The story seems to be pushing emotion while being light on facts and data.

But since APN think tax should be paid on turnover I thought I’d check what they paid. After all if you are going to point the finger at other corporates you had better be a corporate citizen than they are.  Read more »

David Shearer is a big fan of Finland…perhaps he will soon start suggesting this solution, taxing unpaid work:

FINLAND’S tax authority is trying to find new ways to increase revenue and is considering going so far as to tax unpaid labour, an official has told public broadcaster YLE.

The tax office was looking at service exchanges in particular, such as time banking, where reciprocal services are exchanged using units of time as currency, or more informal arrangements such as that between two neighbours.  Read more »

Governor Bobby Jindal at the Republican Leadership Conference in New Orleans, Louisiana. (Photo credit: Wikipedia)

Could it be possible…no income taxes at all? Bobby Jindal thinks so:

Governor Jindal has unveiled a specific proposal.

The plan will eliminate two major tax types: personal income tax and corporate income and franchise tax. Eliminating income taxes in a revenue-neutral manner and improving sales tax administration will dramatically simplify Louisiana’s tax system and reduce administrative problems for families and small businesses. The effective start date of the program is January 1, 2014. …The plan will ensure revenue neutrality by…[b]roadening the state sales tax base and raising the state rate to 5.88%.

This is a superb plan.

Of all the possible ways for a state to generate revenue, the income tax is the most destructive.

That’s why researchers consistently have found that states without this punitive levy grow faster and create more jobs.

It’s also worth noting that jurisdictions such as Monaco, Bermuda, and the Cayman Islands manage to be very prosperous in the absence of an income tax, though the incredible wealth of these places is partly a function of bad policy elsewhere, so the comparison isn’t perfect.

Anyhow, Gov. Jindal expands on this research with some very powerful data.  Read more »