If a couple ask for benefits, winz asks for couples totol income. When calculate the tax, ird treat the couple individually.

BRING IT ON (wishful thinking, I know)!

I would like the tax system to be less complex not more; this proposal seems to make the process yet more convoluted.

I think its a great idea

Families should be taxed as economic units - just as they are assessed for benefits as economic units.

Why should I pay more tax at 100k wiht my partner earning zero, where two persons who earn 50k each pay signficantly less tax.

Currently the work that a stay at home parent does is NOT recognised. All the hype goes on how well parents do when they both work - but hey - a stay at home does something essential for society - nurtures the next generation

Stop pussy footing around. Get on with the bold and forward thinking needed. A flat tax as part of the massive overall reforms NZ taxpayers are looking for.

What is wealth shaun?

Wealth is paying your ex 10grand a month and letting her live in your mansion

Shaun - its rather endearing that you believe that "the rich" actually pay top rate tax under our current system. The number of people declaring an income just under the bracket boundary (was $60,000 - now $70,000) has increased by ~25% since cullen brought the top rate in. Thats because anything above this is being sheltered in various other entities subject to lower tax rates.

Simple tax = minimum tax avoidance.
Massive numbers of exemptions and complexity = tax accountants making a mint and people everywhere stuffing money through loopholes.

A guaranteed national income (GNI) can addresses the issues of progressivity in a flat tax framework as I stated above. Assuming a GNI of $10,000 and a flat rate of 30% then someone on

$40,000 will pay 10,000-10,000 =0 ie a 0% effective tax rate
$60,000 will pay 15,000-10,000 = $5,000 ie effective rate of 8.3%
$80,000 will pay 20,000-10,000 = $10,000 ie effective rate of 12.5%
$100,000 will pay 25,000-10,000 = 15,000 iea effective rate of 15%
and so on.

If you earn less than 40,000 you effectively earn negative tax.

Now repeat after me: "Reactionary socialist dogma does not assist reasoned analysis of the present failings of our tax system."

As a layman I like the thought of it, although I do not know enough about the loopholes and extra work it would create for the employer/IRD.

To me it seems no different from what a self employed couple do, therefore if it is good enough for one, surely it is good enough for the other.

I must say that we struggle on the basis that my wife stays at home and looks after our kids. We do it as we think we will have better kids as a result, however there is more incentive to package them off to some childcare/sow crating "business" and getting her back off to work. Something about that just seems wrong. Maybe there might be some good economic theory that says that we should be doing it?

@Alex Tarrant: Look at PD's constituency makeup (lots of [reasonably] well off ppl who's spouses don't work? or work part time?)....and his general right wing leanings, so its vote buying for PD....hell would freeze over before I'd vote for him mind.

I do agree with @Shell though, WINZ wants to see total household income, so I think it should be the same for IRD, total household income but also not just with children.

regards

Both Labour and National said clearly, flat tax is not an option.
But, why are they wasting taxpayers' money working on something they don't intend to implement and they rule out every time it's even mentioned ?

@Shaun: "flatter" tax...at least from National, looking at the trends (UK is a classic) its likely progressive taxes will get more progressive....it may not be in National's term but it has to happen, there isn't the tax income moving forward.

regards

"To waltz or foxtrot?", that is the question. Whether it is better to sink together or abandon ship one by one? Who is steering this ship anyway?

Actually, I like the idea of Incoming Splitting... but I would expect "Working for Families" to be dumped at the same time Income Splitting was introduced.

Accountability, Fairness and Simplicity... get my vote.

@Mouse - Very true, perceptions of fairness is important - but I don't think a flat tax + GNI + top-up tax based on stamp duty or land tax or GST is particularly unfair. In fact I think its pretty damn progressive AND pretty simple AND (with the exception of GST) as avoidance proof as is reasonably possible. (Kate convinced me on GNI in the end - but I still think Morgan's CCT tax is a pile of pap)

North Korea have just come up with a rather nifty approach to monetary policy and taxation - they have just pulled the reset lever and confiscated everybodys entire holdings of liquid currency. Guess whos going to end up worse off after that?

As I have posted before

Tax free allowance of say $10,000 for all tax payer
Split income over all family members (incl children)
Dump Working for Families

eg Family of 2 Adults 2 children earning $40,000 pays no tax.
Earning $80k pay tax on $10k each

I should ask Peter Dunne how 'Child Support' Tax would work with this

'Child Support' Tax is where you pay 24% of you gross income to the State for the pleasure of caring for you own children almost half of the time so that your ex can receive a benefit

N

Rob - because that single guy will not forego his pension and healthcare that he wants when he is old and not working. Yes he may have plenty of money saved, however he will still want the perks his taxes has paid for, and who is going to pay for it once he stops working? Other peoples kids!

That is why this growth thing seems like a myth to me. Once you start relying on growth you become hooked on it and can then not walk away from it....easily.

Bah... Peter Dunne has been banging on about this for years... another 'family friendly' gambit by him..

There are already plenty of tax breaks/benefits for families, why do we need another pray tel... Its just another tax incentive to have unprotected sex.... Bah!

Skyisfalling - So why should my taxes go to pay for the retirement of my parents at 65 and for them to consume a greater part of the healthcare budget [per chort] but when it comes time for me to retire, my kids will not pay for Rob's and mine retirement at 65 with full health benefits?

That does not seem fair?

SO if we are going to use growth as the means to pay for it all, does that not mean that we should be supporting our GROWTH SECTORS? :evil:

I haven't seen any criticism of single people in this thread.

I've certainly seen some pretty aggressive responses to the idea that having children can be of benefit to society and I have seen no response to the argument that a stay-at-home parent offer benefit to society.

I always find it funny that people bang on about personal choice when talking about government policy relating to children (income splitting, childcare, paid parental leave, etc).

Government policy is set at the macro-economic level, not the micro level. At the macro level, there is NO choice. Humans are biologically programmed to re-produce and the female of the species gets no choice but to bear the brunt of that responsibility. Any argument to the contrary is complete nonsense.

If you don't want to have kids, fine, but someone else's kid is going to be wiping your arse when you're 85 and in a home (regardless of who pays for it).

@Paul(the younger) We have crems already, we just need a wee addon, a stun and hook arrangement....and something like the un-licenced dog catcher maybe, if granny cant out run him, cart her off to the crem, a quick stun and into the box and flames she goes....

"this growth thing seems like a myth to me." I think its proving so....exponential growth cant be fought....so either this time or the next we are into a depression....I cant see how its going past 5 years....we've run out of cheap; energy, raw materials and food to exploit....

regards

Income splitting benefits the supposed 'rich' - that would be my family. Our tax burden is much higher due to the fact that I no longer get paid to work. Because we are 'rich' we qualify for next to no subsidies. No community services card, no WFF, no subsidies apart from any inbuilt ones that apply to the whole population. So we proportionately pay much more than we get back. If they don't flatten out tax, or substantially increase the thresholds (say 250k+ for top bracket), then yes, bring on income splitting (and ditch WFF).

There are so many inconsistencies/inequalities in the current tax/legal/benefit etc system anyway, what difference would income splitting make? Truly wealthy rich people hide their money anyway but its not materially going to affect them too much as they have so much... They have LAQCs and god knows what other devices to avoid paying tax.

To put this "cost" i mean the "choice" into perspective, how much was it that the banks have looked to dodge?? It costs us $400 million annually for two Frigates!!

Nice video from Elizabeth Warren last week, says it all.

Its the middle class that get milked. What difference is a crumb going to make.