Labour leader Goff calls for Tax Working Group to tackle tax avoidance to take pressure off middle classes

Labour leader Goff calls for Tax Working Group to tackle tax avoidance to take pressure off middle classes

Labour leader Phil Goff

By Alex Tarrant

The Labour Party would look to rejuvenate the Tax Working Group to specifically look at ways to deal with tax avoidance and evasion, leader Phil Goff said today, while suggesting a Labour government would act on recommendations from the group.

Goff’s comments come a day after he said in a speech that middle income earners shouldered too much of the tax burden (See more here), which led Prime Minister John Key to question how Labour would afford tax changes, as well as axing GST from fresh fruit and vegetables and resuming Super Fund contributions while the government was in deficit.

Key pointed out that National's tax changes meant middle income earners were now only paying 17.5% income tax.

The middle classes were not feeling the wealth effect they felt in the early parts of the 2000s because house prices had not been rising very much, Key said.

Although Goff stopped short of suggesting any firm policies to alter the tax burden, he said Working for Families could be expanded and that Labour may introduce a higher top tax rate for those earning over NZ$100,000. Goff also said Labour was not looking at implementing a capital gains tax or a land tax.

“My idea would be to get the working group under Bob Buckle, [which] did a lot of good work, set up and focussed on the issue of tax avoidance and evasion,” Goff said.

“We know that hundreds of millions, if not thousands of millions of dollars are lost in that way. Anybody that dodges their tax, it means they’re the people [who will be] picking up their share,” he said.

Goff said working groups were a good idea for the government “if they are given a specific terms of reference, and if you’re prepared to act on them”.

“This government has been setting up working groups like the Brash committee, spending hundreds of thousands of dollars then ignoring its recommendations. Now if you’re not going to listen to them, why set them up?” he said.

Middle income earners

Middle income earners were those who didn’t get a lot of assistance from the State because they earned too much, but were not wealthy enough to be able to pay everything they needed to pay for as the higher income earners were, Goff said.

“They’re the people that didn’t get the huge tax cuts that the government brought in,” he said.

“What I’m saying is that for the middle income earners who didn’t get a share of the big tax cuts that the higher income earners got, they will be facing absolutely no [future] tax increases [under Labour]. If we can crack down on the tax avoiders and dodgers, and we can get further revenue from those sources, then down the track they’re the people, if there is a chance to give tax relief again, [who] would get it," he said.

Goff said that Labour would consider raising the top tax rate, although it would be for earners with incomes “well into six figures”.

Asked whether having a higher top income tax rate that could be around 38% alongside a corporate tax rate of 28% would encourage tax evasion, Goff said, “No there are ways you can deal with that, I’m not going to go into that detail now, that’s something that the group would work at”.

But what about Working for Families - isn't that for middle income earners?

“There are people who get some marginal assistance through Working for Families, but middle income people are people who don’t get a lot of attention because they’re not in absolute poverty, but they are really struggling to make ends meet,” Goff said.

“They’re struggling because petrol’s gone up to [NZ$1.92 a litre], prices are going up across the board – food prices are through the roof – and they haven’t had wage increases,” he said.

“I stand by Working for Families because Working for Families has enabled families to survive at a time when they’d otherwise be facing incredibly tough times and sometimes poverty.”

Goff said one option could be to expand Working for Families, “but I’m not going to make policy on the hoof, we haven’t done the detailed work on that”.

Cut power bills, govt borrowing too much

One option would be to minimise dividends paid by State-owned power companies to the government as a way of reducing pressure on middle income earners, Goff said.

“This country is in trouble with the deficit the government is building up. They’ve borrowed to pay for the tax cuts. There’s not going to be scope for wide ranging further tax cuts other than in specific areas where I’ve pointed out, like taking the GST off fresh fruit and vegetables,” Goff said.

“I indicated yesterday we’d be looking at not using power bills and dividends to the government from the big power companies as another form of taxation, as it has been used in the past by consecutive governments,” he said.

“Any money that goes to the government as a dividend is solely for the purpose of transmission and generation capacity. It will not be used as a milk cow to raise taxation revenue for government.”

“That obviously has an impact on power bills and power rebates,” he said.

‘But we might borrow for Super contributions’

Goff said Labour would look to restart Superannuation contributions, even if government was still in deficit.

“Obviously when you put money into the Superannuation Fund it’s not going into consumption. It’s an asset – it doesn’t add to your net debt,” Goff said.

“In the first instance some of that may be borrowed, but obviously the thrust of my speech yesterday was, if you’ve got decent jobs, if you’ve got decent incomes, then you’re going to generate a lot more taxation,” he said.

No wealth effect any more - PM Key 

Following Goff's comments that prices were rising across the board, Prime Minister John Key said that in some parts of the economy the cost of living has been easing. "Whether it’s been petrol prices or interest rates, that’s actually been a lower burden on New Zealanders," Key said.

"What is true is middle New Zealanders, like a lot of New Zealanders, aren’t feeling the wealth effect that they felt in the early parts of [the 2000s] because house prices haven’t been rising very much," he said.

"There are challenges but the government’s been steadily cutting taxes, we’re trying to take the burden off them wherever we can and for the most part there [have] been quite substantial tax changes for average New Zealanders."

See more comments from Key here

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Can someone PLEASE tell Goff ONE FACT?

That being that he and his sidekicks (Aunty Helen & Co) had 9 years to solve many of these problems that THEY created in the first place! Many People avoid tax because they see where it goes and who it goes too and where it's wasted! WFF's being one, DPB another, the Infinitely unemployed also , and let's not forget GOVERNMENT wastage which goes on and on .

Goff your not fooling anyone mate. Your SO full of it

PM,  Mr. Goff and Mr. Cunliffe - you  both parties just continue with the “Patchwork Economy” and do so not having new ideas or even a vision for New Zealand.

Considering the difficult and fast changing worldwide circumstances only comprehensive changes towards a structured, balanced NZeconomy will succeed.

 In stead of working with the private sector together for instant solutions, the moving back and forward going around the circle with Fiscal policies is just – a waste of time driven by stupid NZparty politics.

 What NZ needs is full employment and higher wages of the general workforce Therefore the creation of new industry segments and more diversity which both are missing for decades in our economy are required. Visionary ideas with a high prospect of success and profitability is the branding, implementing and execution of a “100%NZ pure” economy.

In order to export more successfully our production needs to improve internally. Quality NZmanufacturing, especially infrastructure needs helps to develop skill, research, supply, independency and the reduction of our account deficit. Not to be underestimated good developed NZManufacturing strengthens other sector of industries and encourages young talented Kiwis to set up their own businesses with great investment opportunities.   

Goff in a spot of bovver......just how do you convince enough voters to believe the promises of better times for them if only they would vote Labour....does he really think these people are so dumb they cannot remember the fact that he and his mates wasted 9 years producing a fake period of growth!

'Give it a go Goff' will dance around the minor problem of where he can get the dosh from without increasing govt foreign debt...or without stealing it from those he calls wealthy while leaving out the fact that he collects a wopping fistfull of dollars from the taxpayers every week...for what.

I think Goff needs to invest at least a year of his easy life in working on the chain in a meatworks or fencing on the farms....a taste of real work Phil....ever had any?

Sold those sky hawks yet Goffy? oh.........that's right, another lie

Labour will not bring in a capital gains or land tax. Unless they needed a Greens coalition, as Greens are now the real 'reds'. An expansion in government servants would be needed

When Aunty Helen raised the top tax rate to 39% up went property prices (big time), so if Labour does something similar again (except Goff saying at $100,000 not $70,000), they will need to bring in ring fencing to avoid write-offs against personal tax, and one never needed a LACQ to do that.  Usually half-baked populist policies result in all sorts of unintended consequences.

Goff wants a high wage economy. He will also tax the snot out of high income earners (the supposid rich). Cant have it both ways buddy.

He says the "rich" should pay their fair share? As measured against what? High income earners pay shed loads more than someone on the minimum wage. Is that fair, or should they be paying even more.

So true. And doing that really would encourage high-income earners to leave NZ (and from what I read, no extra encouragement is necessary). Not the way to go...

Please make up your minds!

When people leave NZ because NZ employers refuse to pay more than bottom-dollar, the Rabid Right dismiss them as being the dregs, and good-riddance.

But when anyone suggests it may be time to begin addressing the issue of severe income inequality, the Rabid Right screech that NZ's "high income earners" will leave NZ as a result.

Of course, if they do move elsewhere, they'll discover that their former "high incomes" really weren't so high.

The rabid resistance to paying employees more is ridiculous.  Unless they actually want to handicap their own businesses by reducing the available discretionary income and customer pool to an absolute minimum.

What do you mean by "severe income inequality"? Surely you're not talking about people on 100K compared with those on say, 50K? That's not severe inequality, it's all down to one's career choice. 100K may be a good enough salary, but it also means you pay a whole lot more taxes than someone on 50K and do not qualify for subsidies, which means that in the end their effective incomes are actually quite similar!! (unless one cheats of course, eg  http://www.stuff.co.nz/national/4433583/Wealthy-families-claim-payouts - reading this really made me sick).

Hello Labour will say anything an promise everything an deliver nothing.

We had 3 terms of socialism an what do we have to show for it.

The country can not pander to people who will not get out of bed in the morning.

The country needs to wake up,what we need is can do people.

High earners make big money because they work for it.

Bringing in more people who can't get any work an have no money is not working out.

Get rid off the rubbish an bring in the best people who can grow this country.

We need to do this as the young bright people are flying out by the plane load.

Time limits on welfare,straight into training.Time limits on statehouses.

Fix this massive problem,its dragging the country down,

Hey that sounds just like National! They promised us the earth in 2008 and so we voted for them! What did we get? Nothing worth having.

They can't perform miracles, and a miricle is what NZ needs. Or at least they need to work out a way to export more, and make more money. Putting up taxes only inflates property prices.

Bloody amazing , he thinks earning over $100k a year makes you rich . Its actually a piss-poor salary.

Its no wonder we cant keep the highly skilled and  those with balls and  entreprenureal  skills in this country . The state will confiscate whatever they produce in taxes

He has just made it clear  to me he wants every Kiwi to be  lowered  to the per capita income of Tonga , becasue that what will happen......... all the bright young doctors lawyers and accountants  and engineers will leave , only to be replaced by  skilled but resentful  refugees from Iraq and war -zones elswhere .

We need to become a seriously respected,  high skills ,  high income state like Switzerland , not some Bunga island in the South Pacific, with low incomes , and the laughing stock of Outback  pub patrons

$100k a year puts you towards the top of the second-highest decile of income earners.

Whatchu on about boatman. $100k/year is almost four times the median income (under $27k) and would put you in the top 10% of earners in NZ and probably in the top 1% worldwide.

Further our top tax rate is among the lowest in the world - the UK is now 50%, not that I'm a fan of taxes and big government.

The problem, as I see it is that the wages are too low in that median area,  these folk barely have enough to survive on at $529/week pre tax. Get their pay up and they'll be able to pay a greater share of the taxes. Simple really.

$529 per week median is for all income - not just employed on salary and wages. The median weekly wage for employed people is $797

check out the supplementary tables at http://www.stats.govt.nz/browse_for_stats/work_income_and_spending/Incom...

I'd like to know what Phil Goff, Labour, anyone think of this:

"The policy framework pursued by New Zealand for the past twenty years or more essentially leaves the exchange rate as the loose end of the policy framework. This is what is meant by a “clean” float the theory says there will be equilibrium and currencies will tend to balance with reference to the trade flows. Sadly there is no equilibrium, and ever increasing speculative capital flows exacerbates the problem.

The monetary policy as operated in New Zealand has only succeeded in controlling headline inflation; inflation in the non-traded economy has been impervious to changes in interest rates. Only the absence of price stability in the traded economy has provided headline inflation rates inside the policy bands. The links below give some data in this regard.

The International Monetary Fund and others are coming to the view that exchange rate volatility is more damaging to the real economy than the level of the exchange rate. A clean float ignores both level and volatility, in so doing removing any predictability or stability from the traded economy.

Officials and politicians wedded to a clean float develop an obsessive commitment to that choice and revert to “there is nothing to be done” in times of trouble. Hands off becomes a way of life and troubles are characterised as being in the domain of others.

There are policy choices through a dirty float all the way to a managed currency, again the IMF reports that small economies at managed end of the spectrum have performed better than the ostensibly clean float economies.

http://www.johnwalley.co.nz/136-successful_export_economies_ma.aspx

http://www.realeconomy.co.nz/121-control_inflation_in_the_non_t.aspx

In a clean float pressure on the currency results from higher interest rates particularly when the central bank chooses to be heavily reliant on the overnight cash rate mechanism. Currency pressures are amplified if fiscal policy sees Government operating in deficit and choosing to borrow, absence of local savings, offshore.

This does not have to be the case, but a balanced suite of changes are needed to begin to improve the operating conditions of the traded economy.

• Recognise, embrace and implement the realisation that central planning and winner picking will fail in the high value add sector. Face the fact that policy settings matter and an unpredictable exchange rate has a massive detrimental impact on the real economy.

• Monetary Policy: Managed exchange rate - lower interest rates substituted by loan to value ratios, robust core funding ratios and capital inflow controls.

• Fiscal Policy: lower and broader tax rates, including effective capital taxes.

• Incentivised savings to individual account to bolster local savings.

• Investment Incentives for high value exports on the same basis as other developing economies (level playing field) – skills development, R&D support, depreciation rates, patent costs and investment incentives for innovation.

As there is no equilibrium in currency it is best to apply the common sense test, you know your currency is overvalued if those activities that have significant comparative advantages cannot make a living on the world stage – meat and fibre farming."

http://www.johnwalley.co.nz/138-any_future_for_exporters.aspx

So what do you think, Phil, anyone else?

Cheers, Les.

www.mea.org.nz

 

  

Les...  I can see your main focus is getting the exchange rate down so our exporters can compete.

The trouble is ... what u suggest is just as distortionary and contrived  as things are now.....    ,and sounds like a command economy... except .. exporters become the beneficeries.

Take interest rates....  believe it or not they should play a critical role in the decisions to allocate resourses and balance savings and investments.... You suggest on the one hand , that we keep interest rates low for exporters ...and in the name of a low exchange rate.... and then u also suggest we "incentivise" and encourage savings..???

How on earth is that possible ... without having all sorts of distortions.

( changes in  supply and demand determine price..  If u fix the price ..what happens ..????)

What would have if I could get 6% on my savings in Australia but only 3 % here in NZ..???

I hear what u are saying...  but I'd suggest that unless we go back to first principles and look at things like our Monetary system,  so called free trade, foriegn direct investment, tax system, etc,... etc....     we will only get band aid solutions that will simply lead to more distortions.

I think the solutions u suggest would lead to many problems.

Maybe we also need to revist the whole ideology of free trade and so called "Lassez Faire".    Who was that said we could compete with China..????

I have heard of  manufacturers in NZ who are not even exporters... shifting their manufacturing to China and then becoming importers.  Basically giving away any intellectual property they had in many yrs of improving their products.. This is madness and is not reflected in any kind of fiscal or monetary ploicies..  Just the ideology of free trade... and placing no value on the social as well as economic benefits of the velocity of money in our own internal economy ????

cheers    Roelof

Roelof - in response to some of your points. Sure, am keen for a 'root and branch' rethink on many of the things you highlight, but we are where we are and so am also keen to be pragmatic which I think means some incremental, but not insignificant, changes with the system we have.

It's not just about getting NZD down, it's about returning NZD to a value and volatility appropriate for real trade, see:

http://www.johnwalley.co.nz/137-export_growth_not_under_curren.aspx

"The table shows that New Zealand’s exchange rate is 25 percent overvalued against the US dollar, the highest of the countries included. The table also shows that it is not solely a US dollar depreciation story with the Euro only 5.7 percent overvalued and even the Australian dollar was only 17.5 percent overvalued."

You ask how is it possible. Considering just one approach mentioned, more robust use of CFR. When it was introduced you will recall it had the effect of pushing up td rates, while OCR remained constant. If the ratio of market (offshore, cheaper, hot money) to non-market funding (onshore, domestic tds) was robustly specified in the numerator of the CFR, as well, then the CFR could be used to complement the OCR. With either the CFR and or the ratio of market/non-market money being varied. Hence better control of non-tradeables inflation, interest rates are still a signal (such as they are, more on that in a mo) and without the distortion of NZD away from real trade based values/volatility. (Oh, and onshore savings improve - such a bad thing .....)

As for interest rates as a effective price signal, c'mon let's get real, it isn't. That's because fixed rate loans are used to hedge against the execution of monetary policy which means RB has to lean ever harder on the OCR lever, which simply helps suck in more hot money to fuel the bubble we all know is brewing-up. So our monetray policy, as it stands, is pro-cyclical - but hey, it's "world best practice". Yeah right!

So if you are keen on interest rate as a signal, let's ban fixed rate loans - that way the signal isn't corrupted by 'pure time delay' lag. What do you think? Can you see/list the benefits and advantages of such a change? 

Cheers, Les.

Les,

I didn't say interest rate were an effective price/information/transmission tool....   I said they should be.  Artifically low interest rates.. which has lead to a MASSIVE expansion in the Money Supply ( globally ) has been the principal reason for the shit we are in now..  It has lead to Malinvestment , over investment .Bubbles ... here there and everywhere..

It has lead to the financialization of the Western World...  where Capital Flows have more impact than Trade Flows, on exchange rates ,

U are advocating more of this to try to  achieve a specific outcome... This is band aid stuff.

It just leads us down the road to more problems.

Your focus is on Exports and exporters...   I highly recommend a book called "The Dollar Crisis" by Richard Duncan.

A brilliant book . The title is misleading... this book is all about Global trade and Capital flows.

He talks of the importance of BALANCED TRADE.... The Dynamics between USA and China have alot to do with the problems we have.

Also... that table of currency valuations.... I'd have to dig into it much deeper to see if it is based on good science...  ( to use a phrase ).

I'd love to respond to the other stuff u talk about... but I'm in a rush.

AND... to be a little confusing...  I do agree with much of what u say...  It is only in the solutions that I would question and inquire into..

For me, it wasn't until I really understood the nature of money and monetary systems....that some lights came on and other things made sense.. (  hopefully I'm not  delusional )

 

Cheers  Roelof

Les, John your ideas to influence and make changes to Fiscal Policy isn’t working without a closer engagement with the government. Obviously they still don’t know why NZmanufacturing is important.

The accumulation and speed of negative worldwide events on the political, financial and economic front will increase. Fast changing situations are often unpredectible - terrible for businesses. As an insignificant nation we are just a cork in the ocean - leeway is limited. Therefore our $ will be rather high and of more obvious reasons, the situation is getting more stressed for exporters in general.

That brings me to the question : Why is the NZMEA not more adapting what I’m proposing above 7.12. 10:02pm – especially pushing the government to allocate orders of manufacturing internally ? There are many good reasons why quality and high tech widgets for the NZinfrastructure market – transport, energy and communication should be produced here in NZ.

**I think the NZMEA with other private sector associations should become far more publicly political active - cleverly representing their causes.

Worldwide events, the NZjob market, etc. will **force the government to cooperate with NZcompanies (the private sector) in a far greater way then they are currently doing.

Walter

Never thought I'd get to this - but judging from the comments from both Goff and Key in that article ... I'll be voting Green!

Labour is dead in the water next year unless it changes the Leader - and stops this targetted  pandering to what it "thinks" the middle class in this country wants to hear.

And I'm with Boatman - $100K pa was good money before the turn of the millennium when average house prices were around $200K and a block of cheese cost below $10.00.

I'll vote for the first party which remembers their Third-Form physics.

All work requires energy.

So I'll be voting for the party which understands that the IEA graph, the Clint Smith Parliamentary report, and the DCC Susan Krumdiek report, mean that there will be less done, therefore less wealth generated, in the future.

This, of course impacts the retirement debate, tax, public services, voluntary work swaps for any of the above, sustainable practices, the rights of future generations - the works.

I'm not sure the Greens are there yet -  Jeanette Fitzsimmons was there - but they're closest.

Relative purchasing power (income vs consumables) will of course lessen, indeed had to do so from 'overshoot (get hold of the Will Catton book, Kate, or I'll loan you my copy) in 1980 (hence relative debt rises ever since.

It really hit the wall post energy-peak in 2005 - and hit the wall in debt. Don'e ever expect those times to return - they can't.

Watch for a race to survive - states, corporates, banks and the well-currently-heeled, will scrabble to stay afloat - and will spin the spin as part of that. The spin will be anything from denying climate-change, to promising economic growth, to ignoring/belittling degradation, to bleating'Malthusian'.

And he's written a sequel (2009), Bottleneck - humanity's impending impasse.

Have checked them both out.

I did so enjoy Dr Suess :-)  

" 'neath the bad-smelling sky....."

Yep, a smart man, Theo Le Seig / Theodore Giesel / Dr Seuss.

I went to a Catton lecture about a year ago. I think the most poignant slide in his powerpoint was one of his grandkids - he's not alone in academia in doing this, Ralph Sims did it too recently, and I sense a fear amongst those who deal with reality, that all is seriously not well.

Their only valid approach is to be proactive - Krumdiek for instance suggests "50% energy by 2050" which placates suitably, but she knows there will be 2% by volume (4-5% by quality and export-denial) drop-off from about now.

Just as Goff doesn't ascertain what 'work' he will be taxing, regardless of class. Ultimately, if you can't 'earn' your contribution to health and policing and education, I don't see why approved voluntary work shouldn't be credited.

Leads to the inevitable cry from the employed that their incomes are being displaced, of course. Reminds one of the old WSDP vs painters thing in the early '80's.

 

Except when the Greens had their Sustainable Economy Conference, they had the air conditioning on the whole time ;)

That's the same kind of comment that Jim Mora makes re Al Gore's mansion, and his flying.

Attack the messenger in a condescending manner (without addressing the issue) because?

Usually, because the attackers are scared of the message, as a rule.

ALEX : I reckon that's the funniest thing I've heard today  ! ............ Same deal when they have those Climate Change conferences , and everyone jets in from around the world to Kyoto or Copenhagen ............... Not a thought to do it all over the internet .

 a load of garbage from gormless Goff

I'll be interested in seeing Winston's taxation policy  

is $100k the new $60k pa?  $60k pa was not high income, even 10 years years ago when Labour raised the top tax rate.

How does Labour categorize high income, middle income, and low income?  if you were on $60k in 1999 when Labour consider you as high income earner, by the time they lift the top rate threshold to $70k in 2008, and assuming your income increased to $70k you'd have benefited nothing from the Cullen tax change in 2009.  

Yet during the 10 years, if you haven't bought your house already you are unlikely to be able to afford one.  If you started a family you will be more likely to be on WFF.  So the "high income" of $60k or even $70k doesn't seem that high after all.

"Yet during the 10 years, if you haven't bought your house already you are unlikely to be able to afford one."

The good news is that with collapsing prices, houses are on-track to becoming affordable again.

Most sellers are still holding out for 2006 prices, but either they'll eventually become less idiotic about it, or their bank will sell the property out from under them.

Definitely a big win-win situation for all those young NZers who were shut out of homeownership by the foul greed of moronic baby-boomers.

Vote National for Tax cuts.  Vote Labour for Tax increases, except on fruit and vegetables of course.....

Vote National for Tax cuts.  Vote Labour for Tax increases, except on fruit and vegetables of course.....

Goff: caught between a subsistence economy and a contradiction:  http://tw0.us/R5o   

Note however Goff commented "tax avoidance and evasion" - which I take to mean he intends to close presently legal mechanisms of avoidance - and reading between the lines I think avoidance (or tax minimisation methods as the accountants prefer to call it) is his real target.

I'm curious, Mark, as to what type of taxation you feel would be appropriate/equitable (i.e. delivers the most freedom) in a minarchy  ... i.e. taxing labour (e.g. PAYE), or profit (e.g. company) or consumption (e.g. GST), or user/polluter pay (e.g. energy, water, carbon, road taxes etc..).

You may be partially right in your first paragraph Kate, though Goff says evasion also. Regarding tax avoidance, then first Labour, and second, himself, are the last that should be taking the highground on this issue. Cullen's legislating of lower corporate and trustee tax rates to personal tax rates was a disaster for both sides on one of the main issues currently involved in what IRD are 'holding' is avoidance: it led to unclear tax law that has to now be expensively tested through the court system, leading to both some very sub-standard decision making thus far on behalf of the judges, and leaving many taxpayers in a complete no-mans land regarding what the law is across  all the years the relevant cases are being fought. Goff is already indicating a policy of even higher tax rates for incomes over$100,000 which is set to make it only an even bigger mess.

This is appallingly bad law making, leading to completely unnecessary cost to the productive sector, and stress and heartache to those involved in these cases, all of whom were most probably acting on advice. Mind you, in so many ways our tax laws are an overly complicated, hotch potch mess before which taxpayers can often have little certainty, and that makes for a dreadful environment for doing business.

 

Regarding the tax to finance a minarchy, remembering a minarchy only has to fund:

A police force and army to implement the non-initiation of force and fraud principle.

A criminal and civil legal system.

And nothing else, then very little is called for. The official Libertarianz policy copied from the Libertarianz site is:

A Libertarianz government will abolish all duties, tariffs, taxes and levies - except income tax. As a transitional measure this will be set at 25% - with an income threshold before payment of $50,000 - until being abolished in the shortest possible time consistent with debt obligations and transitional arrangements for ending the welfare state. 

Speaking personally, the minarchy has to continue  on a small level of funding for those two areas I spoke of: I guess some Libertarians would favour a voluntary contribution to fund this (worse case scenario, I would say a GST of between 2% and 5%, nothing else, but that's me speaking personally, not for Libertarianz.).

Curious that the preferred tax is on labour. 

Given the nature of a minarchy, I'd have thought the ideal method of collecting the small tax requirements of such a government would be to use the polluter/user pay taxation method - given that in the absense of environmental regulation/monitoring and enforcement, access to the commons would need some market-based method of allocation.

Also just occurred to me - I wonder how, under a minarchy, do roads get built/maintained - through taxation or through private sector (user pay) means?

 

 

I wonder how, under a minarchy, do roads get built/maintained - through taxation or through private sector (user pay) means? 

Other than those defined areas in my initial post, Kate, which can be summed up as the rule of law under a written constitution - http://www.freeradical.co.nz/content/constitution/index.php  -   that protects the individual (including by stopping the minarchy growing beyond its mandate), every other function is conducted in the private sector. (Any other position leads, as night follows day, to a centrally planned economy, which is obviously only possible  on centrally planned people).

That's what I thought - which raises a bit of a contradiction, in that the way charging for road use under a privatisation scheme would operate (i.e. through electronic tracking/surveillance of individual vehicle movements) I'd have thought diminished freedom/privacy - rather than enhanced it.

Then you also have to extend privatisation to sidewalks as well, of course, and we're suddenly all going to need to be chipped.

All I'm saying is that if freedom is your aim, sometimes privatisation actually reduces that freedom.

You've just jumped to a number of conclusions that aren't in any way valid.

And realise also that I can control my privacy with a participant in the private sector, however, I have no privacy against the State, as they can legally take my privacy from me, and use force against me in the face of which I have utterly no recourse.

Give me the private sector thanks.

How not valid?  Are you suggesting the private sector wouldn't use electronic surveiilance (i.e. GPS tracking)?  The only alternative I can think of is a general road user charge (like we have presently) based on fuel sales (as you can't toll every inch of NZ), but with RUCs cyclists travel for free - and a general charge would be (is) highly inefficient in terms of scheduling/charging for upgrades and maintenance.

But, I'm not necessarily saying that losing the freedom of moving around anonymously is a bad thing.  Indeed presently with cellphone tracking and ownership of that network in the private sector, it doesn't necessarily bother me that my cellphone supplier has a good understanding of my daily movements.  Crimes would certainly be more easily solved with greater surveillance - and like it or not, we're moving in that direction anyway.

No avoiding Big Brother really, be he a corporate or a government - but to hold onto the illusion that you would be somehow more "free" under corporate control is perhaps a bit misguided.

By definition there is no such thing as a private sector Big Brother: only the State has the power to legislate the rules in such a way as to be a Big Brother.

Your private sector equivalent would be a monoply, I guess, but they don't exist under true laissez faire - current monopolies are the result of crony capitalism; companies colluding with the State to score monopoly profits.

I can choose who I deal with in the private sector, I cannot choose when the State chooses to deal 'to' me. The State always has the monopoly on the use of force: that is the problem.

Would you restrict their right to sell your private information on the free market to the government?

Of course I would: silly question. And firms would very quickly learn that if they want business, then privacy will be the uppermost concern. The fact is I can negotiate conditions with private sector company, they haven't got a gun to my head like the State has.

Why don't you get the important fact here: the thing the State has, which no private sector entity has, is a monopoly over the use of force. That is precisely what makes the State so dangerous, and why it is the State that has murdered or imprisioned more individuals than any other entity since the modern nation state came into existence, and will continue to do so, thanks to a dearth of philosophy in the sheeple, via a dumbed down State education system. Humanism, classical liberalism had made Western civilisation the best civilisation in the history of humanity; you only need look at the comments on these threads, the contradictory hotch potch Statist solutions offered by the likes of Kim Jong Hickey, indeed, this very argument, to see how far the West has fallen - now look up history to see what is in store for us, unfortunately humanity has been here before, over and over.

The only real non-commercial use for most private information is law enforcement, which continues to have a legitimate role in your system.  All the cellphone companies voluntarily sell telephone call data to law enforcement agencies now.  When everybody's doing it, who do you boycott?  Go negotiate a deal with Vodaphone to not sell your data to the cops.  I'll wait here.
 

A libertarian society has a focus on privacy, obviously, so the police force in that society is nothing like the current police force. A cell phone company selling information to the police will not survive in a libertarian society, because there'll have been a complete mindset change for the libertarian society to exist in the first place. The police will be there to enforce the non initiation of force or fraud principle: period. There will be none of the laws in existence that they would be snooping for anyway, as they do now, such as drug laws ...

But they'll be paid enough to raise them above needing backhanders, right?

Tui ad.

Luckily there aren't too many of you, lucky too that your philosophy doesn't lend itself to a party structure.......

Yes, they will be paid enough not to accept backhanders; but more important, they will believe in the society they live in.

Tell me, why so much vitriol, so much hatred, against the simple concept of an individual's freedom? So many people throughout history have died to gain freedom, and now people like you piss away freedom against a nihilistic wall of life despising hatred.

On a fundamental level I don't get, although it teachs me how so many totalitarian and murderous States have been: because of you.

In other words I just want to live a life free of, for example, you, whom I don't know from Adam.  I want to pursue my happiness, including looking after my loved ones and extended family, and I don't want my money taken from me by force to pay for the bad decisions of total strangers through a system that now breeds little else but violence. The second hander, user society; the barbarian society based on greed, avarice for other peoples money, and bile such as you show here.

So long as I don't initiate force against you or any other, I simply want to be able to lead a free life.

Yet to you this is the worse thing in the world and you hate me for it. Why.?

It's getting to be so depressing to me. Anyway, I've got a two day business trip from tomorrow, so I'm off to bed: have a great time bossing everyone about, as seems to be your modus operandi.

Keep up the good work , Mark ..... You're not alone here , at being reviled for wanting the citizens to be strong , independent , and free . Let the individual reclaim the power to make his own decisions  .

... I reckon the " nannyists "  hate our guts because  we totally undermine their reason to exist ! They hurl vitriol at " the right " , whilst  they actively promulgate policies that enfeeble the citizenry . And all in the name of keeping themselves in power .  .

..Cheers .

As long as human follow religions/ philosophies - individually they don’t feel free – it is much simpler - just do it.

We have absolutely similar ambitions re family and friends, and I don't 'hate' you.

But your philosophy would be the death-knell of my kids generation, should it gain full (it's gained a lot since '84) traction.

I care about others, and am happy to be part of a society which does too. There, I think, we differ.

That said, I absolutely understand  that we have to drastically reduce our global (not NZ yet) population, and your way - attrition of the disposessed, presumably - will more likely get there. Mine involves education, condoms, science and social maturity. A big ask.

But if left to 7 billion individuals individually individualising, the resources of the planet will simply be devoured - and that includes the ability of the biosphere to absorb (as in climate change, ocean acidification, DDT residues).

We probably won't make it as a species - the prevarication and not-i-said-the-little-red-henning re climate change, says that we won't. Too much residual religion (some big mythical deity gives you the 'right' - yeah right) too much selfishness, increasingly too much daily desperation.

But - it's worth a shot, on behalf of our kids. That shot needs rules. We simply have to live within certain chemical and physical limits, or we won't live.

Beyond those rules, you may be surprised to learn, I don't care what anyone does. If every generation leaves a biosphere as they found it, I'll be pretty happy. For instance, I think housing should be 'caveat emptor' - have long argued for an 'as-is, where-is sale class.  It would leave a small debate as to whether we insure each other re health etc, and I guess I'm in the 'yes' camp there.

I suspect the trouble is that your 'freedom' includes no carbon restrictions, no land-encroacment restrictions, no biosphere-impact restrictions.....and probably a denial that any of the above are a problem.

There I can't accomodate you - those impacts need a society-wide approach, which means rules.

 

"Key pointed out that National's tax changes meant middle income earners were now only paying 17.5% income tax."

huh?

I must look at my PAYE slip and try and believe that its 17.5%....because it sure looks way above that....

"What is true is middle New Zealanders, like a lot of New Zealanders, aren’t feeling the wealth effect that they felt in the early parts of [the 2000s] because house prices haven’t been rising very much," he said."

Uh no....Ive never considered my home made me rich in terms of financial wealth.....maybe for a sad case like JK, yes.....on the bright side I guess Im not feeling less happy or even depressed that my asset isnt making me money just by owning it as opposed to actually generating a good.

 

regards

http://www.oftwominds.com/blog.html

 

Rising productivity is the foundation of increased wealth. As expenses have risen faster than productivity, the U.S. has filled the gap with borrowed money. That is increasingly unsustainable.

Kate, don't think the Greens wil be too sympathetic to a $100,000 income, they'd think that was akin to Bill Gates and tax the hell out of it, no worries. Would be a wasted vote, but agree it's getting  difficult to work out who to vote for.Remember what Winston Churchill said, 'Democracy is the worst form of government he knew, ,except for all alternatives'

On the contrary, I reckon (if calling the shots) they'd be more likely to place less emphasis on taxing labour and profit - and a much greater emphasis on taxing consumption, capital, financial transactions and polluter/resource users.