Do the wealthiest New Zealanders pay their fair share of tax?

Personal Finance / analysis

Report commissioned by tax consultancy OliverShaw argues average effective tax rates increase as the net real economic incomes of households rise

18th Apr 23, 5:00am by Guest

The following was issued on behalf of tax consultancy OliverShaw, whose Principal, Robin Oliver, is former Deputy Commissioner of Policy at Inland Revenue.

New research shows New Zealand’s wealthiest pay their fair share of tax

New independent research shows that high-wealth individuals pay more tax on average and represent a higher proportion of the total tax take than may previously have been thought.

It has been strongly suggested that, in practice, New Zealand’s income tax regime is not as fair as statutory tax rates would suggest. However no reliable data exists to support this claim. Leading tax consultancy OliverShaw commissioned Australasian consulting firm, Sapere Research Group, to prepare a report on the effective rates of tax that New Zealand’s tax and benefit systems impose on the incomes of its residents. The 263-page report adopted the standard modelling methodologies used in the OECD Taxing Wages study to review the income and tax of illustrative households to calculate the average effective tax rates paid by low, medium and high-income earners in New Zealand.

“One of the questions asked is whether the very wealthy pay taxes at the same or higher rate than middle income earners,” says OliverShaw Principal, Robin Oliver. “This research shows clearly that, whether you consider taxable income or other measures, such as economic income, the answer is: ‘Yes, they do.’ The key conclusion of the Report is: “Average effective tax rates increase as the net real economic incomes of households increase.”

“However, when it comes to considering whom to tax, on what basis and at what rate, trade-offs have to be made between taxing all income at the same rate and other policy concerns such as providing assistance to lower income families and encouraging investment. Tax rules are the product of policy conclusions as to what is reasonable, workable, efficient and equitable.”

In order to standardise the data the Sapere Report, following the OECD model, takes into account Working for Families and other benefits, as you cannot sensibly consider average effective tax rates (AETR) without doing so.

“Apparent inequities with the existing tax and benefit system are easy to identify,” says Oliver.

“These occur when lower income earners pay tax at a higher effective marginal rate than higher income earners – for example when people on benefits have their benefits drastically abated once they start working and earning even a modest wage. They also occur when people who earn the same income are taxed at vastly different effective rates, as happens with the widely supported Working for Families tax credit. Inequities are usually the result of deliberate and considered government policy: Working for Families creates inequities because governments have decided to give more assistance to people with families to support, who need it most.

“The problem begins with a lack of agreement on what constitutes income,” says Oliver.

“Is it taxable income as defined in the Income Tax Act? Does it include KiwiSaver earnings? Does it include monetary benefits received from the government? Does it include services that the government funds – healthcare and education – which are delivered to citizens? Does it include the appreciation in value of the family home – value that will be realised only on the sale of that home? Does it include the part of interest that merely compensates the loss of value resulting from inflation? Does it include investment in education that is expected to lead to higher future income?

“The problem is compounded because those who earn most also have most discretion about how they earn. Wealthier individuals generally derive a greater share of their income from sources other than wages and are encouraged to take advantage of the different tax rates payable on income from companies, trusts, property and PIEs. Thus, increasing the top marginal income tax rate will likely have only a modest effect on their effective tax rate. This apparent anomaly is unsurprising. In taking advantage of different tax rates high, income earners are behaving in ways that economists advising government predicted, in the process meeting those policy objectives which governments favour highly – saving for retirement, protecting assets, investing in businesses, creating jobs, developing commercial and residential property.

“The Sapere report provides a model for considering economic income which addresses some of the challenges faced in collecting hard, reliable data and considering the equity and efficiency implications of potential changes in the way income is taxed. The report makes clear that, to achieve equity, consideration of the redistributive function of the income tax system must take into account both taxation and the redistribution of funds by way of concessions, benefits and government-funded services.”

Key findings

The rich pay most of the tax collected in New Zealand and the richer a person is, the more tax they are likely to pay.

Effective tax rates are generally less than the statutory rates.

Average effective tax rates increase as the net real economic incomes of households increase.

As a result of deliberate government policies, households of single employees renting face some of the highest average effective tax rates, and some of the highest marginal tax rates apply to some of the lowest income earners.

Notes on the Sapere Report

Who pays what proportion of taxes

The Sapere study addresses the question of who pays what proportion of tax and where does the burden fall. The IRD’s own data, from 2021 shows that indeed, the rich pay most of the tax collected in New Zealand and the richer a person is, the more tax they are likely to pay.

• Most (68.5%) of the income tax revenue raised by government from individuals in the 2021 income year was paid by the 21.2% of taxpayers in the two top income tax brackets (i.e. those with taxable incomes between $70,001 and $180,000, and those with taxable incomes greater than $180,000 per annum). They collectively paid $31,931 million of tax on their assessed taxable incomes of $122,244 million.

• Individuals earning taxable income from $70,001 to $180,000 each year (18.8% of taxpayers) collectively earned $81,889 million (37.7%) of taxable income and paid $19,562 million (42%) of tax.

• Individuals earning taxable income in excess of $180,000 each year (2.4% of taxpayers) collectively earned $40,355 million (18.6%) of taxable income and paid $12,369 million (26.6%) of tax.

• Individuals earning taxable income from $180,001 to $300,000 each year (1.6% of taxpayers) collectively earned $15,042 million (6.9%) of taxable income and paid $4,350 million (9.3%) of tax.

• Effective tax rates (the percentage of tax paid when income is defined more widely than in the Income Tax Act) are generally less than the statutory rates for most people. The divergence is the result of the way that marginal tax is charged coupled with deliberate policy decisions by successive governments.

The full Sapere report is here.

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

142 Comments

by Cheetahlegs66 | 18th Apr 23, 10:03am 1681769029

I don’t mind paying tax. I’m just pissed at what I get for it. Health system is screwed so obliged to have private medical insurance, national superannuation is strained so I have to budget and save accordingly despite paying tax at the top rate. Crimes through the roof so now thinking of getting out of Auckland. And don’t remind me about ‘consultants’ and all the other wastage. NZ is becoming a CF

by Advisor | 18th Apr 23, 11:22am 1681773775

Public services in their current form are the worst kind of shrinkflation in our economy: huge increases in price (taxes) across the board and worse outcomes for taxpayers than in my living memory. Looking at recent stats, I believe things are about to get much worse.

INZ has issued 5x more work visas to cooks and waiters since July 2022 than to registered nurses. Maybe slow down on the non-critical workers until our system can catch up. FYI everyone with more than 2 year work visa is covered by our public health system.

by False economies | 18th Apr 23, 11:11am 1681773100

Where did you get the 18k figure from?

Migration is about +30k isnt it?

https://www.stats.govt.nz/topics/migration

by Advisor | 18th Apr 23, 11:25am 1681773919

Net movement in February 2023: -18k (Kiwis) + 70k (non-Kiwis) = 52k

I believe you are looking at the Jan 2023 stats.

by False economies | 18th Apr 23, 11:40am 1681774800

Ok thanks, can you give a link to that data?

The only place I've seen it divided in to kiwis/non kiwis is on some clunky govt site (infoshare)

Edit: found it in the graphic under the graph (not sure how to access the data easily though)

https://www.stats.govt.nz/information-releases/international-migration-february-2023

by profile | 18th Apr 23, 7:26pm 1681802792

So the NZ Baby:Immigrant ratio is running at 1:1. Why do we want to change our country so?

*no problem with immigrants but the immigration rate is country changing and has never been put to the demos.

by Jesse1 | 19th Apr 23, 12:54pm 1681865694

It's not that we want to change our country - it's that the majority want house prices to remain unaffordable for wealth generation and this is more important than having other changes happen, and more important than making NZ liveable for people that were born here.

by chebbo | 18th Apr 23, 10:50am 1681771859

Agreed, cheetah. The conventional wisdom is that taxes are necessary to pay for roads, schools, hospitals, and so on. But look at the state of those things in this country. And no, I don't accept that the tax base here is too low. It's just that we give it all away to the people who least deserve it (and no, I don't mean beneficiaries).

by Advisor | 18th Apr 23, 12:53pm 1681779211

I would also argue that the economy-wide skill base in NZ is generally low, which means the select few earning more at higher skill levels are penalised harder with income tax.

Thanks to easy gains from high working-age migration and bracket creep, governments in NZ for the last decade or so have had zero incentive to raise the skill level across the economy to increase Crown revenue.

FYI tax on individual income grew 8.9% for the year ended March 2022. Why bother upgrading infrastructure or upskilling workforce when doing nothing also allows your political slush fund to grow heaps?

Wage and salary distributions for individuals (ird.govt.nz)

by murray86 | 18th Apr 23, 2:19pm 1681784368

It might be 'conventional wisdom' Chebbo, but that doesn't make it correct. I suggest that the Government doesn't have to tax to pay for infrastructure that provides an economic return. high quality roads, schools, and even health care can easily be funded. The Government is the legal and sovereign owner of the NZ $, so they just have to create the funds. This would be easily justifiable s there is an easily identifiable economic benefit/return to the country for that expenditure. It is not a debt against future generations as some would have you believe. Taxation can and should be applied for other purposes.

by Hamish | 18th Apr 23, 2:40pm 1681785635

So who would do the work on the ground for this government created funds ($'s), and where would they spend it?

Would you be able to swap these funds locally or overseas for anything that offers good value against how many hours you put into earning these government issued funds?

by murray86 | 19th Apr 23, 7:07am 1681844824

Wages paid to workers primarily, and spend it just as you do supporting yourself and family. One of the bits of this process that i believe must be carefully managed is that only NZ companies get the contracts, so that the money goes to build capacity in NZ and not to fill foreign company profits. It would also be a way to keep an eye on the cost structure.

"Would you be able to swap these funds locally or overseas for anything that offers good value against how many hours you put into earning these government issued funds?" What are you on about? The government created funds during COVID as a part of their QE, with no purpose. what happened to those? Think it through.

by DrGrump | 18th Apr 23, 12:42pm 1681778544

I have recently moved to Aus. It is far from perfect, but I don’t have that feeling that everything is crumbling around me which is nice.

by 21Trillion | 18th Apr 23, 4:11pm 1681791117

What are the things you like/dislike over there?

by DrGrump | 18th Apr 23, 4:37pm 1681792633

I am now in Sydney.

positives:

1. First rate healthcare (I am a Dr and can verify it is excellent and superior to NZ)

2. Feel safer day to day (of course there are issues like everywhere, but not looking over my shoulder like I was often doing in central AKL for the last 12 months)

3. Salaries are higher (by 50%) for me and cost of living is similar to AKL. Although rents are now rising in Sydney and real estate in AKL is deflating.

4. The transport infrastructure is superior and is functioning well. Traffic is much better, despite the city being much larger than Auckland population wise.

5. Easy to integrate given English speaking and similar laws etc.

negatives:

1. Things are starting to change here re cost of living. There is persistent inflation and reserve bank is behind the curve. Cost of living is going up quite a lot. There is the same house price issues in the central cities, worse than NZ IMO.

2. Distance from family. Can’t jump in the car and see them.

3. In the cities there is very much a speculative frenzy around house prices and the associated flashiness that one expects with it.

4. Other than superior healthcare, stronger rule of law, and slightly better wages/cost of living its not much different to NZ.

by HW2 | 18th Apr 23, 10:21am 1681770111

"OliverShaw argues average effective tax rates increase as the net real economic incomes of households rise"

Noshit. People have heard of bracket creep and dont think its someone you meet in the park

by kiwikidsnz | 18th Apr 23, 10:24am 1681770271

Why should those who can pay more do so ? There’s nothing fair about that: the reasons for progressive income tax regimes ultimately derive from basic socialist envy.

A proportional tax regime is fair (all income levels pay the same%), perhaps with a low income tax free threshold to acknowledge the net taxpayers charity.

by Nzdan | 18th Apr 23, 10:59am 1681772351

I have no issue paying more tax than someone on half my salary, even on a percent basis. I work hard and have been successful, and I'm rewarded financially. But that doesn't mean I work any harder than people who earn less than I do.

Entitlement mentality comes to mind. Maybe people who are successful should take a step back and be grateful that luck and opportunity combined with their hard work to create a great outcome, instead of grumbling about a few extra percent of tax dollars. Many people work extremely hard and don't have the same luck.

by GV 27 | 18th Apr 23, 11:20am 1681773658

That depends. We used to justify that by saying the things you got out of it (infrastructure, healthcare when you were sick and education for kids) were the price of keeping a cohesive society from falling apart at the seams. Better outcomes means less poverty and less crime. But now we have increasingly shit services and any attempt to challenge the worsening access to services for almost everyone is met with gaslighting from extensive comms teams or treated as a new front on a political culture war. I don't really care that National sucks because that doesn't change the problems we have now that the current government either can't or won't deal with. Some people are happy provided someone else is losing, but it's a crappy way to run a country. We're finding that out the hard way.

by Nzdan | 18th Apr 23, 11:59am 1681775943

Well yeah, but the solution to wasteful spend is not demand tax cuts. It's to actually have a political party address the wasteful spend/value for money.

Anyway, it's a separate discussion to our new hobby that is pointing the finger at people who receive tax credits rather than asking the question of why they need them, and who really benefits from them. You might find those that scream the most about it are probably the biggest beneficiaries.

by kiwikidsnz | 18th Apr 23, 5:16pm 1681794994

"..but the solution to wasteful spend is not demand tax cuts." Why not ? Scarcer resources will focus undisciplined minds on musts vs nice to haves.

In my previous multinational career we always had to identify and deliver supply chain cost savings => to the annual business inflation costs. That's what happens when you have to survive in a real competitive market - not the public sector.

by Nzdan | 19th Apr 23, 7:52am 1681847547

I too worked a number of years for a multinational corporate heavily supply chain oriented. The accountants took over running the company, the need to cut down on inventory "just in time supply". This resulted in scarcer resources as customers went elsewhere.

But yes, there's a difference between private sales and Government. Waka Kotahi did not risk losing Transmission Gully to the Australian Department of Roading on price. But do you think TG would have gone ahead if the transport budget were halved?

In business, "scarcer resources" won't stop our ASMs from buying $100 steak dinners on their company card on trips. Senior management needs to instruct that to cease, much like the Government needs to instruct the departments that manage their budgets to cease frivolous spend. After that, it's defined as serious misconduct.

by speckles | 18th Apr 23, 6:15pm 1681798504

You do have to consider though many people earn more by simply trading their time and work a great deal of hours. Trading one’s life, if you choose, should provide some benefit which certainly is not the case or considered in a gross taxable income calculation.

by Brendon | 18th Apr 23, 10:28am 1681770511

I read this article and could not understand if the author considered a household or individual to be rich or wealthy (terms they seemed to use interchangeably) if they were income or asset rich.

The obvious flaw in NZs tax system is the absence of tax on asset wealth especially urban land wealth. Many, many economists over a very long period (centuries) consider land value tax a no-brainer of an idea.

by HGWR | 18th Apr 23, 11:05am 1681772704

It's not just land though, rentierism (i.e. taking more than you make) is rife throughout the economy, be it via finance, speculation, oligopoly, regulatory advantage or good old-fashioned cronyism. Land tax is a very good idea but only addresses one type of rentierism.

For me the report here is based on a false premise, that all earnings are equally earnt. This just isn't true. The average middle earner (say, $70k) is usually earning all of that value directly through the contribution of their labour and innovation. In fact, they are often paid less than they create! By contrast those earning $200k+ are almost always benefiting from some kind of rentierism. It's very difficult to earn that much on your own efforts. How many can genuinely say their labour is worth more than $100/hour? Very few, I suggest - perhaps some top doctors and engineers.

Tax rates of 39% or even 50% are far too low for income that is largely built on the back of other people's work. Back when we had a moral compass we taxed those earnings at 66%, rising to 90% in wartime. So far as I can tell the sky didn't fall in.

These days raising the top rate to 39% during a pandemic is controversial. How timid we have become.

by GV 27 | 18th Apr 23, 11:23am 1681773800

Apparently it is controversial that we might adjust tax brackets more than a decade to account for government-mandated inflation too.

That's not a rash political debate, it should be considered basic tax administration. Not doing it should be considered a failure of the state to monitor and maintain agency issues, but they've politicised it to the extent that it's some huge philosophical watershed. It shouldn't be.

by Brendon | 18th Apr 23, 12:27pm 1681777641

I completely agree NZ has awful problems with rentierisms and we should attack them in all their forms because they are inefficient and morally wrong (it is undeserved income).

by wingman | 19th Apr 23, 7:02pm 1681887730

Who will supply rental property if private landlords don't?

by E46 | 19th Apr 23, 8:16pm 1681892207

Do the houses simply disappear if private landlords decide not to provide rental properties? Will people be forced to live on the streets? Of course not. There are various alternatives, such as social housing provided by the government, housing associations and local authorities, build-to-rent developers, and institutional investors.

I agree that the issue is not about eliminating private landlords entirely but rather ensuring they are held accountable and properly taxed. The housing crisis has been fueled by speculation and investors buying properties solely for the purpose of making tax free profits, driving up prices and making it harder for people to find affordable housing. Responsible landlords who provide affordable housing should not be penalized, but measures should be taken to discourage speculative investment in the housing market.

by wingman | 21st Apr 23, 1:36pm 1682040999

Housing is just like any other commodity. Landlords have taken a beating under this government, there's 40,000 empty houses in Auckland because landlords can' be bothered with the hassle.

by DaveB1978 | 18th Apr 23, 2:44pm 1681785859

If income taxes were 90% people just wouldn’t bother. People wouldn’t take risks as there was no reward. Innovation would drastically decline. I don’t understand why you want to punish people for creating jobs

by E46 | 18th Apr 23, 3:25pm 1681788319

I have no idea why people are so obsessed with income. If you earn an income generally with very few exceptions you are working pretty hard for it.

And I mean working. Not worked, working. Actively contributing. Modern economies cannot sustain themselves entirely upon "worked" which is what this whole speculation mess seems to be built off. That people would like to put a bit of work in and then reap the rewards without having to contribute much in the way of effort themselves. This does not work on a wider societal level and the tax system shouldn't be rewarding it.

What should be criticized and taxed more equitably is the truly "wealthy". those who don't actively work and contribute but instead depend on rent-seeking behavior to fund their lifestyles. The tax system barely touches these people in comparison to income earners and if we want our current setup (Health, superannuation, etc) to be sustainable this will have to change, otherwise, the system will continue to degrade even further.

by GV 27 | 18th Apr 23, 11:58am 1681775918

The problem with taxing urban land is it locks in a government incentive to keep it stupidly high in value. And in the event it does drop, you would get higher income taxes again to make up for it. It's literally lose-lose, and the current state of income tax in this country suggests that the state would take whatever path would boost Crown revenues.

Unfortunately NZ governments have abused that right and I don't think they have shown they can be trusted to manage tax outcomes to the extent that they should be allowed to design a new tax system from the ground-up. Maybe once they've shown they can manage something as basic as indexing for inflation, then we can talk about it.

by E46 | 18th Apr 23, 4:08pm 1681790882

I understand your point, but I think it could be worked around and isn't the major hurdle that you are making it out to be.

One way to structure an LVT that might alleviate this issue could be to calculate a set amount of revenue needed and then distribute that amount across all taxable land based on its value. This would ensure that the tax revenue is collected in a fair and equitable manner. Similar to how rates are collected for councils currently.

And I think you are ignoring the reality that if we had an LVT in place it could create incentives for landowners to increase the utilization of their land and discourage them from blocking developments, as they would now bear some of the externalities of raising land prices. This would also encourage politicians to create better housing policies that are more equitable, as rising land values would be more noticeable to a larger proportion of the population than it is currently.

by GV 27 | 19th Apr 23, 7:32am 1681846333

I would have to dispute the idea that rates are collected fairly - I used to live in Massey and according to the council, I had the same level of local amenity as the North Shore, despite there being no beaches, bus lanes, bus way and limited sporting facilities.

Even though I think the TOP version of the land tax is nonsense and they know it, I still can't think of a broader way to raise revenue that would mean you could lower taxes, with the exception of stamp duties and cranking GST through the roof.

by kiwikidsnz | 19th Apr 23, 9:30am 1681853456

Stamp duties & other clipping the ticket tax rorts are economically inefficient and a significant impact on labour flexibility. Thats why we dumped them over 30 years ago with the introduction of GST.

by E46 | 19th Apr 23, 10:33am 1681857237

The Goods and Services Tax (GST) is a regressive tax because it tends to impact low-income earners more than those with higher incomes. This is because lower earners have to spend a larger portion of their income on necessities that are subject to the tax. In contrast, higher earners have a greater capacity to save and invest, which means they are less affected by the tax.

Additionally, the GST can have a negative effect on economic activity due to its deadweight loss, when the tax reduces consumer spending and investment, leading to a decrease in overall economic output.

Land Value Tax (LVT) is a potential alternative that would be more efficient and equitable. Rather than taxing goods and services, an LVT taxes the value of land, which is considered to be a more stable and predictable source of revenue. This type of tax could encourage better use of land and reduce the burden on income earners who are the ones who actually keep society ticking along.

by K.W. | 18th Apr 23, 10:41am 1681771291

Half the households in this country dont pay any net tax. If it werent for the "wealthy" this country would have no money at all. Unfortunately, the Govt seems intent on driving skilled and wealthy people and businesses offshore, while decimating our export earning industries, so "Aotearoa" will soon be just another impoverished Pacific Island nation with third world standards in health, infrastructure and education.

by HW2 | 18th Apr 23, 10:46am 1681771564

They'll never stop doing politics the way they are. Not even the Gnats can do much because if they try there will be an uprising from whichever group is affected.

We will keep limping along and living off what the old-timers managed to put in place.

by E46 | 18th Apr 23, 11:43am 1681775002

“A society grows great when old men plant trees in whose shade they shall never sit.”

This mindset seems to have been lost somewhere along the line.

by Nzdan | 18th Apr 23, 11:03am 1681772591

Maybe we could legislate a drop in weekly rents by the same amount as a low income earner's tax credits.

The other half of households in this country do pay tax, but that tax is given back to them so they can afford to pay their "wealthy tax paying" landlords.

by HGWR | 18th Apr 23, 11:09am 1681772966

What you're missing is that the earnings of the wealthy are themselves a tax on the bottom 50%. It's hard to make big money without relying on some sort of framework to extract value from other people's work. This used to be well understood and taxes set appropriately, with the loot of high "earners" taken back for the good of society, and ordinary workers - who almost never take home more than they create - largely left alone.

by False economies | 18th Apr 23, 11:15am 1681773358

Your comment reminded me of this book

https://www.goodreads.com/book/show/921359.The_Ragged_Trousered_Philanthropists

by kiwikidsnz | 18th Apr 23, 1:08pm 1681780126

Your "reckons" remind me of the envious socialists who incessantly complain about other doing better than themselves because they can't be bothered getting off their couch.

In NZ 12 per cent of individuals pay just under half of all personal taxation, and the top 3 per cent account for almost a quarter of all personal tax paid. Whats fair about that ?

by HGWR | 18th Apr 23, 1:56pm 1681782986

I'm doing perfectly well thanks. High earnings have very little to do with "getting off the couch" and a lot more to do with the regulatory frameworks, market distortions and cronyism that enable the professional and managerial class to steal most of the value created by blue collar workers. Societies either realise this and redress the balance, or hurtle onwards to their own demise.

by kiwikidsnz | 18th Apr 23, 2:42pm 1681785756

I spent a decade working as a "blue collar" in manufacturing industries and over 3 decades managing & directing them: I "reckon" that you're wrong.

by DrGrump | 18th Apr 23, 1:25pm 1681781148

History shows us this Marxist ideology is detrimental to societies and economies. Sure, the tax system could be structured better, but the ideology is dangerous. If there weren’t any businesses then we would be living in the Stone Age.

by HGWR | 18th Apr 23, 2:22pm 1681784578

It's neither Marxist nor dangerous, just good sensible capitalism. Aggressive taxation of high incomes was a feature of the post-war period across the West, which was probably the greatest generation of economic and societal growth ever seen.

by DrGrump | 18th Apr 23, 2:58pm 1681786716

“earnings of the wealthy are themselves a tax on the bottom 50%“ - is a Marxist perspective of capitalism. We do not live in the post WW2 era. We live in a globalised world with different demographics and without capital controls. Marxist attitudes are dangerous because they seek to blame one class against another and ultimately lead to social division.

by HGWR | 19th Apr 23, 11:01am 1681858918

So we should just pretend all is fine and dandy to avoid social division - and if we don't, it's the people who pointed out the injustice who are to blame?

My perspective is not Marxist. I don't mind seeing success for genuine capitalists, I just believe they are vastly outnumbered by rentiers in today's society. You might say that higher taxes at the top end discourage productive capitalists, but can you really argue that productive enterprise has been increased as top tax rates have lowered over the last 50 years? To the contrary, it seems to me that productive enterprise has been slowly dying and rentier behaviours multiplying.

One mechanism that doesn't get discussed much but might explain the counterintuitive outcomes of the last 50 years is how low income tax changes the equation for someone worried about long term prosperity. When you allow people to keep high earnings at low tax rates, it incentivises withdrawing value from a business as income and passively investing that income, even though that may reduce future earnings via the original business. By contrast when you tax high earnings at a prohibitive level, the best strategy becomes to keep value in the original business and grow it sustainably to guarantee a lifelong income from that business. Because the "get out quick" model is incentivised, people have actually moved towards enterprises that best facilitate that short term strategy, which tend to be less capital-intensive, less productive, less sustainable, more extractive.

by CrispyKahawai | 18th Apr 23, 11:19am 1681773542

Whinge f***ing whinge. I have absolutely no intention of leaving this country because of how much I earn (top 0.1% probably). What an utter crybaby response. If anything I am grateful for what I have when so many others are going without.

by GV 27 | 18th Apr 23, 11:26am 1681774008

I mean... at the 0.1% mark, you probably can afford to not care about whether you're getting value from the tax you pay. Frankly, I wish we were all so lucky.

But for those raising families, sending them to schools and who need access to medical care for loved ones, it's a huge, huge issue. Considering the total Pharmac budget comes in at two thirds of bugger all, many are only a medical event away from something unfunded and literally being better off elsewhere, when we are more than capable of offering better access to medicines if we thought it was important enough to actually do.

NZ is a great place if you are fit, well, healthy and earn good money. If you or a family member fall down on any one of those four things, it's miserable.

by K.W. | 18th Apr 23, 11:38am 1681774726

Good luck to you then. Personally I'm already shopping for houses in Australia, in preparation for a bad election outcome. Even if NACT get in, there is no guarantee that they can undo the damage wrought by Ardern and Co. There is no way I'm staying in a country with a third world heath system where if you get cancer you will be dead before you even get to see a specialist to determine a treatment plan.

by philthy | 18th Apr 23, 12:24pm 1681777496

I'm absolutely amazed we still have 35% of people that want more of this from Labour, and about 10% that want more of it from the Greens, where are they getting their information about what is going on in this country, it's being destroyed by this government.

by K.W. | 18th Apr 23, 12:42pm 1681778555

From the 50% of people who rely on Govt welfare handouts (and who don't pay net tax) because they think the answer to their problems is for the Govt to give them more money. So they vote for the party that promises more handouts.

by HSL | 18th Apr 23, 12:42pm 1681778541

Probably watch TVNZ, read stuff and the herald. Sometimes I think I’m living in a parallel universe especially confronted with people who think everything is rosy in NZ

by K.W. | 18th Apr 23, 12:44pm 1681778663

I drove past a local dairy this morning, half a dozen giant steel bollards have been installed on the footpath outside the shop, and full metal grilles installed on all the windows and doors. Welcome to Detroit.

by philthy | 18th Apr 23, 10:44pm 1681814683

Yeah Labour's "NZ Journalism Fund" has ensured for them a dominant left wing media, all on the taxpayers 55 million coin.

To be eligible for funding, you need to "actively promote Te Tiriti", so if your media organization even raised any concerns about some policy including this, of which this government is writing it into law at every opportunity, then you would be ineligible for some of the 55 million.

Pretty sure people in other countries would be using words like corruption, but you don't get much air time if you are complaining about it in NZ.

by E46 | 18th Apr 23, 12:56pm 1681779366

I said this the other day, but I would struggle to pin the blame solely on either of the parties.

Even with how bad the current government has been, the place we are now is the result of decades of mismanagement rather than the direct result of recent government decisions. Short-term thinking has dominated discourse for the last couple of decades and we are now reaping what we have sown there in regard to the results.

Can you give me a single example of a developed country today that is better off than it was 5 years ago? Our health system hasn't buckled because of this government but because of mismanagement for the last 20 years or so. All of our problems have been building up for 10+ years now, it's just now that we are actually starting to really feel the negative effects of these choices.

Neither of the parties is currently offering anything substantive that will get us out of this mess and stop it from happening again. We need proper leadership and our political class seems to be failing us on both sides of the aisle for the time being.

That's why people aren't flocking to National because even with how awful Labour have been, National isn't coming up with any credible alternative that's going to be substantially different or better, and some people are even perceiving that they might be worse off under National (whether that's true or not).

Hopefully, some better policy comes out closer to the election but for now its looking pretty bleak no matter what happens.

by QuickFox | 18th Apr 23, 5:52pm 1681797123

Brilliant, did anyone see The Daily Blog post yesterday, I know Martyn Bradbarrie is not everyone's most liked commentator but he had a few good words to say about some up and coming politicians. Which is unusual because he is so far left.

by Chaosinflesh | 18th Apr 23, 12:36pm 1681778214

Likewise. We are preparing to go to the UK at the end of my wife's current contract, but a prior move to Aussie is looking more and more attractive by the day. The cost of the move pays for itself within three months simply through reduced rental costs, nevermind the opportunity to buy!

by HSL | 18th Apr 23, 12:37pm 1681778272

Same, NZ is ok if you are extremely well off, can afford private medical, private schools etc etc. it’s actually a pretty shit place if you are average income earner. All the people I know who support Labour are in the financial position to not give a toss. And as for the NZ is a fantastic place, I’ve travelled allot, and have seen many many places that I have loved….for the most part NZ is pretty average.

by K.W. | 18th Apr 23, 1:02pm 1681779749

Even if you could afford private health insurance, NZ does not have a fully functional separate private healthcare system like other countries do. It is designed mainly for low risk or elective surgeries. And for the most part you see the same specialists as those in the public system. Take maternity services for instances - there is nowhere to get an elective c-section in the private system, you have to go public for the surgery (but you can transfer to a private hospital for post surgical recovery) and since the public hospital here is not doing any non-emergent or urgent surgeries due to lack of staff, there is no guarantee that you will even be able to have a c-section at all regardless of your level of health insurance. And even then, the private hospital here is talking about closing its maternity services down completely.

by DrGrump | 18th Apr 23, 1:58pm 1681783099

Agree. Private medical care in NZ is underdeveloped. It cannot deal with acute care. It is already struggling with excess load as public system deteriorates. Private healthcare is cheaper and better in Australia.

by QuickFox | 18th Apr 23, 5:48pm 1681796891

Couldn't agree more.

by E46 | 18th Apr 23, 11:34am 1681774457

In my opinion, those who rely on earning an income to make a living cannot be considered wealthy. The real burden lies with the individuals who possess significant assets and yet pay little to no taxes on them, while profiting from rent extraction and using equity to load themselves up with even more assets.

We need to shift the burden away from income taxes and towards a more equitable sharing of the tax load from a more diverse range of sources.

by hootenany | 18th Apr 23, 11:43am 1681775011

Nonsense, half the households are not paid enough to live off without tax subsidizing them, in effect allowing the employer be indirectly subsidized by the benefits there employees get. If you are working 40 hours a week then you are contributing to society. If you sit on your ass collecting rent you are not, even if you pay net tax, since if you died tomorrow no production capacity would be lost.

Put it this way if the government pays for your doctor, the money goes to the doctor not you, if it pays you accommodation subsidy then it goes to your landlord not you. These are essentials. When the government starts handing out benefits for trips to Hawaii for poor people then we can talk.

by philthy | 18th Apr 23, 10:47pm 1681814873

Why should the taxpayer subsidize solo mums that have their entire 6 or 7 kid families (or even more) on benefits, with no intention of ever getting a job, or ever paying rent for themselves, they only want to live in free accommodation state houses or hotels.

This is by far the worst government NZ has ever, doubled net government debt in a mere 6 years, 60 billion to 130 billion, what a terrible performance.

by K.W. | 18th Apr 23, 1:00pm 1681779619

The Labour Govt actually removed the requirement of someone on the Sole Parents Benefit to even look for work (under National they had to look for a job once their child turned one), thus guaranteeing it as a lifestyle of choice for people who cant be bothered working. Which is why the numbers of people on the SPB have gone up 30% since Labour took office. Now they are talking about giving the child support payments to the parent in addition to the benefit, so you can expect it to become an even more popular choice.

by the Joneses | 18th Apr 23, 1:11pm 1681780317

Fair enough, what is your proposed alternative then?

Take their kids off them, pay someone else to look after their kids, and send the mum to work?

Sterilisation to get the benefit?

Honest question.

by GV 27 | 18th Apr 23, 1:38pm 1681781882

Probably making it stack up better to get a job, rather than punishing parents who earn more with aggressive abatement as well as having to cover daycare cost and the cost of getting to/from work. The subsidy for 20 hours a week free ECE only kicks in when a kid turns 3 and you need two working parents to even make rent in some parts of NZ. So you can incur all of this lost time and extra expense to end up not really any better off than you did before, or you can just... not do that.

I don't agree with it as a lifestyle choice but the stupid thing is it is a rational, financial one.

by philthy | 18th Apr 23, 11:10pm 1681816242

@GV 27, that is part of the problem for a lot of Mums that genuinely want to work, it doesn't stack up to work, with daycare costs etc.

But I suspect that doesn't really come into it for these solo mum, serial breeders that have 6 plus kids all while on benefits and in state houses or hotels, the idea of working never even remotely came into it for them.

by kiwikidsnz | 18th Apr 23, 1:55pm 1681782931

Offer $1000 + free IUD/Vasectomy to anyone receiving a benefit.

Honest answer: when you're in a deep hole, stop digging.

by Cheetahlegs66 | 18th Apr 23, 6:25pm 1681799102

That’s my idea but I’m more generous. $1000/yr for Mums on benefits for not getting pregnant, 18-35 yrs. It’s the only way to reduce kids being born into intergenerational welfare.

alas I can’t advocate my eugenics policies as I’d get a lifetime ban but FFS am I the only one sick of hearing about family X getting a new state house with 7 kids and you think ‘shit if it was tough with 3 why did you pop another 4 out?’ They breed like rats

by philthy | 18th Apr 23, 10:54pm 1681815277

You are definitely not the only one sick of hearing about it.

Labour and the Greens definitely encourage it though (even more so with TPM I'd imagine).

I like the $1000/yr for Mums on benefits for not getting pregnant, 18-35 yrs, could extent that out to 40 though probably, because you could definitely be mistaken for thinking a heck of a lot of these solo mums are trying to get pregnant, no one has that many accidents.

by philthy | 18th Apr 23, 10:57pm 1681815442

"$1000 + free IUD/Vasectomy to anyone receiving a benefit" 100% why not, this problem isn't going away, to the casual observer it seems to be getting a heck of a lot worse, kids having kids, all with hands out, give me a warm house, give some food, give my kids free lunches, give me....

by Rumpole | 18th Apr 23, 3:54pm 1681790045

According to NZ Debt clock current debt is $154 Billion and your share $79,281 with debt growth at $70,500 Million a day. NZ debt 1/1/2018 was $53.6 Billion so Grunter and his merry band of evil incompetent liars has almost tripled debt since being appointed by the great charlatan W Peters - this should be screamed from the rooftops so even the 45 % of NZers who vote forf Labour/Greens understand that their future is bleak and Zimbabwean of they re elect them.

by Beanie | 18th Apr 23, 5:37pm 1681796260

You are neglecting to tell us what National was suggesting re appropriate debt levels. They are as bad as each other. Historically National have racked up more debt than Labour.

For a country coming up on 200 years old we should have zero debt by now. Same with councils, and this idea we must borrow even more for water pipes scares me. The future could easily be less prosperous than today, and we would have the debt millstone around our neck.

by philthy | 18th Apr 23, 11:02pm 1681815726

"Historically National have racked up more debt than Labour. " historically National have been in power a heck of lot more times than Labour over the years, but Labour/Greens have pretty well wiped out anything from the past by doubling our government debt in less than six years, over all of the years before that.

You can definitely stop repeating that comment about how frugal you think Labour are because this government has not only blown that out of the water, they've blown it out of the universe.

by Beanie | 19th Apr 23, 3:53pm 1681876415

You will NEVER find me saying Labour have been frugal. They waste money in the true sense of the word. The huge borrowing of this version of Labour was largely for the covid handouts and bribes. National were supportive of them.

John Key flogged off the state assets (less $400m sales commission to his mates) and still managed to rack up debt.

by philthy | 18th Apr 23, 11:06pm 1681815983

@Rumple, yeah we had all this what seemed like endless moaning about debt the last National government added, and it was only about 20 billion I think over 9 years, over a time which included the GFC and a major earthquake.

Yet this ship of fools have doubled our debt in 6 years, and all we get is tumbleweeds, it's unbelievable how complicit our media are in the debacle that is this government.

by Jesse1 | 18th Apr 23, 12:09pm 1681776562

Driving all the wealthy offshore? You mean to all the other countries with capital gains taxes? I don't think so. They get a massive free pass here and are really the countries biggest beneficiaries.

by K.W. | 18th Apr 23, 1:10pm 1681780219

You mean used to. Now we have one of the most punitive capital gains taxes on residential property in the world (Brightline) and a ridiculously high FIF tax on international shares. If you were interested in investing in residential property or international shares (like the average person looking to get ahead), you would be looking to move overseas where you could convert your higher earned income into investment assets. In NZ the Govt is out to prevent you from investing in anything.

There is also Singapore as an option, with it 15% income tax and no capital gains tax, and it welcomes wealthy people.

by GV 27 | 18th Apr 23, 1:41pm 1681782076

The Brightline came about because people took the piss with tax-free gains by financing investment properties that were never going to be viable as investments unless you could offset the borrowing costs against your own income. I'm not sure landlords no longer being able to get away with a third of their financing costs being funded back to them is really justifiable when the same house used in the same way (as a house) by someone who owns it outright gives no deductions at all.

The FIF regime is a dog though, agreed there. As is taxing Kiwisaver earnings, denying us the benefit of accumulated growth over a working career, when it should be taxed upon exit like almost any other super scheme in the world.

by Beanie | 18th Apr 23, 2:39pm 1681785540

Assuming a constant tax rate, delaying taxing until exit makes no difference to the final after tax figure.

On the balance of probabilities I would say your effective tax rate will be higher later on. Only time will tell though.

by E46 | 18th Apr 23, 2:08pm 1681783711

In Singapore, the government owns most of the land and leases it out for development. It’s not exactly land value tax, but they do obtain a fairly significant portion of public revenue from land rents which have clearly worked to encourage other, more productive means of wealth creation.

by interesting1234 | 18th Apr 23, 3:43pm 1681789438

They also live in the middle of the worlds key intersect of international shipping, making the opportunity to capitalise on trade far more accessible to surrounding and far flung countries.

by E46 | 18th Apr 23, 4:24pm 1681791873

Yep, not easy to compare us and them. Although it does show a different way of collecting revenue that could prove to be a lot better than how we currently do it. If people could keep more of their income and get more directly rewarded for their hard work we would all be a lot better off than we are now.

by Rumpole | 18th Apr 23, 3:57pm 1681790246

KW - And which of those countries has improved the living standards of its citizens in the last 5-6 years -no rush you have 50 years to concoct an answer.

by kiwikidsnz | 18th Apr 23, 8:14pm 1681805664

Australia has a full & unconditional exemption of CGT on the family home.

by philthy | 18th Apr 23, 12:21pm 1681777277

Exactly, I'm pretty sure one of this governments goals is to turn NZ into a third world country, because that is what "Aotearoa" is going to be if we keep this government in for any longer.

by nktokyo | 18th Apr 23, 10:58am 1681772281

What would the tax take be from getting a percentage of the large number who don't pay at all to where they contribute, vs increasing what you skim from those who are already net taxpayers?

by Nzdan | 18th Apr 23, 11:05am 1681772735

Everyone who works pays tax. Some people get it back in the form of a tax credit. Not for shits and giggles though, but to help them pay the rent to wealthy "net taxpayers".

Who is the real villain?

by QuickFox | 18th Apr 23, 11:27am 1681774029

I have put some posts up here with some ideas on improving the NZ Tax system. I like the $15,000 tax abatement idea from TOP but believe it should be $20,000 for everyone. I like the idea of a standard 10% tax rate for all but realise this may not be feasible (NZ's total GDP is $400 Billion, and the tax take is approximately $37 billion (about 10%)) , but say up to $100,000 income it may work and increase the tax rate above that to 15 or 20%. Salary and wage earners pay on gross income, many others do not. So if you have a company or act as a sole trader you perhaps must allocate your self a Salary/Wage and pay tax on that to be equivalent (fairier all round), and then pay company tax on the rest? Just throwing ideas out there so we all start thinking about a better and equitable solution.

I also like a land tax, similar to the TOP idea, but this tax should also include farm houses (800 M2 around each, or housing on land that is not taxed, such as religious and Maori land. If people are living on the premises or can live on these premises then they should be taxed.

Thoughts from anyone??

by lastlegs | 18th Apr 23, 11:52am 1681775556

you would be naive to think the wealthy pay their fair share of tax,they certainly dont want you to know how much they do pay.we see what assets our politicians admit to but not what tax they pay.

by DrGrump | 18th Apr 23, 12:07pm 1681776442

The argument that more tax needs to be paid to fix NZs problems just doesn’t stack up and misses the point that the country is deteriorating because of poor management, not because of insufficient tax take. We are now in a vicious cycle which is accelerating. Happy to pay tax and have done for a long time, but I also know when I’m being ripped off.

With regards to the health sector, I believe we have now reached a point of no return for quality of patient care. Immigration will not fix it, and in fact makes it worse as there is a low portion of healthcare workers among immigrants. In my experience, new immigrants are often an huge strain on the public health system. Even more money will not fix it as the main issue is poor management of resources and staff. They are already spending millions on consultants to get recommendations on how to improve doctors happiness. Just spend the money on the frontline and the Drs would be happier.

by philthy | 18th Apr 23, 12:33pm 1681778019

Absolutely, we have a government that is destroying NZ, racked up net government debt from 60 billion to 130 billion, and the country is in a much worse off state than when they started, how the heck anyone at all could be considering voting these idiots back in again, it's unbelievable.

by Nzdan | 18th Apr 23, 1:06pm 1681779981

Who does the Government need to pay this debt back to?

by DrGrump | 18th Apr 23, 3:00pm 1681786842

Well, whoever has purchased the debt…

by Rumpole | 18th Apr 23, 4:01pm 1681790489

Current debt is 153 Billion up from 53 Billion 1/1/2018.

by philthy | 18th Apr 23, 11:13pm 1681816405

Gez, my bad, so they've actually tripled it? I just can't believe how bad this government is, yet all we hear from our media is praise of them.

by E46 | 18th Apr 23, 4:22pm 1681791732

Again, it is dishonest to blame all of our current problems on this current government.

They certainly haven't made the situation any better, in fact, they have probably made it a lot worse. But our problems are not the result of one poor government. Our problems are the results of decades of mismanagement from both Labour and National chasing after a flawed economic model that has continuously rewarded speculation over productivity.

If a country is fragile enough to get ruined by one poor government it's pretty clear that the issues are bigger than they would appear on the surface. And National (or Labour) is not advertising itself as doing anything different from what has been done in the past.

Neither party is offering anything substantial to fix this which is where the real concern is.

So where am I going with this? I don't know. I genuinely am not sure what the best options for us are but all I know is repeating the same stuff that we have been doing for decades isn't going to get us anywhere and will keep us chugging along on the same old path to ruin that we already seem firmly set on. But that is all that is being offered by either of the two parties and their vestigials, the same old stuff.

Hopefully some better policy comes up in the run-up to the election but for now, we are looking pretty screwed either way.

by 21Trillion | 18th Apr 23, 4:29pm 1681792154

$180m on Maori Adaptation to Climate Change in 1 year.

I do agree we can't blame this single term of govt, but the frivolous spending is strong.

by E46 | 18th Apr 23, 6:30pm 1681799457

I'd agree with that, we seem to have a consultant class in Wellington that is taking the absolute piss when it comes to spending and results. But even if we cut that cancer out we will still have a huge amount of issues that neither party seems to have any interest in confronting.

I guess for a lot of people voting for the "least worse" option is good enough but I really think we need more than a "least worse" option this time round and I don't think anyone is really offering it.

by philthy | 18th Apr 23, 12:15pm 1681776943

Yet this incompetent and overtaxing Labour/Greens government has more than doubled net government debt in less than six years, that's quite an achievement.

Going from 60 billion when they came in, to 130 billion now, and we have absolutely nothing to show for it, the country is in a much worse off state than it was 6 years ago.

by Larry76 | 18th Apr 23, 12:30pm 1681777846

Oh there was me thinking that most of that new public debt came from bailing out the private sector and funding a health response during a global pandemic. Not sure where you think it went....

The biggest ongoing drain on the public purse is of course superannuation & healthcare welfare for Boomers.

And list these extra Labour/Green taxes please - I see none. I live in Auckland and don't count the regional fuel tax because our roads already suck and need the extra investment.

by HSL | 18th Apr 23, 12:45pm 1681778733

The private sector was effectively shut done on a whim with little benefit….see Sweden. Following that the focus became co governance, split the heath system in the midst of a pandemic. That’s where the cash has gone.

by GV 27 | 18th Apr 23, 12:51pm 1681779095

The 'extra investment' isn't being spent. The Council has had to slash spending and is on the hook for 50% of the CRL. Let's Get Wellington Moving is being underwritten by the government to the tune of 60% and they have no regional fuel tax. So yea, let's count that one.

As for the 'extra taxes': Are your living costs the same as they were in 2010? Because our tax rates haven't changed since about then.

by Shaft | 18th Apr 23, 12:22pm 1681777349

Over tax the rich and your economy dies!.

They stop investing

They stop employing

They stop buying

They leave the country

The government should incentivise the rich into competing against monopoly duoply markets.

by philthy | 18th Apr 23, 12:34pm 1681778097

The commie Labour/Greens/TPM parties just don't get that though, tax and spend is the only thing they comprehend.

by Larry76 | 18th Apr 23, 12:36pm 1681778168

Ah, a bleeding heart capitalist - the rich apparently do al those things for our greater good. Delusional.

Government could try to incentivize competition in our duopoly markets, but the NZ rich chose to invest in unproductive wooden boxes called property instead.

by GV 27 | 18th Apr 23, 12:52pm 1681779154

There's nothing stopping the Government from doing that anyway. They're just choosing not to.

by Shaft | 18th Apr 23, 1:51pm 1681782686

Larry76 aka Jacinda, Your the delusional one.

Tell me what the poor/ bene's do for the countty? Other than root, rape, rob, and ramraid?

What happened to "be kind" larry? Oh i get it... ve kind to crims.

by Chaosinflesh | 18th Apr 23, 12:31pm 1681777893

I'm a net tax payer, and I'm pissed at the amount of tax I pay - not because of the $$ amount, but because our income is so heavily skewed that we pay $10k more tax than my brother and his wife on the same income.

That's $200 a week we pay more - because I am highly skilled and renumerated commensurately, but my teacher wife is paid barely more than minimum wage after student loan deductions.

Also pissed at teacher's remuneration - Jan gets it, I'm sure, but the bunch of clowns she works with sure as hell don't.

I believe in taxes - fair taxes - not this hodgepodge of loop holes and progressive envy we currently have. And the fairest tax of them all is an FTT - taxed on what you use, no exceptions.

by QuickFox | 18th Apr 23, 12:56pm 1681779365

A great deal of moaning and groaning along with a lot of finger pointing, and stuff all ideas. Put your brains in gear and lets work out some alternatives, as both Labour and National have no ideas. Labour spends up large, and achieve nothing, National save up large, and achieve nothing but a better bank balance, then we get sick of that (don't give Bill English a chance) , so vote Labour back in and they spend up large once again. Been that way for decades.

Put your ideas down.

by Chaosinflesh | 18th Apr 23, 2:11pm 1681783915

Very well. Here is the tax system I have proposed before:

1. Convert all land titles to leasehold - buy them out with a non-transferable credit towards future leashold payments (non-transferable as in between owning entity, not the land itself, so people can still move, and when they die, the credit it removed [not inheritable]). Initial rate for all at 2% of value, with treaty land having a reducing discount, starting at 100% and reducing by 1% per year.

2. Remove all benefits - super, WFFTC, AS, etc.

3. Halve the current minimum wage, and set a UBI at new minimum wage x40 hours for 18+. Child UBI of (10 + 5 * age)% of adult UBI, paid to parents/caregivers/guardians until 18, split according to care hours.

4. Remove all taxes, GST, levies, [edit: rates also], etc. Replace with FTT on receipt of value, including transfer of funds into/out of the country. No trade without a NZ-registered entity to pay the FTT.

5. Set up on call account (savings/withdrawals only - no credit facility) at RBNZ, at OCR, for all citizens.

RBNZ set lease rate on land, UBI rate (minimum wage), FTT and OCR still. - gives much better control over the economy. Remove land speculation, recognise it is a finite resource shared by all. The idea is to increase the velocity of money away from hoarding in assets and moving it through the economy - the faster money moves around the economy, the lower the FTT needs to be.

by GV 27 | 18th Apr 23, 1:49pm 1681782580

Why would you possibly need to convert all land to leasehold? What is that even meant to achieve if you're going to tax it anyway?

Sigh just once I would like to see a credible alternative tax proposal that doesn't go into extreme complexity just for the sheer sake of it.

by Chaosinflesh | 18th Apr 23, 2:10pm 1681783830

So, it's not credible because you don't understand it? /sigh.

The idea is to remove an asset class - in fact, the asset class. It doesn't fix human greed, but it encourages people to use their land effectively. If that effectively is providing shelter for your family, then that's great. If that effectively is producing goods/services/innovation, great. If you're just holding the land hoping it's value will increase, it needs to increase greater than the cost of holding it - and that is now controllable under this system. If doesn't stop rentier behaviour towards most peoples absolute #1 need, but it makes it more controllable without complex legislation.

This sytem is far simpler than what is currently in place. The only complexities (which I've addressed) are the need to a) not steal the land off current owners, and b) recognise we have obligations under the treaty. I allowed 100 years to allow the redress of past wrongs through financial favour, over which time we can hopefully move away from the need for racial favouritism.

by GV 27 | 18th Apr 23, 2:45pm 1681785915

It's not credible because it's ridiculously convoluted and absurd. There are far simpler ways to do whatever it is you think you're trying to do that don't involve a wholesale resetting of the legal framework.

by Chaosinflesh | 18th Apr 23, 2:56pm 1681786616

I disagree, obviously. A wholesale resetting of the legal framework based on who owns the land, written by those who own the land for those who own the land, is exactly what's needed to begin to address our current problems. I'd just like to avoid a bloody revolution in the process.

by HSL | 18th Apr 23, 3:47pm 1681789637

And who is the owner…..the state. Communism!

by E46 | 18th Apr 23, 1:11pm 1681780301

Yep, the US has joint income tax returns for married couples that could certainly help a lot of families out quite a lot.

I still believe the least worse tax is a land value tax as everyone uses land and it doesn't carry any deadweight losses associated with other taxes.

by Nzdan | 18th Apr 23, 1:14pm 1681780460

My wife is an Early Childhood teacher for a private center. They've finally gone through the first stage pay parity, her pay just went up 30%. It was getting to the point where she'd be better off flipping burgers than dealing with infants.

by GV 27 | 18th Apr 23, 1:43pm 1681782189

ECE is criminally neglected, given how we've basically forced every adult in a household to have to go work to cover the basics. Why we still persist with the current 20 hours free from aged 3 model, I have no idea. It needs to be modernised, or at least updated to reflect current economic reality. Yet another thing left on 'seen' as if life is the same as it was 12 years ago.

by DaveB1978 | 18th Apr 23, 3:10pm 1681787426

Income splitting would be a good option. Flatter tax rates are another. It is inconsistent that sometimes the household income is considered and other times it isn’t.

by QuickFox | 18th Apr 23, 4:28pm 1681792090

Thanks people for your input, assessing and will send this info to Raf Manji and his team for input to their policy unit.

I am endeavouring to work with TOP, but they are very focussed on Ilam as they have a very good chance of securing this seat apparently, and then at being an alternative for National, or in future, when they have some reasonable politicians, for Labour, so we can get away from the Greens..

Raf Manji is a very interesting character, I did not realise that he was the co-founder of the Student Army after the CHCH earthquake. He was a CHCH councillor, and stood as an Independent in the 2017 election against Gerry Brownlee and came second with 24% of the vote, as I say well liked in Chch. Not bad for an Independent, with no party support.

by QuickFox | 18th Apr 23, 4:29pm 1681792172

Thanks people for your input, assessing and will send this info to Raf Manji and his team for input to their policy unit.

by David Murray1 | 18th Apr 23, 12:34pm 1681778044

The highest earning 10% of NZers certainly isn't paying their fair share, according to their means to pay.

Meanwhile, ordinary NZers continue to pay more and more tax as inflation has its impact.

by Juzz | 18th Apr 23, 5:32pm 1681795923

Business owners perhaps, but wage and salary earners are paying a lot more tax than you.

by kiwikidsnz | 18th Apr 23, 5:35pm 1681796154

"...according to their means to pay"

Pardon me, your socialist envy is showing

by Noncents | 18th Apr 23, 12:38pm 1681778304

Tax is tough, the point of it is to fund things efficiently that will contribute to the collective benefit of the Nation.

However from my own analysis the average tax consumption of an individual across their life greatly exceeds their tax contribution.

The boomers appear to have unwittingly masked this issue due to the sheer size of the cohort being in peak contribution for the past 40-50 years. But they have now entered peak tax consumption, and we are seeing the actual issue play out everywhere.

I don't have a solution, but in order to find one, we need to fully understand the scope of the problem first. i.e. what is the actual tax cost of an individual? and is this sustainable?

by DrGrump | 18th Apr 23, 1:06pm 1681779984

In many ways the boomer generation is unintentionally looting the country. They benefit from a 40 year asset bull market, with houses being largely tax free. Then sell the assets to the younger generation at astronomical prices with very large mortgages required on the part of the younger generation. So then yo end up with a shrinking productive tax payer base, which has high levels of debt, and is required to financially support the country. Sounds a bit like a pyramid scheme.

by Nzdan | 18th Apr 23, 1:15pm 1681780545

Once they've cashed out of their real estate, they moan about the pitiful interest rates on their term deposits while ignoring those term deposits wouldn't exist if interest rates hadn't been ratcheted down to zero.

by Retail shop | 18th Apr 23, 7:25pm 1681802749

Why wouldn't term deposits exist if interest rates hadn't been ratcheted down?

by Nzdan | 19th Apr 23, 7:56am 1681847793

I'm referring to the specific term deposits from someone selling their house for $300k+ more because mortgage rates are 2.5% instead of 6%+.

They wouldn't have that $300k in the bank if mortgage rates were 8% and TD rates 6%, because there's no way they'd be selling their house at such a premium. So it's rich for them to complain about low interest rates, when that's exactly that gifted them the capital to begin with.

by pythagoras | 18th Apr 23, 1:08pm 1681780118

Leading tax consultancy OliverShaw commissioned Australasian consulting firm, Sapere Research Group, to prepare a report on the effective rates of tax that New Zealand’s tax and benefit systems impose on the incomes of its residents.

Why did OliverShaw do this, and what is their interest in such a report?

by philthy | 18th Apr 23, 11:20pm 1681816849

I wouldn't trust anyone our government appointed to do it, probably a good idea to have a company removed from NZ.

by ExecBBR | 18th Apr 23, 2:26pm 1681784807

If you interested in seeing the full report, go here to download it https://www.wereonthemoney.co.nz/.

by 21Trillion | 18th Apr 23, 4:20pm 1681791652

Only 21% of tax payers earn over 70k? Holy smokes, and the average house price is what?

No wonder this country struggles.

by QuickFox | 18th Apr 23, 6:01pm 1681797697

Why not do what I did and for the first time in my 71 years, joined a political party so that instead of moaning and groaning I am actually trying to do something positive. The 2 main parties are so tightly structured, your voice is completely lost unless you have oodles of money, or have a union pedigree, neither of which apply to me. I am not extreme left or right but very centrist (so long to Greens and ACT) So I choose TOP. May not be the best option but I feel it is at present as I am a ir-religous person, so extreme conservatism is not for me.

At least they are listening, so maybe just maybe some of my thoughts may be taken seriously.

Anyone else of a similar view????

by kiwikidsnz | 18th Apr 23, 7:06pm 1681801618

"Anyone else of a similar view????"

Not quite. I'm 68 this year, have never joined a political party & have usually voted Labour since Kirk (only 2 exceptions), voted for Jacinda 2x. Will never vote Labour again after the last 2 years of unmandated deceit & racist division.

Why would you consider ACT "extreme right" ? in the global context they're very middle of the road, even left in terms of some of their social policies. I also suggest you Google Overton Window for a wider perspective on left/right political agenda.

by HSL | 19th Apr 23, 7:11am 1681845082

Can you please explain what extreme right is? Someone who thinks a woman is a biological woman perhaps? Or someone who thinks that democracy is democracy and that mathematics is not in fact racist?