OnPoint: It's real
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DexterX, in reply to
I could say something about nerf herding and nerfherders, however, that response doesn't answer the question.
How is owning shares or a stake in financial or stock markets promoting growth in the productive base of the economy - that bit that actually creates and does things?
Bear in mind the greater part of the productive base of he economy is not listed on the stock market.
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Idiot Savant, in reply to
For more money in your pocket?
Ah, but whose pocket? Labour gives to some pockets, National to others, according to their ethical theories about just distribution and the desirability of substantive (rather than formal, equal right to starve under bridges) equality. You can deride it as a bribe, but at its core, this is what politics is all about: who gets what. If we just wanted managers, we'd hire them (and they'd pay themselves fat bonuses, and swan around in private jets, and screw us over - so, just like Ministers, then)
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Idiot Savant, in reply to
How is owning shares or a stake in financial or stock markets promoting growth in the productive base of the economy - that bit that actually creates and does things?
Well, supposedly the stick market is about providing investment to help firms grow. In reality, of course, its about speculation, and finding greater fools to dump the losses on when the bubble bursts. Any push to get more people to put their money into that casino is going to be hard up against the memories of 1987.
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Why is [the slow start] a problem?
Why isn’t it? (serious question)
If the purpose of CGT is to raise revenue, then not getting any revenue might be an issue to a government that wants to cut GST and reduce borrowing.
For the purpose of incentivising behaviour, then it isn’t a problem, of course. And if half the people like this guy who’ve said they’ll go to Australia do so, then it’s worth it for that outcome alone. (I'd note that the UK has a five year continued liability for emigrants as an anti-avoidance measure).
If the government can treat accrued but uncollected CGT as an asset on the national accounts, then it also isn’t a problem, but I would have thought they couldn’t do that. Anyone know?
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Steve Withers, in reply to
I turned Mora / Farrar off. I already know the dogma.
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the Higgs bosun
is somebody you can only find on a ship that has a warp drive.
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Craig Ranapia, in reply to
Happy now, Craig?
Am I supposed to be happy that RNZ couldn't get a basic COI disclosure right from the start? No, I'm not. Anyway, I've got something a little more useful to do.
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Dave Howell, in reply to
Bear in mind the greater part of the productive base of he economy is not listed on the stock market.
Who said anything about the stockmarket? Exactly the same argument applies if you do a deal with Fred the plumber to give him 20 grand towards buying a new van, in return for a chunk of his plumbing business, and therefore of his future profits.
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I reckon that Labour had to launch a CGT to stem the flow of their supporters to the Greens. "Russel Norman and Bernard Hickey save Labour" should be the headline if they beat National.
We need more investment in small businesses and the share market can't help the problem. How about if the trading banks were forced by legislation to offer a higher ratio of business lending? Or if we brought in compulsory super and part of it was invested or lended to SME's through Kiwibank? This would encourage kiwis to start more companies and therefore eventually increase our standard of living. -
Rik, in reply to
How will the 90% of all families in NZ paying no income tax when you take into account WFF become investors in productive businesses?
Possibly easier than you might think - a friend of a friend is a policeman who doesn't earn all that much but seems to do OK with WFF. He has somehow managed to buy five rental properties over the last several years and has done quite nicely on the capital gains.
I guess just because a family is "paying no income tax when you take into account WFF" doesn't mean they have no ability to save or invest. Or that banks won't lend them money.
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3410,
Am I supposed to be happy that RNZ couldn't get a basic COI disclosure right from the start? No, I'm not.
Merely noting your emergency feedback serve.
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Russell Brown, in reply to
I think I can be atypically terse on this: No.
If Curia is writing the costings of National policies (prominently displayed on their website) and David Farrar is on a panel discussion of those policies without a very full disclosure at the top of the interview, I’ll be calling bullshit too.
M’kay?
I'd be more inclined to agree if pretty much everything David Farrar has said on the issue since yesterday afternoon hadn't been such obvious, disingenuous, unmitigated party spin.
I was actually quite shocked by the way he presented that graph on his website.
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3410,
I'd be more inclined to agree if pretty much everything David Farrar has said on the issue since yesterday afternoon hadn't been such obvious, disingenuous, unmitigated party spin.
True dat. I'm getting a bit sick of these "new" ways of reporting tax figures.
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Keith, you're pwned! They're bad numbers, don't you know.
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For the mystified, Danyl fisked DPF’s graph.
Amazingly, he’s trotting out the exact same misdirection in his Herald column today.
Households who earn $150,000 or more currently contribute 71% of the net income tax (tax less transfers) of all households. So 10% of the households pay 71% of the next tax. If you take households over $120,000 then you have 17% of the households pay 97% of net income tax.
At the other end of the tax scale, you have 44% of households with income under $50,000. Those 44% of households play $1.7 billion in income tax and receive $7.7 billion in welfare transfers such as Working for Families, Accommodation Supplements etc.
He knows damn well that the top tax rate doesn’t apply to household incomes over $150,000, but to personal incomes. He’s deliberately and misleading conflating the two. If someone else did this, he’s go to town on them.
Good to see the Herald includes DPF’s disclosure statement at the bottom of his column. It has never been more needed than it is today.
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More Farrar apple-and-orange action:
Labour also announced a new top tax rate of 39%, for those earning $150,000 or more a year. They obviously feel those people are not paying enough tax through 33% income tax, 15% GST and now also a 15% CGT.
Hey, yeah -- and when you add all those up, that's like 66% tax ... isn't it? Fark.
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Sacha, in reply to
NZ companies, listed ones at least, pay relatively high dividends and have relatively low share price growth.
Would a CGT affect that tendency over time? (serious question)
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Sacha, in reply to
How about if the trading banks were forced by legislation to offer a higher ratio of business lending?
I wonder if their aversion might change anyway under a CGT?
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How about if the trading banks were forced by legislation to offer a higher ratio of business lending?
My understanding is that no bank will lend more than chump change without taking a security, normally a mortgage on real estate.
I'm unconvinced that we should encourage them to do otherwise. I think having financially robust banks is more important than easy finance for any hairbrained scheme with little prospect of positive cashflow. (People get funding for jetpacks and floating cars, FFS).
There is also the aspect, which I have personally encountered (in the UK) during the first dotcom boom, that if every business is being funded into an unprofitable burnrate driven strategy, it's very hard to actually create and run a business with a real revenue model. (Because the competition are giving investor-funded shit away for free, not to mention attracting investment with competitively delusional business "plans").
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Rik,
So....that graph by DPF...aside from all the interesting conclusions being reached by commentators on both sides of the fence, the household vs individual angle, and the fact that it doesn't allow for the shared benefits all NZ'ers benefit from (health, corrections, education, etc)...could we not use it as the basis for some discussion about whether we have the balance right.
Like what are those transfers going to $150k+ households?
Like it or not - the reality is that some people/households take out more benefits than they pay tax. That is always going to be the case, however this graph does make it look like this goes on to an income level that some might have thought to be higher than necessary.
Is it sustainable?
Is the only solution to obtain more tax from those on higher incomes?
Could there be more done to lighten the load of benefits/WFF?
Are there enough incentives for those on benefits to get off them?
OK - riot shield raised.
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Dave Howell, in reply to
How about if the trading banks were forced by legislation to offer a higher ratio of business lending?
I beliebe there's already a mechanism by which something of the sort can be done. Banks' Capital Adequacy requirements (i.e. how much liquid funds they need to have available to back their debts) are worked out based on risk weighted exposure. RBNZ sets the weighting assigned to different types of risk. Banks prefer to lend into low weighted areas because they can lend more per unit real reserves. My understanding (which may well be wrong, I'm not an expert) is that in theory, this allows the Reserve Bank to push them towards company lending and away from mortage lending by adjusting the risk weighting of each. At present, "residential mortgages are assumed to be less risky than loans to companies" so banks favour mortgages.
Rich has a point though about whether pushing them the other way is necessarily a good idea.
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giovanni tiso, in reply to
Hey, yeah – and when you add all those up, that’s like 66% tax … isn’t it? Fark.
The thing that I find most depressing about Farrar is not that he's everywhere - it's that he's as dumb as a freaking post.
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Stephen Judd, in reply to
Are there enough incentives for those on benefits to get off them?
For one thing, the biggest benefit going is national super (citation). Currently we don’t incentivise old people to die, but I don’t think we should change that.
For another, numbers on other benefits change more or less in sync with the wider economy. This suggests strongly that when jobs are available, people take them. I don’t know what Farrar’s mendacious graph tells you about this one way or the other though – seems like a non sequitur even to bring this up.
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Well, IANACBE (work it out) but it seems to me that the risk ratio is designed to reflect actual risk, not an opinion on the desirability of certain lending.
However, if the likely inflation of house prices is limited through taxation, then that will make residential mortgages more risky, and should hence make the central banks adjust the weighting accordingly. So the weighting would change towards business lending - although as noted above that's usually secured on real estate anyway.
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Sacha, in reply to
The thing that I find most depressing about Farrar is not that he's everywhere - it's that he's as dumb as a freaking post.
If he were genuinely stupid, he'd be less evil. Much like some of his fellow travellers.
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