This whole thing enrages me. If anyone thinks us Gen Xers and younger will be retiring at 65, they're dreaming. And political grandstanding by Key and now Little on the topic is just cynical politicking.
In the meantime, my 69-year-old mother is working up to 16 hour days as a cook, because she can't fucking afford to retire and pay fucking $390 a week for a cockroach-infested single bedroom flat in South Auckland.
This is because she can't get an accommodation supplement due to her extensive lifetime assets of $8000 in her cheque account.
Excuse me for thinking this is all cheap point-scoring.
You don’t need to restrict yourself to only one tax.
And I probably wouldn't. Taxation on income from dividends would survive, excise tax would survive (at a level that is pegged to cost recovery of the consumption costs of those goods to society.. e.g., tobacco, liquor), consumption taxes would survive, tax on business profits would survive - the one you'd eliminate would be income from labour taxes... which make up the bulk of Crown revenue at present.
And as land taxes stablise (the likelihood would be I assume that they would be highest initially as land is over-valued in relation to its production potential), one might look to reduce consumption tax on essential goods and services if a predominantly land tax base proved sustainable.
@TracyMac: Nah, it’s worse: expensive point-scoring. Blinglish’s recent hints about possible tax cuts render this unambitious piddling footling pussyfooting around cutting future eligibility for super an example of fiddling in several senses.
Well, bugger me, it must be an election year :-/
Wealth taxes are a good idea, but they’re not a substitute for income taxes, they need to be part of a whole mix of different taxes if we’re to have an effective taxation system.
Of course they are a substitute for income taxes - well, not a substitute actually, because tax on labour is not a wealth tax and land taxes are. And yes, I'm happy for land tax to be one among many other forms of taxation (see above) - but the shift from taxes on labour being the lion's share of government revenue, needs to shift to taxes on land being the lion's share. That's my main point.
It's inevitable I think - as is demonstrated by the many tax credits and other means-tested subsidies aimed presently at the working class. The working class simply can't afford to pay the level of taxes asked of it at present.
Yeah - this was my first thought. Diet, diabetes, antibiotic resistance. A generally more polluted and populated world. Climate change and associated catastrophes. The increased stress, which which plays a role in longevity, of debt, precarious employment, not owning homes. Not to mention, we've just had 60 years of relative political stability, which is not the historical norm. Fingers crossed it will continue and expand, but who knows? Maybe this is doom-saying - I hope so. But all the talk of increased life-spans extrapolates current gains into a very uncertain future.
Like many others, I reckon we should scrap super, and institute a UBI. The political and economic issues that raises are far bigger - 'fixing super' by comparison is a cakewalk. BUT since walking back super is a move in the wrong direction, we should oppose that, too.
As for solutions, I say means-test and tax wealth and reintroduce higher income tax brackets. If a UBI shall come to pass, great, but I'm not holding my breath.
For means-testing, make it "if income than threshold, or if assets greater than 1st decile of house price index in city of residence", or along those lines.
I still remember that woman who sued the govt for her super, and got it backpaid plus compensation. She got more than a year backpaid, because she didn't notice she wasn't getting it until her frigging accountant brought it to her attention.
Yes, she was entitled to it, fair enough. But meanwhile in Sth Auckland...
If nothing else, at least the long delayed discussion about superannuation has actually commenced among those empowered to do something about it ...
Now we just need everybody to act like grown ups and work collaboratively and in good faith to identify a superannuation solution that's fair and fit for purpose for the next couple of decades. How hard could that be?!
There's no point arguing about whether the wealthy should be excluded or not. The wealthy have always been able to access mechanisms which allow them to conceal their wealth, and its the sods in the middle that most feel the squeeze of e.g. means testing.
The biggest challenge of budgeting for retirement is not knowing how long you're actually going to live for, and the state is able to manage that with much more certainty over the whole population, than we ever can as individuals. So the state just needs to budget accordingly - not exactly rocket science!
How hard could that be?!
Well it's defied our political system for 40 years so I guess the answer is "It's pretty hard".
I guess the answer is “It’s pretty hard”.
Or 'they're pretty useless ... " :)
Or even both
Getting back to taxing the super - if it weren't taxed it's recipients would get less, likely about the same as the net after tax people receive today.
For people just living off the super it would be a wash.
What taxing super does do is act as a little bit of a means test for those who have other incomes, it pushes people on super with other incomes into higher tax brackets.
BTW if you want to encourage people to save for their retirement you might reduce the tax on the first N$ of interest past age 65
But we already don't tax capital gains
Liam Dann points out that 'generations' are an artificial construct anyway, and urges millennials to not be distracted from enjoying their youth.