Posts by Paul Campbell
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This week's best thing ever
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Note: it's quite OK to bell the cat, after all the idea is to scare the birds away - we do, because of all the native birds where we live, last thing I want is her dragging in a kereru twice her size ....
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Sadly Dunedin doesn't have its groove back - RG bought up the competition and then shut down ..... guys I used to drop over $1k a year on you and you went away .... now I'll have to turn to the internet .....
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well rental properties are not completely unproductive - people need places to live (but rents have been driven in part by the real estate speculation of the past few years - now there's a glut).
What they don't do is have the multiplying effect that benefits everyone - I invent a cool new widget, you use the widget to make a new product, they buy the new cheaper product and get some new benefit from it.
Could be worse though - consider the arms industry - governments take tax money and buy expensive armaments ... then they blow them up and buy more
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I'm not sure what the difference here is between "investment" and "capital gains" - in the US buying anything (a stock, a property, art, etc etc) for X$ and selling it for Y$ is a capital gain
what you want to do is encourage long term investment - in particular investment in things that create real real wealth rather than just making money from moving money around which in the end just makes a bubble
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Matthew - the US system, which I lived under when I was there so it may have changed, has exemptions for ones primary residence - if you sell it and buy another within some reasonable time and the value of the new one is less or equal to the old one there's no taxable gain - there's also a one time (in a lifetime - think retirement) waiver on selling and buying a cheaper house (yes old people do vote in the US - a lot more than everyone else) - doesn't apply to rental property, or holiday homes or ..... that sort of takes the issues that most people would have with their houses out of the mix (would also make for an easy transition here in NZ) and leaves the tax to speculators
By default in the US all capital gains are just treated as income - you pay at your marginal rate - if you register a purchase with the IRS and hold on to it for long enough (3-5 years) then you qualify for a lower 'capital gains tax rate' (25% rather than 33% federal) - so there "capital gains tax" is perceived to be a lower tax while here it would be a higher one - which colours people's perceptions
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When my kids were tiny I worked at home, my wife worked mornings and I got to be solo dad with kids at the park every day (in Berkeley rather than NY) - the actual parents would tend to gravitate together while the nannys would form their own clique - I think this was largely a language issue (we mostly didn't speak spanish) - being the only guy at the playground with a kid did seem a bit strange though
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I must admit I do like the RB's idea of reducing income taxes and replacing part of that with a capital gains tax (not so much the raising GST bit) - we need a capital gains tax to move our 'currency of the realm' out of real estate and into investments that create wealth.
Just taxing capital gains is not enough though - we need to tax long term capital gains less than short term ones (like flipping a house for the profit) - we want to encourage money going to productive use and staying put for a while
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Of course they're all Winston's constituents so I guess no one cares .... :-)
My mother is in the same boat - and, come our retirement, all our Kiwisaver income that we'll all be living off will behave the same way whenever there's a downturn - it's the way of the world
I've paid off my mortgage, and don't live of investment income so in some sense I'm unaffected by it either way - but there are other effects on our daily lives - primarily because of the effect that the low interest rates have had on the exchange rates:
- exporters (that's me - I consult in the US) are looking good - they are making more NZ$ per sale and are more competitive (my income had gone down by ~30% over the past couple of years, now it's back)
- importers are in trouble, overseas stuff costs more - I'm told that the buy up of stuff to sell at xmas mostly happened before the exchange rate changed - expect price rises in the new year
- the carry trade is fleeing us - maybe not a bad thing - except that it's probably reducing liquidity here even more
- farmers may vaguely break even (between reduced demand and better currency results) - maybe it will help us keep a more mixed farming economy rather than continue the rush to dairying - a monoculture is never good - their BMWs will cost more thoughHeaven help anyone (cough cough, sigh) trying to do a startup in NZ right - it's the right time to try and catch the next business cycle but the money's just not there, and the R&D credits are going - right at a time when we should be investing in ourselves
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well they already let you annotate locations on google maps with your photos - NZ seems to be covered in tourist's droppings