Posts by Rik
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Cracker: Another Capital Idea..., in reply to Jeremy Eade,
...and one more thing! :)
I think the real reason I come to PAS is to enter into debate on such matters arising. I am hugely disappointed when the debate is reduced to sniping between those with opposing views (and yes, I get sucked into this as well).
I am no expert and I do not have a solution (indeed, there is no one solution, just preferred options held by different factions) however I would like to learn from hearing from others who may think differently to me. Let's use the example that I have used earlier - a teacher and the CEO of Telecom. I see two individuals - the teacher paying something like (and I am rushing out the door to chop some wood so don't have time to do accurate sums) $10k in tax annually and the CEO of Telecom paying something like $561k of tax annually. In my opinion the CEO of Telecom needs a pat on the head for his large contribution and the teacher has paid an absolutely fair and reasonable amount of their income. Others seem to think that the CEO of Telecom should pay far more tax - simply because "he can afford it". Like he has no say in how the money he earns should be apportioned.
There's only so many people in NZ earning the sort of money the CEO of Telecom earns. No matter how much we tax people like this we are not going to solve the problem of how to fund the country. The IRD can take $10 off 100,000 people and make $1bn, far more than they will make taking a slightly bigger hit out of the handfuls of people that make $300k+ per year.
The discussion I wanted to have a few months back related to what the definition of "rich" or "earning shit loads" was. I know plenty of people who earn +/- $100k and they are by no means rich or earning shit loads. With a mortgage and a couple of kids you need to be pretty good at budgeting to make ends meet. So how do families on less than that get by? I have no idea - it must be really tough.
I have to run so i will stop rambling on - I'm hoping to not be seen as the enemy, I'm genuinely interested in discussion. But feel free to throw stones if you must.
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Cracker: Another Capital Idea..., in reply to Jeremy Eade,
Dear Jeremy
Let’s take a look at a comment I posted earlier:
Let’s think about that. Let’s say the teacher is earning $80k – so for the last $10k of their income they are paying the same tax rate that the CEO of Telecom is paying on the (roughly) $1.7mil he earns above the top tax rate. Without including bonuses. At 33% that comes in at $561,000 in tax for Paul Reynolds and $3,300 for the teacher.
And let’s look at the comment I was responding to:
why should *any* teachers be in the same tax bracket as Telecom’s CEO? It’s nutty.
Now – who used facts and figures to illustrate their argument?
Let’s also consider that 1) I didn’t bring the teacher vs CEO of Telecom topic up 2) I didn’t write this blog and 3) I have merely posted comments to show there are other viewpoints than those expressed in comments already made on this blog. Which I would have thought would add to the richness of the debate.
However – it seems you feel that unless I agree with the generally shared outlook here then I am not welcome to post my thoughts. It’s interesting that after reading the blog and all its comments that you point the finger at me as being “the problem”. Not Damian, who wrote the original blog clearly stating his stance (which I agree with). Mind you – I knew the last comment I had made was cheeky and bound to produce some form of response. Luckily I have broad shoulders and can take your criticism.
There was a very similar discussion to this one about 3 months back on PAS where there was debate on the fairness of a small percentage of the population contributing a high percentage of income tax revenue – once again I was derided for having an opposing viewpoint.
By the way – I totally agree with your thoughts on PAS and Russell. My only concern is that if you don't agree with the herd - lookout!
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Cracker: Another Capital Idea..., in reply to Sacha,
Investment bankers will still be paid way more than teachers unless we magically de-couple NZ from the global economy.
And this is a bad thing that needs to be changed?
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Cracker: Another Capital Idea..., in reply to Rich of Observationz,
Fair point! I wondered when this would come up. :)
No-one ever said that all highly paid execs were actually worth the money they are paid!
I don't begrudge them their income though - if they can convince some foolish company to pay them "shitloads" then why not?
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Cracker: Another Capital Idea..., in reply to giovanni tiso,
You are welcome to opinion, however I do not share it.
I believe that if an individual pays anything like $561,000 in tax that he (or she) have contributed enormously.
I see no reason to gouge them for more just because of your beliefs,
You, however, are more than welcome to give up as much of your income to the state as you desire.
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Cracker: Another Capital Idea..., in reply to Stephen Judd,
So I’m scratching here. What exactly is the effect of tax refugees fleeing on our tax base?
There only change would be that a different bunch of "rich pricks" would be taking crap about not paying enough tax (to support all the poor teachers, as it appears in this thread!).
My point was this - we all enter the workforce in full knowledge of what the tax rates are. We all make choices as to the education and careers we take up. Some of us end up teaching, some of us end up CEO of a big company - it's errelevant to the IRD, they don't care what line of work you are in, they just arbitrarily apply the tax rates to your income and ping you for the amount of tax you owe. For someone to be horrified that we live in a country where a teacher could be on the same tax rate as the CEO of Telecom NZ is ridiculous.
Let's think about that. Let's say the teacher is earning $80k - so for the last $10k of their income they are paying the same tax rate that the CEO of Telecom is paying on the (roughly) $1.7mil he earns above the top tax rate. Without including bonuses. At 33% that comes in at $561,000 in tax for Paul Reynolds and $3,300 for the teacher. So who got stiffed?
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why should *any* teachers be in the same tax bracket as Telecom’s CEO? It’s nutty.
This does not appear nutty to me. Doesn't matter what line of work you are in really - whatever you earn, there is a scale of income tax applied progressively increasing as your income gets higher to the top bracket of over $70,000.
Whether this is fair or not probably depends whether you earn a lot less or a lot more than $70,000 but it is roughly the system that has been in place in this country for quite some time.
So in my opinion it is "fair" in that we are all aware of the system and choose to inhabit this country and abide by its rules and taxation system.
Whereas making tax free capital gains on houses as their prices spiralled upwards wasn't really all that fair.
As for all the "rich pricks fucking off" it might be worth noting that their contributions to the tax take would fuck off with them and make it that much harder to fund social welfare, health, etc.
I'm pretty sure there were similar discussions along these lines on PAS a while back and emotions ran high. I just can't figure out why some people seem intent on biting the hands that feed the nation.
Damian - agree 100% with all you have said in this post and comments. You appear to be one of the voices of reason. Look forward to seeing some blogs once your little one arrives - they are so much fun!
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About one dollar out of every hundred you pay in tax ends up going to the New Zealand Government aid programme. It’s not a lot of money...
With individual income taxes sitting at around $24.3b that 1% works out at $243m. Is that really what inhabitants of a small country like NZ would call "not a lot of money"?
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And Rik, I’m really sorry but I’m not going to tell you why I believe what I believe, simply because 1) I can’t be faffed
My interpretation: I'm not important enough to be bothered with.
Probably true! :)
The sun is shining strong out the window in my world now - supposed to be like that all week.
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Basically, I think the last tax cuts buggered the revenue base
I tend to agree, however I don't think the GFC or Christchurch quake have helped much either.