New Zealand Conservative

A new cigarette tax came into force 1 January , building on the progressive taxes already imposed. That makes cigarettes $22 a pack (per 25). Smoking is now an addiction presumably only the rich and the criminal can contemplate. Perhaps smokers are considering swapping to P or Heroin or crack cocaine. They may well be a more economical addiction, and help take the mind of the craving for smokes. Who knows? Meanwhile, flushed with the success of the smoking tax, the call for a tax on sugar is looking sweeter each day. In the 2000AD comic series, the cities of the future were regulated by Judges with the power to convict on the spot.  I remember a scene where Judge Dredd breaks into an apartment to find an elderly couple having a cup of tea. It all looked pretty normal, until Dredd tasted the contents of the sugar bowl. Was the evil white substance cocaine? Nope, sugar. But sugar was a banned substance in the future, so the couple were hauled off for a stretch in the ...

Air New Zealand is again under investigation over the credit card fees it charges passengers.It is the second time in a year the airline has come under scrutiny for fees that could breach the Fair Trading Act. The airline charges a $4 processing fee on all domestic bookings made by credit or debit card... Yes indeed, a government watchdog, always on the alert for corporates adding surcharges to their fees, are worried that AIR NZ are gouging the customer. Adding an extra surcharge on top of the total price. And yet, the requirement for AIR NZ, and indeed every single business and council in NZ to add an additional fee of 15% on the top never gets any sort of scrutiny at all. Oh, the hypocrisy. Watchdog investigates wrong surcharge

From the Wiki , a story about socialism and taxation: "Pomperipossa in Monismania" (also called Pomperipossa in the World Of Money) is a satirical story written by the Swedish children's book author Astrid Lindgren in response to the 102% marginal tax rate she incurred in 1976. It was published starting on 3 March 1976 in the Stockholm evening tabloid Expressen and created a major debate about the Swedish tax system. The marginal tax rate above 100% which was dubbed the 'Pomperipossa effect' was due to tax legislation which required self employed individuals to pay both regular income tax and employer's fees. The story, a satirical allegory about a writer of children's books in a distant country, led to a stormy tax debate and is often attributed as a decisive factor in the defeat of the Swedish Social Democratic Party - for the first time in 40 years in the elections later the same year. Countries that try such high marginal income tax rates now ...

There are a lot of areas to discuss when talking about building a more equitable system. And when I say equitable, I don't mean equal, I mean "just". So my opening assumption is that the system isn't just. There are weaknesses and discrepancies. There are things that the market doesn't necessarily "correct" itself for in a way that is good for the people of NZ as a whole, especially as we are but a small part of an increasingly globalised economy. My first topic for 2012 is a musing about Corporate Welfare and Corporate Contribution to the NZ Economy. Whilst such figures as I'm about to discuss might be on the balance sheets somewhere, I'm interested in a quick way of understanding what the key figures are. I'm looking to understand: How much net GST did they pass on to the Government? How much corporate income tax did they pay in their last complete financial year? What their total average income tax payments have been since in...

Somewhen in the distant future, perhaps as distant as the year 2014, sugar is an illegal substance, and possession of such is almost a capital crime. So it was portrayed by Judge Dredd, of 2000AD comic fame in " The Line " and other Judge Dredd stories written back in the 80's. Tony Falkenstein thinks starting with a 20% tax on the wicked white powder is the way to go. MacDoctor explains in more rational terms why it is a bad idea: Sugar Sickness . Why do so many (progressives*?) think that there isn't a problem that cannot be solved by a new tax and the strong arm of government? Sweet dreams are made of these, who am I to disagree? Travel the world and the seven seas Everybody's looking for something Some of them want to use you Some of them want to get used by you Some of them want to abuse you Some of them want to be abused * Maybe Tony can drop in and explain his political stance to satisfy my curiosity on why people reach for the IRD when ...

You are going to love this New Zealand's "cashie culture" is corrupt and irresponsible and forcing cuts to vital state spending, Former Fair Go presenter Kevin Milne Yes we just might have to dispense with the vital work the Department of Women's affairs does, for example. People who offered cash jobs seemed to have a mentality of "keeping the Government out of it". "It's them saying, `Let's stop them from getting their hands on our money'. Well, it's just so stupid – it's not their money, it's the country's money . I think it's corrupt, I think it's irresponsible." Former Fair Go presenter Kevin Milne It's the countries money? To spend as they see fit? Really? Agreed everyone should contribute to the running of this country but there is a heck of a lot of tosh that the urban middle class might hold dear but expect the working man to fund. And let's get real here Politicians have not set very good ...

Well, I predicted it . [ and here ] Remember how National dropped the income tax rates IN EXCHANGE for putting up the GST rate? Well, when Labour come in, the income tax rates go back up and the GST rate stays the same. They throw in a tax free threshold to appeal to the low incomes, but it, in socialist reform terms, is pathetically low (5K) and is only going to be introduced in "stages". Blimey, such conviction. At least he's held off doing GST exemptions for certain items. Labour on its own looks unlikely to win the next election, but with the magic of MMP could find itself in the tax and spend seat under a coalition of all the minor parties: Elderly suffer tax shock

"They will now be able to transfer their property portfolio to their children. If, for example, a person earning $150,000 also earns a net $42,000 from their property portfolio and receives this personally, they pay $14,000 in tax on it (33 percent). "But if they transfer this to their three children, the children then each have an income of $14,000 which is only taxed at 10.5 percent," Phil Goff said. "That means the total tax paid is $4410. That is a tax cut by stealth of $10,000 in this case." Goff was blabbing on about the scrapping of Gift duty , and his example was rather useless, as the same scenario could be repeated in other ways under the old system. So I think the main message is that National seem to be encouraging bigger families according to Goff. Three minimum. Well, that's nice. PS: I think it is illegal to arrange your affairs so as to make tax avoidance the main reason for a transaction, so be careful following Goff's advice...

Here's a gift - Speaker Lockwood Smith has backed down over hiding MP Expenses. That should please Goff, because you can't sell the public the policy of envy if you aren't quite sure what there is to be envious about. Sure, we could misoverestimate, but that would be beating about the bush. The Key word is transparency. And the other gift this week was the announcement of intent to abolish Gift Tax . It was never a fair and sensible tax, because the workarounds were many. It does however, illustrate a fundamental point about the process of tax collection - how much money it wastes. Apparently, the Government would spend half a million dollars to collect a relatively paltry 1.5 million (or 2.2 million depending on what you read). And the Public would spend up to 70 million in compliance costs to pay (or avoid) the tax. This demonstrates the point I was trying to make about excluding GST on some food items. The industry could do it, but the compliance costs wo...

I love the idea of publishing where our tax payer dollars go in the form of a receipt, much like what is suggested here: Tax Payer Receipt We do get access to departmental expenditure, like your local Council's Annual Plan and Corporate Style Annual Reports, but I've never seen an "across government" view of expenditure. It's a good start. However, it doesn't go far enough. For one thing, I'd love to see a list of NGO's that are funded by tax payer dollars. I'd like to see different levels of detail, each total hyper-linking to a second level of detail, then to a third level of detail and so on. I got this link from the Dim Post . I note some good points in the comments there, like it not accurately representing other taxation sources (business taxes, levies, ACC costs etc) and that there's a couple of grand in incidentals that aren't really mentioned. I suspect some of the costs are also misstated. Like the costs for paying elec...

Goff's comprehensive tax policy is his first plank on building the bridge back to power. I'm writing of course about his suggestion to exempt fruit and vegetables from GST . He'd be better off exempting fruits and veges from his cabinet, but that is another story. He has quickly offered a variety of fresh reasons for this bold and unexpected turnabout (given the repeated calls for this in the nine years Labour ruled), and one of them is the inevitable "other countries do it". Well, ask MP Williamson if other countries stone adulterers to death. Ask America if they stone murderers to death (albeit, using drugs, but drug users can die stoned). There's a new law and order platform for Goff. Now that ACT MP Garrett has gone, I open the paper and an alleged murderer, with 175 previous convictions , many for violence, may be getting a stiff warning strike for this one. RIP Garrett. But that's another story. I have a better suggestion for Goff's G...

I'm for flat tax before I'd support income splitting, but I thought I'd muster a few simple words of defence of the proposed bill for income splitting, because in essence, it is a very family friendly bill, and worth consideration on that basis alone. I'll likely do a few posts on this topic over the next few weeks or months if the bill gets feet because lefties will crawl out of the swamp and start worrying about the government not gaining their rightful amount of tax from single income families. Oh, the horror of government not maximising its tax take! Why is income splitting as a concept being put forward? Well, the progressive tax system is designed to tax rich bastards a lot more than poor bastards because this is "fair".

Exempting GST on certain items is touted by many as "simple" and "easy". I disagree. It's certainly "possible" and "do-able" but at the impact of greater costs. Here's one area of complexity that impacts compliance costs (thus increasing time and effort and ultimately raising prices):

Government exists to protect us from each other. Where government has gone beyond its limits is in deciding to protect us from ourselves. - Ronald Reagan The Maori Party would like to have GST exemptions on healthy food. They think they've figured out what is healthy and what isn't. Lean meat is healthy, but fatty meat isn't. Tax one and not the other. See, simple. When differential rates of GST were introduced in other countries, it lead to all sorts of complications and the occasional example of stupidity. After many years of trying to sort out a system, the Australians think they have cracked it with a special database and rules and regulations. That's called bureaucracy, and having a database of products doesn't necessarily make it easy for retailers. It might make it easier than the previous system for handling anomalies, but it's still harder than not having to check every food against the database. It's not a question of companies not be...

National have introduced a new tax 3 months ahead of the proposed GST tax increase. Sure, there will be a PAYE Tax reduction in three months time, but by then the new ETS will have pushed the general cost of energy and goods up and we will be feeling the bite from increases in property taxes (rates) at well above CPI. How high can the GST go, even as other taxes kick in? The UK will be moving from 17.5% to 20% soon. This is done with the promise of offsetting other tax rates, but keep your eye on new taxes, and don't be surprised when they all creep up again as government spending continues unabated. When cuts are made in one area, you can be sure they are spending in yet another. It's a tornado of taxes, spiraling higher and faster leaving only destruction in its wake. There are taxes on our freedoms too.

I recently decided to dig up the old restaurant tax story to preserve on this blog as a handy reference. [ A Restaurant Tax Story ] Scrubone has decided to add to that story by putting it in pictures - a series of handy graphs illustrating the nature of proportional taxation and the effect of proportional rebates, and notes that the usual complaints about tax reductions "for the rich" are never discussed in context of the proportions they are first applied. No wonder the criticisms often seem faintly ridiculous.

( written by Victor Boc, and told on his radio program ) Every day, ten men went to a restaurant for dinner. They always ordered the same meals, and the bill for their food always came to exactly $100.00. They did this day after day, year after year, without variation. They did not divide the cost of the bill up equally among them, however. Since some of the men were more wealthy than others, they all agreed that an equal split would be unfair to those with less money. So, the men decided to pay the bill in precisely the same way we all pay our income taxes.

My take on the GST rise "GST should only be increased if it were accompanied by comprehensive tax reforms that saw all tax rates dramatically reduced. It is lower Government spending, coupled with dramatically lower tax rates that would best encourage productivity. "Just like the Maori Party, ACT must support the increase in GST as part of our Confidence & Supply Agreement with National - but, that doesn’t mean we like it," Sir Roger said. [Roger Douglas - ACT Party] In theory, I'm in favour of increasing GST in return for lowering income tax rates. And this is what the budget has done, but like ACT, the Maori Party and the Greens I'm suspicious that taking on a bigger GST is really going to stress the lower incomes once other factor kick in. One of the big factors would be the ETS. Unless it too comes with radical tax reform, I'll be fighting hard against an ETS. And why start the GST increase in the middle of the tax year? Small businesses ...

Raising taxes and putting in new ones is never a good look for any party that campaigns on lowering tax before they get into power. Especially when subjected to the added scrutiny that only the Blogosphere can give. After stating on Wednesday that GST will most likely be raised to 15% this year (from 12%), here's John Key in 2008 stating that GST will not be raised if National does a good job in Government. Mmmmmm.... Begs the question, really. Does this mean that National doesn't think they are doing a good job? Could a good excuse now that the proverbial fan has been splattered. John Key could come out and say that National are a bit green, and now they realise that they aren't doing a good job and the only way to dig themselves out of the hole they've made, is to raise GST. Ok, that wouldn't go down well, either. In my opinion, GST is one of those hot button issues that affects EVERYONE, that should have been looked at as a last resort exercise. Saying that t...

THE GREENS say they will support the government if it wants to introduce a tax on land and a comprehensive capital gains tax. Why is that a news story? Give them half a chance and they'd be in favour of new sets of taxes on roads, petrol, diesel, fizzy drinks, possum fur, Indonesian sourced furniture, banks, deposit accounts, shares, hydro power, alcohol, non-approved tuck shop food, fatty food, fast food, foreign food, beef, lamb, chicken, fish, pork, plastic bags, new cars, old cars, construction, renovation, soap products, non-hemp clothing, teeth alignment, plastic surgery, religious institutions, non-government charities, catholic schools, non-recycled paper, advertising, business loans, television sets, socks, the SIS, the army, guns, toy guns (including water pistols), any children after the first one, farming, fishing, forestry, mining, the Tiwai Smelter, Invercargill in general, tourists, airports, exports not being shipped by sail boat, shower heads, single flush toi...