Everyone wants to pay more tax

Said no one, ever.

 

This from?Newshub?Quote:

Two-thirds of New Zealanders believe the Government should increase taxes to keep public services running at their current levels, according to a poll.

One-third believe tax should stay the same and public services should be reduced, a Council of Trade Unions (CTU) poll has found. The CTU used the poll to inform its submission to the Tax Working Group. End quote.

I have worked in taxation for over thirty years. Not once, not ever, when told what their tax bill will be, has a client ever said to me, “Gee, that’s not enough. Can I pay more?”

Not once. Not ever. Most people react in exactly the opposite way. They don’t want to pay what the system deems is fair and reasonable.

Of course, you can pay more tax if you want to. Anybody can. It is just that no one ever does because no one actually wants to. Not in the real world.

We seem to have entered into a parallel universe, complete with fairy dust and magic dragons. In this fabulous world, everyone wants to be fair and reasonable, give their houses to others, pay far more tax than they need to and wave a magic wand to make poverty disappear. What a lovely world this is.

Unfortunately, this world does not and can never exist. It is a fantasy world.?Quote:

The survey was conducted by UMR and polled New Zealanders over the age of 18.

Nine out of 10 of those polled said public services are in need of increased funding from the Government.

The poll also found 66 percent of people thought a fifth tax bracket should be introduced for those earning significantly more than the current top tax bracket. The top tax rate is currently 33 cents on income over $70,000. End quote.

Aha! So, let us call it by its proper name, shall we?? Envy tax. I think I am right in saying that most union members (who took part in this poll) do not pay tax in the top tax bracket, but even those who do are probably not far into it. In other words, they want people who earn a lot more than they do to pay extra tax. This is straight out of the Michael Cullen playbook and he (it just so happens) is currently heading the Tax Working Group. Wonders never cease, huh? Quote:

But that’s not going to happen before the next election unless the Government breaks its promise not to introduce new taxes.

During the campaign period, Labour leader Jacinda Ardern repeatedly said she’d immediately act on the findings of the Tax Working Group’s review. The uncertainty of what those recommended taxes might be left Labour vulnerable to attacks from National, with Ms Ardern eventually backing down and saying she would introduce the taxes after 2021.

CTU Secretary Sam Huggard says taxes need to increase, but he says that could include taxes on polluting companies, multinationals and tax on investment properties. End quote.

Since when did the CTU decide our tax policy? Clearly, they think they do now. Are they going to tax investment properties? Well, why not? Landlords have been kicked from so many directions, they won’t even notice this blow. Are they going to tax multinationals? Good luck with that, because there are teensy things called the international tax rules that just might get in the way here. New Zealand benefits from those rules, as well as being disadvantaged by them in some ways. You can’t have it all one way. Quote:

The CTU’s submission to the Tax Working Group says the group of trade unions would support measures including:

  • Reducing the rate of GST to 12.5 percent
  • A capital gains tax that excludes the family home
  • Increasing the highest tax brackets to 38 cents on income above two times the average wage (over $106,000) and to 45 cents on income three times the average wage (over $160,000) End quote.

Under National John Key got rid of Michael Cullen’s punitive top rate of tax (38% on income over $70,000, down from 39% on incomes over $60,000) but increased GST to 15%. Part of the reason behind this was that it is easier to avoid direct taxes than to avoid GST. The plan was intended to be fiscally neutral and encouraged people to work hard and earn more.

But the CTU want to go back to the future. This proposal is clearly aimed at the Tax Working Group in an attempt to influence their decisions, while at the same time trying to persuade the government to go back on their promise not to increase taxes during this parliamentary term (a promise they have already broken).

I just saw a pretty pink unicorn outside my office window. There is also a formation of flying pigs circling my office. Everyone wants to pay more tax. The tooth fairy is real, along with Santa Claus and Danaerys Targaryen.

But, when you have finished laughing, take heed. This is a government heavily influenced by the unions. Jacinda has broken a number of election promises already. There is nothing stopping her from breaking another one, particularly when it is something that everybody wants.

 

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