Cracker: Another Capital Idea...
285 Responses
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Rik, in reply to
Rik, seems like you think that taxing the rich means taxing you, but on the other hand you don’t think you are rich. Which implies that you think other people have a lower threshold for “rich” than you do. Yes?
Yes!
Personally, I think being rich is more about having enough assets to live off your savings for an extended period, than having a high income, but that seems to be an uncommon view.
I would agree with this statement.
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Sacha, in reply to
What I have asked in the past (and got nowhere with) is what is the definition of rich?
I prefer relativities - richest, not 'rich'. Top 2%, 5%, 10% and 20% seem reasonably uncontentious example thresholds for most things. Though with a government fond of lying about the 'average' and 'vast bulk' of people, levels like 50% and 70% also seem useful.
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Rik, in reply to
Aaaahhhhhh...a light-hearted retort from Sasha. First time ever. All that typing was worth it. Maybe it will be safe for me to attend the Great Blend after all?
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Sacha, in reply to
First time ever
I believe they were more common in my earlier work..
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giovanni tiso, in reply to
So I painted a picture and came to you for budgeting advice and you did not deliver.
Want me to deliver? Fine, here goes: we have three kids under ten years old, a fluctuating income - but generally lower than 100k - and we've always managed. Could it be that we're living within our means? I can't restructure your life. If it's the big mortgage and the two cars and the accountant and the 12k in childcare a year that you want to have all at the same time, maybe it's too much. It doesn't mean that 100k is hard to live on really. Or it could be too much but only until your children hit school, at which point your main crazy expense item is going to go away. And your mortgage payments are going to decrease. I'm not sure what you want me to deliver on - you're obviously fine.
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is a rather large 6 cylinder SUV which I use to drop the boat into the water at the beach in front of our house
As you do. And no I don’t think you’re a rich prick Rik, it sounds like you’re doing okay for yourself, I’d fully appreciate the fortuity of your circumstances.
My partner and I are both self-employed and guess what – we do our own accounting. We had to learn, so we learned.
Now that, that’s just downright inspirational.
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(Also, your income is obviously less than 100k, once you deduct the business expenses such as car and ACC. So a household that is actually on 100k would have even fewer problems.)
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BenWilson, in reply to
Maybe it will be safe for me to attend the Great Blend after all?
Do it! They're fun.
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Danielle, in reply to
So is Rik saying he liked your earlier, funnier comments?
(This seems to be 'the thread in which I make dumb movie jokes', for some reason.)
(Our household income is similar to your example, Rik, and I'm afraid I think we live like fucking kings. Your 'friend' has a surplus at the end of every week! That's... not how it is for most people.)
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Rik, in reply to
Our household income is similar to your example, Rik, and I’m afraid I think we live like fucking kings.
I guess Danielle, that everyone is in a different situation and different stages of life. You may or may not have a mortgage. You may or may not have some kids.
So when thinking about tax rates, possibly some thought needs to be given to the variance of peoples situations. Some households may be more able than others to afford higher tax rates, even though they are on similar incomes.
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Rik, in reply to
Do it! They’re fun.
Yep - have been to a few. Best one was at Grey Lynn Bowling Club with Dimmer (& others) playing. The museum one was pretty good also. And the one at the Civic. Russell throws a great party!
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Rik, given that we now know where Labour’s 39% threshold will be, let’s look at another example. My partner and I both work (well, until the end of today, but let’s not go there) in professional jobs. She’s on salary into the current top bracket, by a small margin, and by a rather smaller margin my salary plus interest/dividends puts me into the current top bracket. Our combined household income is still short of the single-income figure needed to put us into Labour’s proposed top bracket. We run one-and-a-half (I don’t drive mine much, but it’s still got fixed costs) cars, we rent a fairly nice house in Ellerslie and don’t need a flatmate, we can buy whatever food we want, we can eat out whenever we want, we can go wherever, do whatever, and not pay attention to the figures in the bank. She’s debt-free, I’ve got my student loan plus some interest-free borrowing for “toys” that I’d just have not bought otherwise. My net worth is very definitely positive, even accounting for the debt.
Are we rich? By my reckoning, and I’d say the reckoning of the majority of contributors to this thread, we are. We’re not filthy rich, by any stretch, but we have surplus cash every pay period and we don’t have to keep an eye on the bills. And we still fall short of Labour’s proposed top bracket. We could comfortably raise two or three children on our combined income. I have friends who raise two kids with expensive dietary issues on a gross income about 2/3 of ours, and I know they struggle but it wouldn’t take much more money for them to be doing OK. $100k gross would make their lives considerably easier. And still they’d be well short of Labour’s proposed top threshold.As others have said, on planet PAS, if you struggle on $100k you’ve either got some involuntary issues that don’t get adequate state support or you’re making bad choices. The current vogue is to berate beneficiaries who struggle to live on considerably less than the median income, then say “Oh, poor dears, we can’t possibly increase their income tax” for people who make very bad choices and struggle with the same number of kids on more than twice the median income.
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Income adequacy often looks at housing expenses as a proportion of income, doesn't it?
By my reading, Rik's 25% puts him in the OK category compared with many low income earners who are paying 50% and more (and usually for rent so they get no capital gain either).
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Sacha, in reply to
dumb movie jokes
welcome here
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Danielle, in reply to
Actually the reason I responded to you in that way is that we're in quite similar situations. We do have a mortgage and in December we will, all going well, have our second child (the first is currently 16 months old). I suppose a key difference is that we don't have to pay for childcare because I work from home, but I think it might even out because (and here's one of my "poor financial but good for my mental health" choices) I really hate supermarket shopping and get a lot of stuff delivered, so I guarantee we pay about a gazillion dollars more per week for food than you do. :) And I really do think we have an utterly luxurious lifestyle, the kind of thing I could only dream about when I was younger (were you ever hand-to-mouth? Do you remember what that's like?). I'm not entitled to this, either: it's pure dumb luck and privilege. So I couldn't possibly whine about increased taxes in the higher bracket: I would welcome them. The whining is not only embarrassing but really unjust to other people who are subsisting on so much less.
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So... if I were to say that in 1995 (someone will be able to do the inflation-adjustment for me, right?) I fed a family of three on $40/week, I could make some money selling budgeting advice?
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Danielle, in reply to
Wow. I fed two people on $50 a week in 1992 and thought I was kind of a badass. I bow to you.
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James Butler, in reply to
And I really do think we have an utterly luxurious lifestyle, the kind of thing I could only dream about when I was younger (were you ever hand-to-mouth? Do you remember what that’s like?). I’m not entitled to this, either: it’s pure dumb luck and privilege. So I couldn’t possibly whine about increased taxes in the higher bracket: I would welcome them. The whining is not only embarrassing but really unjust to other people who are subsisting on so much less.
I just lost a lengthy post due to a network outage at work, but Danielle has mostly said it for me… Considering that at one stage we were bringing up two kids on the student allowance, our current single-income-a-bit-south-of-the-top-bracket mostly feels pretty sweet.
That said, there are some things about having a modest income which can make it harder to save money in the long term – when we urgently needed (ding ding! privilege speaking!) replacements for our TV and computer recently we couldn’t get secondhand ones, because we have no savings and can’t get a credit card because of (minor) bad debts from a more straitened past; but we were given free rein to spend up to $5000 on HP on new stuff. Only just managed to restrain myself.
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Steve Barnes, in reply to
“let’s tax the rich”. What I have asked in the past (and got nowhere with) is what is the definition of rich?
Enough.
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Rik, in reply to
So I couldn’t possibly whine about increased taxes in the higher bracket: I would welcome them.
Good thing I'm not whining about increased taxes in the higher bracket then!
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Rik, in reply to
I have friends who raise two kids with expensive dietary issues on a gross income about 2/3 of ours, and I know they struggle
2/3 of $140k is $92,400. You've just about agreed with my argument there - which is (and not many people seem to read this part), that a family with an income of $100k is not as well off as some would think. I'm not saying it is impossible to get by - just that it is not as easy as some might think. Danielle may disagree with that, however with only one child and working from home it might make things different for her. For the first 3+ years of our two kids we had only one income and a mother at home, somehow that seemed easier than two incomes and kids in daycare.
It seems your calculations on potentially having kids in the future do not allow for any change in your income - you may well find that for 2-3 years you are down to half your current income, and you may well find it isn't as easy as you think. But don't let that stop you giving it a shot - having kids is the best thing we ever did.
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Danielle, in reply to
Good thing I’m not whining about increased taxes in the higher bracket then!
I don't understand what your point is, dude. You seem to be mildly complaining because we aren't sympathetic enough that you can't wipe your arse with fifty dollar notes every time you take a shit.
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Most (the biggest numbers of people, or the mode as opposed to the median or the average which are higher numbers) individual people in NZ have an income around $14-$15,000. For that group (which included me this last year) a tax free income of $5000 will make a big difference, as will the GST off fruit and veges.
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By the way, Damian, as far as I can see, the media is still talking about this a week after it was leaked (on purpose), so you owe Russell.
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Islander, in reply to
+1
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