Posts by Rik
Last ←Newer Page 1 2 3 4 5 Older→ First
-
Cracker: Another Capital Idea..., in reply to Stephen Judd,
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.
-
Cracker: Another Capital Idea..., in reply to Stephen Judd,
but on any given day I could have run the numbers myself
Thanks Stephen - I appreciate your thoughts. Actually I may have obfuscated a little too much - I run a fairly complicated spreadsheet that I update on a daily basis which tells me my net position down to the last cent. And I just hand it over to my accountant at the end of the year (I do my GST returns myself) and they do whatever they do. Yeah they are expensive but they are also a good customer so I figure, whatever. And yes - there are some legitimate expenses claimed through the business.
This wasn't really about me - the bits that were (like daycare, fuel costs, insurances, rates) were just figures I could relate to. And I will happily keep paying my health insurance! Along with all the other things I pay for that were not mentioned in my example.
Yes - i don't know how we keep our food bill so low - we sure eat well enough. Must be all those trips out to Whenuapai to 1) get the kids to take an afternoon nap and 2) pick up some damn cheap fruit and vege.
-
Cracker: Another Capital Idea..., in reply to giovanni tiso,
I'm sure I could get my head around accounting if I needed to - but like I said, they are a customer and we each do a bit of work for each other. Sometimes it pays not to rock the boat.
I do have an amazing house and like I said - the figures I quoted were not mine. So I don't really need to look at making any changes, aside from a possible downsize on the car (but I still need AWD for the beach boat launching, as the sand is sometimes a bit soft at low tide). As I also said - I do know people who are not a million miles from what I described (some better, some worse) and the whole point of my post (which I now realise I neglected to address in response to your "what's you point" query) was this:
Earlier on I posted the following:
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
(ooo Look Sacha - I dooooo know how to use the quote tags! Not bad for an IT guy, huh?!)
And you responded thus:
These people can’t be living in the same country in which I live. Either that, or feel free to send them to me for budgeting advice.
I’d start with cutting down on the Beluga. I know, it’s rough.
I had forgotten it was you who made the (ever so funny) crack about Beluga.
So I painted a picture and came to you for budgeting advice and you did not deliver. Even if we take out the accounting fees as well as the health insurance (hey - once again, you don't know if I have an underlying medical condition for which my HCP advised that I take out healthcare) the situation is still not looking too pretty. It's a bit like Ben said - you're not out-on-the-street poor but you are not rolling in it with a household income of $100k.
And as I said in my original post - I don't know how people on much less than that get by. Obviously - they just go without. Or - as the graphic (http://networkedblogs.com/knlaH) makes clear - some benefits come in to play. Which is a good thing - that's what they are there for.
So what's my point? I'm starting to wonder myself...but basically PAS is a great place but sometimes the conversation gets a bit one-sided and seems to be looked at from only one perspective eg. "let's tax the rich". What I have asked in the past (and got nowhere with) is what is the definition of rich? Who decides? It's no good looking at an equation and only taking one point of view into consideration. Don't just think about those on benefits - think about those on middle incomes and high incomes as well. Everyone should have a say. But really - let's not jump down peoples throats when they make a post that, at first glance, doesn't seem to match with your personal viewpoint or philosophy.
-
Cracker: Another Capital Idea..., in reply to giovanni tiso,
Thanks for your feedback. Let me address some of your points.
Off the top of my head I’d cut the health insurance, seeing as the state provides that. OK - you just shaved $1,800 off my expenses.
I’d also ask myself if I really need an accountant. Yes I do - for a start they are one of my customers and for another I don't know the first thing about accounting so I give them all my invoices/receipts/expenses and they sort the rest out. So you lose on this one - I need an accountant. As does my self employed wife (the figure I quoted was for both of our accountants).
And you’re spending 12,000 in childcare with a parent home two days a week? We have three kids and the most we’ve ever spent was $3,000 a year. Yes we are. And we were lucky to find a place that would take our kids so that my wife could work. And all of the places in our neighbourhood were this price. One of the kids gets ECE, the other does not. Once again - you lose.
And 9k in fuel alone?! Our car expenditure (one car) is less than 4k including WOF and registration. You trim some of that, which frankly shouldn’t be very hard, catch the odd bus, and you’re fine. Wrong again - I drop the kids off to daycare three days a week - that would be tricky on the bus - and then head off to work. My work does involve quite a bit of driving around customers so yeah, I chew a bit of gas up. Like it said - it's tax deductible. My wife has to travel across the bridge three days a week and she would be on a couple of different buses to get there, also she does the pickups in the afternoons which again would be difficult via bus.
I’d also assume that not all of the 25k for the mortgage is interest, some of it must be principal, surely, so while all of that money is outgoing, not all of it is an actual expenditure. What's your point - it's still an after tax outgoing, whether a small component could be considered an "investment" or not. And who is to say that in my example it wasn't an interest only loan?
And you’re not going to have such a high mortgage or two preschoolers for very long – in fact I assume yours are both under 3, since after 3 they get most of their childcare for free. Wrong - between 3-5 even with ECE one kids costs $4,200 for 3 days a week. And that is short days - full days are more expensive. So yeah - when our little one turns 3 our childcare will drop to $8,400/year so we save $4k. But this example was about here and now, this point was irrelevant. But you did sound a lot like my dad on that one. Only his tone would have been warmer.
But the example is completely misleading, anyway, since nobody here has ever talked about people who just reach the current top tax rate as being “rich pricks”, in fact exactly the opposite: we’ve said that people on 70k a year _shouldn’t__ be on the top tax rate. And even if you tweaked the example to a household with one earner on 100k and the other partner not working, then taxation is higher but some of those expenses disappear or are significantly reduced. So you’re still fine. And it’s still hard to know what you’re on about to be honest. The example is not at all misleading - it is pretty accurate for many families (I know some in a far worse situation than the one I describe). There have definitely been "rich prick" comments made about those who earn $100k+ - and here's a $100k example for you. And you know what - you only managed to shave off $1,800! I'm glad I am not paying you for this amazing budgeting advice.
@DeepRed - thanks for taking the time to ask for clarification on a couple of points - you will see I have addressed your queries in my response (above). It is so refreshing to have a poster who stops and think before they post a response full of assumptions. Although - I have to confess one of the cars 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. The fuel bills are starting to become a drain though so I am looking to downsize (on the advice of a professional budgeting advisor). I agree with you - Labours idea of setting the top tax rate back to 39c in the dollar kicking in at $150k is a good one (in my very humble opinion). I don't think anyone (even me) could argue that when you're earning $150k+ you can probably afford to pay a little more tax. However in my experience people who earn that sort of money usually end up paying very little tax, one way or another.
-
Cracker: Another Capital Idea..., in reply to giovanni tiso,
OK, help me out here. Let's say you have a family of two adults and two kids (I'm going to loosely base this on my own situation but I am tweaking the numbers a bit so don't think what I am describing is my "lot" in life) and one of the adults earns $70k and the other earns $30k working 3 days a week. After tax that $70k is $55,980 and the $30k is $25,730 so the after tax income is $81,710. Sounds like a fortune, Im sure.
Now let's throw some expenses into the mix as follows:
Mortgage $25,000.00
Council Rates $3,300.00
Water Rates $500.00
House Insure $500.00
Contents Insure $500.00
Health Insure $1,800.00
Car 1 Insure $700.00
Car 2 Insure $600.00
Car x 2 rego $580.00
Annual fuel x 2 cars $9,000.00
Accounting fees $2,500.00
ACC levies $2,000.00
2 x kids 3 days week childcare $12,000.00
Annual Food bill ($200/week) $10,400.00
Annual Power $3,000.00
Annual Phone/Internet $1,200.00
Total $73,580.00We ate into that $81,710 pretty quick. And that's just the basic expenses - it doesn't take into consideration doctors visits (pretty frequent with kids - and no community services cards for us "rich pricks"), insulating the house (man, what I would give to have a toasty warm house), firewood, clothing.
On a weekly basis that $81,700 works out to $1,571.35 and the expenses work out to $1,415.00 leaving a princely $156.35 left over each week. Which could easily be eaten up in interest rate increases coming later in the year.
OK - some of the expenses are tax deductible - accounting fees, some of the fuel, some of the phone and internet. The ACC levies are not tax deductible but you can get the GST back on them. That still does not leave a huge amount of fat.
So help me out with my "rich prick" lifestyle. Like one of the ever-so-helpful posters said earlier - cut back on the beluga. Oh yeah - he was as funny as fuck.
-
Cracker: Another Capital Idea..., in reply to Islander,
I agree Islander - my income hasn't changed all that much over the years, but back in the day it seemed like a fortune. My only resentment is not the taxes I paid but the amount of money I squandered. I eventually figured out - the less you spend, the less you have to earn. But then I had kids!
-
Cracker: Another Capital Idea..., in reply to BenWilson,
I expect I need some of that advice. I can’t talk to anyone else’s reasons for being in this position, but I’ve been in the top tax bracket for the longest time and don’t have much of a fortune to show for it, other than whatever value my house has risen by in the last 8 years, and the deposit.
Thanks for restoring my faith in PAS Ben. This is the sort of discussion I had been hoping for when I brought this up in this thread and another a few months back - there's these references made to "rich pricks" and people earning "shitloads" and everyone seems to have a different idea of where to set the bar for these.
I guess if you have only ever earned bugger all earning over $100k might seem like shitloads, whereas if you are a family earning $100k you might be wondering how to make ends meet.
-
Cracker: Another Capital Idea..., in reply to Stephen Judd,
3. The “net” part is net of benefits paid or tax credits given, which appears to be unemployment benefit etc, super (don’t forget superannuation is the biggest benefit going, why does Farrar hate the old?), WFF, etc. As if we don’t all get major benefits from living in a stable state with a nationalised healthcare system, free education, maintained roads, yadda yadda. Farrar omits all the things paid out of taxes that high earners benefit from too. Wow, I wonder why.
I had been wondering about the "net" thing and whether it had featured in some of Keith Ng's figures referenced previously. And then I too thought about the "shared benefits" that we all get (the Holiday Highway!). Given that it is all a bit of a money-go-round it probably makes sense to factor benefits in alongside taxes paid but maybe there needs to also be some mention of the shared components - maybe thats where the nearly $11bil left over in the graphic comes into it.
And then there seems to be some sort of a weird "add up all the benefits paid to families with incomes under $50,000 and then subtract that from those next up the scale and that only leaves those at the top paying any tax" take on it. Seems to me any family earning over $50 is making a contribution. Which is good.
With regard to CGT I did hear something on talkback (yes, I know, talkback) where some property expert from the University of Auckland reckoned that all it would do is drive up rents. Which you would think would make renters go and buy a house instead but apparently due to high rents they would not be able to save a deposit and therefore would be stuck with high rents forever. Or something like that.
-
Cracker: Another Capital Idea..., in reply to Jeremy Eade,
Saint Paul and his family are worried about losing some disposables and according to you we may lose him to country X .
Just wanted to clear a minor detail up - it was not me who suggested that high earners would leave if top tax rates went up. What happened was someone suggested this theory, others jumped on the bandwagon and said great, let's get rid of these "rich pricks" and I was thinking how ridiculous, on the one hand we want to tax the high earners more to pay for everything, on the other hand we want to see the back of them (which begs the question, where will the money come from once they are gone).
So when I was so bold as to suggest what might happen if they did leave and take there future tax dollars with them the answer I was quickly provided with was that nothing would change as a new bunch of high earners would come to take their place and happily pay (presumably) higher tax rates. And I'm guessing also attract the scorn of many for being "rich pricks" in the first place. Unless they were teachers - as apparently no amount of money is too much to pay teachers (OK, I'm taking the piss now, settle anyone who's bothering to read this. I love and respect the teaching profession. Really).
Anyway - small point, but just wanted to clarify in case anyone else seemed to think it was me who suggested high earners would leave if tax rates went up. I did not, and think it would be an unlikely outcome.
I would like to add though that I find labelling people as "rich pricks" as a tad offensive, especially when it is seen as imperative that we have them in the first place so that we can tax them highly to support the running of the empire. Kind of smacks of biting the hand that feeds the nation.
The discussion I was looking for would be to 1) accept that one solution might be to tax the high earners more than is done currently but then 2) to look at other options, such as the concept that there is more involvement (in paying tax) across the board at all income levels. But obviously if you have anything like a higher level of unemployment or welfare dependancy you are always going to need more to fund the state.
Another minor point - someone was talking about the good ole days when tax rates were a lot higher for the high income earners - this was well before GST came along so surely this would need to be taken into account as well? It's not like tax rates were just dropped on their own.
Jeremy, I'm sure we would not be poles apart in general life, but for now I would have to disagree that we need to tax high earners such as our Scotsman more than we do currently. Having said that - do we really think he gets paid via PAYE and pays the sort of tax in my rough calculation? I suspect there would be some form of management company or trust involved with its own accounts so who would really know just how much tax ends up getting paid by individuals such as this. And that might be another thing to consider - when tax rates are reasonable, people just pay them, when they get higher and may be considered by some to be too high, that might be when people go looking for ways to minimise their tax.
-
Cracker: Another Capital Idea..., in reply to Sacha,
Sure you weren’t derided because it’s not true? Previous discussions hereabouts have established to most people’s satisfaction that those who pay the greater share of tax also happen to have the greater share of both income and assets.
So I'm a bit confused now...you seem to be saying that it is not true that a small proportion of wealthy people pay a disproportionate amount of income tax...but then you seem to take a u-turn and agree that it is the wealthy that pay the greater share?
I looked back a few months and this came either from you or from Keith:
So the top 1% of taxpayers pay 15% of the tax, and the top 3% pay 26% of the tax? Does it mean we overtax our rich?
This was generally accepted as fact and is what I was referring to. The point I made then and repeat now is that I for one don't think that is necessarily such a good thing. Although I am coming around to accepting the idea as necessary.