Posts by Matthew Poole
Last ←Newer Page 1 2 3 4 5 Older→ First
-
Paul, my point was that we can tax capital gains. It's not called a capital gains tax, but its intent is precisely that. If IRD got funded to chase people who engage in property speculation and ensure they're compliant, it would raise the tax base a fair bit. If the rules were tightened around residential housing, it would raise the tax base even further.
I also don't see that bringing in a blanket CGT on all property sales would be of benefit. For one thing the way the system is written at the moment means that I can flog my belongings on TradeMe without having to report the income. That's because I didn't buy them for resale, I bought them for personal use. It greatly simplifies things for individuals when they're not in the potential position of evading taxes by not returning gains made from selling possessions. The hole is around residential property, which is made greatly more attractive as an "investment" due to its having the same status as any other personal property.
Plus, with our rates of investment in startups being so woeful, I can't see that the situation would be improved by bringing in a tax that catches those few who do invest. It may even prove to be counter-productive.
-
I'm more interested in getting the tax system to reward long term capital investment - that means not playing the market to make a quick buck but putting money into the growth of companies over the long term.
Anywhere else this is called a "capital gains tax" it's a LOWER tax on long term capital gains (in the US it's ~25% compared with ~38% marginal) - our problem of course is that we don't tax capital gains at all so we can't reward the people who invest in the future over the people who watch too much house-porn on TV and want to make a quick buck flipping property
Incorrect. The proceeds from the disposal of any property purchased with the intention or purpose of resale can be taxed, and that extends to houses. The IRD's problem is that it doesn't have the funding to chase all the property speculators. If they did, it might make rather a difference since the onus is on the taxpayer to disprove the intent/purpose claim. The up-side is that sale of shares in a company that you started is totally tax-free. Yes, really. Sam Morgan et al got to keep every single cent of the $700-ish mil that they were paid for TradeMe. Every cent. Overseas they would've been stung hard, even in the US. It's a two-way street, and it's just very unfortunate that it's houses, not companies, that people get wet dreams over. I don't know how it can be made more attractive than tax-free, really. The best thing that can be done is to change the rules on what attracts tax with the disposal of housing, and publicise that you get to keep it all if you sell a successful company that you helped found.
-
Sofie was almost right. The Companies Office increased the cost of registration outrageously last year and it's now $160 ($10 to reserve the name and $150 to actually carry out the registration). It was $60, at $10 and $50. But even at $160 it's still an absolute steal compared to many countries based on things I've read. Australia, for example, charges $400 for a registration. You can do it entirely online, too, if you have a scanner. Once you pay for the registration and enter the appropriate details you get emailed the PDF documents required for the directors and shareholders, already pre-filled and just awaiting signatures. You can email or return fax them (0800 number for the fax, too), and once all the forms have been returned you get emailed a PDF of the company's registration certificate. It really can be done in a morning.
As for the bank account, the last company I formed opened its bank account with no deposit at all. So it cost $160 (ignoring the cost of getting the trustee lawyer to sign things) to have a company fully registered. IRD charge nothing to get registered for any form of taxpayer status, and once you have the IRD number, which the Companies Office can apply for on your behalf as part of the registration, you can do it all online. There's no requirement for a constitution, and if you want to file one later there's no charge if you submit it electronically.
It's cheap, easy, and quick. Paul's right that doing the tax stuff can be a little daunting at first, but the IRD produce any number of guides on how to fill in all their forms. The guide to filling in an IR3 (personal return, and selected because I have one next to me), for example, has 68 pages of content. That's comprehensive. The guides for company and everything else are similarly thorough. Admittedly the first time you do a company return it's rather confusing, even with the guide, but be shown once and it's quite straightforward if you're a small business. Or pay the accountant a few hundy, which I should add is entirely deductible against the tax owed in the return, and make it someone else's problem. That's the only return you really have to pay someone else for, as Paul observes when he says that GST and withholding returns are dead easy to do yourself once you know how.
Interesting that the World Bank ranks us 12th for ease of paying taxes. The UK is 16th, Australia is 48th, the US is 46th. Many of the countries ahead of us are such hotbeds of taxation as the Maldives, Saudia Arbia, and Qatar. The only heavily tax-regulated economies are Ireland and Singapore.
-
It was on that basis that I felt Shearer's election was a failure. Helen got the nod and it was a big deal that it went to a woman. Then it reverted to a physically capable, heterosexual, white, educated and wealthy male. Yipdee fucking shit.
Because, like, Lee should've been elected based on her gender and ethnicity not because of any kind of, oh, competence? Capability as a politician? World view?
You're pretty much claiming that Shearer got elected because he's "a physically capable, heterosexual, white, educated and wealthy male" (wealthy? Really?). Do you not see the irony in this? If Lee had been elected, which I think is where you're angling since she was the only non-white, non-male candidate, you seem to have wanted those attributes to be the basis of her election. Implying that it's perfectly fine to be elected because you're not a WASP male, but if you're a WASP male then you shouldn't be elected simply because you are a WASP male. That's not, I think, how we choose our politicians in this country. Shearer was elected because he really was the only viable option. Norman was a maybe, but a very fringe maybe. Mt Albert's not quite as liberal as all that. Lee was a loose cannon who should never have been let loose on an electorate race. Boscawen was never going to be elected, and everyone knew it. That leaves Shearer. WASP or no, he was the mainstream candidate who didn't fuck up. Dreams of a Greens victory were just that. Dreams. With Lee stumbling around with both feet blown off by her mis-aimed shots, it could have gone no other way. -
And now to add some of my thoughts on the original post, rather than merely being outraged by Tom's desire to ship us back to the bad old days.
1) If this "world class tax system" is bereft of some incentive for R&D, we may as well give up now. So many aspects of Shon Key's speech are intertwined that they're hard to disentangle, but when many of its outcomes revolve around increased technological output we need to be encouraging R&D in a big way. Even the 15% credit that had been given was meagre by international comparison, and now we have National abolishing with one side of the caucus mouth at the same time as the other side says "More innovation, kthxbai".
2) Where's the money coming from for this increased output by academia? National abolished the annual funding increases that Labour were using to increase academics' salaries to try and keep them in the country. With that gone, we're going to see yet more flight by some of the very people on whom an innovation revolution will rely most heavily. High-level intellect is a global commodity, especially in technological fields. If we can't pay these people something approximating their global market worth, we're going to lose them.
3) Just coz the BRT bleats about how "hard" it is to do business in this country, that doesn't mean it's actually so. In fact the World Bank says that we're the second-easiest economy in the world in which to do business. In between Singapore and the United States. In that order. Yes, it's easier to do business in NZ than in the US, according to the World Bank. But, hey, what would they know? Our lowest ranking for any of the criteria they measure is 23. The United States'? 46. Where's Australia fall? Ninth, with a worst category ranking of 57.
So, what red tape can really be stricken? It's not that bloody hard to do business here. It really isn't. You can register a company and be in business within a week, if you're not in an industry that has specific regulation such as food handling. For a lightweight industry such as software development, the only thing that would hold you up beyond a week is waiting for IRD to send you the IRD number that you have to have in order to provide GST invoices. That's it. Hell, you can register a company and get a bank account in the same morning if you're particularly organised. Registering for GST or as an employer? Get it done online in minutes. For all the griping about how terrible IRD's service is, their website mostly does a good job of walking you through the steps required to get a business underway. -
Paul, Fonterra is at least (mostly) held in check by the world price for its products. If they get too outrageous in what they're charging domestically, domestic purchasers will buy overseas. It's horribly inefficient to do so, but that's the way the market works. At least it's an option. In Tom's wet dream, Fonterra would not only be protected from foreign competition they'd also be encouraged to price significantly higher than their costs.
Disposing of Fonterra would be good for NZ in some ways, not so good in others. The removal of its distortionary market power as regards the cost of dairy products locally (though I'm still not convinced that it's Fonterra and not the retailers that're fucking us on that one) would be of significant benefit, but the costs associated with losing the unified marketing and manufacturing clout internationally probably outweigh, in the long term, the benefit to consumers. I imagine there're several economists' reports that examine exactly that.
What's particularly impressive about Fonterra is just how massive its international muscle is, despite only being the sixth-ranked dairy company in the world by turnover. When they're competing against the protected-to-the-hilt European and American producers, and winning so convincingly, I'm not so sure that we want to interfere. Letting subsidised producers have more influence over the world price is a recipe for pain, as witnessed by what EU/US subsidies for other products do to farmer incomes in the third world.
-
Glad you appreciated the pop culture reference, Mark :P
I took a paper on international economics a couple of years back, and one of the clearest messages the lecturer imparted was that protectionism costs far more than it gains. Take monopoly rents, apply them to an entire industry, then support them by government fiat, and you've got a recipe for inefficiency and waste.
-
The solution is re-assert the importance of the export sector over that of the money men. All those old "heresies" need to be dusted off and applied judiciously and intelligently to help our productive export sector... Tariffs and import restrictions to ensure we have a healthy balance of payments
You just contradicted yourself there Tom. Those "heresies" of which you speak are antithetical to "our productive export sector." Protectionist economic policies shore up inefficiencies and discourage producers from seeking to improve productivity through capital investment in technology. They also benefit the few - the producers - to the great detriment of the many - the taxpayers and consumers. The money to pay for these measures doesn't magic itself out of nowhere, it must come from behind the border over which imported goods must cross. And if you think that domestic producers will compete strongly on price, you're deluded. Why would anyone compete against a government-imposed price buffer when they can just cream the extra profit? To do so would be completely against the producers' best interests.
There's also the small matter of our international reputation. There's plenty of scope for our trading partners to wallop us with increased tariffs and quota restrictions if we decide to go backward, and you can be sure that they will. That would cost us far, far more than any notional gain. One of the reasons we beat the pants off British farmers by every measure except "food miles" is that we don't prop up under-performing operations. If we want to keep that marketing advantage, we need to continue to let production be a Darwinist, gladiatorial system.
Protectionism is a loser's game. It costs domestic consumers, and it costs in lost opportunities for trade. Why would we do that to ourselves? We can't very well preach to the rest of the world that they need to ditch protectionist measures if we return to them ourselves. To quote "Joshua" from War Games, "the only way to win is not to play."
-
Not only do I not get a return now, I don't get anything from my bank or employers as far as I'm aware.
Am I being screwed through inactivity?
Why do you think there's a huge business scamming people to do the meagre work involved in claiming back over-paid tax? Seriously, all those tax agents that offer to tell you if IRD owes you money, for a measly cut of any refund, they're a scam. The minimum fee I've seen from any of them was $20, assuming you're entitled to money. Given that requesting a Personal Tax Summary online from the IRD website takes about ten minutes (at the outside, if you have the paperwork at hand, and you need that same paperwork for any of the agents so you lose nothing by doing it yourself), they're charging you $120/hour. For most of us, our time is worth considerably less than $120/hour. The handful of people whose time is worth more, well, they very likely already have an accountant who's on top of all this stuff for them anyway.
You can claim back for up to seven years. Your PAYE details are held by IRD, so you need nothing from your employers. If you've made money from interest or dividends, it's legally required that the payer furnish you with the necessary information about gross payments, withholding tax, imputation credits, and withholding payments if any. Get those (the payer is required to maintain their records for seven years, so they'd better have copies even if you don't!) and you can request Personal Tax Summaries for the relevant years. It's painless, and once you've supplied bank account details to the IRD they'll credit any refund within, usually, a couple of days. I've never had to wait more than three.
Oh, and make sure you're requesting a Personal Tax Summary. If a PTS shows a debt to IRD, you're not legally obliged to pay it. If you do a full IR3 and it shows a debt, you are. A PTS isn't deemed to be "taking a position", in tax parlance, meaning that you haven't actually said to the IRD "this is the state of my tax affairs for the year."
The above is not legal advice, etc. It is, however, the considered opinion of someone who's been claiming refunds for the last three years, including going all the way back to the 2003 year when I found out just how incredibly easy it was to do online. That's before I studied tax, too.
-
set in train a repeal of the 'commissioning rule'.
Which appears to still be in train, even if I don't quite know what it is.
I understand that your boss/hirer would then have to explicitly take the copyright in contract if they wanted it?
The important part of the bill is here. In short, it reduces the default first copyright ownership positions from the current muddle to two. If a work is produced in the course of one's employment, it is the property of their employer. In all other cases, including works-for-hire, it is the property of the author.
At present some classes of works-for-hire default to the commissioner, others default to the author. The law simplifies things greatly. I'm not sure I agree with the outcome, but the sentiment is well-placed.