Posts by Stephen Judd
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One of the things about Australia's economic success is that it's been better distributed through a higher minimum wage and the preservation of employment conditions we lost years ago.
Anyway, right now, Wikipedia tells me that mining is 5.6% of Australian GDP, and about 35% of exports. cite. It's not clear to me that mining alone explains the relative prosperity gap. Certainly not how they pulled away from us through the 90s.
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I think one thing we need to keep in view about higher taxation is what we do with the money, and how that can be positively attractive. The government doesn't set your tax money on fire, it spends it, sometimes on rather good stuff.
When we have high quality public services and low income inequality, we are likely to have a happier populace, lower crime, better educated and presumably more productive workers, blah blah -- if you loved Sir Paul Callaghan's prescription for more high tech etc, note that it was accompanied by a call for promoting social justice in order to create a country that is attractive to smart people.
I actually agree with Damian in that there is some point at which taxation is so onerous that it will cause a harmful level of people to choose to live elsewhere. But I think we can usefully argue about where that level is and what would justify it. Arguments that amount to "ooh, if we raise taxes too high then all the smart rich people will leave and we'll be DOOMED" are not helpful or convincing to me. Especially since arguably, I AM one of those people, and am not fazed in the least by the prospect of 70s-level taxation, at least if it funds 70s-level public services.
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if the salary was capped at $361,000 or whatever arbitrary figure we decide is ‘enough’, they might be quite a shitty CEO
I suggest you google "CEO compensation correlation". You might be surprised, or not, to learn that there appears to be no correlation or possibly an inverse one. So there might be a shitty CEO at $361K, but there might be an excellent one as well.
A possible explanation which I heard is that skills at negotiating compensation packages and climbing the corporate ladder aren't necessarily the same skills required to run a business really well. Another is that external factors -- luck -- overwhelm the effect that one person can have. Another is that good boards are really what create great companies, and a good board doesn't overpay the CEO.
I honestly believe that the idea that CEO pay reflects their contribution is bullshit. Competent people are rare, but not that rare. If you don't share that belief, obviously you'll come to different conclusions.
As to the businesses we can least afford to have leaving being portable, well no. Dairy farms are not portable, and they are the engine of our current economy.
Niche manufacturing, software and high tech, which I personally think of as being the ones that we really want to grow and depend on for the future, are portable, in the sense that intellectual property is mobile. If the creators of those businesses were strongly motivated by tax regimes, they'd be elsewhere already. In any case, they certainly don't pay themselves very much, in my experience. Not Telecom CEO level pay. A 40% or even a 50% marginal tax rate is unlikely to make much difference to what in the end is a lifestyle choice to remain in NZ, I suspect.
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Incidentally, do Swedes emigrate much these days?
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it might be worth noting that their contributions to the tax take would fuck off with them
How does that work, exactly?
Suppose I have a lot of assets, and a lot of income, and I decide to leave in disgust.
We don’t have a wealth tax, unless you count rates. And if you are thinking of rates, property is something I can’t take with me. So NZ loses nothing there. Any loss of tax contributions must be about my income.
If my income was from salary, presumably someone else will be employed to do my job, and they will pay the income tax I can’t stomach.
If my income was from business dividends, the business will still be taxed, and as a non-resident, I will no longer be able to claim imputation credits, so the govt will actually keep more. If I sold the business, the new owners will be in the same position.
So I’m scratching here. What exactly is the effect of tax refugees fleeing on our tax base?
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Cracker: Another Capital Idea..., in reply to Damian Christie,
You wanna see the people already paying by far the lion’s share of the tax all fuck off overseas?
Assuming that were to happen, and I think to a great extent it wouldn’t, what do you think would happen next?
Would Telecom operate without a CEO? If the remaining capitalists who are still resident for tax purposes fled, would they sell their businesses here? Who would buy them? Would they go unsold? Really, how do you see this flight of tax haters playing out?
Do we miss Douglas Myers?
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Speaking as an avowed Labour supporter, this makes me very unhappy.
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I agree, exempting the family home is inconsistent. My best attempt to explain it in terms of fairness is that up until now, New Zealand folk wisdom has been that the family home is a crucial asset in the domestic portfolio and a form of savings that you ought to prioritise. Thus immediately bringing it into a CGT regime penalises people who made capital allocation choices based on that folk wisdom. Idiot/Savant is right, this is more political expediency than principle.
Perhaps in future, governments will incrementally tidy this up.
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Hard News: NetHui is here, in reply to Gary Hutchings,
That suggests a good thing would be a long term plan to pay heavily into a foundation now to continue funding ISOCNZ's work when that revenue from names has dried up. (I confess I'm ignorant here and such a plan may already exist).
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Actually I believe Goff ruled out a coalition agreement. That doesn't mean they couldn't cut a more limited deal for confidence and supply,