Yes there is legislation concerning bonus bonds, and presumably for PIEs. Perhaps not the best example. The point i was making is that avoidance is not quite the simple definition you gave it.
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CJ & fungus Pudding Bonus bonds are a lottery just like lotto not a term or bank deposit
Here's one of the responses to that article by Damien, from Grant in Otago.
I think we all know a few people like Grant. I'd just like to remind Grant that Sam Morgan and others like him did employ staff, and if they hadn't sold Trademe off at a huge capital gain, they'd have been paying substantial taxes on annual profit. Presumably Fairfax are paying those dues (although other business areas may be loss-making, starts to fit). So you're saying it can't be done? Look around.Quote:
Brilliant, Damien. Short, sharp, & straight to the point. What a pity that most of those who have been motivated to comment so far are envy-ridden parasites who want to tax everyone else to fund their own visions of utopia.
The Laffer curve theory is sound. I know plenty of folks whose behaviour fits with it - me included. I'll never allow myself to earn more than a bare minimum as a taxable income in NZ. I'll do that deliberately so that the parasites won't have anything to feed off of. Even if it means foregoing potential wealth.
And for the same reason, I'll never create jobs by starting a business in NZ. I'll only do that in a country that respects private property. Income & excise taxes, regulations, and a culture of enforced altruism makes NZ undeserving of a citizen's productive efforts.
NZers are leaving the country for better jobs overseas because that's where NZ's best job creators have gone. That's the sound of Atlas Shrugging.
I wonder if Grant pays his own way at the doctors and on any hospital visits, pays for his children's education, refuses to travel on roads because he didn't help pay for them, and begrudges every cent of GST and excise tax. Maybe he's one of those self-respecting plumbers.
Of couse anyone can run a loss making business which will lower taxable income. Tax is assesed on the accumulation of all P+L, but you seem to imply that this is a deliberate ploy to avoid tax. Anyone who deliberately loses money to lessen a tax bill should certainly be locked up - not in a jail, but a padded cell. I'd be amazed if such an individual exists.
You also seem to be critical of Grant, which is a slap in the face to me as well. I retired from active work very early in life, simply because of Muldoon initially. I was paying 66 cents in the $ tax. Obvioulsy I wasn't doing my bit at all for the country according to your outlook. But ethics aside - it's a fact of life that high taxation removes incentive, particularly from the productive and entreprenurial types. (Mind you, when Muldoon went, I didn't bother getting back to work. I'd forgotten how, and developed too many bad habits. :p Lovely.)
No FP, I was hoping you wouldn't take offence, in your case you just don't like the idea of being an employer. This guy Grant took things to a whole new level.
I have been in the unfortunate situation of having a sideline loss-making business, and I did notice the effect on reducing taxes due. But it was a waste of three years effort. Those Muldoon years were crazy, looking back. It was a clever Waikato MP, Marilyn Waring, who helped bring that to a conclusion. I suppose you were only paying 66% on the very top of your income, but fair enough.
But I think Grant actually exists, he'll stubbornly struggle on achieving less than he should, so as not to pay tax. An ex-farming family (Europeans) I knew did that, trimmed the farm operation so it paid no tax for decades. In the end most of the stock died of starvation on the hills and fell into the gorse-filled valleys, and the bank foreclosed on the mortgage. It's a true recent story.
Basically it. the wage slaves in the middle (of which I am one) pay the most tax as a proportion of their income.
I also think the paper on which the article is based is good in that it points out that increasing the tax rate doesn't increase the tax take. The tax take under Labour grew because of economic growth (the end of the worldwide boom as opposed to anything Labour did), not because they decided to tax the "rich". Unfortunately this recession, no fault of national, is going on longer than is ideal.
CJ, thanks for your comments. But if you're completely right, every voter should vote either National or Labour according to the best deal for them on the day, because we are at the complete mercy of external situations, and all the lever-pulling from govt does nothing.
Actually, one of those comments after the article spelled out something else. In 1999 Sir Michael Cullen set the tax rates on companies at 28%, the lowest rate for a higher earner. This did help cause more companies (and enterprises) to be formed. When National got in and the tax advantage wasn't so high, the number of enterprises dropped. National has obviously pulled other levers like dropping the number of employees in the public sector. This had a roll-on effect to many smaller service businesses, and would have been predicted. I could go on with examples but it's too depressing..
Another comment was that National as a party are primarily there to look after the already wealthy. That seems to me, to be an inescapable conclusion at the moment. I want to support a party that has the best interests of the country as a whole in mind.
I was paying 66% on over 50% of my income. A bottle of Scotch had more to do with the conclusion of Muldoon's reign than Ms Waring, although she possibly caused Muldoon to consume the stuff. You are right, I would never subject myself to the laws employers face. There are plenty of others like me on that score, and it's not that I want to underpay or exploit - far from it, I just like to operate on my own terms.
Anyway - good on Grant. It's his life. He at least is earning, and there are others with his attitude who don't even bother to do that.