I wouldn't argue. So let's agree that everyone over the age of 12 already knew that.
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Exactly, what the market will bear with too much protest. That also applies to low skilled workers. Wonder why that is? Lawyers, surgeons can only set their recompense at what society/market thinks they are worth. Same applies to other occupations thus the same rules apply to all.
FP is correct in that there are those that are overpaid due to the artificial barrier to free markets and price discovery that the minimum wage provides.
Ha, classic. You believe that tosh? That might apply in a mythical "perfect" market. Market/society has no idea what lawyers/dentists etc are worth, as lawyers/dentists etc well know and strive to maintain. Much like houses. Their fees go up CPI+ 5% each year, they sit back and as long as some weird breakout doesnt rock the boat they all prosper. Occasionally some rascal will increase fees 20% and a new low will be set. They know we are too stupid to query it. We moan a bit then book an appointment. The professions with the strongest lobby groups ensure nothing too crazy happens to them.
Overpayment/underpayment? Its largely guesswork. Non market forces are many.
https://www.abc.net.au/news/2016-11-...f-life/8058578
Inheritance taxes efficient, but unpopular
Inheritance taxes are incredibly efficient on economic grounds.
After all, you can't really change your behaviour to avoid them. We're all going to die one day.
This is surely one of the biggest frustrations for economists — for some reason, the 'best' taxes also seem to be some of the most unpopular ones.
People grudgingly accept income tax and stamp duty, which are 'bad' taxes.
They discourage people from doing positive things, like working more or moving to a more suitable home.
There is one big flaw in inheritance taxes, aside from being deeply unpopular, however.
Experience shows that many people manage their affairs to minimise the inheritance tax they have to pay.
For instance, they might set up a family trust during their lifetime to avoid some of the tax bill.
These problems are not insurmountable, after all there's plenty of historical experience in Australia and current lessons from overseas about how governments can minimise this avoidance.
However, the combination of avoidance and various exemptions (such as high thresholds) used to minimise popular backlash against death duties mean they raise relatively little revenue.
Belgium raises the largest proportion of its taxes from the dead but, even there, the OECD found estate taxes make up just 1.6 per cent of total tax revenue.
So are death duties worthwhile if they raise so little?
The answer is yes if they prove to be an effective tool to redistribute some of the accumulated assets of the wealthy to those born without a silver spoon anywhere near their mouths.
Certainly, renowned economist and author of a best-selling analysis of wealth and income inequality, Professor Thomas Piketty, thinks estate taxes have a significant role to play.
"If you have labour income of $50,000 or $100,000 you are going to pay a lot of tax, but if you receive $1 million or $2 million in property from your family the tax rate will be zero per cent — there is no inheritance tax — which is very small as a tax rate."
How would inheritance taxes apply in NZ? Family trusts are very popular in NZ. The wealthy in NZ have to a great extent settled their wealth into discretionary family trusts. In NZ to include inherited wealth in the tax net, you would need to introduce death duties together with some sort of a capital transfer tax.
Another way to tax inheritances in NZ could be to treat trust assets in a trust, in which the settlor retained a beneficial interest in the assets in the trust as a discretionary beneficiary, as forming part of the settlor's estate upon their death. The trust assets would then be taxed at the marginal estate duty rate applicable to the deceased estate.
Thomas Piketty and his data are not the best to rely on when formulating policy or even opinions.
In any case although there might not be death duties etc here atm, those who inherit assets are required to pay tax on any income from them. So swapping labour for capital as an income source. Just like working at the office for $50k, but without the working.
Wouldnt be that difficult, thats the way it used to be (gift and estate duties in tandem) until not so long ago. then just need to discourage trusts as a tax dodge e.g. with tax rates, put estate duty on people, then wealth duty and/or higher income tax on trusts. Once the disincentive goes they generally stop being much use. Not sure if there is s genuine reason for trusts anyway, if it is to ring fence assets against creditors then presumably you've done something wrong. If one has a valid reason then the extra tax becomes the price one would have to pay for that insurance. Or some such thing.
Correct me if i'm wrong but aren't NZ Trusts taxed at 33%? Any income they derive would be taxed at that rate? Also being a trust, and like a company, they lose the benefit of tax free capital gain vs an individual owning a principal resident home?
Most places have some form of CGT and likewise, estate or death tax. Why should NZ be excluded? FYI, the US has death / estate tax which the threshold is set at a whopping $10.5M and higher. Nothing wrong with that but I think NZ needs to be careful on the level of taxation as more and more will continue to leave - find ways ways to move wealth abroad.
Death duties can be very unfair and may not be good for Nz.
For instance they may force the sale of a family farm that a son has spent all his life contributing to but his father has wanted to hold on to.
Nz is a country made up of small business paying taxes and contributing-they maybe forced to sell it in order to pay death duties.
The rich will find ways to avoid.
The old will be encouraged to gift their assets to family before death-hence no luxury in resthomes
It is a form of double taxation for most cases that will be hit and why should this be so?
True, it will be the moderately well-off who will end shouldering the burden. The seriously rich will have the well-paid advisers to find the loopholes.
There are lots of instances of double , treble and more taxation. The government clips the ticket when income is earned, then when it is spent. Then when it earns income from investments made from tax paid income etc.
Except in certain specific cases such as inter-spousal inheritances and your example of the son not receiving a market place salary for working on his father’s farm, from an inheritor’s point of view, receiving a legacy is an untaxed windfall gain.
Yes you're correct. Trusts are still subject to tax and they're not really a viable entity to use as a tax dodge as others have suggested. IRD gets their share one way or another.
What they have traditionally provided, is a method to shield family assets. This has slowly been chipped away by the courts, along with many other advantages.
The point was regarding estate duty, the old tax dodge was to set up a trust which lives longer than the parents thereby avoiding estate duty when they meet their demise. Another was (before it was closed down) a way of removing assets from means testing regarding aged care subsidies. Tax dodge/careful planning, call it what you like.
And to the question about the farm being built up and handed down, no different from building up a panel beater shop or just building up a nest-egg for your kids' education or whatever, not sure farmers should get a specific tax break. Some bigger question than just farmers to be addressed.
I noticed this and thought of you Blackcap.
Obviously Stephen Tindall doesn't know how to properly virtue signal as it looks like he is actually giving away quite a lot (about $10million a year). What a virtue signaling w*nk*r.
Maybe you should contact him to point out what an idiot he is making of himself by asking for the wealthy to contribute more to society.
https://tindall.org.nz/who-we-are/