Originally Posted by
SBQ
While i'm not against taxation, why is it no one really addresses 'how much taxes' should a person pay in NZ? In my recent post here I made the comparison of the top 1% earners in NZ vs the 1% in America. What NZ politicians seem to miss out is how much more is expected out society to pay in taxation?
Perhaps question why NZ Gift Duty and NZ Estate Death taxes were removed in the past? I think the answer was more along the lines of NZ's failing brain drain and flight of capital overseas. You had NZ charities that struggled because of the Gift Duty that limited donors from achieving anything (I recall Jane Cameron ex-Katmadu wanting to make a generous gift in NZ but ended up moving to Australia). We live in a global world and there are no laws 'yet' that stops a person from declaring non-residency in NZ (so easily achieved by just flying to Australia). Where I grew up in Canada, a decision to declare non-residency is not so easy achieved because one can't simply say they just want to move to another country. A green card or residency visa is required in the US if a Canadian wants to live there. It's not so simply as a Kiwi hopping on a plane and flying to Australia when ever they want to.
So this brings back to my original point, if you want to compare the top 1% of the people in NZ, look who they are? Are they really make a lot of money or wealth? More importantly, are they the LAST egg left which Jacinda Ardern has been cautious about imposing CGT (or any new tax) to them? Believe me, Canada has had it's fair share of wealth leave the country throughout he 90s and 2000s (mostly due to brain drain and the wealthy sending their assets abroad).
As I said before, what level of taxation is acceptable? NZ gov't has to be very cautious about this because again, we live in a globalised world. Residents will find out that they had enough and will leave. The US has all of the above (gift tax, death duty, etc..) but like their income tax brackets, the thresholds to be paying a lot of tax is way way up there. To be in the 1% top earner, one needs to be well over $500K a year income, in addition to also having capital gains tax. But for the vast majority, and i'm talking those that have enough after-tax disposable income to pay for medical insurance, they can structure their finances so they pay very very little taxes.
So I ask again, how much taxes should a NZ resident be paying? More specifically, how much should the top 1% should be paying in NZ? Because these groups of people are the most likely to move to more tax friendlier places like in the US (as what we've recently seen from the EU's hunt for taxes).