New Zealanders definitely hate entrepreneurship - one political party wanted to introduce a wealth tax if you had more than $1 million equity. Median house price in Auckland is just over $1 million! Auckland has about 30% of the population, and house affordability (price compared to income) is similar as bad as Sydney or San Francisco.
I have done okay for myself founding a software business and I notice the tall poppy syndrome from friends. Plus the relentless attack on my hard earned savings by a grifter government. And shit support for businesses to start-up or function (government incentives are mostly negative, and the positive incentives are incredibly badly run).
Fortunately we are building more houses in New Zealand (low single digit percentage growth) but unfortunately immigration is exceeding supply. We need the immigrants because we aren't breeding enough New Zealanders.
My experience of our government healthcare system is mostly positive.
I don't understand it: we should want people to save for their retirement but all the incentives to save are negative. The main taxation incentive is to gear up and borrow money for property. Then that blows up of course.
Even our right leaning government seems to want to consider a capital-gains-tax. The existing taxes screw any reason to invest in the stock market.
I'm whinging: I think it is a good place to live but I feel a comfortable retirement is becoming an unacheivable dream.
> The wealth tax contemplated by New Zealand Labour would have required couples to pay an annual levy of 1.5% on any assets they held over a $10m threshold. The estimated $3.8bn in revenue would have funded income-tax cuts for the vast majority of Kiwis. Labour’s potential coalition partners, the Greens and the indigenous-led Te Pāti Māori, ran on similar platforms.
> Plus the relentless attack on my hard earned savings by a grifter government.
$150,000 a year if you own $20 million, $0 if they somehow attacked you all the way to a pitiful $10 million, and in return tax cuts for those doing worse than you, and they did not get elected.
I’m not seeing the problem.
The problem is what is the incentive to keep working once you've earned a house and bach? Why bother save for retirement if your savings are to be taken from you at a significant percentage per year? A few percent is a huge penalty (see index funds versus mutual funds), and the wealth tax is on top of taxation of salary and dividends.
assets over $1m - a threshold the party thought would hit the wealthiest 6 per cent of New Zealanders. The higher [$2m] threshold means only the wealthiest 0.7 per cent of households will be targeted. The $2m threshold is a net figure, meaning people with mortgages and other debts would need $2m of equity before they began paying the tax.
And incentive is to borrow money on property which is whacko, and then next thing CGT will also be added.
Houses should be for living in, not financial instruments.
The incentive is it’s still a fuckton more money. You’re not taxed at 100% and in turn you live in a country with better services. The amount of money wasted by the rich is hilarious when combined with this take.
1 in 10 businesses survive. Why bother starting one if you don't get your 10x return? If you've got one, why bother trying to be a serial entrepreneur if it's all gonna be taxed? Do you think New Zealand should leave the entrepreneurship to the USA and we can just buy what we need from US multinationals?
> The incentive is it’s still a fuckton more money.
It just isn't. The people I know earning way more than I don't have anything significantly better. Mostly a nice house and a nice car and if they're lucky a bach.
Marginal incentives matter. Over 50% of my personal income goes on taxes including GST.
My life is similar to most any professional worker. I have never owned a new car. I know solo-mums that didn't work for over a decade with more equity in their home than me. My biggest expense is tax, my second biggest is my mortgage.
> The amount of money wasted by the rich
Just the rich eh? Everybody else is so much more careful! Watch out with your stereotypes - I'm guessing you don't like them applied to yourself?
You're repeating bullshit - The majority of spending in New Zealand is not by the wealthy but by the rest of the majority of kiwis[1].
If people earning less than $100k waste 5% of their income, and people earning more than $300k waste 50% of their income, then the people earning less than $100k are wasting more.
We're not in the USA with Jeff Bezos, so your point just makes no sense.
The majority of earners I know blow more than single digit percentages on unnecessary crap and luxury. For example my working class friends that spend more than 10% per week on booze and drugs - plenty of people spending more than $150 with a weekly income <$1500.
Look around you and there are obviously not a lot of superyacht stores. Plenty of booze shops doing a roaring trade and it isn't the $300k+ earners in them.
The wealthy people I know invest. If those investments are bringing foreign income into New Zealand, we already tax that and all New Zealanders win!
The government needs to get rid of the bad property investment incentives - those are where the wealthy are fucking over the non-wealthy. We have enough land and resources in New Zealand for everyone to have their own home.
Don't discourage people from investing in things that make New Zealand better off. Our taxation system discourages founding internationally competitive businesses, and it discourages owning more than $50k in overseas shares. And the majority of New Zealanders don't give a shit because the majority don't begin such businesses and they are ignorant about where their income to buy imports ultimately comes from.
Negative incentives matter, probably more than positive incentives. We all want to slowly tax the well off until they leave or until they are no longer well off.
[1] Data based on: https://www.ird.govt.nz/about-us/tax-statistics/revenue-refu...
That sounds like a terrible thing the government is doing to you.
> No, not the government.
That sounds like a terrible thing the opposition might do to you.
> No, not the opposition.
OK… did you at least accurately describe what was happening originally?
> Well, there’s these asterisks. But I am oppressed.
no: - I'm using the numbers in the quote in my comment, and from the link I gave you.
Taxation rules create incentives and disincentives. If you earn a salary you are usually ignorant of those incentives because you don't experience them. From what I see the attitude is "fuck everyone who is better off than me".
Our rules need to encourage people to make NZ better off. Not have the incentive to stop once you have gotten a $20m home: https://www.trademe.co.nz/a/property/residential/lifestyle-p...
Anyone that owns businesses worth $20m is already taxed on income. Giving a big middle finger to people that build businesses is silly.
Disclosure: I am not anywhere near the big salary or wealth numbers we've mentioned.
You've never had a bill you couldn't pay? Major assets are usually tied up in long term investments with breaking costs due to illiquidity or taxation (e.g. sell a house before the bright-line period is up and you may pay a lot extra tax). You are showing your ignorance of the issues. Have you saved enough for your retirement or are you going to live off the backs of other New Zealanders? Good luck to you.
Paying the tax bill can mean selling an investment at a loss or borrowing. Not much different from someone poorer pawning what they own or selling their car because they need the money. It costs me 8.8% at present to borrow on my mortgage - (due to bank conditions I can't borrow cheaper). The same thing can easily occur to wealthy people (managing investment risks sucks).
Many people have already paid tax - their savings are what they have left over after tax. A wealth tax can be a double taxation - another taxes on top of money that was already taxed. Plus the wealthy still often get to pay income tax on any dividends or other gains.
There's a lot of people out there that blow all their money on shit and then put their hand out to the government. I watch friends on low incomes absolutely waste money and don't give a shit about saving. Not all of them, but enough. I've seen friends get big ACC payouts - and a few weeks later its all burnt on nothing. Or inheritances and lose it all. Luckily they live in New Zealand where they can get money from family or get some living expenses from other NZers (the government). Certainly not flash living, but better than most places in the world. Some of those millions come from my tough job earning export income. I get fuck all of the money I bring into the country (after expenses, salaries risk and taxes).
I bet if we met you would have a lot of complaints about how hard done you have been with taxation. It's the same issue.
So why argue this passionately against a non-existent tax that failed at the ballot box on A. assets that doesn't kick in until above $10 million by citing B. an income of near enough $0?
> You've never had a bill you couldn't pay? [...] Have you saved enough for your retirement or are you going to live off the backs of other New Zealanders?
I'm pretty sure that in either of those scenarios, there is no practical difference between having twenty million and twenty million minus $150,000 a year, reducing to zero by ten million, in assets.
> I've seen friends get big ACC payouts - and a few weeks later its all burnt on nothing.
Hmmm, sounds like they irresponsibly spent it somewhere in the economy. My guess is that they might have enriched people who have invested in medium to large businesses in the consumer discretionary sector, the sort of people who would have a net wealth north of $10 million. But since they were provided with, and I quote, "nothing" goods, the owners of the businesses providing those goods should have relatively no problem dealing with high taxation.
If you feel this doesn't apply to you, you might want to revisit your investments before complaining about hypothetical tax policy.
No wait, that wasn't the argument here, your argument is that they wouldn't want to accumulate even more wealth.
> Not have the incentive to stop once you have gotten a $20m home
Minor point, that's not a home, that's two homes in the same listing. I'd argue that accumulating property wealth beyond a house seems like it ought to be disincentivized at least a little bit, but evidently you're under the impression that either poor people don't deserve the opportunity or that land is in infinite supply.