Comments on: Exploding tax myths – Part 2

By: Tauhei Notts

Tauhei Notts — Sat, 30 Jan 2010 23:02:37 +0000

Today is the forty third anniversary of me commencing work with an antecedent firm of Ernst & Young. I have specialised in tax over those four decades. I can even remember the Labour Gov’t reducing the top rate to 45% in about 1973.
Labour’s move to a top rate of 33% in about 1988 was the smartest move by any political party in the past four decades. That, and their imputation system as well as their withholding taxes on interest, and to some extent on dividends. People like Stuart Nash are too young to comprehend the huge damage that Muldoon’s silly 66% top tax rate caused. It spawned so many idiotic investments that were all tax related. Fair dinkum, people invested in, get this, Rabbits!
If Key can align the company, trust and top personal rates he will have achieved something that the Labour Party did so well 22 years ago.

By: Draco T Bastard

Draco T Bastard — Sat, 30 Jan 2010 08:45:18 +0000

Taxation is theft….

No it’s not. If you removed taxation you would remove the community that you rely upon to live.

no matter how you spin it nor how much “common good” (gag) is served.

That common good applies to you as well. Without it, you wouldn’t be able to survive in anything close to how you live now. Here’s an example of what happens when you remove community:

http://img.photobucket.com/albums/v235/draco1337/TheIk_01.jpg
http://img.photobucket.com/albums/v235/draco1337/TheIk_02.jpg

By: charlie

charlie — Sat, 30 Jan 2010 05:53:09 +0000

a long road to ho

smirk…

By: James

James — Sat, 30 Jan 2010 03:32:13 +0000

Taxation is theft….no matter how you spin it nor how much “common good” (gag) is served.

Its only those who want to live of others or control them that get all hot for tax….

By: Anne

Anne — Fri, 29 Jan 2010 23:15:24 +0000

Good one Dorothy.
Cactus has a lot to learn. Growing up would be a start.

By: Hilary

Hilary — Fri, 29 Jan 2010 23:05:51 +0000

Instead of tinkering around the edges of our economic orthodoxy, Raj Patel’s latest book ‘The Value of Nothing’ reconsiders what really has value. He’s a former World Bank and WTO man who now critiques their approaches in a positive way. A refreshing social-justice/left/intellectual view. http://rajpatel.org/

By: Clint Heine

Clint Heine — Fri, 29 Jan 2010 22:35:29 +0000

Dorothy, pot. kettle. black.

HK’s wealth comes from what exactly? How many countries with that sort of wealth and economic freedom would choose what you’re advocating?

Naa, didn’t think so.

By: Dorothy

Dorothy — Fri, 29 Jan 2010 21:59:24 +0000

Cactus – abuse as usual! Never disappoints, does she. This ain’t your blog – keep comments to a reasonable length. And your reply is to go ballistic – pathetic!

By: Stuart Nash

Stuart Nash — Fri, 29 Jan 2010 20:40:25 +0000

great post Rob – said it all.
Cactus – i am well aware of the economic history and foundation of both the Singapore and HK economies. While we need to study and understand how successful economies achieve prominance, and if appropriate, take the lessons and adapt them to the NZ situation, your argument that a large part of HK and Sing’s success is because of a superior tax system shows a lack of financial, historical and social understanding – and I am sure you are not that ignorant. The comment I deleted from your post inferred that I am a misogynist, and that I would discount a paper simply because it was written by a woman. Nothing could be further from the truth, and I won’t put up with that sort of crap in this site.

By: Rob Salmond

Rob Salmond — Fri, 29 Jan 2010 13:01:07 +0000

Stuart – This is a really good post, and the Exploding Tax Myths series is an important one. It is high time Labour stopped basically ceding these taxation-type arguments to the Nats, as the evidence does not line up nearly as neatly as they like to claim. Great to see you taking up the baton on these issues.

CK
1. Your perspective, both here and elsewhere, appears to be that the sole goal for taxation policy should be to maximize productivity growth. I don’t think that view is widely shared, and that concerns over other issues such as equity and funding quality public services also enter into the equation for most.
2. Even if we were exclusively concerned about productivity growth, the answer to your supposedly killer rhetorical question “Which political party actually cut the corporate tax rate? LABOUR” is neatly contained in this sentence of Stuart’s original post: “Lee & Gordon (2005) found that while corporate tax rate is significantly negatively correlated with economic growth, other tax variables, including the average tax rate on labour income, were not significantly associated with economic growth.”
3. If you are going to disagree with various empirical findings published by the OECD and others, great. But can I suggest that it is more persuasive to critique the findings themselves, rather than simply declaring all those OECD reports that you disagree “inherently biased.” That is a pretty weak argument. Maybe you could tell us exactly where the studies used the wrong data, or analysed it poorly, or drew incorrect inferences from their analyses. That would be helpful information. Calling them names isn’t.
4. It is absolutely appropriate to consider New Zealand’s position on the World Bank’s “ease of doing business scale” (and also the various “economic freedom” scales where New Zealand also does very well). This is because much of the argument for lower taxes in New Zealand comes in the form “we need to be more economically free and more business friendly, like Australia and the US,” and those studies consistently refute the premise of that argument. (They also suggest, by the way, that New Zealand has little to gain, either in terms of “ease of doing business” or “economic freedom” by taking up HK-style policies, as we already at basically the same level as HK. And remember it isn’t me making that judgment, it is the World Bank and the Heritage Foundation and the Cato Institute.)