Thursday, January 21, 2010

ZenTiger A New New Zealand Tax System

"Taxes have to be fair" is the mantra that justifies National and Labour taking turns at changing the way we are taxed.

And this is where it all goes off the rails.

The socialist definition of fair is different to the right wing (and National are basically running as a centrist party, their right wing remains mostly tucked under their shoulder).

To my mind, the fairest possible tax system would be a single, broad flat tax on either earnings or consumption, say 20%. Done.

The government then budgets to live within that income (a concept that seems to be missing from the tax reform discussions).

Additional to that would be the ability to charge a range of fees in exchange for selected services (such as council rates) although the market could take up much of whatever the government could not afford to do, and the discussion on what government core business should be to meet such a budget would be long and hard, but worth the sweat.

That would worry socialists who work in the following way:

If you are intelligent or highly motivated, and get better marks at school, you should redistribute those marks to less intelligent or less motivated people so that everyone receives a "fair" mark. Got it? Because that's exactly how they approach money, which represents your earnings from your work. Their base assumption is that the product of your work is not really yours, but society's. It has some merit, in that it's easier to make money if society is stable, secure and rich. Equally, the very rich don't make money from their work, they tend to make money from their wealth. Once money works for you, you don't need to. That's why taxing consumption (a universal GST) can work better at capturing a slice of that wealth.

To then give the socialists and humanitarians their due, the "fairest" thing we could do to help the less fortunate would be to provide a *universal* income, a minimum base "wage". It would be funded from license fees applied to the wealth generated from NZ's natural resources: Oil, Gas, Coal, Fish, Forest, National Parks.

We effectively are shareholders in our nation's natural wealth. Your right to a share is based on (a) being resident (b) being a citizen, by birth or by oath. (c) not being in prison for an offense of more than 3 years.

If the dividends are low, we provide soup kitchens and bunk beds, and call on family and whanua; church and charity to help people work their way out.


Discuss

1 comment(s):

Stephen & Karen Coster said...
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