Again, this is not an arts and literature post: I will be getting back to those again, but in the meantime as I previously published my submission on David Seymour’s Choice in Death euthanasia bill, I may as well publish my submission to Michael Cullen’s Tax Working Group. Perhaps I do this for no better reason than as an example of how not to make a submission (but that with the corollary logic I obviously believe all submissions to this working group will be a waste of time: appointing redistributionist extraordinaire Cullen to head it tells me all I need to know about the evil which will be forthcoming).
Note the feature painting on the index page, for those who came in via that means (click on Daisy dog above) is The Tax Collector by Pieter Brueghel the Younger. I’ve also included it at end of the body of this post below.
Submission to the Tax Working Group.
16 March 2018
To the Members of the Committee.
It will be pointless me advocating less tax and the need for a smaller state to this committee, so I won’t try. I long ago realised that society is once again on the road to its big state serfdom (this iteration via taxation, securities, and our monstrously expensive and intrusive anti-money laundering legislation), and that individuals like myself with the quaint belief that freedom is an end unto itself are a dying breed whose graves will soon enough be jackbooted over by these awful social justice warrior clowns demanding their entitled ransom of flesh from the free and self-reliant… which brings me back to tax.
The only point I would ‘plea’ for among the otherwise damage you will be recommending, is the abolition of resident withholding tax (RWT) on interest income.
A decade after the GFC we have had central banks around the world, including RBNZ, move us to command economies whereby in an act of insane hubris bureaucrats have destroyed the price discovery of free markets by commanding for themselves the pricing of that most basic commodity of all: money. Worse, over this decade they immorally decided to price money, via interest, artificially low to grow historic speculatory asset bubbles in financial assets, including property, at the expense of, and the sacrifice of, prudent savers such as myself and the elderly, whom wisely won’t touch these stimulunatic markets – modern portfolio theory be damned – and have confined ourselves to term deposit investments in investment grade banks, (having also learned from the junk grade finance company collapses pre-2008): this investment strategy has been made costly for us.
All my wife and I savings are in such deposits that were saved almost solely from our earnings over the last 30 years on which we both paid the top personal rates of tax. Now we are effectively being taxed a second time on those same earnings, and we are the investor class earning least of everyone: why are conservative, and in our case, high tax paying people, the ones being victimised by the state through this immorally disproportionate burden of tax? My wife is adamant our returns are so ludicrous we may as well just drink our bloody savings. And we are, to some extent, doing that, despite the cost due to the excise taxes on alcohol – (side-line note, taxing fun is pathetic, and Mr Cullen’s stated aim on using the tax system to change lifestyle choices is totalitarian. Not on at all.)
Not only do we need a microscope to see our real return on investment, which across all our PIE deposits is currently 0.15% after tax and inflation, but the RWT thus plays havoc with the otherwise magic of compounding – (noting at least we have PIEs to cap our tax at 28%, but that is still over a quarter of our measly interest income). Further, people like myself look at farmers growing hugely rich on tax free capital gains in land they’ve filled with shit ponds, due in big part to this decade’s cheap funny-money credit, and at perhaps one in twenty share traders/investors paying tax on capital gains in their NZX/ASX sharemarket investments, and are justifiably pissed off at RBNZ having sacrificed our returns to the speculators of this loose monetary policy from the asylum. Albeit, please note, the answer is not to tax their wealth, which is communist: the answer is to stop taxing my wealth, thereby punishing myself and my wife, and fellow savers, for taking conservative, prudent investment decisions. The financial world currently is turned on its head, and is lunatic, frankly.
Given savings are the powerhouse of properly functioning free economies – and okay we are far from those with the lunacy we’ve seen of QE (every governor of the BOJ should be in a straitjacket) – it defies sense for any government to tax and disincentivise such saving. We need to encourage saving, but for the reasons given above, given such pathetic interest rates, RWT on top of inflation makes prudent investment imprudent, and I suspect many elderly have been forced to move their term deposits into inappropriate riskier class assets which will, on the coming Great Collapse of Keynesian economics and this laughable price stability by central banking, be beyond sad. It will be tragic for them. Many would not have made this switch, had they been left with the tax deducted from their interest income – it could have made all the difference.
And that’s it, other than one final point, small, but necessarily symbolic of the free society over the command state we voted in at the emoting booth: reinstate the child rebate that the miserable bastards in National cancelled; let a kid do a paper round without being fleeced by an out-of-control state and allowed to live with the illusory vision of a free life and volition up until at least their late teens.
Signed with very little respect given what I know this committee will be coming out with,
M D Hubbard
PS: just remembered I think Geof Nightingale is on this committee: hi Geof!