Tax Working Group Report & Related Matters

[k1w1]

Not just production, but services too, I'd have thought.

[Jalice888]

Money is powerful stuff, and outweighs morals by many times.

The Govt is generally too lazy to try to encourage wealth, it is much easier just to raise taxes, rather than wait for wealth to be grown and receive the increased taxes from increased economic turnover.
The stupid thing is that they don't seem to learn that by increasing taxes, the initial increase gets rapidly lost due to reduced turnover ! Look at the IRD's GST predictions & actual collections. Their model assumes activity continues at the same level & they get surprised when GST take is down due to constriction in the money supply.
The same nonsensicle attitude is prevelant throughout the IRD where they see it as their "Responsibility" to extract all the tax and penalties that are "DUE" by closing down the business that would otherwise have produced many times the "Dues" in years to come & provided employment as well, even more PAYE.

The same dropoff will happen with any money they tax from IP due to "closedowns" & "Restructures".

While so much today is quotable I got confused which best to reply to but 'IRD', what a joke they are being just a puppet of Main & Local Governments thus never taking those thieving mongrels to court !
With the Sharemarket it is a total failure now for the average new Zealander since overseas computer and greedy big companies wait for us here to build up decent companies then they flog the hell out of it - there are no laws in our society to prevent those greedy overseas companies raping our whole sharemarket!
If Property gains Tax isn't brought in it will do the same to all property in the country. Taxing in other ways will continue to take from the middle income people who seem to be the only savers, give to the rich that hide wealth to avoid taxes that middle income earners can't claim and mean that beneficiaries increase but get less support too - hmm yes a lot like Zimabwee is suffering from today. We don't stand a show in hell of getting equivalent to the Aussies, they have all our good trades people now, they have a much larger people base market for competition and they do huge amounts more to help the middle income earners as thats what makes the country move forward - not from robbing them.

End of the world, doom & gloom, I just don't buy it. How about property loses it's attractiveness as an investment & instead wealthy investors move their money into businesses, either through direct ownership or share ownership which creates jobs & stimulates the economy. Why all the doom & gloom?

This Generation Y reaction that keeps showing up shows the mess this generation cause - Y did this generations parents ignore them so much to make them unaware of repeated life cycles .
As for whats happening, my drive to work of 15 minutes used to have about 2 properties at any time for sale. Today there are 5 showing sold, 2 up our shortish street with 7 properties for sale, 15 on the way with another 3 just had signs put up by time I returne home. This will be business that can afford to sell with the price dropping so they are cashed up ready to return knowing that the property market is certain to take a much bigger hit, this has been predicted all the time even before any talk of Property tax but the government certainly are trying to push this along faster .
It has been said several times on here now that everyone will get hit hard, even those that have held onto their cash waiting for better times (those have recently gone). Properties drop, banks loose and try to recover their losses from investors instead, builders loose work & go bust, commercial business don't have people buying thus more sacked & closures, the cycle just accelerates and because of the silly way it is being started it will be too fast for someone like John Key to fix - remember how really useless and out of his depth he was when Thailand had it's problems, he has failed a lot of times like that since being a numbers noob rather than a peoples person. Helen Clarke did immensly better but she was a good leader in another bad parlimentry party - only fools today vote for the big party that they forgot how to hate with the present party making them feel worse, we need democracy which means no one power and a mix of the others so all will have to vote for what is best for the people of the country, now thats what MMP is and we haven't seen it happen yet !

[LKSteve]

As for investing in a Business, as a friend of mine who runs a restaurant told me, why would you want to run a business when the whole thing can be wiped out by a bad customer, or a bad staff member, or a case of food poisoning, or yet another cost imposed by Govt like increasing the minimum wage regardless of their productivity, or even more paid holidays, or forced penal rates for working on a holiday etc...

As for investing in property, as a friend of mine who owns a property told me why would you want to own a property when the whole place can be wrecked by an out of control, unpredictable tenant. The hopeless local council can increase rates as they are broke, the biggest local employer can close, leading to high unemployment & a collapse in rents & values or the Government can pull the rug out from under investors, eliminating all the tax benefits which made up for the low or negative yields. . . . . There are only two certainties in life, death & taxes.

[Keithw]

Yes, quite true- I have asked myself those or similar questions on various occasions.

[muppet]

why would you want to own a property when the whole place can be wrecked by an out of control, unpredictable tenant.

Well then what about all those who invested in the various financial companies that have gone bust over the last couple of years?
What about those who invested in the two ING schemes that ANZ had to buy out at about 62% of the original investments?

[schooner]

muppet

Well then what about all those who invested in the various financial companies that have gone bust over the last couple of years?.....

because they invested in property!

[Keithw]

muppet

Well then what about all those who invested in the various financial companies that have gone bust over the last couple of years?.....

because they invested in property!

Correction Schooner:
They invested in PROPERTY DEVELOPERS, not in property. (ie in other businesses)
If they invested in property then they would have some assets to repay some of the money they lost !!!!

[McDuck]

Why is it that everyone thinks, because a few PIs will sell, that the market will tank? Many jurnos have said this (as they have said that it was the PIs that drove prices up). This presupposes that most properties are brought and sold as investments when this is just not true. Private home buyers twist the market more because they use more emotion when buying than a PI and will pay over the odds.

Excellent post,. this is a point conveniently missed and twisted by the anti property lobby

Might I jump in here.

This point is fun.

The speculators will always force the price up over the norm.
Two speculators will really boost the price ... unlike Joe home maker, who must meet that price or dip out.
Just watch the TradeMe auction sites for a few months, you will get a good idea on how that whole interpaly unfolds.

Think about it, the speculator will pay any price ...because they know they will make on the resale (in an expanding market)...the home owner in contrast is more grounded to the wages he earns...but will be forced up in price or face missing out on everysingle deal.

[muppet]

Mr Key said today he shared the Tax Working Group's concerns about property.
"There is $200 billion approximately invested in that sector and the Crown lost $150 million last year. So you can expect to see some discussion on that in the speech tomorrow."

What % is the $150m of $200b?

If the size of parliament was dropped $150m could be saved quite easily.

[muppet]

Ahhhh but schooner there is investing in property and there is investing in property.

[Bob Kane]

What % is the $150m of $200b?

If the size of parliament was dropped $150m could be saved quite easily.

The $150m (gasp! what a large amount!) works out to be less than $1000 per landlord. So this whole property rort is $20pw - something every tenant will be able to afford.

[CJ]

Tax Change 'Boost To Big Kiwi Exporters'
By Roeland Van Den Bergh - The Dominion Post
08/02/2010

That is not really news. It has been in the making for the last 2 years!

Look for Key to indicate the tax changes today. Was in on a conference with 2 people who know a lot (one seemed to have received a tip off) more than most arguing whether Key will signal depreciation to go on 1 April 2010 and have the legislation retrospective (introduced in the budget). All other changes to come 1 april 2011.

[Austrokiwi]

retrospective taxation! Did I read that hint right?

[CJ]

retrospective taxation! Did I read that hint right?

Yes but clearly signalled in advance. This has been done a number of times in the past few years - there have even been situations where the legislation wasn't enacted before companies tax years were completed which made end of year accounts difficult (do you use the current or the proposed legislation) though it was legislated before the tax returns were due.

Note: the other guy who is better connected than an XT cellphone said it wouldn't be this April as they had far to much work to do.

We will know all by the end of today. John Key makes his speach just after 2pm today apparently. If anything is to come inforce by 1/4/10, it will need to be clearly signalled then.

[Wayne]

What % is the $150m of $200b?

If the size of parliament was dropped $150m could be saved quite easily.

No one mentioned the $500million of taxes paid back to Trusts! You don't hear the media running trusts down.