Tax Revenue

[Perry]

Here's a pretty chart from the IRD. I've added the text and
rounded figures at the bottom, to give the rather abstract
percentages some substance. Maths was never my strong
point, but isn't $50B/year a tax-take of about $5.7M/hour?
Close to a $100k/minute. Just the IRD grab, mark you!

[PC]

Pity all that dosh disappears out of the productive sector.
Who says armed robbery doesn't pay!

[Wayne]

looks like the economy is improving given the increased GST and company tax take.

[Keithw]

Thats one way to look at it, altho the more likely way is:
Individuals incomes took a big drop, now remain the same despite all the social welfare grants (wff etc)
Company incomes took a big drop but now they are having to pay more tax (due to policy changes or more enforcement)
GST income is up due to the increase from 12.5 to 15%

ie same or less incomes but greater tax take

[Perry]

I wondered about the GST, but the period
covered by the graph does not seem to
significantly cover the 12.5% to 15%
increase, plus the trend was down just
a little in percentage increase terms.

[speights boy]

The NZX50 index (top 50 companies on NZX) would tend to support Wayne's view.

The company tax line made a sharp reversal in direction in June 2010.
The index at that time 2760; today it is 4333.
Up 57%.

[Keithw]

Care to put some relativity into that ? whats the relative value of the $ ?
Just like the DOW has reached a new all time high of 14000, while at the same time the real value of US $ has dropped by 20 - 30 -40 %

[speights boy]

I don't really understand the question I'm afraid Keith.

The New Zealand Exchange 50 Gross Index is a modified market capitalization weighted index.
This index consists of the top 50 companies by free float adjusted market capitalization that are listed on the New Zealand Exchange Limited.

[Keithw]

A company valued at $1 mil in 2001 $ is worth what today in 2001 $ - assuming no change in share value due to better returns or whatever ?
$2 mil ?
$3 mil ?
$10 mil ?

ie what has inflation done to the real value

[speights boy]

Don't know Keith.
The market capitalisation of a company is the share price x the number of shares issued.

Assumming the number of shares remains unchanged, if a company makes more profit ( and is forecast to continue improving) then the share price (and market cap) may well also increase.

Looking at the TSR (total shareholders return ) of the NZX50 over the last 3 years this has certainly been the case.

[Perry]

Chip, Chip, Chipping Away; Chipping At The Value of a Dollar

A company valued at $1 mil in 2001 $ is worth what today in 2001 $ - assuming no
change in share value due to better returns or whatever? ie what has inflation done
to the real value

Using the RBNZ Inflation calculator, the factor is:

Decline in purchasing power 25.7%

. . . a need for it to be valued @ 1.35M in 2012 to give
it the same 'value' as 1M in 2001.

[Wayne]

Thats one way to look at it, altho the more likely way is:
Individuals incomes took a big drop, now remain the same despite all the social welfare grants (wff etc)
Company incomes took a big drop but now they are having to pay more tax (due to policy changes or more enforcement)
GST income is up due to the increase from 12.5 to 15%

ie same or less incomes but greater tax take

Same of less income but they are spending more hense more GST?
GST went to 15% in 2010 but the GST take was rising before that.
Individual tax has stopped falling and stabalised (and welfare grants
don't show in this so are irrelevant, they would show in GST take though).
Company incomes took a big drop and have now reversed.

I am sure Eyeore could see the sky falling on a lovely sunny day.

[speights boy]

Thats one way to look at it, altho the more likely way is:
Individuals incomes took a big drop, now remain the same despite all the social welfare grants (wff etc)
Company incomes took a big drop but now they are having to pay more tax (due to policy changes or more enforcement)
GST income is up due to the increase from 12.5 to 15%

ie same or less incomes but greater tax take

Meanwhile.......

Budget deficit of NZ$2.5 bln in 7 mths to Jan was NZ$571 mln better than expected due to higher taxes and lower spending than expected, Treasury reports

Core Crown tax revenue was NZ$486 million better than expected, partly due to fewer part time workers and relatively more full time workers on higher wages, and therefore paying higher tax rates. Taxes from investment income was also stronger because of stronger stock markets.

www.interest.co.nz/bonds/63485/budget-deficit-nz25-bln-7-mths-jan-was-nz571-mln-better-expected-due-higher-taxes-and-lo

[Keithw]

Stats, Lies & Damn Lies
Spin merchants at it again.


Bigger tax take blunts deficit
http://www.stuff.co.nz/national/poli...blunts-deficit

"Tax from source deductions was $225m ahead. Although overall the same amount of total income was earned it was paid to fewer workers and they were on a higher average tax rate. The recent fall in employment was concentrated at the lower end of the income scale, such as among part-time workers."

what was it I said earlier ?
"ie same or less incomes but greater tax take"

[speights boy]

Ahh yes.
Employers replacing part time workers with full time workers is always a bad sign.....

Companies making more profit, paying more company tax on that profit, higher dividends to shareholders....

Nothing spectacular, but NZ Inc is ticking along quite nicely at present....

Toplis says the BNZ doesn't suggest for a second that manufacturing output will return to its 2005 peaks anytime soon, but the medium term outlook for the “core” manufacturing sector looks relatively promising: - New Zealand trading partner growth is expected to be at or above average; and - The building sector is set to boom and will support domestic sales.

The PMI ( Performance of Manufacturing Index ) was 55.1 at 31st Jan 13.
Above 50 = expansion; below 50 = contraction.