Stats NZ: 10% have 60% of country's net worth

[Wayne]

But what percentage of the total income do they earn. That's what determines whether they are paying a lot of tax or a little.

People complain that the 'rich' have most of the wealth but ignore the fact that they pay most of the tax.
I never said they pay too much tax - if they pay at their proper tax rate then fine - but 3% still pay 24% of tax and 40% pay none.

And before you start that they hide income just remember the 'middle income' tradie who does a cashy - no tax there!

[Bobsyouruncle]

24% is not most of the tax......

[Wayne]

24% is not most of the tax......

Fair enough.
How about 14% pay 53% of the tax - that's 14% pay more than half. 2008 figures.
That 14% earned $60k+
The top 1%, earning >$150k, paid 16% of the tax.

The point is they may have a lot of the wealth but they pay a lot of the tax as well - where's the problem?

[Bobsyouruncle]

No problem, just interested. I "know" anecdotally that the middle class often pay more than their fair share of tax and the wealthy are very good at minimising it so it's just interesting.

[Wayne]

No problem, just interested. I "know" anecdotally that the middle class often pay more than their fair share of tax and the wealthy are very good at minimising it so it's just interesting.

The figures I gave were income tax only - didn't include govt distributions back to the tax payer.
People often talk about how good the wealthy are at minimising income but ignore the black economy.
I have always found it is the upper middle who have it hardest - not wealthy enough to hide a lot and wrong skills to do cashies.

Because of the 40% who don't effectively pay tax (net tax) we end up with those on $150k+ (15%) paying 75% of the tax - that's most in my book.

Still begs the question of where the issue is.

[Bobsyouruncle]

Another conundrum. At the end of the day NZ is doing pretty well by global standards so whatever we are doing is working reasonably well. When I travel I think even more highly of NZ. There is real poverty in so many countries, thankfully we don't really have any compared to USA, Singapore, Malaysia etc.

[Wayne]

Another conundrum. At the end of the day NZ is doing pretty well by global standards so whatever we are doing is working reasonably well. When I travel I think even more highly of NZ. There is real poverty in so many countries, thankfully we don't really have any compared to USA, Singapore, Malaysia etc.

Agreed.
The trick with taxation is to extract enough money from the rich without then buggering off or encouraging them to minimise it more.

[Bobsyouruncle]

I wonder how much difference it would make if the super globals were forced to pay tax in the nations they derive income from? EG: Google.

[donna]

It's the erosion of the upper end of the middle class - (individuals earning over $150K) while as you say the wealthy pay very little tax. I agree it would be good to lock down the global giants Here's a good read on the deal the UK did with Google and how it's laughable. There is one rule for them and another for everyone else.

cheers,

Donna

[Wayne]

The sad thing about the Googles and Facebooks of the world is that they have truck loads of cash they can't use.
If they distribute it to shareholders as divvies they have to pay tax 1st.
So it ends up locked up or spent on what can turn out to be an expensive aquisition.

[Anthonyacat]

It's funny that people get upset about 'the rich not paying their fair share'. I'm sure there are plenty of super-rich who do employ fancy tax strategies to shield their earnings, but they will be the 0.1 to 0.5%. The vast majority of that 10% are 'regular' people, earning approx $65-150k. When I left New Zealand I was below that bracket, but I'm sure I'll be well within it when I return - the only tax-avoidance strategy I use is making use of tax free capital gains on property and shares. This is the only tax-avoidance strategy available to the 'regular rich' that has any real impact.

[Perry]

. . . is making use of tax free capital gains on property and shares. This is the only tax-avoidance strategy available to the 'regular rich' that has any real impact.

If employed, I agree. But 'regular people' in most SMEs do have one or two extra options.

[Bobsyouruncle]

65 to 150K, hardly the rich. Habitual investors would be the absolute minimum level of people I am talking about. 2 mil net worth and 200K income annually. In the last census 240,000 people earned over 70K and that has increased significantly int he last 3 years.

[Anthonyacat]

150k, hardly the rich.

But yet these are the majority of the top 10%.

People rage against 'the rich' but that is a category that is reserved for those significantly richer than themselves. Much like everyone considers themselves in the middle- or upper-middle-class, everyone considers themselves just a step or two off being 'wealthy'.

Globally, we're probably in the 10% because we can afford internet access and have the education or wealth to discuss property matters. The Global Inequality Problem says that Basically, anyone who makes more than $35 K US per year is in the global 1% of income earners.

I've been in the 1% since a year after finishing university. Maybe even my first job, depending what exchange rates were like at the time.

[Wayne]

I agree Anthonyacat - we have always been just above the level of getting benefits from the state.
No working for families, no family benefit, no community services card.
We just earn money and pay tax but it seems we (I since they talk individual income not family income) am in the top 3% - really doesn't feel like it!