Thursday, February 11, 2010

Tax me now and pay me later...

Ok, so here's something from New Zealand that's actually about politics.

Prime Minister John Key (boo!) announced yesterday that the National Government is considering raising our Goods & Services Tax (GST, or the NZ version of sales tax) from 12.5% to 15%. Is this some scheme to introduce free services to the public that are very much needed (like universal healthcare, as I've bitched about recently)?

No. It's t fund about $2.5B for personal income tax cuts that amounts to about a 2% per working person in New Zealand. So, Mr. Key, what you're saying is that in order to fund a 2% tax cut, you want to raise GST by 2.5%? Riiiiiiiight. Somebody please tell me how this is suppose to work. Please??

I'm all about tax cuts, but I know that taxes (like waking up in bed the next morning with someone you didn't want to) are inevitable. But, I would think that taxes could be used to fund more important things *cough* healthcare, infrastructure, public services *cough*. What I'm REALLY wondering about is where does the extra half a percent go? Maybe it's to fund a "pat ourselves on the back for cutting income taxes by raising sales tax" party. Maybe it'll go to into a slush fund for John Key's drivers in case they get slapped with more parking fines. Hell, maybe it'll go towards buying JK something he really, really needs. A conscience.

In my opinion, they need to pick a tax, stick with it and let it cover everything. A flat, fair tax that pays for government, infrastructure, healthcare, welfare, etc. Not this bullshit of splitting it all up so the government can giveth with one hand while they taketh with the other. This applies to America as well. I think Patrick has been banging that drum for some time now and I totally agree with it.

Please, leave me a comment or three and tell me what you think. While you're at it, allow me to do a shameless plug for my new personal blog surreal life geek where I'll be covering everything and anything I can think of.


Patrick M said...

I should have sent you the link to the FairTax site so you could have put it in your post. Oh well, time for redundant linking.

The reason I've advocated for a simplified tax system, the FairTax being the best I could find, is that, whether it be the NZ way of raising one tax to untax another group or the bullshit class warfare here in the States, modern tax code is not about generating revenue for the federal government (although that's the reason taxes exist), but about power.

Think about it. You want the economy to go one direction (green jobs), you give tax breaks. You want to kill an industry without prohibition (cigarettes), tax the shit out of them. You want to appeal to some economic "group" (rich, poor, middle class), you find a way to lower their taxes, whether by sucking from someone else or just running up some debt.

Because money is power, especially in Washington. And while the buying of votes with pork is another problem to tackle, the fact that the Imperial Federal Government, as well as the state governments, can poke and prod and manipulate you without any real input from your end should be disturbing to say the least. Because if they can tax someone's cigarettes away today, then they can tax your wine tomorrow, and your potato chips the day after that. Then your car (wait, they already did that), then your TV, then your phone (they've been sucking taxes to wire the country for over a century or so (and years after the wiring was done).

To contrast, the FairTax would allow the political class control over only two numbers. Two. 1 - 2 - That's it. They could control the actual tax rate (on everybody, not just a group) and the poverty level, which covers the prebate (which every household gets). In other words, there is no picking and choosing who gets what.

But the problem lies in getting the political class to willingly give up such shiny and juicy power.

Ok, what the hell. Here's one more link if I haven't pounded it home yet.

Toad734 said...

But I thought you would like a plan such as this... Its a lot like your flat tax as consumption would be taxed...which you feel is somehow better than income. See, now you see why the fair tax makes no sense, you are still paying the same (if not more) in taxes...unless you don't ever buy anything...then you come out ahead....but then of course the economy collapses.

This is yet another example of how the money has to come from somewhere. I agree, maybe congressmen shouldn't get a life long pension for serving a 2 year term, maybe we don't need NASA or the largest military in the world, colonialism, 800 billion in corn subsidies but if we do have it, we have to pay for it. These teabaggers are protesting the wrong things, they should be protesting the 800 Billion in farm welfare, the 800 Billion we spent in Iraq and everything else I mentioned, the taxes would naturally come down if they would just oppose things such as that instead of expecting great roads and transit and our Empire and military to support it and expecting to not have to pay for it.

Toad734 said...

By the way, what's your deal with New Zealand all of the sudden?

Lars the Pseudo Kiwi said...

Toad: I'm all about taxes, provided they go where they need t go and that the government isn't giving with one hand while taking with the other.

Here in New Zealand, they've got real good at taxing us to death while hiding new tax hikes on the back of personal income tax cuts. They tell us they're putting more money in our pockets to go spend. Then they tax us to death when we do spend it. They then take the extra tax dollars they get and use it to "fund" future "tax cuts".

For Christ's sake, pick a tax and stick with it. Make 1 fair, flat tax on everything.

And to answer your question about what my "deal" with New Zealand is all of the sudden, is that I've lived here for 11 years and I've watched a good country spiral down the tubes. New Zealand used to be the place I planned to live the rest of my life in, and perhaps even die in. But that's long over. I might as well go home and enjoy the spoils of consumerism while I still can.

Toad734 said...

But isn't that what a flat tax is? Taking away the taxes of production and placing them on consumption?

Toad734 said...

Wait, what the fuck is going on here? I just realized this post wasn't from Patrick.

Patrick M said...

Toad: Shall I comment on the fact you didn't read who the post was from? :)

But let me clarify something. The flat tax is essentially an income tax without all the progressive BS designed to pit class against class, although the flat tax still punishes people for earning money. the FairTax is a radical departure, completely scrapping the mess that is our current punishment-by-tax system. And you only turned on it when you figured out that it untaxed businesses (thus eliminating the embedded tax on all goods and services).

And the reason you fix the tax system is to fix the tax system. Spending is another issue that needs tackled. But a good tax system, free of political machinations, gives the individual a clear amount of money they send to the government for all the shit the government wastes money on. It's a little more motivation.

Toad734 said...

Ya, so it punishes people who buy things and punishes poor people the most because they spend a larger portion of their income than the rich so the same class discrimination exists only against the people who can't afford it as opposed to the ones who can.

So why is a dude from New Zealand posting on your blog?

Patrick M said...

...punishes poor people the most because they spend a larger portion of their income than the rich so the same class discrimination exists only against the people who can't afford it as opposed to the ones who can.

Uh, let me clarify. It fully untaxes the poor (including the embedded taxes they now pay). You pay nothing on the cost of living. And the rich pay a higher percentage overall, because they have the disposable income.

And Lars is posting here because he's my friend from High school, and he has a unique perspective on politics due to his decade gone kiwi.