Wednesday, January 20, 2010

Eat The Rich

Eat The Rich
There's only one thing that they are good for
Eat The Rich
Take one bite now - come back for more
Eat The Rich
Don't stop me now, I'm goin' crazy
Eat The Rich
That's my idea of a good time baby

Lyrics from "Eat The Rich", Aerosmith.

If you're a leftie blogger, it appears you'd criticise the Tax Working Group's findings by saying this: Let's make the poor rich by making the rich poor.

What was that quote by Margaret Thatcher?

The problem with socialism is that eventually you run out of other people's money to spend.

Here's Sanctuary from the Dim Post.
Actually garethw, any tax working group which uses a series of bumper sticker neo-liberal slogans as their starting point and fails to bother to consider the social and redistributive role of tax in a democracy was always going to produce outcomes that reflected the input. Bullshit input, bullshit output.
Okay. So tax is about redistribution. Got that.

And then the very same Sanctuary later on:
My parents worked all their lives to rise from grinding poverty to the point they were able to purchase a lifestyle block with a lovely nice house on it. That land has accrued nicely and their wise investment and hard work has lifted a whole family up the class scale. They are pensioners now. A land tax will force them off their land. Is that fair? If defending their right to own their own land is “Labour Party supporters fight for the right of the landed class not to have to pay any tax” then I happily plead guilty.
So redistribution is a tax goal, just as long as the Left and their families aren't the ones being asked to contribute to the great distribute.

Nah. That's the role of the rich. As I said in my opening, a synopsis of the left blogs still has the position in this country where they argue the poor should be made rich by making the rich poor.

I'll finish with another quote:

The good news is that, according to the Obama administration, the rich will pay for everything. The bad news is that, according to the Obama administration, you're rich.

P J O'Rourke


Anonymous said...

How many rich people do the left think there are in this country?

Do they define rich as those earning over 70K?

To me, people like John Key and Michael Hill are rich. Overall I wouldn't think there were more than 100 or so people in NZ at that level.

The nurse down the road is not rich. And yes, a lot of nurses earn around or above 70K.

Anonymous said...

No, the purpose of tax is provision of nationwide facilities & services AND income redistribution. Get it right Gooner.

Government levies tax so they can provide things like hospitals and schools & benefits because it takes the whole nation to afford them, and it makes such facilities and services accessible no matter where you live in NZ. So if you work 5 years in Auckland, then move to Napier, you can still get medical care.

The income redistribution is to achieve a reasonable quality of life for all on a national scale. Because small income disparity lowers crimes, increases social harmony, etc. Except for you rich b*stards, who are only harmonious when you're feeding on poor kids blood ;)

You do realise there is a finite pool of NZ money, right Gooner? So you can't 'make everyone rich' by just printing more; do that and it devalues your dollar, which is inflation, rendering the printing of extra notes pointless. Ask Mugabe and Gordon Brown.

So if you want to raise income levels of the poor, you have to take some money off the rich and give it to the poor. Logical.

Of course, this is not as unfair as you make it sound - the rich always tell you they made money through their wise choices and hard work, but that is largely horsesh*t. Most made money buying land decades back and letting heaps of rich foreigners buy houses here, pushing prices up and givig windfall (untaxed) capital gains.

And the profits of the rich who actually made profits in business, comes off (mostly) working class consumers. No workers, no goods made & services provided, and no goods & services bought.

Which is why countries (think Nordic) with a small gap between rich and poor (achieved by tax & redistribution) have better social outcomes.

Aerosmith fan.
P.S. Don't eat the rich - their sour attitude makes them taste bad. Burn them to stave off global cooling, or use them to build a beach castle.

ISeeRed said...

I'd say $100k is "rich" in most of NZ, maybe $150k or $200k in Auckland. These figures would be very much middle-class in much of the "developed world" Kiwis kid themselves they're part of. What's truly pathetic is even after you point out the 38% "rich prick" rate kicks in at what's considered an average or even low wage in richer countries like the US, Australia, the UK, much of Western Europe, Singapore, Hong Kong, the average Kiwi just stares uncomprehendingly or says some variation of "The rich must pay more".

Well, goodbye to all that. I left 9 years ago - like 20% of the population already. I won't be an appetiser on some ravenous obese bulimic leftie's menu.

Anonymous said...

Single low-medium earners get nothing again. In fact less.

homepaddock said...

"Government levies tax so they can provide things like hospitals and schools & benefits. . ."

Trouble is the last government gave middle and upper income families benefits too.

"You do realise there is a finite pool of NZ money,"

No there isn't - wealth can be created. It's just much harder to do that if too much is being taken off what you earn to give in benefits to people based on greed not need - ie those who could already afford more than necesessities.

That is expensive for the country and highly regressive for the individual because so much of each extra dollar earned is rebated off the benefit.

It's much better to let middle and upper income earners keep more of their own money so they're not penalised for working harder or taking a promotion.

Psycho Milt said...

Okay. So tax is about redistribution. Got that.

Nowhere does he say or even imply that - he says it has to be "considered." The reason it has to be considered is that we need it to keep dumb-ass right wing govts from making Marx relevant again.

If you're a leftie blogger, it appears you'd criticise the Tax Working Group's findings by saying this: Let's make the poor rich by making the rich poor.

And if you're the Tax Working Group, a Nat or ACT member or any right-wing reader of this blog, you'd say this: let's make the rich richer at the expense of the poor.

I notice Stuff is buying into the bullshit by announcing the govt will "sock landlords" to pay for the cuts. Uh, duh-uh - where do landlords get their income from, thicko Stuff journalist? What you're actually saying is the govt will "sock people who pay rent" to pay for it.

Lou Taylor said...

"You do realise there is a finite pool of NZ money, right Gooner?"

HP bet me to it but it is moronic thinking like this that is at the root of our problems.
Wealth has been and still can be created through two simple concepts - ideas and work.
Of course lefties are always lacking in the first and wary of the second.


I have just commented over at my place over the bizarrreness of the situation.
We had a Liarbour government that raised the top rate of income tax.
All this achieved was a boost to the rental market as the middle classes sought to evade the extra income tax by investing in property.
The supposed party of the workers thus created an environment where the workers increasingly could not afford their own homes, the rich increasingly owned several, so wealth inequality boomed.
And now we see a supposed centre right government cracking down on the property fatcats and the landlord classes.
And National will tax the workers less thanks to the extra income they will gain from such less-productive activity.

Sanctuary said...

Actually, as a left winger I have no problem with taxing rentiers heavily and cracking down on the insideous parasitism of landlordism.

I guessed the TWG would come up with the most iniquitous form of property tax, largely because the NZ hard right traditionally like simplistic, brutal and easily imposed and collected tax "solutions".

If someone could explain to me how an arbitrary poll tax, which is what a land tax really is, on landowners like my parents or farmers (neither rentiers or landlords) will stop property speculation better than other tools that are not such arbitrary then I am all ears.

Speaking of poll taxes and Maggie Thatcher - I think we've got some pointers on where any attempt to impose a land tax will end up...

Anonymous said...

Okay - let's spell it out slowly for the capatalists, so they can get BOTH brain cells working.

Every nation only has a finite (=limited) supply of notes and coins minted at any one point in time.

Of course, if you are dumb enough to think "wealth can be created" [Homepaddock] by "ideas and work" [Lou Taylor], then you have missed the point.

It does not matter what economic measure you use, GDP, CPI, profit-loss, etc. The actual physical amount of money does not change. It is just a question of how that cash is distributed, and by what mechanism.

Free market nutters want people to keep all the cash they can grab. Most people reject that level of greed, because if a minority of greedy capitalists are billionaires, then a whole bunch of others are poor.

Think about it (this will hurt for some) - if 10 people have $10 each, the average wealth is $10. Total monetary supply = $100. But if 2 people have $40ea, that leaves just $20 for the other 8 to share. Average wealth is still $10, but income disparity has gone from nil to $37.50. You now have rich and poor! Congratulations Friedman. Think about it.

@ ISeeRed - $100,000 is 'rich' in NZ terms because just 2% of income earners make that much. Duh! Of course, more than 2% ACTUALLY earn over $100,000, but many tax dodge through trusts. This is the problem the TWG wrongly thinks will be solved by flat tax.

@ Fairfacts - actually, National started the last housing boom in the 1990s with their firesale of Housing NZ homes, and open immigration policies (which boosted migrants, and hence demand for housing, which drove up prices). Clark & Labour just recognised that and did more of the same.

And Labour has not been the 'party of the workers' since the Depression in the 1930s. Missed Rogernomics did ya? ;)

And the Nasty Nats will tax workers less? Yeeeees. After we've paid our regressive land tax, and paid more rent to the landlord to offset their lost LAQC tax dodge, and more regressive GST, we can thrill to the top tax rate of 38% being abolished. It makes such a difference to workers who weren't even up to that top tax rate threshold...

On the plus side - from the tory commenters we are developing a good understanding of why right-wing economic theory is so flaky.

Aerosmith fan.

ISeeRed said...

Anonymous/Aerosmith fan: Singapore proves you wrong: No minimum wage and lower taxes, yet higher wages and a labour shortage; less welfare yet less crime and poverty. (I've visited and stayed there.) Singapore's not some libertarian utopia or pure free market, but its development and progress is instructive. Other countries have different lessons to teach. One thing is clear: no nation became rich by high taxes and spending.

The fact is we need to become much wealthier as a country through higher economic growth. This is partly achieved by lowering the tax burden on both employers and employees, the businessman and the wage earner. The tax base needs to broadened and as neutral as possible. Less tax on productive investment, earnings and income, and more on non-productive investment or consumption is better. We should be encouraging people to be productive. Higher economic growth means more tax revenue long-term to afford the social welfare system we want.

It's pretty simple: it's called baking a bigger cake. Let's eat that, not New Zealand's "rich" which are barely middle-class overseas - which is often where they go in the end because of attitudes like yours.

Lou Taylor said...

I'll sleep well tonight knowing that I've missed your point aerosmith

Gooner said...

Sanctuary, poll tax and land tax are totally different. A poll tax is a tax on individuals; a land tax is just that - a tax on land.

I prefer a poll tax. I don't like land tax especially as we have it now with rates and it is nonsensical.

Aerosmith fan: Milton will be mortified to have been rebutted in 2 lines on a blog. How do you do it?

Anonymous said...

"Every nation only has a finite (=limited) supply of notes and coins minted at any one point in time."
I suggest you might like to do some reading about the fractional-reserve lending. Not ideal but that is the reality.
And-haven't you noticed the odd one or two eftpos cards that are in circulation?
And if NZ has such a limited supply how about we start earning a whole heap more from some the the very rich countries around the world who I'm sure would love more of our exports and surely woudn't miss a few more billions to prop up a million or so underpriviledged NZ's


Anonymous said...

Part 1
Aerosmith fan: OMFG, are you sponsored by a union?
Honestly your argument is so shallow that were it to be a puddle, an amoeba would die of dehydration.
Wealth is created by ideas and effort.
Commerce is the response of the market to the desires of the people. In its simplest form this entails bartering, ie the exchange of goods, e.g. heres a fish I caught, you can have it for that additional faggot of wood you have stored in the corner for your fire.
Imagine that we have a village where 10 people live, 9 fishermen and 1 potatoe farmer. Life is going well, people are trading fish for potatoes, but one day one of the fishermen is watching a spider in its web and sees that the spider caught 3 flies on its web without having to move, so hey presto, tangles, and knots his lines together in a weblike fashion to create a net.
Technolongy changes the ballgame, because instead of having 9 fishermen and 1 potatoe grower, we introduce a net, which can catch the same anount of fish as all 9 men, thus making the other 8 fishermen redundant. Problem now is What the hell are the 8 going to do? The potatoe farmers problem was that he had too much fish and it would only keep for a day before spoiling.In steps technology again, as someone notices that salting the fish makes it last longer, so now one of the redundant fishermen is recruited by the farmer to salt the fish, but it still needs to be stored somewhere, for when the weather is bad and the fisherman can't set his net, so another redundant fisherman now makes pots, which are stored in huts made by another couple of ex fishermen. We have more people available for farming alternate products, collecting more wood, hunting different game, and making new clothes. Unfortunately, the village has become so successful at storing food for winter, the neighbouring village, who due to impoverished thinking, believe in finite amounts of resources, get jealous, at our villages abilities to secure food for the lean times, so sends their few of villagers to steal/pillage our stores. In order to better protect ourselves we have the luxury of training a couple of redundant fishermen to become soldiers/ policemen to prtect our efforts from the previous season from theft. Hopefully you get the drift.....
Is the village a better place, has the combined wealth of the village improved with the advance of technology?

Anonymous said...

Part 2
The answer is a resounding yes, and what made that situation so? Technology.
The technology was the wealth creator. In essence what is technology but the application of an idea through some effort. Thus the effort and the idea are worthy, and therefore have some inherent value. Today we reward people for their effort, and their ideas. It is the creation of the idea that is the wealth creator, because the labour can be provided by any person skilled enough to handle the task.
So, your argument that wealth is finite, fails to account for technology. Technology, that is, ideas, is the bearer of new wealth.
What NZ needs to become wealthier, is new ideas which solve real problems, or increase productivity and thus enhances life. Unfortunately this taskforce is not addressing any of those things. It is merely pointing to the people who house the populace and demarcating them as the enemy. The TWG is biased and they are too blind to see their prejudices, and so the outcomes from their investigation are entirely predctable. What else is the chairman of the Sharemarket company going to say apart from we need more people investing in the sharemarket, or an accountant saying we need more annual reviews of assets performed by duly skilled people (namely accountants), so we can apply a tax which another competing accountant can argue against.
If the TWG really wanted NZ to improve they would have suggested that there be a category of exceptionally low tax environment for exporters. People who produce saleable goods & services would then be stimulated to work in the area of suppplying the wants and needs of consumers worldwide. These investors would recruit/ employ more people in new industries, technological advancements would be chased, because lets face it, we all have a whats in it for me approach to life, and we are more likely to work harder for longer, and develope better ways of doing things if we get to keep more of the rewards at the end of the day.


Anonymous said...

I prefer a poll tax. I don't like land tax especially as we have it now with rates and it is nonsensical.

A poll tax is the only truly fair tax. Flat, universal, ideally capitalised at birth for the first 18-21 years of life. Enact such a tax and voting patterns, love of big government, welfare, health, and education - not to mention breeding patterns of the underclass, will change overnight.

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