DOWN TO THE DOCTOR’S: Who Pays The Tax? [update 2]

Libertarianz leader Dr Richard McGrath invites you to come on down to his surgery for an inoculation against this week’s stories and headlines on issues affecting our freedom.

This week: Who Pays The Tax?

Someone posted this to me recently, so I have to acknowledge the work of David Farrar in getting this information out first. However, Bill English’s comments merit further comment, which is why I reproduce much of what has been posted already on Farrar’s Kiwiblog.

First, a table which apparently comes from Bill English’s office (so take that for what it’s worth), followed by the Minister’s answer to a question about who pays most of the tax collected by government (as opposed to tax collected by gangs and various other extortion rackets outside of the IRD):

Hon [sic] BILL ENGLISH: Our tax and transfer system is highly redistributive, and the number of people paying income tax is surprisingly small. The lowest-income 43 percent of households currently receive more in income support than they pay in income tax. The 1.3 million households with incomes under $110,000 a year collectively pay no net tax—that is, their total income support payments match their combined income tax. The top 10 percent of households contribute over 70 percent of income tax, net of transfers—over 70 percent of income tax, net of transfers. This system is highly redistributive and we believe it is fair. (My emphasis in bold).

So there you have it. On average you have to earn over $110,000 a year before you pay any net tax, even though you start paying net tax on income bands above $50k. That makes nearly 79 per cent of New Zealand households net welfare beneficiaries, supported by the other 21% and by the $380 million Bill English borrows every week.

So most of the country are moochers.

And the 10% of households who have visible earnings over $150k pay 70% of the tax collected.

Bill English admits this system is highly redistributive and he believes it to be “fair.” Fair? It’s outrageous. It’s so biased against success that it almost makes a person want to give up. Or emigrate. Or vote Libertarianz. Be advised: if you dare to work hard, or innovate, or invent; if you are an entrepreneur, if you succeed (or even if you fail) you will be punished!

Now be advised too that this is the system presently in place—even before David Cunliffe gets his hands on your wallet, your business and your art collection. Even under the system as administered by Sire Double Dipton, you will not be given an opportunity to employ others or to use your profits as capital investment. Instead, you will hand most of it over to the government as income tax, GST, ACC levies, consent fees, permit costs, etc.

Mr English believes that’s fair, because Mr English is in every way that matters  an old-fashioned redistributive Marxist. Mr English is a man who believes in the maxim “From each according to his ability, to each according to his need.” (And as we know, Mr English and his family are very needy.)

That approach is fine when the community is a voluntary co-operative, where people can come and go of their own volition. That does not apply in New Zealand. We can’t opt out of paying tax, which of course is filtered through government departments before it reaches those to whom it is officially destined.      

Greece… Ireland… Italy… Spain… Portugal… New Zealand. We live in interesting times.

And still 53% of people support that nice Mr Key and good old Bill English. No wonder Labour are faring so poorly in the polls. They and National are fighting over the same group of voters: those who want to live at the expense of everyone else.

There are only two political parties that want to abandon this self-destructive Marxian death cult. One is led by Don Brash, the other by me. Both our parties are “lunatic fringe” extremists. Both parties are “right wing”, and “racist”—or so the media would like you to believe.

Neither party appears likely to play any meaningful role in government of this country in the near future, for the simple reason (as a much wiser head than mine once opined) that there hasn’t been a revolution in people’s heads. And because 10% of the country are paying for the other 90%, and none of those turkeys will be voting for Thanksgiving any time soon.  Frankly, things haven’t moved on since 1990; we’ve been in a time lock through the eras of Prime Minister Spud, Headmistress Shipley, the long decade of rule by Clarkistan, and what now looks to be six and possibly nine years of the Smiling Assassin and his sidekick Billy Bob.

Do New Zealanders really want to change? Or do they value the equal destitution of a collectivist state above the uncertainties of freedom and the accompanying obligation to think and act and experience consequences? Looks like that crab bucket mentality that tennis ace Chris Lewis wrote about all those years ago is still thriving. It’s so damned hard to shift people away from a mindset of utter denial about where our economy is headed. Perhaps the future is too scary to face.

And that’s the thing about the Libertarianz and ACT parties. They scare people, because people will do anything to evade reality.

See ya next week!
Doc McGrath

UPDATE 1: Rob Salmond takes issue with the Farrar/English figures, saying the rich are not paying so much as they say—and then argues govt should get out there and soak the rich anyway. Read: Tax Burdens: Some Facts (For a Change).

UPDATE 2: And David Farrar responds, saying Rob Salmond can’t count.