Debt

Taxed to the max in NZ

New Zealand has an overwhelmingly onerous, highly regressive, taxation compliance regime to which we must conform under the Sauron-like gaze of the IRD, or get flogged with fees and penalties.

We pay more tax than anyone else, and unlike other nations every dollar of our earnings is taxed.  Even our children are taxed.

Now, our government intends to slap a Capital Gains Tax on us.  Cullen, head of the Tax Working Group, said “it’s to bring us in line with the other nations.” 

“It’s all about fairness” the proponents of this tax proclaim as they seek to apply it not just to speculators flipping Auckland houses, but to farmers and small business owners!  I know its not going to be fair, its already corrupt and unjust.

Here is my experience of the NZ Government as a small business owner.  We set up in 2007, in our early forties.  It was quite the mid-life crisis.  We didn’t get any help from the government.  In fact, they were a stumbling block.  Our capital was a measly $48 but we secured a private loan of $10,000 which we paid back in three years.

The first year, we couldn’t take drawings so worked at night.  I worked three part time jobs, my husband two.  We cleaned  workplaces, did night-fill at a Supermarket, and I looked after a group of handicapped people on the weekend.  Our tax was 28% because of the “secondary” jobs.  If we’d been in Australia we would have paid no tax.

We went along fine for two years, and made a small profit of $34,000 before drawings, which triggered Provisional Tax.  This tax is brutal for small business and the reason most of them fail in the first five years. It’s like a bar to entering business.

Under Provisional Tax, NZ Businesses have to pay two years worth of tax, being tax for the previous year and tax on money for the current year that hasn’t been earned yet.  We didn’t have enough put away, not knowing how much we were going to be charged.

We had to pay nearly 25% of that profit in tax.  IRD said we could pay the first year’s tax off in installments, with penalties, but had to pay the entire amount on the second year.  It was a serious setback, and we would have been out of business if we hadn’t had access to revolving credit.

For the next three years, we were unable to replace the twenty year old car or grow our business, because of the amount taken off our profit.

The business is now twelve years old.  It hasn’t made us rich but it does provide a living and we’re our own boss.  We haven’t been able to participate in the Auckland housing market but hoped the business would be a nest egg for our retirement.  If the CGT goes through the leech-like NZ government will seek to take 33% of the money from our small business.

My husband and business partner considers the NZ government and its enforcer IRD to be like blood-sucking Queensland cattle ticks.

My tale will be typical of small business and the middle class in New Zealand.

We are a nation of entrepreneurs.  Small businesses generate 28% of New Zealand’s GDP and employ over 600,000 people.  You’d think we’d be encouraged and helped every step of the way but we’re not.

Given the risks we take and the hurdles we have to overcome to get our business running, its demoralising to think that at the end of it the government will take a third of our nest egg, on top of all the other tax we pay in the business; Provisional Tax, PAYE, 15% GST, the ever-widening FBT, ACC, Fuel Tax, and GST on Fuel Tax.

Cullen and the Tax Working Group appear to be completely out of touch with NZ Small Business.  If Jacinda follows the Tax Committee’s advice she will only be in for one term.  In the meantime, how much damage will they do?


There are two tax regimes, one is hidden.  It turns out NZ is a well-known tax haven.
Just like Vancouver and other places where foreigners have speculated, we’ve now got an unaffordable property market.  Guess what the overseas tax lawyers invested their client’s un-taxed money in?  I found out how it happened and will deal with that in a separate post.

Finally, Jacinda is a socialist.  Here she is in action ten years ago as Comrade Jacinda Ardern. Should we trust her given what we’re seeing here?


Links

Cartoons about the proposed capital gains tax

Andrew Dickens: Supporters of a capital gains tax should be angry

NZ Monopoly

MonopolyWe’ve been sitting down playing the latest game of Monopoly these holidays.  The board is an ominous black colour, there’s no cash and it’s ruthless!  At least you get round the board quickly.  Even my husband joined in.  He normally refuses to play, calling the standard game “Monotony.”

Anyway, it got me thinking about the game.

How would you feel if we sat down for a game and I was the banker who could generate more Monopoly money whenever I needed to?  I had the most expensive streets.  Your cheap properties would end up mortgaged, and every time you made it around Go, you’d only get about half of your Go money because a portion would be electronically deducted to me via income tax and GST – even before you landed on the tax squares.

That’s what the system is like in every country in the world that has a reserve bank and a system modeled on the Bank of England.

Uninsured picIn the New Zealand version of our rigged game of Monopoly, if I as the Banker did get into trouble, I would take your money to keep myself in the game.  It’s called the “Open Bank Resolution.”  New Zealand is the only OECD country without deposit insurance.

To add insult to injury the banker is foreign.  The “big four” banks in NZ are all Australian – even the BNZ, which was sold to Australia in 1992 after the NZ tax payer bailed it out in 1990.

Do you want to play?  The NZ version of Monopoly is probably the worst – but we’re all playing unless you’re in North Korea, the only country left without a reserve bank.  Interestingly, the other hold outs – Iraq, Afghanistan and Libya have had central banks imposed after being invaded.

Guess How Many Nations In The World Do Not Have A Central Bank?

Money creation, Fractional Reserve Banking

While the NZ Reserve Bank controls the issue of currency, most of the money is now generated electronically – essentially created out of nothing by the Australian banks.  We think the banks are loaning from depositor’s funds, but they’re not.

“As the Bank of England has now confirmed, banks create the money they lend out of nothing and can charge interest on the new money for as long as it exists in the form of a debt owed to them.” Source:  Banks fuel housing market by ‘creating’ money.

john-maynard-keynes

 

money_out_of_thin_air

What can we do?

How Monopoly ends

We could educate ourselves about money.

We could ask our governments for a change to the money system. Ask why we aren’t creating the money electronically and charging the banks for it?

Don’t do business with the foreign owned banks.

Join an international movement for money reform.  http://internationalmoneyreform.org/


Links

The New Zealand housing affordability crisis will go on getting worse. In other words, and at the risk of accusations of xenophobia, it is not so much Chinese buyers, as Australian-owned banks, that are responsible for New Zealand’s housing crisis. Source: Banks fuel housing market by ‘creating’ money.

NZ Open bank Resolution: ‘A flawed system to protect savers’

“On the bank’s website, BNZ invites customers to “check out how we’ve been part of New Zealand’s history”, with a timeline running from 1860 to the present day.  It contains many high-points, but fails to mention either of the two times the bank required government bail-outs in order to continue trading.”  Source: BNZ ‘inadvertently’ rewrites history by omitting bailouts.


Greece was fleeced and made to fail

greek-bailout-cartoonGreece did not fail on its own. It was made to fail.

In summary, the banks wrecked the Greek government, and then deliberately pushed it into unsustainable debt … while revenue-generating public assets were sold off to oligarchs and international corporations.

The rest of the article is about how and why.
Greece — The One Biggest Lie You Are Being Told By The Media.

I recommend the associated video: Confessions of an economic hitman.  It’s 24 minutes long and explains how a global empire has been created by the oligarchs.

The corporations identify a country that has resources that they covet.  First they’ll arrange a huge loan to that country, but it won’t go to the people, it will go to corporations and infrastructure projects; things that will benefit the rich.  But the whole country is left holding huge debt ….

Conquering by debt