Some fiscal responsibility in order

Phil Newdick

Opinion

by Phil Newdick

Pardon my stupidity, but can someone please explain to me how the percentage rate of tax collected can be used as a barometer to assess how much tax is enough tax?

It is reported that our 311 wealthiest people only paid a paltry 9.4 percent of their “income” in taxes in 2021, because of the loophole that is not having a comprehensive capital gains tax — and by coinciding a Treasury study with a period of fast-rising asset prices.

Although I am not a mathematician or one of the elite, it is quite plain to me that someone paying 9.4 percent tax on a median income of $47 million (total income for the 311 was said to be $14.6 billion) is still paying a lot of tax — $4.42 million . . . whereas someone on $100,000, even though part of their income is taxed at the whopping rate of 33.3 percent, pays the princely sum of around $20,000 per annum.

The combined tax take from the 311 in the year of study will have been $1.37 billion.

If any of these people are deliberately defrauding the system they should certainly be criminally charged and possibly sent to prison. But for some reason, popular opinion is that they are obviously smart Bs and as such should be, if not burned at the stake, at least heavily fined/ taxed for being so successful.

I do understand that after our Government’s huge spending spree the Treasury will be feeling the pinch, and more taxes are needed to oil the wheels. However, surely a bit of fiscal responsibility could be in order . . . simply put, a bit more bang for our hard-earned cash that we are paying them, quite handsomely, to administer.

I will pass on this gem of wisdom at no charge, even though our Government is happy to fork out big piles of our money to people — whose main skill is growing their own fortunes — to advise them what they want to hear.

I also understand the reasoning that says targeting 311 families and turning them into greedy monsters is good sense, in an election year. Even if bankrupting them would not replenish the coffers, it would not lose as many votes as spreading the pain over the whole population. Good sleight of hand, taking the focus away from the real issues.

While on this track, have our decision-makers considered how we would replace the millions in taxes from these few filthy rich, when they join the rest of our skilled workers overseas?

Our PM offered to pay a bit more tax . . . have he or his advisers considered that if the money they and this iceberg we call the public service are draining out of the system was reduced, it would benefit the community 100 cents for every dollar saved?

The minefield that is capital gains tax has many implications, one obvious one being there would need to be an offsetting capital losses allowance. Also, to be administered fairly it would need to cover any situation where gains are made, even if they are only caused by inflation.

Imagine filing a compulsory return and learning you have another $20,000 of tax to pay for an inflation-adjusted value of a property or business, which will never be realised until it is sold.

Just my opinion . . . but our lot will never be improved if those who administer the country are focused on justifying their own remuneration, while stigmatising the wealthy and disincentivising success.