In a commentary, "The Jacinda Problem: Where she goes we go", Chris Trotter quoted Nick Hanauer, an American venture capitalist: "I have been rewarded obscenely for my success… yet the most important lesson that decades of experience at the heart of market capitalism has taught me is that morality and justice are the fundamental prerequisites for prosperity and economic growth. Greed is not good." Then he includes, "a fundamental prerequisite for a more just society is that the wealthiest should pay their fair share of tax".
Well, good for him but I am tired of hearing such commentary. What on earth does that mean, "pay your fair share"? It means nothing, and there is nothing stopping any individual, ultra wealthy or not, from giving Inland Revenue however much they want.
Then the question, what is greed? More than you need is a usual answer, or anything more than $10 million? $50 million? A billion? If you made it honestly, and you pay your legal taxes, it is yours to do with as you wish.
In the US the richest 20 per cent pay 87 per cent of all income tax. The bottom 40 per cent end up getting money from the government. It is not dissimilar in New Zealand. The above is only part of the discussion. The rest can wait for a future column.
To me, liberty is the foundation for everything else. That one simple, but crucial, word has such an extensive interpretation.
So, back to the question of governments and tax systems. The best is a simple, uncomplicated regime that is difficult, if not impossible, to avoid. With serious consequences for miscreants. The reason we don't have such a scheme, I suggest, is because of politics and greed. Governments have a voracious appetite for both money and power, and the former can buy the latter. Every election involves bribery. For hundreds of years, the aforementioned William Tell has been famous for his skill with a crossbow after shooting an apple on his son's head. In Switzerland he is more renowned for launching a revolt against the tax policies of the Hapsburgs in 1291.
The Swiss, as a result, developed what some say is the only real democracy in the world. It's a fascinating system because the Swiss voters are actually in charge. For example, the Swiss government must get approval from its voters by virtue of referendum to give themselves a pay rise or change tax rates. In 1975, the voters declined a government request for a tax increase. A prominent Swiss citizen, responding to a question of what happens next, replied "the government will have to live on what it has, like the rest of us." But it doesn't stop there. The Swiss have a separation of powers between taxing and spending, in the belief that temptation to overspend is omnipresent. Unfortunately, we in New Zealand could be returning to the ideology of the politics of envy. The introduction of any tax policy that enriches the accounting industry is bad policy.
A very large problem with our political system is the constant changing of administrations. And that is in addition to an increasing inability to elect a popular government. And it is getting ever harder to find someone who admits to voting for MMP. But, seeing that we are stuck with it for the foreseeable future, we must encourage candidates who are more credible and principled to elect to office.
• Listen to the Leighton Smith Podcast is at newstalkzb.co.nz, and nzherald.co.nz and on iHeart Radio.
