The wealthy trying to avoid new tax

[king1]

The "rich" folks I know of are addicted to making money so I doubt very much that the prospect of a bit of extra tax alone is going to make them pack it all in and move to the 'burbs.  That decision will be made by other factors, such as health, lifestyle, retirement plans etc...

How do you define "rich"? 

In that context, based on the several clients I have in that position, and to some extent based on dken31 statements of "a bit above average" and "This year ... pay about $127K income tax" (the latter seemingly understating the former imho)...

I was trying to make the point that not too many people making that sort of money will simply shut up shop, lay off four staff, sell up all the plant, essentially destroying all he has built up over the years - just because the government might/will increase the tax burden...   This seems to be the arguement or outcome being proposed of an increased tax burden.

The reality I would suggest, is the said business will be put up for sale as a going concern, the four staff will most likely continue to be employed (and pay tax), the company will presumably still make loads of money (and pay tax), and dken31 will move to a life style/sentence block with a nice seven figure payout for his efforts building up the business over the years, invest the funds, earn returns, pay tax...

Or do what everyone else is doing at the moment and put prices up slightly to cover the "cost" of the extra tax burden and blame it on inflation... 

[SueDonim]

How do you define "rich"? 

In that context, based on the several clients I have in that position, and to some extent based on dken31 statements of "a bit above average" and "This year ... pay about $127K income tax" (the latter seemingly understating the former imho)...

I was trying to make the point that not too many people making that sort of money will simply shut up shop, lay off four staff, sell up all the plant, essentially destroying all he has built up over the years - just because the government might/will increase the tax burden...   This seems to be the arguement or outcome being proposed of an increased tax burden.

The reality I would suggest, is the said business will be put up for sale as a going concern, the four staff will most likely continue to be employed (and pay tax), the company will presumably still make loads of money (and pay tax), and dken31 will move to a life style/sentence block with a nice seven figure payout for his efforts building up the business over the years, invest the funds, earn returns, pay tax...

Or do what everyone else is doing at the moment and put prices up slightly to cover the "cost" of the extra tax burden and blame it on inflation... 

From your previous post ..."That decision will be made by other factors, such as health, lifestyle, retirement plans etc...". You are right that most people won't shut up shop directly because of tax, but if they are being over-taxed and are sick to death of the hassles that come with compliance they might think "what the hell" on top of all those other reasons.

When the point comes that you want/need to change what you are doing or where you are doing it, some businesses are saleable (but usually don't have as much value as people think) and relocatable but some are not. If it depends on the owner's unique skills or the precise location, then it might not be saleable at all and the owner then needs to decide what they wish to do. Which is often to just shut up shop and stop trading. If they have built enough reserve it can be a very tempting option and as said, takes a taxpayer out of the workforce. We need to reward productivity more.

[king1]

On the subject of tax rates, the highest tax bracket rate in...

Aussie is 45%
US Federal tax rate is 37%, I believe they have state taxes on top of that.
UK is 45%

NZ at 39% looks fairly competitive doesn't it?

[jim157]

What rubbish. Waste it on what? The health service? Education?

maori bribes

[king1]

What rubbish. Waste it on what? The health service? Education?

maori bribes

Maori aren't the only recipients of politically motivated incentives - just the way politics works...