03-07-2022, 01:15 PM
This financial year, I'll pay about $127K income tax, but will avoid paying a further $25K by spreading income between me, my wife and kids and our trust (with very little taxed at 39%). The income I earn comes from owning and operating a business in Auckland that comes with significant risk and responsibility, and employs four well paid full-time staff.
No doubt some of you will have a low opinion of my "avoiding tax" and think that I'm dodging my full obligation to my fellow tax payers. However, if I chose to shut down my business, move to the provinces for a slower pace of life, and take a job being paid only $80K, I'd only have to pay $17K tax and could start getting $23K in Working for Families payments. So, instead of paying $127K, I'd be receiving net $6K. And yet, presumably, none of you would consider me to have any obligation to go back to my current occupation.
I think society needs to be careful not to bite the hands that feed it. For the "a bit above average" like me, the option to chose lifestyle over income definitely becomes more appealing if the tax burden becomes too onerous. For the mega wealthy, moving to another country is more likely to appeal. The point is, rich people already pay most of the income tax being paid; if society keeps trying to squeeze more and more out of them, if it chases enough rich away, the tax take will actually decrease and then the average/poor will be really stuffed
No doubt some of you will have a low opinion of my "avoiding tax" and think that I'm dodging my full obligation to my fellow tax payers. However, if I chose to shut down my business, move to the provinces for a slower pace of life, and take a job being paid only $80K, I'd only have to pay $17K tax and could start getting $23K in Working for Families payments. So, instead of paying $127K, I'd be receiving net $6K. And yet, presumably, none of you would consider me to have any obligation to go back to my current occupation.
I think society needs to be careful not to bite the hands that feed it. For the "a bit above average" like me, the option to chose lifestyle over income definitely becomes more appealing if the tax burden becomes too onerous. For the mega wealthy, moving to another country is more likely to appeal. The point is, rich people already pay most of the income tax being paid; if society keeps trying to squeeze more and more out of them, if it chases enough rich away, the tax take will actually decrease and then the average/poor will be really stuffed