Thursday, October 24, 2013

12% of us prop up 76% of all spending.....

Bill English released some figures this week which certainly show who bears the greatest tax burden in New Zealand.
Finance Minister Bill English says lower income households are paying a smaller proportion of net income tax than they did in 2008, indicating that the tax system has become more progressive since the Government’s tax changes in 2010.
“This should contribute to improvements in income equality in New Zealand, contrary to the Opposition’s completely false claims that lower income households were disadvantaged by the tax changes,” he says.
“Estimates of net income tax, as paid by income bands, indicate the tax system has become more progressive since 2010.”
In particular:
  • Households earning less than $60,000 a year, which total around half of all households, are generally expected to pay less in percentage terms towards total net tax in 2013/14 than they were paying in 2008/09.
  • Conversely, households earning more than $150,000 a year – that is, the top 12 per cent of households by income – are generally expected to pay more of the total net tax than they were paying in 2008/09.
  • And only 6 per cent of individual taxpayers earn over $100,000 a year, yet they pay 37 per cent of total income tax. This has increased from the 2010/11 tax year, when those taxpayers paid 29 per cent of total income tax.
Mr English says this raises questions about Opposition calls for the top tax rate to be increased.
“They need to explain to New Zealanders why that should happen when higher-income households are already paying a larger share of total net tax, since the Government’s tax changes three years ago.
“At any particular time, a large number of households effectively don’t pay tax.
“The income tax paid by these households is exceeded by the amount they receive from welfare benefits, Working for Families, paid parental leave and accommodation subsidies.” So 12% of taxpayers are funding 76% of the net income tax take.

Tuesday, October 15, 2013

Economics Nobels–for tangible contributions

The great contributions of personal hero Eugene Fama along with Lars Peter Hansen and Robert Shiller  are acknowledged in the Nobel Committee’s latest awards…
Fama’s work on efficient markets in particular changed the way we think about valuing assets forever.
These awards are long overdue.

Friday, October 11, 2013

Mr A Little: Knows how to do better but refuses

Andrew Little continues to call for a “Living Wage”

If we assume

  1. He has a good brain, is well experienced and has led his union – one of the better thinking amongst unions – very successfully;
  2. he knows that his hard working members who have worked long and hard to reach $18.40 an hour or better through education, training, and experience will not be happy to be trounced by $13.75 workers suddenly getting $18.40 at the stroke of a pen;
  3. he understands relativity better than most in the country;
  4. he knows that any serious attempt to allow employment only at a rate of $18.40 an hour or better would  render thousands jobless in an instant; and,
  5. he knows that a rough guess by a couple of priests at what it takes to live in NZ is not an objective or scientific basis for anything,

he therefore knows that – the entire “living wage” concept as conceived at present is simple silly, not to be taken seriously by serious people of the left or the right and that it damages his hitherto good credentials.

Two questions arise

  1. Why would he advocate the policy? And at the same time drag others to whom much of the above also applies into supporting it; and,
  2. why does no one hold him to account for not using his considerable brain and good sense to useful purpose.

Failure to use your brain is forgivable if you haven’t got one.

Failure to understand the policy and having to have it pointed out to you by the Greens (that Civil Servants are not the target) is at least humorous and typically Cunliffian.

BUT: Pretending you can’t think and that you support policy you know is demonstrably harmful is irresponsible.

Some accountability for using your brain would be handy.

Thursday, October 10, 2013

Finally some data showing that, indeed, things ain’t what they used to be……

It is no stretch to speculate that the situation in England’s former colonies is exactly the same or worse….. modern teaching unions take a bow.

The culture that is England

by Tyler Cowen on October 9, 2013 at 1:00 am in Data Source, Education, History | Permalink

England is the only country in the developed world where the generation approaching retirement is more literate and numerate than the youngest adults, according to the first skills survey by the Organisation for Economic Co-operation and Development.

In a stark assessment of the success and failure of the 720-million-strong adult workforce across the wealthier economies, the economic think tank warns that in England, adults aged 55 to 65 perform better than 16- to 24-year-olds at foundation levels of literacy and numeracy. The survey did not include people from Scotland or Wales.

The OECD study also finds that a quarter of adults in England have the maths skills of a 10-year-old. About 8.5 million adults, 24.1% of the population, have such basic levels of numeracy that they can manage only one-step tasks in arithmetic, sorting numbers or reading graphs. This is worse than the average in the developed world, where an average of 19% of people were found to have a similarly poor skill base.

When the results within age groups are compared across participating countries, older adults in England score higher in literacy and numeracy than the average among their peers, while younger adults show some of the lowest scores for their age group.

- See more at:

 http://marginalrevolution.com/#sthash.nh83Jpnh.dpuf

Wednesday, October 2, 2013

Tuesday, October 1, 2013

No You’re Not Worth it – Nor You Mr Cunliffe

One imagines that upon reading of the “plight” of Labour’s embattled young 23 year old IT consultant wishing to buy a $500,000 house in Auckland and being thwarted by the LVR regulation that says “no you can’t lever up to do this and shove the prices up further in the process”, the Reserve Bank Governor is likely to say “this is exactly the sort of total nonsense the regulation is designed to stop”.

He would be right in that this seems less a case of screaming poverty than it is of screaming “because I’m worth it” (BIWI)disease. A bit of “expectational adjustment” would seem to be in order.

Unfortunately, regulation is such a blunt instrument that in dealing with the aspirant IT property entrepreneur (who is obviously to be applauded for his efforts and needs no help from any regulators) the Reserve Bank is imposing widespread collateral damage on much less well endowed people looking for loans to finance housing and the property which acts as security for numerous small businesses.

I understand why the Labour opposition’s PR people can’t quite get the analysis done, spin not logic is their trade after all. That ought not to be the criterion for aspiring Prime Minister.