Real inflation.

Currently the top tax rate in NZ is 33 cents in the dollar. We have a GST which is 15% on all transactions, so you are basically paying 48% of the money you spend in tax.

The income tax rates now have a new higher rate for the rich pricks. Note that is NZ dollars: this is about 90K euro or 120K US.

The Inland Revenue Department is warning people on incomes over $180,000 not to try to avoid the new 39% tax rate.

“Inland Revenue will be keeping a close watch for any activity by such people that looks like its primary aim is to avoid the 39%. If that’s how it looks to us then we’ll take the necessary action,” Inland Revenue customer segment leader Tony Morris says.

The 39% rate kicks-in from April 1.

I expect that the senior doctors and civil servants who are the people who will be hit by this will demand a pay increase well over six percent.

This will also make saving for retirement problematic. The real rate of inflation is better measured by the price of the big mac than the official inflation rate, which includes a whole number of consumer goods.

Such as laptops, TVs, cars etc. You can’t eat those. What matters is food inflation, rent inflation, and fee inflation. You can’t avoid them. And they are going up by over 5% a year.

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Amy
Amy
7 months ago

I’ve been watching my own personal inflation rate … kitty litter. I buy the cheapest possible basic clay. When clay is more expensive, the dollar is worth less than it was last year.

In non-pet related products, meat is up (veg are not) and clothes one or two notches up from “cheap” are way up – while quality clothing is not. I can buy a polyester blend sweater for $60 or a wool sweater from Ireland for $130. Since the polyblend will last 2 years and without dog participation, the wool sweater will last 5-10, guess which gets my money? (At the beginning of the pandemic, cotton knit was WAY up in price, whereas other fabrics were not – it was getting bought to make gaiters).

Heresolong
7 months ago

“primary aim is to avoid taxes”

Also known as “taking all the deductions that the law was written to allow”.

I had the same discussion in court years ago. Officer claimed I was wearing small motorcycle helmet to avoid the helmet law. I pointed out to the judge the absurdity of wearing a helmet to avoid complying with a law requiring wearing a helmet. Since the officer couldn’t prove my helmet was illegal, the judge threw it out.

The only deduction available to a wage and salary earner is for charitable donations. Nothing else. Income splitting is verboten.

So exactly how is the IRS going to go after someone who takes all legal deductions for tax avoidance? Claim after the fact that motive for the claim matters?

Idiots, but idiots with too much power.