Wednesday, September 10, 2014

Secondary trickles - vanishing rich people (aka "Y'all are doing capitalism wrong" part 2)

Hokay, first things first. On the offchance that people really really like me reviewing stuff and are worried that Cinemania's gone, it's been reborn phoenix-like as Love & Pop and I'm still writing stuff for them pretty regularly. Most recently I reviewed the Australian River Cottage spinoff (pretty good, very white), Hugh's 3 Good Things (moar comfort-food cooking TV), The Life After Death Project (a horrible doco about ghosts, centred on a pretty interesting-sounding dead guy), a Korean disaster movie (actually pretty amazing), and an Adventure Time special (it's Adventure Time, whaddaya want?*).

Right. Where was I? Oh yes. Taxing the rich.

I fall pretty squarely on the left in terms of politics. According to the most recent shot I had on Vote Compass**, I'm pretty much in the middle of the left-libertarian*** box. One of the things that goes along with that is that I believe in taxing people (particularly rich people, particularly very rich people) more in order to make it possible for the government to pay for more stuff, allowing the public access to free or heavily-subsidised services.

To clarify, I'm talking about income tax here. In NZ we have two primary kinds of tax - income tax on the money we earn, and GST (Goods and Services Tax) which is a percentage of the cost of everything we buy. The current government have cut income tax, and increased GST.

The problem with doing this is that while people with higher incomes will always pay a higher dollar share of income tax, even if the percentage is flat across all income brackets (here in NZ it's not, though I couldn't tell you the precise rates off the top of my head), GST always runs into the "you can only buy so much stuff" problem I mentioned in my last post. With income tax the government will get a bigger share if more people earn more money, while with GST the only way for the government to increase their take is to convince people to buy more stuff - and even the richest person can only eat so much food, and wear so many clothes. On top of this, increases in GST are always passed on in the price of the Goods and Services in question - so raising GST makes everything more expensive for everyone, which disproportionately affects the poor.

So, I'm in favour of plans (regardless of which party they come from) to cut GST and increase income tax in the top brackets to compensate. One of the most common objections I hear to plans like this is that they "punish people for hard work", and that if we tax them too heavily all our richest citizens will head overseas. To which I say, "who cares?"

First off, there's a tendency to misunderstand the way that tax brackets work in New Zealand - or to wilfully misrepresent it, if you want to be cynical. When you enter a new tax bracket, the new tax rate doesn't affect the entirety of you income - just the bit that pushes you into that new bracket. Secondly, if someone makes over a million dollars a year, and you really do tax 50% of their whole income - they still end up with a minimum of $500,000 - which is still more than 5 times the median income.

And as for people who'll leave if they're taxed - I contend that we can do without them.

There aren't that many people making more than a million a year in New Zealand, so if they all left at once the impact on our population would be pretty tiny. Moreover, the jobs that they're doing can, I believe, be done at least as competently by people who are willing to accept smaller salaries. I don't believe that people who have the skills to be CEOs of large companies are actually as rare or as superhuman as they like to make out, and getting $500,000 (even $1,000,000) per year instead of $4,000,000 still leaves you pretty well off.

The question is this: do you want it to be possible for some (not very many) people to be astronomically rich to the point where they couldn't spend all their money if they tried? Or would you rather have free schools, hospitals, and ambulances?


*What do you mean you don't watch Adventure Time? It's really good! It hits that Moomin-flavoured sad-stuff-for-kids button whilst also being actually funny, and has D&D jokes without being self-conscious about its nerdiness. And it's a kids' cartoon where the characters aren't perpetually snarking at one another and the voice acting isn't 50/50 gravel and horrendous squeaking. Seriously. Go do it.

**It's a tool that aligns your personal values with the stated policies of the major political parties here in NZ. If you're a New Zealand resident, I strongly recommend you have a play with it. I didn't find the results especially surprising for me, but I get the impression that others might - and it's always nice to have your sense of where you sit politically confirmed.

***In the sense of letting people mostly do what they want - I'd call it "anarchistic" but the axis on the graph that Vote Compass gives you calls that "libertarian" as opposed to "authoritarian" on the other side. Basically, I'm on the side of Chaos if you're familiar with 4-axis D&D alignment grids. Chaotic Good, I hope.


  1. "Internet Traffic Management Notice: Page Blocked

    Category: Pornography
    This web page has been blocked in accordance with the University of Otago's Information Technology Policies."

    1. I imagine that's because they review some pretty exploitation-y movies from time to time. Oh, and they have a still from "The Holy Mountain" as a banner image, where you can see some definite sideboob - that might get it flagged too, I suppose.

  2. Well, I don't watch adventure time because I don't see TV. People say it's good, and if you are going to jnvoke Tove Jansen (iirc) on my arse...

    1. It will make you have feels watching an ice wizard battling zombies while he sings the theme from "Cheers" - I'd say that's pretty good.

      I dunno that AT is currently on TV in NZ. Some enterprising people have put pretty much the whole thing on Youtube, but you should of course consider paying Pendleton Ward money so he keeps doing tings. Also he makes another series called "Bravest Warriors" which is similar in tone but slightly more grownup and sci-fi instead of fantasy in its genre-DNA, and that's a free web series he's put on YouTube his ownself.