I believe the top personal tax rate has played a significant role in fueling
the housing boom. Let's face it, negatively gearing property investment is
the only option open to middle class salary earners to reduce their tax
exposure.

With high interest rates, comparatively low rents and no great tax break, many
of these people would flee the market. I think many would never have got into
it in the first place without the 39% tax bracket.

Futhermore, while I agree that some people would spend their tax cuts, if they
got the chance, the ones paying most of the tax are also probably better able
to manage their money and would be more inclined to save/invest or reduce
debt. That should have a positive effect on the economy and everyone would
benefit.

I think there is too much prevalence of the "tax those filthy rich bastards"
mentality in the NZ psyche.

Todd.

On Fri, 27 Jul 2007 16:41, Phil Scadden wrote:
> > The point is that at 40% of GDP the govt is the biggest spender, also we
> > have huge increase in
> > bureaucracy which tightens the the labour market.
>
> And doesn't this simply reflect WHO is spending the money? The government
> is not borrowing to fund spending. The alternative would be tax cuts. do
> you think the people getting the tax cuts are less inclined to spend than
> the people who getting the money via government spending? I agree that
> growth of central government size is a worry but in perspective, the
> increase is small.
>
> > For all  the resource  the government  has at it
> > disposal no-one has categorically stated what is fueling the housing
> > market, tho I suspect it is
> > (in Auckland anyway) migration coupled with shortage of supply which
> > no-one politically wants to admit
>
> And in South it is wealthy amercans buying up land for variety of reasons.
> I agree migration is issue. I also find that its impossible to find
> suitable people inside NZ so of course we are bringing more immigrants in.
> But we could lose the speculators thank you.
>
> > As for KS, do i want to sign away 8%-12% of my income for the next 10+
> > years into badly managed funds
>
> Is there a well managed fund? Some of the offering look pretty competitive.
> I am still making by mind but it seems that with combination of other
> investments and KS, this has to be worth looking at. If the funds dont
> do well, then time for holiday. however I am only 15 years out from
> retirement so pretty much got that sorted.
>
> ----------------------------------------------------------
> Phil Scadden, GNS Science Ltd
> 764 Cumberland St, Private Bag 1930, Dunedin, New Zealand
> Ph +64 3 4799663, fax +64 3 477 5232
>
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