Matthew Henry John Bartlett

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Wednesday 08 October, 02008

Give It Up hits the big time

by Matthew Bartlett @ 7:00 am

Maxim Institute on Give It Up
… and in the Herald, and on Radio NZ news [streaming audio; I start around 13 minutes in. “Matthew Bartlett says he hopes that discussions over tax cuts won’t dominate the election” – ha! brilliant]

18 responses to “Give It Up hits the big time”

  1. danyill says:

    also Dompost:

    FWIW, I think very high-taxation social democracies destroy genuine initiative, creativity and free service in society.

  2. Ben Hoyt says:

    Good call, danyill. I agree about high taxes — if the government is taxing us at say 33% plus 12.5% GST, they’re taking almost half our income … that doesn’t help one’s feelings of personal generosity (though that way of thinking isn’t exactly good either).

    Great website, Matthew — I really think help for the needy should come from people who want to give, and it seems like that’s the point of GiveItUp. Good stuff.

  3. Matthew Bartlett says:

    Thanks Dan & Ben.

    Re. tax rates. Your figures are somewhat misleading. You make it sound like 45.5% of your income is taken by the government. But that 33% rate is only for the income between $40,001 and $70,000. If I earn $50K, I’m actually paying only 21% on the whole amount. And GST is not paid on what’s probably the largest spending item for most people: rent or mortgage (correct me if I’ve got my wires crossed). Also, if supported a wife and child on that income, with the Working For Families credit factored in, I’d be paying more like 11% tax. Not so exorbitant, I think. For that I’d get, among other things, use of the roads, hospitals and schooling.

    It may be so that current tax rates stifle personal generosity, I don’t know. Which parts of current government spending are you keen to see reduced?

  4. Matthew Bartlett says:

    O I thought of something else – my tertiary education, such as it was, was subsidised circa 75%. I can’t remember how long I studied (too long, or too short), but the subsidy would have worked out at say $20,000 – i.e. two years of my total tax bill (not counting WFF or GST). Are we certain an unsubsidised tertiary education sector would be a good thing for enzed? Perhaps a Microsoft/Google/ExxonMobil/China Construction Bank-sponsored university would be better than the current system?

  5. danyill says:

    Hmmm… While I’m reluctant to debate taxes, I keep fairly accurate records of such things.

    Crunching a few numbers I’d estimate that over the last year my overall tax (income & GST) as 33% +/- 2% not including any effect of Kiwisaver.

    This doesn’t seem excessive, at least not on the face of it. And much of it is put to good use…

    Quite incidentally I note also that income gap between rich & poor has narrowed over the last few government terms which I applaud.

  6. Matthew Bartlett says:

    Thanks Danyill. That is good news re. income gap — do you have a source for that?

  7. Simon says:

    Re: the income gap – I’d be interested to know whether this narrowing of the gap is as a result of the global market cris(e/i)s, and that therefore the rich are not making as much money as they once were, or that the poor are earning more (or taking out the bifurcation, some crazy combo of both). I suspect it is the former, and that therefore the narrowing of the gap is not necessarily good news for those (us) poor people.

  8. Ben Hoyt says:

    You’re right, Matthew, I was stretching the figures a bit. Sorry. (One would need to be earning $138k to be charged 33% income tax on the whole amount.)

    For me personally, I pay GST on about 30% of my gross income, so that’s about another 4%. Hence, if I worked for an employer, I’d pay 25-30% total tax (income and GST). However, I “work for myself” — that is, I’m a director of Brush Technology, and small technology business.

    So in my comment above I was speaking from the perspective of employees. It turns out that our government really likes small businesses, and the amount of tax one can save when running one comes close to being unfair. I guess this is because the gov’t thinks small businesses are good for the country, and they’re probably right. In short, if you want to pay less tax in NZ, start your own business, work at home, and get a good accountant. :-)

    BTW, why is mere “income gap” a bad thing? I’m very happy there are some very wealthy people around. For one thing, they invest in small businesses like ours. They’re also often employers, so they provide lots of jobs. And the poor we will always have with us.

    But it’s certainly not the government’s job to be Robin Hood. That leads to Animal Farm, where everyone’s equal, but some are more equal than others. Oh, and less incentive to work hard (see this article by David Holtslag).

  9. Matthew Bartlett says:

    Thanks Ben.

    It’s funny (and probably useful) to have to justify the idea that there’s something wrong with e.g. this. I guess I mostly hang out with a fairly politically homogeneous (vaguely Left) group. Basically I think anyone who finds themselves with some power/cash ought to use it to help the poor, bring some peace, heal the earth and make beautiful things wot God might approve of, and that a priori theories about e.g. ‘the role of the state’ are only slightly helpful in these endeavours.

    David’s article was written almost three years ago – Working for Families has had a few years to prove itself, or not. Do you know how it’s done?

  10. danyill says:

    It was from a presentation from a guy from The Family Centre. Can’t see the stats on their website unfortunately.

    Income gaps are not per se bad, depending on what they reflect.

    Within a given society, changes in income gaps quite often reflect structural inequalities and unjust situations (e.g. what’s happening in the US now will have massive effects here – probably good and bad). Reductions in income gap often indicate healing of those same injustices or the provision of new opportunities for poor people.

    In NZ, Working For Families strikes me as a way in which the present government has made a genuine attempt to relieve financial pressures on struggling families in view of e.g. house prices and increased energy costs. I’d rather it wasn’t necessary and don’t think it’s an ideal fix, but it’s a hell of a lot better than doing nothing.

    It’s correct that the governments task is not to be Robin Hood – on the contrary, it is to ensure justice for all its citizens.

    Where there are significant amounts of people living in poverty and an underclass becomes entrenched socially, it seems likely that there has been a significant injustice done – often caused by business or government decisions to a lesser or greater extent (whether it be the mother of all budgets in the early 90s, the closing down of factories due to free trade agreement with China, higher energy bills due to the ETS or whatever).

    The idea is not to eliminate income disparities but simply to responsibly account for them. (Incidentally I am happy with the idea that some people might be worth up to, say, 30 x my salary in view of responsibilities/experience/abilities.)

    So at a societal level consideration is required as to why income gaps might be increasing or decreasing and what they reflect.

    And certainly from a Christian point of view, consideration of one’s own status relative to others (locally and globally) and the reasons as to why the disparities exist (often not more than lucky genes, family money and good education) might result in something of an impetus to ensure options are available to to allow people to work and do well insofar as their abilities allow. Particularly the downtrodden, the poor, the mentally ill, single mothers etc (see e.g. Prov 21:13; 28:27).

    For instance I’d suggest people below a certain income should have low-cost housing made available for them or very low interest-rate loans.

    Incidentally I think the appropriate counterpoint to Matt 26.11 is Deut 15:11 – because poor people are gonna be around that is *precisely* why we need to be personally generous and openhanded and ensure their options aren’t closed down.

    Contra Matt I think it is very helpful to think about the role of the state in answering this question and would be very much interested in any suggestions he might have about an alternative way to evalute this. Would he agree with, for instance the government reapportioning all our incomes to ensure everyone has a guaranteed income. What about land redistribution?

  11. Matthew Bartlett says:

    Thanks Danyill. The family centre man would have been Charles Waldegrave.

    The Mondrag√≥n coops in Spain (inspired, I understand, by R. Catholic social teaching) managed to keep to a maximum wage differential of 3x for their first twenty years, and nowadays it’s at 6x.

    Re. reapportioning incomes to ensure a guaranteed minimum income – I don’t know if it is a good idea, but I wouldn’t rule it out in principle. (I recall the Libertarianz Party (!) were campaigning for a universal income three elections back.) There are many other guaranteed minimums available in our society: schooling, doctors, the roads, etc.

    I think land redistribution in some cases is probably a good idea. I can imagine supporting turning over control of a banana plantation to a coop made up of its labourers. I think our society’s definition of ‘ownership’ is somewhat broken … it’s too diffuse, or abstract, it pulls against the idea of stewardship. Renters and landlords don’t care for their properties in the way that owner-occupiers do.
    A shareholder by virtue of a piece of paper gets to take the cream of an enterprise that couldn’t continue for a day without the labour of any number of wage slaves.

  12. dennis bartlett says:

    I suggest you read some Rodney STARK young Matt available from Te Radar (Lynton)

  13. Matthew Bartlett says:

    Thanks Dad, Stark’s on my list. How does it relate to the current discussion?

  14. Dan says:

    It’s interesting living in Switzerland (been here since May).
    Total income tax is 13% where I live. (it varies from canton-to-canton)

    On top of that, we have to pay compulsory health insurance, which is not ridiculously cheap, but the quality of service here is much greater.

    The federal government is non-professional, i.e. they hold a day-job for 50% of the time.

    But the great thing is, the government (federal and local) can’t change the tax rate without a majority vote by the constituents.

    GST (or MWST, as it’s called here) is 7.5%, I think.

    Unemployment benefits are paid at 70% of the income you received from your last job. and you can only receive it for 400 days in a given two-year period. Employees also pay an unemployment insurance, which consists of 50% from the employee and 50% from the employer.

    The really big difference I notice here is that people are so much more socially responsible. Sure, there’s the odd bit of graffiti, but I feel so much safer walking around town at night, and I leave my bicycle at the station every day and it’s never been subjected to senseless vandalism (it did get knocked over once).
    People take much better care of their properties, and at a personal level (rather than a policy level), seem to be much more environmentally friendly.

    (I guess you should bear in mind that I used to live in South Auckland)

    Kiwis seem to have this inherent problem that I can’t quite put my finger on. Take their attitude to alcohol; I wouldn’t say the Swiss drink any less than New Zealanders, but alcohol is nowhere near the problem it is in NZ. And here you can buy a 500ml can of beer from the corner dairy.
    And the attitude towards women; in Switzerland, most women will just wear a bikini when swimming at the beach/pool. And yet there is much less sexually-related crime here than in NZ where girls wear board-shorts and t-shirts when swimming.

    Kiwis seem to lack self-control, self-esteem, respect for others, and just responsibility in general.

    I think the government recognizes this, but tries to solve it with preventative legislation (bans, restrictions), which only further removes personal responsibility.

    I know the best solution for this is for the church to demonstrate the love and care of Christ in the community, but there still needs to be something done at a government/legislative level. What can we do?

  15. Dan says:

    Sorry, that kinda veered wildly off-topic.

  16. dennis bartlett says:

    That was fascinating Dan it is a pitty the likes of Rodney Hide couldn’t get this type of message out to voters…..I suspect many NZers are starting to figure we need less government not more. The people need to take ownership not continually expect Aunty Helen or Uncle John to be the fire truck. After 100 odd years of leftleaning social engineering it would be a massive √°djustment’to head in Switzerland’s direction.

    What is the down side of the Swiss system?

  17. For one thing there’s too many fat children

  18. Dan says:

    Hi Dennis,

    If you ask a Swiss what they thought were the downsides of their system, they might say:

    – It takes too long to get anything done. Sometimes a bill will get voted down several times, but its supporters keep bringing it back, refining and amending it until it can get enough support to pass.
    I see this as an upside, especially in the light of the current NZ government who dream up legislation and bring it into law regardless of whether the majority of voters agree or disagree.

    – Another interesting complaint I’ve heard is that the representatives don’t take things as seriously as they should, in that two member from different parties can debate in the house on opposite sides of an argument, and then go out for a beer together afterwards. At least two people I’ve talked to have complained about this; they think it shows a lack of passion or dedication to the cause, or something. Again, I tend to see this as a good thing.

    – Too much bureaucracy. This might be true, but combined with Swiss efficiency, it’s rarely a problem, and it does ensure things get done properly.

    I believe there is some social decline in Switzerland, the older people seem to be seeing it, but I think that by-and-large, the Swiss are so used to their wonderful system that they take it for granted – many of their complaints are trivial – and I sure that if they were to spend some time in NZ (or just about anywhere else), they’d appreciate their system more.

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