Kerre McIvor

Kerre McIvor is a Herald on Sunday columnist

Kerre Woodham: Tax dodgers mean spirited

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Gary Hooper. Photo / Supplied
Gary Hooper. Photo / Supplied

If newspaper readers are anything like talkback callers, I don't expect many of you will agree with me on the issue of the tax-avoiding surgeons.

You've probably heard the story - Christchurch surgeons Ian Penny and Gary Hooper were found to have restructured their business affairs, using family trusts and companies, to radically reduce their respective incomes.

One man's personal income went from $650,000 to $120,000 in the space of a year and the other's went from just over $300,000 to $100,000.

The IRD decided that the men were having a laugh and took them to court.

The surgeons won the case in the High Court but that decision was overturned in the Court of Appeal. The surgeons then appealed to the Supreme Court, which decided in a landmark decision that they were deliberately avoiding tax.

I don't think the IRD should hound the surgeons into penury - after all, the 10-year battle has been costly to both men and, indeed, taxpayers.

They were acting on the best advice at the time and even the Court of Appeal split two to one on the legality of the situation.

Tax avoidance is a major industry in this country and tax lawyers say it's because our tax system is too complicated.

One tax rate for all would ensure that tax avoidance was a thing of the past and besides, the lawyers say, it's simply not fair that people who earn more pay more. They work hard and they deserve to hold on to as much of their money as they possibly can.

The prevailing ethos seems to be a hangover from the 1980s - that greed is still good, although I'm sure these men wouldn't call it greed but rather asset management or capital preservation.

Whatever.

Other people, on minimum wages, work jolly hard too and take a pride in their work. It's not just the extremely highly paid who work hard. And if paying taxes on an increasing scale isn't fair, well, life isn't fair, is it?

It's not fair to be born into a family of drugs and violence. It's not fair that some children get cancer.

It's not fair that Christchurch got slammed with an earthquake and some houses are fine and some aren't.

Life has never been fair.

It's not really fair that the taxes from lowly paid workers of yesteryear helped these men get the university education they needed to launch their glittering careers - and it's not really fair that the public money these men were paid for their skills is salted away into family trusts to be used for their personal fun and pleasure.

Even at 39c in the dollar, as the tax was then, that's still just under $400,000 clear and in the hand, to play with.

Bloody hell. How many houses or cars or items of clothing or first-class tickets does one family need?

I'm all for paying people good money for the job they do. But it just seems so mean and petty to try to pay as little as you can when you earn such a healthy salary.

Seeing the government coffers run low and having funding to state schools and the public health systems cut won't worry the wealthy. They'll just tap into the family trusts and go private.

But it's the hard-working people doing jobs that are vital to a civilised society who will suffer if tax avoidance continues to be seen as a duty, rather than the mean-spirited grasping pettiness that it really is.

- Herald on Sunday

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