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Home / Business / Personal Finance / Tax

Damien Grant: Heavy tax load borne by a few

By Damien Grant
Herald on Sunday·
6 Oct, 2012 04:30 PM3 mins to read

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Photo / Thinkstock

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Opinion

It is hard to imagine a more inane waste of taxpayers' money than an advertising campaign telling me not to hit my wife. It's not OK!

It is OK, evidently, to spend my money on such garbage. Which makes me think, is it OK, morally, not to pay taxes?

Economically, it makes sense to cheat. For the self-employed, evading taxes is ridiculously simple and virtually undetectable. If you are smart enough to make decent money, you are smart enough to work out an industry-specific way to under-declare your income.

The IRD processes eight million returns annually and allocates $3.77 to process each one. Its annual report boasts of sophisticated analytical techniques to detect evasion but, in truth, it alternates between fruit pickers and property developers.

In the event that you are unlucky to be caught, the biggest risk is bankruptcy.

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The city is replete with busted property developers who declined to meet their tax obligations and, to my knowledge, not a single one of them is even wearing an ankle bracelet much less communally-washed prison apparel.

A handful of tax cheats go to prison every year but usually because false GST returns have been submitted to get a refund.

Tax evasion, unless remarkably crude or based on fraudulent documents, is unlikely to attract a prison sentence, although the laws are certainly there.

We have nearly 4.5 million people but only 2.2 million in the workforce to cover the $73 billion cost of Crown spending, a total of $33,000 per worker. A total of 106,000 people pay this much in income tax. Allowing for GST and company tax, maybe 200,000 taxpayers contribute more than they consume.

Taxes pay for roads, police, the navy, etc. We all use them, we should pay. Yet more than two-thirds disappears in social welfare, education and health.

Discover more

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Damien Grant: Horses for wrong courses

08 Sep 05:30 PM
Opinion

Damien Grant: Fear, greed and vanity are excellent staff motivators

22 Sep 05:30 PM
Employment

Tax dodgers cost country $80m

16 Oct 04:30 PM
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Damien Grant: Worthy of trust? I sincerely doubt it

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The system is based on the flawed premise that a middle class diabetic in Rakaia is more worthy of assistance than a starving orphan in Rwanda. They aren't, but the poor in Rwanda do not get a vote over here.

Democracy works by taking money from a few and giving it to the many. This is not a moral system. It is one driven by the self-interest of the majority who benefit from this system at the expense of the minority who fund it.

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Our welfare system goes far beyond helping the poor in New Zealand. It is a politically driven institutional transfer system that has long since lost its moral basis.

The world does not lack opportunity for you to contribute if you feel obligated to help the poor.

To be fair, you should first pay your $33,000 but, beyond that, your moral, if not legal, obligation is extinguished.

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