Saturday, May 30, 2015

Bill English says an astonishing thing

"The reason people hand over their PAYE at the end of the week or fortnight... is because they think we are making a difference to someone else's life." Bill English
Except nobody hands over their PAYE. One doesn't stand in a queue patiently waiting to make their contribution to government thinking how much better off someone is going to be because of it.

There is no choice. Paying tax is compulsory. If it weren't, many would have long since concluded that an institution wasting or misspending so much isn't worthy of support. If there was a queue, it'd be a very short one.

As well as a fib, it's an incredibly conceited statement. It reveals the disconnect politicians have with common people.

Tax is unseen. There is no opportunity for the payer to consider whether he or she is happy with what it buys. That is the way government wants it to be. PAYE perfectly suits their purposes; gone before the person who earned it has any ability to value it.

A government  truly convinced it was the best supplier of services - social, health and education -  would allow an opt-out choice. For example, it would provide a tax exemption for people would bought private healthcare. Or a tax exemption for those who sent their children to private schools or home-schooled them.

That's never going to happen because the revenue collected from people who pay twice is crucial to the continuation of the deceit.

The reason people "hand over their PAYE" is because they have  no choice. Unfortunately, most have become quite passive or apathetic about this reality. If no choice exists then what's the point of considering whether the outcomes are desirable?

From there, it is an impossible stretch to expect people to consider whether taxation is even morally sound.

Yes, agents of the state have us right where they want us.

And to add insult,  the Finance Minister then has the audacity to tell us what we think. Un-bloody-believable.


macdoctor said...

The purpose of tax is actually to provide services that a free market would not be able to provide easily - notably defence and law enforcement. Making people's lives better is what charities are for and the donations to those are supposed to be voluntary. Helping the disadvantaged is a function of human compassion, not government intervention. Much that is wrong with our welfare system is directly attributable to our getting this backwards.

On the other hand, at least Bill is acknowledging that he is responsible for spend our money as wisely as possible. Even though that is a little like a burglar promising not to spend the money he's stolen on gambling and alcohol. Our little socialist friends would just go on a blinder and then demand more money...

Berend de Boer said...

macdoctor, I don't think you have taught this true. Our NZ government providing defence? You're joking right? We have no air force, a few boats, and a few SAS guys. If it wasn't for the US and Australia picking up our defence tab, some eager entity could have swallowed us long ago.

On law enforcement: you think all that enforcement of drugs, gambling, and other vice laws is money well spend?

But let's talk about something you probably would think is important: property protection. What's the resolution rate for burglary again? 3%? Why are there so many private companies providing security?

You'll see a lot of companies working in these supposed "only government can do that" cases if you look closely. And if you look even more closely, often private companies are not legally allowed to compete with the government, so what you think is "no one but the government would do it" is actually "no one but the government is allowed to do it".

tranquil said...

" because they think we are making a difference to someone else's life."

Dear Bill -
No, that is NOT the reason I pay my taxes. Have you been at the "Dipton dak" or something?

The reason I pay my taxes is that I have no *choice*.
Let me make a suggestion, Bill -
make income tax voluntary.

If you are right then the tax take should stay much the same as now.
If you are wrong then the tax take will drop - enormously.

Either way, it's a win/win situation.
Either you are proved correct or people get to keep more of *their* money.
Just do it!

Anonymous said...


I don't think it is quite as involuntary as your world-view suggests.

First, the community does get to vote the Government in, and since the second world war we as a country have continuously voted in government's that take a significant portion of their pay packet. There was a choice -- for instance ACT - but there has never been any significant support for that option.

Secondly, paying taxes is not as voluntary as all that. I know PAYE earners find it harder to evade, but even they have choices around things like interest and dividends, and despite all the assertions that are made, New Zealanders indulge in very low levels of evasion, and given the relative weakness of IRD monitoring, it is difficult to see any other reason than that they overall are reasonably happy what the government does with the money overall.


Anonymous said...

Well put Lindsay.

Kiwiwit said...

Bang on, Lindsay!

Anonymous said...

Mary, people accept income tax, which is a relatively recent invention, because they do not know enough to debate its use. Its like the boiling frog theory - tighten the noose a bit from time to time and they don't notice. There are alternatives to income tax but they allow freedom from intrusion by a nosey government and we can't have that. The ruling elites have become addicted to helping themselves to your money and when income tax was introduced in NZ (at a very low level) the smart people were against it because they could see where it would lead.

david said...

Bill English says "The reason people hand over their PAYE at the end of the week or fortnight... is because they think we are making a difference to someone else's life"

Macdoctor says "The purpose of tax is actually to provide services that a free market would not be able to provide easily - notably defence and law enforcement"

So leaving aside the compassion / compulsion aspect, there is first of all a difference in opinion about what the tax is for. Bill thinks we pay tax to improve the lot of the less fortunate, MD thinks it is to provide public goods. MD might be surprised, but we pay $30 billion in personal taxes and Bill gives 25 billion of it to someone else. There is only $5 billion left for the things MD thought taxes were for.

And I don't agree that this is the choice of the taxpayer. We are in the sad situation where only a minority are net contributors to the public purse and the government is looking after the majority. Not for nothing does the IRD have wider search powers than the police, and penalty provisions under which you are guilty until proven innocent.

Bill could have said "The reason people are required to hand over their PAYE at the end of the week or fortnight... is because our voters think it will make a difference to their lives".

If only it did make a positive difference to people's lives. James Bartholomew in "The welfare of nations" makes a strong, well researched case that welfare as we know it makes things worse - a point made consistently by Lindsay.

Graham O'Connor said...

Excellent post Lindsay. It's good to see the mythology stripped away for a change and the compulsion laid bare.

Anonymous said...

And I don't agree that this is the choice of the taxpayer

absolutely. The community doesn't pay: less than 10%, mostly about 1% of Kiwis pay for everything for everyone else.

All the problems in local government - especially in the supercity - came when the ratepayer franchise was ditched and turned into the universal franchise. Welfare as we know it came only when property qualification for the franchise was ditched and again NZ adopted the universal franchise.

Fix that problem and the rest will fix itself.