Endeavour: #23 – S05 E06 – Icarus
1 hour ago
The welfare state is unsustainable economically, socially and morally.
* To start with, individuals and businesses must pay the government the $1 in revenue plus the costs of their own time spent filing and complying with the tax code; plus the tax collection costs of the IRS; plus the tax compliance outlays that individuals and businesses pay to help them file their taxes.
* In a new study, Laffer and his colleagues estimate that these costs alone are a staggering $431 billion annually.
* This is a cost markup of 30 cents on every dollar paid in taxes.
* Consider a family that made $40,000 in the year 2000.
* If their income grew by 3.2 percent per year, the average long-term gross domestic product growth rate, their income by 2010 would be $53,110.
* Now imagine that the growth in the family's income was not 3.2 percent but 3.72 percent (the impact from halving the costs of our current complex tax system).
* Under this higher growth scenario, the family's annual income would have been $55,568 in 2010.
* The slight increase in the economic growth rate raises this family's purchasing power by 4.6 percent.

“There was a large increase in the number of young people receiving the sickness and invalid benefit between 2002 and 2007 (the largest increase was in the 18-19 age group). “Why was there such an increase in young people on invalid and sickness benefits? How much is due to mental and physical disease as a result of the increase in child poverty?”
U.S. Tax Code Is One of World's Most Progressive
The United States has one of the most progressive tax systems in the world, and has become much more progressive in the past 30 years, says Richard Rahn, a senior fellow with the Cato Institute.
* The top 1 percent of taxpayers pay 38 percent of all the income taxes despite having just 20 percent of the income.
* The top 10 percent of taxpayers pay 70 percent of the income tax while having just 46 percent of the income.
* At the other end, the bottom 50 percent of taxpayers pay just 2.7 percent of the income tax while having 13 percent of the income.
This has resulted in a situation in which a relatively small minority of taxpayers pay the bulk of the taxes, while most American pay little or no income tax. This is causing an increasing disconnect between benefits from government and what most citizens pay for. One result is a greater polarization in the political realm where a majority of citizens increasingly demand more government benefits for which they want others to pay.
The Swedes were on this same destructive path, but they reversed course over the last couple of decades and made their tax system far less progressive, even though their tax rates at all levels are above most of those in the United States. The result has been a tempering of demand for new government services as people at all income levels realize they will be the ones paying for those services and not some mythical "rich" person. The side benefit is that Sweden, as a result of tax and other reforms, now has one of the highest economic growth rates in the world, says Rahn.
Source: Richard W. Rahn, "Tax Inequity," Washington Times, April 11,2011.
Sweden may need to push through tax cuts at every budget if it is to reduce unemployment further, Finance Minister Anders Borg said.
“We have a lot of work to do to secure full employment,” Borg said at an event today arranged by Svenska Handelsbanken AB (SHBA) in Stockholm. “It will require that we make changes to taxes and spending in practically every budget going forward if we are to come down to unemployment rates in line with the best European countries.”
The government yesterday raised its economic growth forecasts for 2012 and 2013 and predicted budget surpluses, allowing it to cut taxes when most other European countries are grappling with austerity measures. The fastest-growing European economy will expand 4.6 percent this year, 3.8 percent in 2012 and 3.6 percent the following year, Borg said yesterday.
The krona strengthened 0.2 percent against the euro to 9.0224 at 9:40 a.m. in Stockholm. It jumped 0.9 percent yesterday following the government’s forecasts.
Unemployment fell to 7.9 percent in February from 8.2 percent the previous month, Statistics Sweden said on March 17, citing non-seasonally adjusted figures.
In her speech to the Sydney Institute last night, Ms Gillard said Labor was ''politically, spiritually, even literally the party of work. The party of work not welfare, the party of opportunity not exclusion, the party of responsibility not idleness.''
Extended family and close friends of child abusers could face up to 10 years in prison if they turn a blind eye to abuse and do not report it.
Justice Minister Simon Power yesterday introduced changes aimed at protecting children from abuse and neglect, including a new offence making people who are close to a family liable if they do not report abuse to the authorities.
OPINION: KIWI mothers are battlers too. Donna Wynd and Susan St John need to be enlightened about this fact before they consign all mothers in New Zealand to the state-funded victimhood they seem to be advocating in their column Enlightening the Welfare Working Group.
Sometimes events beyond our control conspire to undermine our abilities to look after ourselves and our children, which is where a caring community kicks in.
The Welfare Working Group seems to be offering hope with help and the Child Poverty Action Group is offering help without hope to Nikki - the solo mother example. It is the second option that riles me the most.
Let's look again at Nikki. She has two children aged six and three and works part-time at night to help support her family. Let's not talk about a nebulous no-good partner, but give the father of her children an identity - Sam.
Sam and Nikki, for whatever reasons, have decided to split. Nikki keeps her night-time job because she likes it and it is the place where she is treated like an adult after day-long childcare. Sure, she is tired but sometimes she gets help from her family.
It does not require magic to continue working and looking after children. New Zealand mothers (and fathers) do this every day and we cope. Support is nice but not always available.
Accessible, safe and affordable childcare close to the workplace is essential, or mothers of children aged under five are not able to work. Once this is properly addressed, there are no barriers, other than choice, to a mother working after having children. Lots of us do it (alone). We have to. Our kids are fine.
Child Poverty Action Group says the definition of ‘family scheme income’, which came into force on 1st April goes too far.
Spokesperson Susan St John says it is fair that income from trusts and ‘portfolio investment entities’ (PIEs) is now counted when calculating Working for Families, Student Allowances and the Community Services Card entitlements. “But the new definition includes regular gifts of money from other family members, for example, if an outside family member pays for something like the electricity bill.”
While gift duty is abolished for the rich, regular transfers which total over $5,000 to struggling low income families are penalised. Transfers totalling $5,001 means $1,000 loss of Working for Families tax credits.
These low income ‘working families’ are not the ones hiding money in PIEs and trusts. The government ought to be encouraging grandparents who can afford it to help their children. In the recession, without such help many more working families will resort to loan sharks and foodbanks.
CPAG also queries how such as scheme could possibly be administered fairly. “And there are other anomalies,” says St John . “For example, payments for daycare made by a working grandparent is captured by ‘family scheme income’. But if the grandparent looks after the grandchild themselves it is not counted. The overall value of the help is the same but the impact on the way IRD treat it is very different”
St John says “Under the changes one-off cash gifts are exempt, raising the prospect that families will be planning their transfers much more carefully in the future”
Bernard Hickey's column last week elicited this response from Susan St John, associate professor of economics at the University of Auckland business school.
Bernard Hickey says dropping "middle-class welfare" such as Working for Families would be the fastest way to reduce the budget deficit.
His analysis displays no understanding of family economics at all.
Unfortunately, the antipathy to Working for Families is now widespread and he helps smooth the path for the Government to slash this programme.
But Working for Families tax credits simply adjusts tax to take account of family size and to share the costs of raising the next generation.
In Australia, one-child families, including those on benefits, receive maximum assistance of A$10,200 ($13,000) if there is a baby bonus paid, A$8815 for a child aged 1-4 and A$7738 for a child aged 5-13.
In New Zealand, if this one-child family is on a benefit the most they can get from Working for Families is $4472. A family defined as "working" qualifies for the In Work Tax Credit, but they can only get the full entitlement of $7592 if their total income is less than $36,868.
Contrast these with the Australian figures when our dollar is only worth about 75 per cent of Australian currency.
If we do away with the meagre Working for Families tax credits, how will we stop the exodus of our young struggling families to Australia?
WEALTHY parents should pay a levy to upgrade the nation's rundown schools, according to the headmaster of Australia's oldest private school.
Tim Hawkes, head of The King's School at Parramatta, said the levy should apply to well-off parents who send their children to government schools, which he described as an untapped funding source.
Well-off parents already paying school fees to send their children to private schools would also have to pay the levy.
It was "no time to be stoic", and people should seek CYF help before they reached "breaking point", she said.



Temperance Pledge
He whakaae tene naku kia kaua ahau e kai tupeka, e inu ranei I tetahi mea e haurangi ai te tangata, kia kaua hoki ahau e whakaae ki te ta moko. Ma te Atua ahau e awhina.
Translation:
I agree by this pledge, not to smoke tobacco, not to drink any beverages that are intoxicating, and also not to take the ta moko. May God help me.
Tapu/Noa Sacred/profane The recognition of the cultural means of social control envisaged in tapu and noa including its implications for practices in working with Maori Service Users.
ACT MP Heather Roy said it was obvious further changes needed to be made. "The question is, how much was the system allowing this to happen? It seems to me if we've got that much money going west ... there's something going wrong."