According to central government “Rates pay for a huge range of infrastructure and services crucial to the quality of life expected by New Zealanders”. That’s a justification for state-legislated theft, and unfortunately my magic wand is out of order, so rather than halting this rape I intend to show the internal inconsistency in the way in which local bodies calculate how much they’re going to steal.
First, let’s see how rates are calculated. There’s a base tax, and on top of that there is a large portion which is calculated from the property value. Therein is the kicker: although property values do fluctuate, the overall trend is that the value of a property rises over time. So, in calculating taxes this way you’ve got guaranteed tax increases. In the process, more of your power base – money is power – is taken from you by local government.
What is the internal inconsistency in this calculation? It is this: the rates are supposedly going to pay for services that you consume. But the way the tax is calculated has meant that this year people are paying up to 650% more tax. Has their consumption of services risen by 650%? I don’t think so.
Let’s look at a concrete example. The article linked to above mentions FHM Automotive, whose rates have gone from $3189 to $24,054: that’s an icrease of just over 650%. Has the business used an extra $20,865 of services this year? If it has, the owner must have improved the business performance by about 650% and the guy is a genius. Never mind, punitive taxes will help to stifle such a stellar performance.