Kiwi Polemicist

November 3, 2009

• Bill English wants to change property tax laws

Filed under: Government/State, Tax — Tags: , , , , — Kiwi Polemicist @ 9:43 pm

The NZ Herald is reporting that Bill English, Minister of Finance Fraud wants to change property tax laws (translation: the government wants to steal more money). The article says in part…

[English said] “We haven’t had those put to us yet, but I think the evidence that investment patterns in New Zealand could be more productive I think is pretty strong.”
Those advocating change argue that investment is being funnelled into unproductive parts of the economy, such as investment properties. [Is anyone other than the government saying this? Beware of unsubstantiated statements like this one]

What arrogant nonsense. People only funnel money into “unproductive parts of the economy” when the government forces them to: if people make a poor investment their diminishing wealth tells them that they’ve done so and they quit. That’s one of the signals that people receive in a free market.

What’s really happening here is that the state doesn’t like people putting money into investment properties, so it’s going to slap on extra taxes and make that part of the economy ”unproductive”. That is how the state interferes with the free market and fouls up the signals.

If we had a true free market (i.e. zero state interference) we’d know which parts of the economy were truly unproductive: they’d be the parts that everyone was pulling their money out of. Snap quiz: how many people would throw money at the government if they didn’t have to?

It’s more than a bit rich when the government, the parasite that sucks away more than 45% of your wealth, starts blathering on about unproductive parts of the economy. Pot, meet Kettle.



August 31, 2009

• Property rights are a part of human nature

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Yesterday I witnessed an 18 month old child squawk when her big brother tried to take a piece of her food. Clearly she has a basic understanding of property rights, i.e. “That food is mine”. You don’t have to teach children the concept of property rights, and from this I conclude that property rights are a part of human nature, i.e. it’s a “built in feature” added by our designer.

The bedrock of libertarianism is property rights¹, and I believe that libertarianism is consistent with human nature. This belief is supported by the fact that sociopolitical systems that try to remove all personal property rights do not flourish and last, whether they be involuntary (e.g. Socialism/Communism/Marxism), or voluntary (e.g. hippie-type communes). These systems fail because they are contrary to and hostile to the way we are made.

The girl that I witnessed defending her property rights is living in a Socialist country and as soon as she starts earning money the state will begin to violate those property rights on a daily basis². The sad thing is that so many adults accept this situation without so much as a squawk, despite the fact that even a toddler recognises theft when she sees it.


Related posts:

There is no such thing as “human rights”: a classical liberal perspective on the Electoral Finance Act

What is a “social contract”?

1. Property rights are summed up by the non-aggression axiom, which says “It is illicit to initiate or threaten invasive violence against a man or his legitimately owned property”.

2. The only things certain in life are death and taxes, but at least death doesn’t get any worse 🙂


July 30, 2009

• Site Plug: Living Off the Smell of an Oily Rag (Or, How To Avoid Wasting Your Life)

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Living Off the Smell of an Oily Rag is a website that gives free access to all sorts of practical tips for minimising waste and living cheaply. Updates are available via email, you can contribute tips, and books are available. The site is listed on my links page, and you can access that links page via the sidebar.

Why do I think that this site is worth a mention? I believe that it’s worth a mention because an essential part of economics (personal and otherwise) is wise use of the resources that you have. Here’s a couple of examples that illustrate what I’m talking about:

Example #1

If I’m throwing out a shirt I’ll cut off the buttons and put them in my sewing box. Those buttons are a resource that I have and if I throw them away it’s an unwise use of that resource (also, cotton shirts make great rags so they go into my rag bag).

Example #2

Buying house-brand cheese when it’s cheaper than the same thing with a big-name brand on it. If you buy big-name cheese that costs $2 more you’re wasting a resource, i.e. the two dollars.

But wait, it gets worse: people think of “wasting money”, but in fact “wasting money” is actually “wasting your life”. Let’s have another look at the cheese example: by spending $2 unnecessarily you’ve also wasted a chunk of your life, i.e. the time it took to earn those two dollars.

How much of your life have you thrown away by buying big-name cheese? Your true tax rate is 45%, so if you earn $20/hour then it takes you eleven minutes to acquire two after-tax dollars*. So, by buying big-name cheese you’ve wasted eleven minutes of your life, and time is one resource that you can’t get more of.

You might say “I’ll get more money to replace what I’ve wasted”, but that is impossible. When you work you convert one resource (time) into another resource (cash), and you can’t get more time, therefore it is impossible for you to replace what you’ve wasted. To put it another way, once you’ve converted your time into cash that cash is as irreplaceable as the time. This is your take-home message: you can only spend each minute once, therefore you can only spend each dollar once.

If you want to give eleven minutes of your life to the company that makes big-name cheese you’re free to do so. Personally, I prefer to avoid wasting my life 🙂 .

Please share your stories about your attempts to save money/avoid wasting your life – the funnier the better.

Click here for a biblical perspective on the points that I have raised in this post.

Consider this: with a true tax rate of 45% the state has taken at gunpoint a huge chunk of your life. If you work for 40 hours per week then you are enslaved for 18 hours per week. 45 working years x 52 weeks x 18 hours = 42,120 hours or 4.8 years (4 years, 9 months and 24 days). You can look at this in two ways: (1) that’s almost 5 years where you are enslaved by the state for 24 hours a day, 7 days a week, 365 days a year, or (2) that’s 20 work-years where you are enslaved by the state.

* The state takes 44.6% of GDP (Gross Domestic Product) (source). I know that buying cheese involves GST and therefore the two dollars aren’t entirely post-tax dollars, but I’m operating on the KISS principle here. Secondary taxation such as hospital parking fees and other hidden costs of governmental interference in daily life will probably even things out anyway.


July 22, 2009

• John Key’s lie: “There aren’t any little pixies”

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The NZ Herald has an article that begins thus:

Labour’s call for the dole to be paid to redundant workers even if their partners were on high incomes would cost about $1 billion over three years, Prime Minister John Key said today.

“It demonstrates (Labour) haven’t got their heads around what’s happening in 2009,” Mr Key said.

“It’s not that I don’t have sympathy for those people but in the end someone has to pay the bill – and there aren’t little pixies at the bottom of the garden printing cash.”

pinocchio with long nose - real manMr Key, your nose is growing. That is exactly what the NZ Government has done since 1934 – printed money at will – and it’s the same thing that Hitler did before World War Two. It’s called fiat currency, and every time the government prints some money each dollar in your wallet is worth less. You see it as inflation, and it’s one of the ways that the government steals from you.

We should return to a gold-backed dollar without fractional reserve banking, where each dollar bill is exchangeable for a quantity of gold that actually exists. Only then can Key truthfully say that there are no pixies at the bottom of the garden printing money, and only then will we be free of the government theft that is visible as inflation.

For a full understanding of this topic see What Has Government Done To Our Money?.

Then there’s this clanger from Key; It demonstrates (Labour) haven’t got their heads around what’s happening in 2009. In my humble opinion Key hasn’t got his head around what’s happening in 2009 either, but that’s what happens when you’re a Keynesian Socialist.


May 30, 2009

• Budget 2009

I’m not going to attempt an in-depth analysis, but here’s three points for you to consider:

1) Stopping the planned tax cuts. This move can be described in three words: stupid, stupid, and stupid. The Socialists/Marxists in Wellington have the idea that your money is better off in their hands and they say that they will use the money to “lead the country to recovery”. It’s more like leading it to ruin, because giving money to the state is like giving money to an alcoholic: it just gets pissed away.

In 2009/10 the government will take more than 30% of GDP in taxes. Studies have shown that a tax take of 15-23% of GDP leads to economic growth and anything more kills the economy; 23% of GDP can be had from an income tax rate of about 10% plus the miscellaneous taxes that plaque our lives*. Naturally I favour a simpler (cheaper) tax regime plus low taxes that will foster growth as has been shown overseas; with a flat income tax rate of 5-10% and no other taxes the economy would take off like a cat does when a child tries to give it a bath (it would also address the chronic shortage of medical professionals because the government could afford to pay a competitive wage and the tax regime would be attractive).

History clearly shows that reducing tax rates increases the tax take, but all the Wombles of Wellington can think of is keeping their sticky mitts on your money. The present taxation levels are simply parasitic and it’s no wonder that the patient is sick.

2) Stopping the contributions to the Cullen Fund (for future superannuation costs) was sensible. However, if the government adopted the tax regime described above they’d have more than enough money to pay for the superannuation that they shouldn’t be providing.

3) If you’re in the financial dung the first thing to do is trim discretionary spending. Here’s some of what this government should, in my humble opinion, cut:

  • $50m cycleway. The idiocy of this beggars belief.
  • $323.3 million over four years for home insulation and “clean heating devices”. Why should you pay for the insulation and heating in someone else’s house?
  • $34m for broadband internet in schools, when schools can’t even get the three R’s right.
  • $10.5m extra over four years for arts, including $3.4m for ballet. Presumably you’re happy to be paying for ballet so a few people can watch it. All arts spending should stop immediately because there is no rational reason for state funding of the arts.
  • $290m for high speed broadband in 2009/10, out of a total commitment of $1.5b. Let the private sector sort it out, and make it easy for them to do so.
  • $52m for defence. Our defence forces are a joke, and they’ll still be a joke after spending another $52m on them.
  • $11.7m over four years for the “financial adviser watchdog”. “The implementation of the Financial Advisers Act and the Financial Service Providers Act will help restore confidence in the financial markets by introducing a minimum standard of competence for financial advisers,” Commerce Minister Simon Power says. “It will also place the supervision of financial advisers with a central regulatory body, the Securities Commission.” How wonderful, more regulations and more compliance costs. Anyone who trusts a financial adviser just because they’re “government approved” is an idiot, therefore this scheme has nothing to recommend it. Caveat emptor.
  • $1.2m to “strengthen local networks and give a voice to community groups that are often not heard in government processes”. Apparently this is necessary “because local organisations often did not have the opportunity to engage in the policy processes of central government”. What’s the point in talking to a government that just nods politely and does what it intended to do in the first place?


Admittedly cutting those expenses would like jettisoning the Titanic’s silverware, and I’m not pretending that removing these things will stop the ship sinking, but I do want to show you that there’s plenty of frivolous government spending.

We have the same problem that the people on the Titanic did: the master has steered us into dangerous waters and we’re sunk. We need a new ship  – a new fiscal regime – and a new master.

What are your thoughts regarding the budget?


*I’ve Been Writing by Richard Prebble, p102

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