The Covid tax is coming (9 Sep, 2021)

Have your say on today's Aardvark Daily column

Re: The Covid tax is coming (9 Sep, 2021)

Postby aardvark_admin » Thu Sep 09, 2021 10:22 am

Hagfish, can you please tell us where the money *ultimately* comes from if it's not from the pockets of the public?
aardvark_admin
Site Admin
 
Posts: 5183
Joined: Wed May 07, 2014 2:10 pm

Re: The Covid tax is coming (9 Sep, 2021)

Postby paulw » Thu Sep 09, 2021 11:27 am

If you think it's expensive to live in this country now wait until this lot of Marxists start the big tax gathering. You ain't seen nothing yet..
paulw
 
Posts: 444
Joined: Thu May 08, 2014 8:33 am

Re: The Covid tax is coming (9 Sep, 2021)

Postby hagfish » Thu Sep 09, 2021 11:50 am

Monetary sovereigns create money, in much the same way a referee 'creates' the points they award to teams. They don't run out of points. They don't have to borrow them or pay them back. The government could cancel the debt that it owes to itself at any time. A couple of keystrokes. Job done. This would cause chaos - it would destroy our (and the market's) faith in NZD. But they could do it.

Taxation and 'paying down debt' simply removes/destroys money that the government has brought into being. It does NOT represent a pool of 'money' that the government can now spend. If a government 'pays down'/destroys too much debt, it leads to recession - we need that money in circulation. The 'money in our pockets' is there because the government created it. If they take their football and go home, private sector borrowing has to make up the short-fall. They're only too happy to create money.

Stepping back a bit, a society can do whatever it has the desire, know-how, and the physical/human resources to do. Governments like to couch their programmes in terms of choices and budgets and fiscal responsibility, because when they say "we can't afford it", we voters just accept it. Really, the creation/release of funds is the easy bit. A few key-strokes. Job done.

Making dental visits free for all might sound 'expensive', but - until we can 3D-print dentists - it's impossible at any price. We simply don't have the resources to do it. Setting up a pumped hydro scheme also sounds 'expensive', but if we decided we wanted to do it, the government could create/release the funds, and crack into it.
hagfish
 
Posts: 1011
Joined: Thu May 08, 2014 10:28 am

Re: The Covid tax is coming (9 Sep, 2021)

Postby Perry » Thu Sep 09, 2021 12:19 pm

Perry wrote:Who ultimately pays for anything 'free' given out by the gummint?
Clue: The word starts with a T and ends with an R.
hagfish wrote:This is an amazingly common misconception.

Right. Do tell us all who ultimately pays, then.
I suspect Bruce will be keen to hear the answer, too.
He can then go back and correct all his silly misconceptions, starting here:
Bruce wrote:Sadly, this money has to come from somewhere and to date it's been funded by borrowing. Right now we need to remind ourselves that loans, whether from offshore entities or from future generations, must be repaid... with interest. Where will the money come from to repay those loans? Well there's only one place that money can come from... your pocket! The huge costs of dealing with this pandemic is something that can only be recovered by way of the tax base.
Perry
 
Posts: 1280
Joined: Thu May 08, 2014 9:31 pm

Re: The Covid tax is coming (9 Sep, 2021)

Postby aardvark_admin » Thu Sep 09, 2021 1:37 pm

hagfish wrote:Monetary sovereigns create money, in much the same way a referee 'creates' the points they award to teams. They don't run out of points. They don't have to borrow them or pay them back. The government could cancel the debt that it owes to itself at any time. A couple of keystrokes. Job done. This would cause chaos - it would destroy our (and the market's) faith in NZD. But they could do it.

But then who pays Pfizer for all that vaccine that's been bought? I don't think they'd be interested in the government trying to "cancel" that debt.

And, if they've paid for that money with borrowed money, I don't think the lenders will be interested in being told "sorry, we've canceled that debt so there's no need for us to repay it now".

I suspect that the vaccines had to be paid for with US$ so it's not like our treasury can just print off as many of those as it needs.
aardvark_admin
Site Admin
 
Posts: 5183
Joined: Wed May 07, 2014 2:10 pm

Re: The Covid tax is coming (9 Sep, 2021)

Postby Kiwiiano » Thu Sep 09, 2021 2:24 pm

I'm curious as to how long it takes for Gummint hand-outs to return to their coffers? Since the majority of beneficiaries/pensioners/ACC recipients/etc are going to fritter the money away at supermarkets & service stations, a fair bit will go relatively quickly in GST and Excise taxes, plus the Income tax & GST on shop wages, on & on, round & round it goes. The major leaks to this process will be things like the rents & interest disappearing into overseas banks.
Why else would clearly sensible accountants be suggesting Universal Minimum Income for all citizens?
~ Kiwiiano
“I'm not a total idiot. Parts of me are missing!”
Kiwiiano
 
Posts: 594
Joined: Wed May 07, 2014 5:36 pm

Re: The Covid tax is coming (9 Sep, 2021)

Postby hagfish » Thu Sep 09, 2021 2:32 pm

Sure, we wrote a $1 billion cheque to Pfizer for the vaccine. Those funds don't come from taxes on our made-up Hobbit Bucks.

There is zero link between "we can't pay our nurses more" and "we are raising taxes" - we've just been sold the idea that there is. For a very long time.
hagfish
 
Posts: 1011
Joined: Thu May 08, 2014 10:28 am

Re: The Covid tax is coming (9 Sep, 2021)

Postby Perry » Thu Sep 09, 2021 2:46 pm

With bated breath we await something to back up all those assertions.
Perry
 
Posts: 1280
Joined: Thu May 08, 2014 9:31 pm

Re: The Covid tax is coming (9 Sep, 2021)

Postby Perry » Thu Sep 09, 2021 2:48 pm

Kiwiiano wrote:Why else would clearly sensible accountants be suggesting Universal Minimum Income for all citizens?

I do wonder what it is that makes anyone "clearly sensible" and so be that much different to others, who, by implication, are not so?
Perry
 
Posts: 1280
Joined: Thu May 08, 2014 9:31 pm

Re: The Covid tax is coming (9 Sep, 2021)

Postby hagfish » Fri Sep 10, 2021 7:31 am

Taxes remove money in order to reduce inflationary pressure. If the government runs a 'surplus', all it means is that they are destroying more money than they are issuing. But, sure, it's very complex and I'm not explaining it very well, and it's very much all up for debate, because it's all made up, anyway.
hagfish
 
Posts: 1011
Joined: Thu May 08, 2014 10:28 am

PreviousNext

Return to Today's column

Who is online

Users browsing this forum: No registered users and 7 guests

cron