Roger Douglas

I stumbled across this short video of Hayek discussing the central problem of socialism: http://www.youtube.com/watch?v=CNbYdbf3EEc&feature=related

I want tax to be as low as possible - and I also want the deadweight loss associated with tax to be low as well.

Wasn't this the idea when you originally introduced GST? To replace income tax in order to stop tax avoidance? IT is generally accepted that Tax has to purposes, to generate revenue and to help discourage certain habits or behaviours. I think every Citizen has a responsibility to pay tax, it is part of living in a communal society. It is ... Read Moreunfortunate though that I think the original intent has been somewhat skewed by a "robin hood" (steal from the rich to give to the poor) mentality as well as a "let's take as much as we can, and THEN decide how we want to spend it" attitude IMHO this should be reversed to "let's see how much we need to spend, then find out how to generate it"

And sadly, it is only the productive who take the trouble to study the situation. Seeing no future, flee.

It is about wealth creation and the facilitation thereof. We must encourage the best of the worlds businesses and immigrants here. There is no economic growth when our culture allows our best to go overseas and assist other economies. The big OE sends so many of our youngsters overseas. This is key, keep our best people here and encourage the best the world has to offer here. Create wealth and encourage the creation of wealth, rhetoric about people on benefits is just unproductive.

and to Jimmy and Andrew, I think we need to all start trusts, including charitable trusts, to feed and cloth all our families and unemployed, and compete with the govt. and by the way, the govt is made of the same people of the country, the hippies, lefties, right.. you name it.. so lest all have the same rights I say and full stop.

I think I have already mentioned my tax system but i'm going to post it again:

1) Where-ever possible all govt dept's are changed to SOE's (having in their charter they must be at least 51% Govt owned)

... Read More

Benefit - GOVT departments become more efficient,



regulation is achieved by the govt having a



company in every sector (thus the perfect



anti-monopoly) the ownership means that



we can still enjoy the benfits of foreign



capital without losing control.

2) Govt set's and cap's a level of revenue as a % of GDP. Ideally money is set aside for the GOVT to act as a prudent investor, investing capital into starting buisnesses that can either be completely free to New Zealander's or to be sold off to make profit for the taxpayer.

3) GOVT then prioritises where the revenue is gathered from, (this is where policy comes into play) ideally, only the top taxes on the list are needed to generate the required revenue, and the other's are only used if required.

My list: (a completely uneducated pluck, only to be taken as an example

-Profit from SOE's/investments
-Pollution TAX's
-Dissensentive TAX's (ie alchohol, tobacco etc)
-GST
-Company TAX
-Personal Income TAX (flat rate)

Either way the attitude of tax and spend (ie how much can we tax and how much can we spend?) need's to end.

I liken it to the two main types of consumers, those who spend everything they get and live pay to pay, and those who put some money away, invest it and are able to enjoy a better lifestyle on the profit from their investments.

We can have a na fault system and private insurance. The Government does not provide fire insurance, but if an arsonist burns down my house, I cannot sue him.

Rodger, I have extensive knowledge of the ACC scheme. I agree that opening up the work account to private insurers because, especially for self-employed.shareholder/ employees, they do not really understand what their levies provide in way of cover and entitlements should they suffer an injury. Private insurers are more likely to provide that ... Read Moreinformation when trying sell a policy.
However, and this is the biggest issue I have, is that it is VERY EASY (and trust me on this one) for the Insurer (whether it be ACC or a private insurer) to take advantage of the injured worker who becomes incapacitated by providing less than adequate rehabilitation then exiting them from the scheme. In this respect the injured worker is not in a position to shop around for another insurer.
Therefore, there needs to be a robust dispute process to deal with this problem. The current dispute process reasonably well and offers a degree of independent quality control of decision-making on entitlements and cover. The Government will need to ensure the dispute process is reinforced and not erroded. Otherwise MP's up and down the country can expect to be dealing with even more unhappy claimants coming to see them. So the trade off is, yes open it up to competition but ensure quality control of decisions thru a robust dispute process.

wasn't there a study done about the optimum amount of GDP that can be spent? It was in one of Richard Prebble's book's, the story goes that the report was shelved and the researcher fired.

Please correct me if im wrong? but wouldn't a drop in tax, given a perioid of time, result in equal revenue in dollar terms after said period? due to the increase in economic activity?

If I am correct then surely a cut back in capital expenditure for that period would suffice?... Read More

I do have to agree that effenciency is paramount, re-role all department's as SOE's?

A drop in tax rates can increase total revenue. This phenomenon is represented by the Laffer Curve, named after the economist Arthur Laffer: http://en.wikipedia.org/wiki/Laffer_curve

It seems unlikely that New Zealand's tax rates are at that point. It should be noted, however, that the Laffer Curve only looks at revenue - but actual revenue raised... Read More is not the full cost of taxation. Moreover, the optimal point on the Laffer Curve is not the maximum revenue point, but lower down (see http://www.youtube.com/watch?v=fIqyCpCPrvU&feature=player_embedded#at=13)

The main reason for this is because the cost of taxes is not just the revenue raised. The full cost of taxation includes all the deadweight loss associated with it - all the ways that it affects our behaviour, all the fees for lawyers and accountants to restructure people's affairs to lower the tax burden. The estimated full cost of raising a marginal dollar is actually about $1.50, but it varies depending on the study.

Yep. As proof, my page on the ACT website links here:

http://www.act.org.nz/roger-douglas

That's good to know. I like the interactiveness of this page, the responses, the lack of one-way traffic!

"tax on hip hop "music" to discourage its consumption" LOL

Scrap Bill English. That's a good start right there.

Tanya, there was one held in Auckland on the 14th September, with Rodney on the panel of MPs

well, no one told me!

"This country is going down the drain" amen to that!

Your absolutely right Roger. When will NZers wake up to the fact the 15years without surplus will cripple this country. And by that time we will be in the next recession = without ACTs policies NZ will never again make a surplus.

I have not been following Australia as closely as I have been following America's issues, but my understanding is this:

Australia has not entered recession, and seems unlikely to do so. This is not because of the stimulus, as most of the money has yet to come online, and to the extent a stimulus is financed by deficits then the permanent income hypothesis would tend to suggest that it will not have much effect.

The stimulus spending will unfortunately increase the overall size of Government permanently. All large expansions of the Government - be it post-depression, or Keynesian spending in the 50s and 60s - has permanently increased the overall size of Government. Mainly, reforming Governments have managed to stop rather than reverse the growth of the state.... Read More

In terms of increasing interest rates, I would make the point that low interest rates do not necessarily imply easy money. In fact, some economists see the relationship acting in the opposite way (http://www.american.com/archive/2009/october/have-we-misdiagnosed-the-crisis). I think it is hard to determine the looseness of monetary policy by examing only interest rates.

Thanks Sir Roger, you've given me much to think about.

Hi Dennis,

I am aware of those arguments for a more liberal approach to drug laws (a good video is available here: http://www.youtube.com/watch?v=nLsCC0LZxkY).

There are two points I would make. First, I think New Zealand is better than the US at enforcing our drug laws - primarily because we have no land borders. Second, drug addiction is a terrible thing, and it is a matter of weighing the unintended consequences of prohibition against the possible increases in the number of people addicted, and the costs that arise therefrom. I have not seen sufficient evidence on this issue to make up my mind. ... Read More

What do you all think?