Rates are set to rise by 13.2% in Auckland City this year, after a 9.7% rise last year. As I have stated previously, this is getting ridiculous. You cannot just keep raising rate levels at faster than the rate of inflation (currently at 3.2%). The majority of property owners are not getting equivalent pay rises, and so every year have less disposable income.Download MapHack warcraft free
Those renting don't avoid it either - landlords simply take into account the rate levels when setting the level of rent.Download MapHack warcraft free
Quite frankly, rates on property are an apalling way to generate income for local authorities. They penalise investing in property, and hit severely those that are asset rich, but cash poor - particularly those on superannuation. While the rates rebate scheme can help some people in that situation, it is less than ideal and horribly bureaucratic (the council issues the rates, the rateplayer then applies to the council for a rebate, who can approve or decline it. Then, the council must apply to central government for the rebate again).Download MapHack warcraft free
In addition, we already pay large taxes to central government, who then argue that the regions should take more responsibility for funding their needs. Central government taxes need to be lowered if they really expect regional authorities to increase theirs.Download MapHack warcraft free
I think that local authorities would be much better to generate revenue via a regional income or sales tax. I think it would much fairer, and much more transparent. However, it would be very difficult to implement.Download MapHack warcraft free
First of all it would require an act of Parliament, under the principle that new taxes require the approval of Parliament (authority has already been given to set rates, but not local taxes).Download MapHack warcraft free
Secondly, it would be a pain to setup initially - particularly a regional income tax - as you may find the business officially relocate to areas with lower taxes. A sales tax would be easier, but would still raise problems for sales across regions (but not insurmountable).Download MapHack warcraft free
Thirdly, for it to be fair, rents should drop accordingly as they no longer need to fund the rates on the property. However, convincing landlords of that might be hard. You could potentially end up with tenants effectively paying twice: once for the rates equivalent on their properties, and secondly as part of a regional sales tax. This would sort itself out over a year or two due to market forces, but could be a problem initially.Download MapHack warcraft free
But I still think it should be investigated. The current system is not sustainable as the city council doesn't seem to understand simple economics.Download MapHack warcraft free
Comments
property is a non productive (in general) asset and also one where you more or less can't dodge the tax by distorting the market (if done right although apparently it isn't in some cases) or dodging it by deception. the alternative - taxing work or consumption distort all sorts of behavior and drive people out of making things.Download MapHack warcraft free
> and hit severely those that are asset rich, but cash poorDownload MapHack warcraft free
Who should be hit?
1) imagine a poor person (A) working hard for 30k a year
and a rich person (B) with millions in housing assets earning $0 a year.
Now why does person A have to work all day to pay for person B?Download MapHack warcraft free
SECOND - efficiency -
they are unproductive users of assets. While a business owner might be a productive user of assets - apparently the business owner needs to take out loans to pay taxes and day to day expenses so that he can subsidize the man who doesn't bother to get out of bed in the morning.Download MapHack warcraft free
THIRD as you note your taxes are hard to enforce and distorting - rates are easy (relatively) to enforce and cause minimal distortion.Download MapHack warcraft free
One could argue the tax will be perfectly passed on and property owner’s profits tend to zero but that doesnt seem to be what happens.Download MapHack warcraft free