It turns out that if you're rich and are identified as such in an online search, there may be higher chance you'll pay more taxes. This state of affairs has all but been confirmed by Revenue Minister David Parker. Yes, ACT leader David Seymour has been probing in Parliament why a group of wealthy Kiwis have been caught up in a "survey" by the Inland Revenue. When asked about who has been included in the survey, Parker acknowledged formation of the list included scanning public records, including the NBR List. So the IRD "methodology" is to go online, and do a bit of googling?
The NBR, which I write for, has no physical version of the paper - its an online publication - apparently since the distribution costs became too high. So Parker appears to be confirming that the IRD are doing online searches to see whose name pops up on that kind of outlet. So it's obviously best to stay out of the news if you're "wealthy" and tell everyone you're poor. But we already knew as much.
What's the background to IRD's snooping? David Parker has long been fascinated with the "top 1%", or "top 0.1%", stemming from his interest in Thomas Piketty's book, "Capital in the 21st Century". For a while, David could barely stop talking about it, back when I used to see a bit of him. The book seems to have had a somewhat unhealthy influence on his philosophy - especially Piketty's obsession with measuring inequality and the assets of the top earners. What the book is weak on, and in turn it's a weakness of David, is how such measurements should influence tax policy.
That is, I concur with the writer of the best-selling economics textbook in the world, Greg Mankiw's, view of the Piketty book on this matter (see below):
"My own view - and I recognize that this is a statement of personal political philosophy more than economics - is that wealth inequality is not a problem in itself. I do not see anything objectionable if the economically successful use their good fortune to benefit their children rather than spending it on themselves. As a society, we should help those at the bottom of the economic ladder through such policies as a well-functioning educational system and a robust social safety net (funded with a progressive consumption tax). And we should help people overcome impediments to saving, thereby allowing more workers to become capitalists. But if closing the gap between rich and poor lowers everyone’s standard of living, as I believe Piketty’s global tax on capital would do, I see little appeal to the proposal.
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