- ▼ May (4)
- ► 2010 (70)
Sunday, May 8, 2011
Its an election year in NZ, and the NZ Herald is drawing attention to a tremendous false economy. The resources that people sink into setting and administering trusts. The problem of course is that this piece of statutory folly is destined to change because its senseless policy. Yes, you might decide to set one up, then the rules arbitrarily change. It effectively turns you into a slave to the tax code. Citizens of other countries beware! This is what arbitrary government can do to you.
We need to get rid of trusts. Get rid of deductions! Get rid of subsidies! Get rid of tax! Bring the country back to its essential services. Strip out the minimum wage and watch the price of labour fall. Strip out all forms of private and public extortion and watch costs fall, and see people resume spending. No one but the super-rich can afford to build in NZ at the moment given:
1. The high cost of building approvals by local govt
2. The extortionate regime for land ownership (i.e. zoning) - worse in Australia because it actually has a growing population. You can still but cheap in NZ where the population growth rate is negative....if you can get a job.
3. The extortionate mark-ups by builders to buyers, whom are effectively using the market power given them by their customers to run a cozy deal with the hardwares. Tradesmen need then only work for 3 days. If they were aspirational, they'd just go to Australia for a 50% higher wage.
Trusts are a form of unfair tax persecution that hurt the poor more than anyone else. They are a productivity nightmare. It is not just the professionals you need to pay, its what its doing to people's judgement. People's capacity to think conceptually is impaired when their lives are governed by arbitrary ideas - as opposed to the logical, long range ideas that they would live by if the market actually followed principles, and not arbitrary statutes. If you want to succeed as an investor in this market, you need to sleep with Ben Bernacke, not study economics. Yep, if you are a seductive prostitute, you might just be over-qualified in the modern era.
Read more about the trusts industry in NZ.
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