I’m normally a great proponent of tax. It’s an important part of a functioning society with a decent health system and support available for those who need it.
But when I get hit with a massive tax bill (which I was kind of waiting for) it does get me thinking.
After my accountant had me sit down so as he could deliver the tax blow, and after I stopped gasping for air, he explained that EVERY TIME you get paid $1, put HALF of it aside for tax.
That’s a lot of money.
I’m going to split my rant in 2. I think that personal tax is pretty much at a state where everyone hates it equally (which is probably the best you can hope for).
But profit tax is where I have my issue.
The profits that Decisive Flow makes are not taken out of the business. They are left in the business to enable us to have some cashflow, some ability to work on other projects (i.e powerkiwi). This money is not lining any of our pockets, it’s going towards getting some other cool things started and will eventually go towards trips to the US to build on the export revenue we are already bringing into the country. This money is being used not just to help me, but in it’s own little way, boosting our economy.
We are tiny. The profit we make is probably what a lot of government departments spend on stuff like corporate lunches. And it hurts when so much of it leaves our account.
I’m really appreciative to have been given a grant by NZTE but it did strike me as a little odd today that the money I got from them is far less than the tax I paid, money I WOULD have spend on the same stuff anyway.
I know I’m not the only one who suffers from my tax bill, and I would hate to be the guy who has to figure it all out. However, it does seem to me that especially now there would be some benefit in significantly reducing company tax or removing it altogether until it is removed from the company by means of dividends or anything that doesn’t go towards growing it.
And I am only talking about small businesses. We could limit it to the first $50-$100,000 in profits or something and everything above that is taxed as per normal.
Is that totally selfish?