Sunday, August 23, 2015

Petrol taxes were first levied in New Zealand in the 1920’s. It seemed a sensible idea at the time. Why not tax the motorist, the obvious “user” of the roads, to pay for them. In the 1920’s not everyone owned a car. It seemed right that the small minority who did should pay for the privilege of using the roads. The large majority of New Zealanders were not affected by fuel and road taxes. Most freight went by rail. Rail was powered by coal.

Circumstances have changed dramatically since the 1920’s. Car ownership is no longer the privilege of the few. The nature of modern society and the growth of large cities mean that for all income groups a car is a necessity not a luxury. Road taxes are regressive. They have a higher impact on lower income earners. Compounding the problem lower income earners face long commutes due to high prices for central suburbs. Paying high levels of petrol taxes depresses their ability to pay for the necessities of life. Petrol tax contributes to increased levels of hardship.
Paying for the transport system by using petrol taxes increases the cost of doing business. Good tax policy should not unnecessarily add to the cost of production. It should if possible avoid harm the productive portion of the economy. The part of the economic process where wealth and prosperity is generated. Petrol tax increases the cost of doing business and those unneeded costs flow on to the wider population in higher prices for goods and services.

The worst culprit is road user charges. This tax is based on the thinking that trucks cause the most damage to roads. They do. Therefore goes the thinking a system that taxes heavier users relative to their use is the most fair. This is misguided. It is a mistaken view of who the real users of the roads are. It assumes that the physical users of the roads are the real users of the roads. It doesn’t take account of whose shoulders the tax actually falls on. Truck owners pass the taxes down the logistics chain to everyone. Transportation is at the heart of the productive economy. Everyone in the wider economy including those who do not produce goods and services and wealth is a user of the roads. Even the most reclusive pensioner who walks to the supermarket and seldom ventures on a public road save on a pedestrian crossing is a user of the roads.

The goods and services delivered to her supermarket come by road. The “real” “road users “ are every single person who buys anything which is carried in a truck. 80% of all freight is moved by diesel. Every item in a supermarket, a retail shop, and a coffee bar, every business in New Zealand one way or another get their supplies using trucks and delivery vans. Fuel taxes imposed on the transport industry for “their” use of the roads are “cascading” taxes. They cascade down through the cost chain unnecessarily adding millions to the price of goods and services.
Since everyone is a road user then everyone should pay. The best way to pay for road maintenance is therefore through general forms of taxation which applies to everyone. Paying for road maintenance by way of income tax is a far more sensible strategy than throwing it into the cost of production and laying an unfair burden by way of a regressive tax on the economically weaker members of society.

Paying for new roading and transport infrastructure is another matter. New roads, bridges and motorways are long term assets that last lifetimes. They are not only used by the generation alive in the year of the budget but by generations yet unborn. Paying for them through fuel and road taxes from current income and short term undesignated government debt is like paying for a house in the year it is built.

 A road or a bridge will add to productivity and prosperity for at least three generations. It is sensible to spread the cost of transport assets across the lifetimes of those three generations. New roads and transportation assets should be purchased through long-term government Road Bonds with the cost spread over 75 years. This would remove the cost of new roads from this vital sector of the productive economy. Generations of taxpayers would shoulder their fair share. New taxpayers yet unborn coming into the road using population in 40 years time will have the opportunity to pay for the infrastructure they inherited. Older taxpayers will not pay now for roads and bridges that they will not be using in forty years’ time.

Spreading payment for essential roading infrastructure across generations would allow New Zealand to upgrade some of the appalling roads that pass for state highways. On the Desert Road there are four or five corners that indicate you should negotiate them at 25 k to 35 k. (You should). When winter ice and snow comes along they are impassable particularly to trucks. Four or five large four lane viaducts and bridges would solve the problem. These are commonplace in Sweden, France, Italy, Spain built across the ravines and mountainous terrain of those countries. Building a modern all weather highway across the Desert road may well be beyond the taxable resources of the current generation. But it is well within the capacity of the next three. If the cost of those viaducts was spread over 75 years then they could be built now and the benefits accrue to us and our descendents. The countries number one state highway would not need to be closed every other day in the winter for a few centimetres of snow.

The same applies to the road over the Rimutakas from Wellington. This road unbelievably purports to be the second state highway of the country. A few whiffs of sleet and the entire east coast is cut off from the capital. Fortunes are being spent making a mountainous narrow sheep track of a road straighter. The simple answer is to build a tunnel through the mountains with three lanes each side. This is no big engineering feat. The existing railway tunnel was dug by hand in the 1930’s and today’s large tunnelling machines would find it easy going. The Swiss built 70 kilometres of tunnels in the last few decades through basalt. Again the tunnel may not be affordable by one generation but it is by three. It goes without saying that a six lane tunnel from Wellington to the Wairarapa would bring increased access and prosperity to both regions. One benefit of changing the funding of new roads from current spending to long term bond financing is that it will to provide a capital market in a new kind of Government debt. Quality bonds for productive assets are worthwhile assets for savers.

The point is that there are many benefits to changing the tax mode and mix in raising government revenue. The Benefits of removing Fuel taxes and Road user charges. The lowering of the costs of goods through changing the method of paying for better roads will lower the costs of goods in the stores and put more discretionary income into the pockets of all New Zealanders. New Zealand has the most expensive grocery and food items in the entire world. Ask anyone. Transport costs are a large factor. A large element of high transport costs are cascading taxes such as fuel and road user charges.

Removing all petrol diesel and road charges will have a large positive impact in rural areas. It might be possible for places like Whanganui, Levin and Rawene to have profitable industries when transport to Wellington, Auckland and the ports gets cheaper. Small towns and provincial cities will have a chance to compete in the economy and not increasingly lose their populations and become ghost towns hollowed out by high road costs. If the tax on transport is removed our main exports can move from the factories to the ports without a cascading tax adding to the final cost. Removing fuel taxes will give New Zealand exporters an advantage over countries who misguidedly add a tax to the productive sector of their economy. Lower income suburbs will have a boost to their spending capacity.

The spread of suburbs in the last 50 years has imposed long commutes on those who live there. Why should their costs be added to unnecessarily while those who were earlier settlers and who tend to be more prosperous and live in the inner city escape these costs. Remove road use taxes and a segment of the population who do not generally benefit from tax cuts would. They would have an increase in their disposable and discretionary income. This would bring increased prosperity to a group that has not seen much in a while. The poor travel from necessity the better off for leisure.

Removing road taxes will make taxis an affordable part of more peoples transport options. Taxis are an overlooked part of Public transport system. More use of taxis would help traffic congestion and make more effective use of the country’s car fleet. Overseas tourists would find New Zealand more affordable and therefore a more desirable destination than the alternatives on offer.

 Lower road travel costs would see tourists travel more widely and spend their money at more locations. We would attract more of them. Some of the money they save on fuel and road taxes would be spent elsewhere in the economy to the benefit of New Zealand businesses and employees. New Zealand is a high cost tourist destination. It costs a lot to get here from anywhere. Imagine the number of Australians that would visit if petrol was $1 a litre and the price of goods was 20% lower.

It will help internal tourism. Removing petrol taxes will allow New Zealanders to travel in their own country, go to the beach, to visit friends more often.

There will be savings in bureaucratic costs spent filling in form to buy diesel mileage. Some will say in a begrudging fashion that removing road charges will put more money in the pockets of people with higher incomes. It won’t. It would take a small adjustment to income tax rates to pay for the road maintenance. Those affected would find little change in the amount of tax they pay. Instead of paying at the service station they would pay for it through their income taxes. Like all citizens they would benefit from the lower price of goods.

Road charges and fuel taxes illustrate a circumstance where the Minister of Finance thinks he is doing one thing but the reality of the changes in society and the economic processes mean he is actually doing another. In this case unnecessarily adding a cascading tax increasing the price of goods and depressing a number of income sectors in the economy to no useful purpose. It is preferable for the manner of taxation to reflect the reality of today and for Road building to be paid from long term bonds and road maintenance costs should be taken from income tax and general revenue.
A quote from a commentator on Wattsupwiththat
 - M Seward I think.
Couldn't have said it better my self

A lot of us think we live in a rational, science dominated world with the dividends from the Reformation, the Renaissance and the Age of Reason flowing into our lives. There are however an awful lot of people out there whose education was not really sufficient to bring them up to speed with enough maths, science and the rationality of scientific method who simply do not see. hear or feel in that same part of the intellectual spectrum. They still take their life cues from the sorts of emotionally targetted thinking and rhetoric that has been the signature of the shamans, the priests, the mythmakers and the secular spruikers who have always been there in the irrational shadows. Climatologists are just a recent iteration of the doomsayer strand of humanity’s manipulator class who can make a buck spruiking their schlok and form alliances of convenience with political and commercial interests who see their work as just the latest brand of useful idiocy.
This is an old problem wearing some new ’emperor’s’ clothes.
I just wish they would all find their Jim Jones and a supertanker full of Kool Ade.

Thursday, August 20, 2015

Just venting my spleen on the madness of models. The world is too complex for present day computers and human knowledge to think they can model multi multi multi (to the 900th variable) variable models of immensely complex systems. Economic/social/physical availibilty systems for a streat.

Because I am so old I remember the world before the madness of models began
Like the model which in 2007 said that the chance of a crash in the derivatives and credit debt swops was a one in a 50 year chance. MR Xi’s little bit of graphery. Honestly they bought the model and issued triple AAA credit worthy certificates to financial instruments they did not understand. That cost a few trillion and we have not really recovered from the problems when that model did not work out.
Then there’s the IPCC climate change model that has never been verified by past climate and never validated against current climate. So what happens. The temperature stopped climbing for the last 18 years whilst CO2 went up. Australia wastes billions on desalination plants that were mothballed on completion. Tim Flannerys little model said it was not going to rain. The seven year drought would continue forever.
South Australia, UK Ontario and Germany instituted insane wind farm construction on the basis of the climate model that does not work. Probably about a trillion down the gurgler on that model before its over.
So along comes these characters with their tax effects on smoking addiction conjectures in a cute little easily graphed model that has no connection with real life.
They keep getting out their slide rules and making stuff up. It has to be verified and validated. It hasn’t been tested in either direction.
Ireland still has high rates of smoking and high rates of tax. Sweden has the lowest rate of smoking in Europe and its not the tax. Spain has low tax and ordinary rates of smoking.
The tax governs smoking behaviour model is a dud.
Get over it. Start working on practical on the ground real programs like E cigarettes that have been proven to work in real life not in models.
Reminds me of the model where this bloke claimed that scientific socialism would make the world a workers paradise.
What was his name again.
How did that one work out.
How many trillions of effort, lives hopes and dreams were wasted on that model of society.
Intellectual model makers and graph fiddlers should be kept under leash and away from the lives of real people and most especially kept away from their wallets.
An excerpt from my book. Must finish it.

Politicians are not a socially loved lot. There are many tempters pleading at the parliamentary gates more than willing to lead humble aspiring politicians into the temptations of spending taxpayers hard earned cash. “If you spend just a few million they say or pass this vital law it will repair the ills of our chequered humanity. The bonus is that the cost of their philanthropy will fall on the taxpayers. It will not cost the petitioner or the politician a penny.

For all the maligning of politicians they enter the parliament with the best of intentions to do what they can for their fellow citizens and their country. This means the temptation to save the world is constantly present. Lets look at an ongoing example. The latest petitioners for political and fiscal solutions for the repair of the human condition is the medical profession, particularly its public health branch.

Public health is a legitimate concern of government. There are many great achievements by the state sector by way of clean water, research into diseases which we can all applaud and take great pride in. Politicians have been presented with a new statistically based form of health improvement proposed by epidemiologists. Some earnest well meaning doctors have entered the public domain with political solutions for the “improvement” of the New Zealand population. The conclusions the health professionals proffer are derived from data mining.

They look a lot like the livestock improvement schemes that raised milk production so much in the 1960’s The good doctors champion a view that a number of medical conditions are caused by “unhealthy life styles.” The advocates of these nostrums assemble collections of data and infer correlations between the consumption of substances, sugar, salt, tobacco, alcohol and rising incidences of obesity, heart condition, lung cancers and liver damage in percentages of the group. The correlations are sound statistics. You would think therefore that the medical community would apply funds and efforts in a medical way.

To take a normal medical approach and round up the culprits in the statistically significant groups and invite them into hospitals and clinics and offer them treatment for their afflictions. The treatment would include stern advice one assumes to stop certain behaviours, cease or minimize their use of the offending substances or face the medical consequences.

Instead they propose using tax to cure these medical conditions caused by “unhealthy life styles”. It’s an extraordinary idea. The medical profession have come to the conclusion that somehow tax can be rubbed on the wound, ingested into the system and the illness will be cured.The thing is taxes affect all the group including those who might suffer health effects and those who will not. All are treated as "guilty" all are to be punished. It is most extraordinary. The poor suffer most from the tax the better off can behave as they wish. The tax will not inconvenience them at all

Sin taxes are not a known medical solution to anything. It is very well established they do not change people’s behaviours. All that taxes do is allow the better off to practice the “bad” behaviour at a small marginal cost. The poor may continue to practice their “dreadfulness” but with less money in their pocket to feed their children, buy school lunches, shoes for their children, petrol for the car and other necessities of modern life.

The doctors instead of using their medical competence to cure the problem have fallen in love with fiscal remedies for health problems. They have decided that prophylactic prescriptions are too hard so they are resorting to using the mandatory edicts of politics.
This is group therapy through taxes.

I think their adoption of collective curing through taxation comes from the fact that their knowledge of the problem comes in part from the grouping of statistical results.

There is a danger that while the doctors are playing politics and setting up new taxes they take away the energy that they could devote to offer actual solutions for the conditions they consider unhealthy. Theirs is a new powerful role as expert counsellors to the politicians as the arbiters of state prescribed ‘normality’.

They ask for a political solution for a health problem. It’s tempting. They become public celebrities lobbying politicians to cease their heartless resistance to their solution. New taxes on substances that everyone consumes most with bo adverse health outcomes.

Politicians are getting tempted. The statistics of dreadfulness are lobbied through the media. It ill behoves politicians if they are not seen to be doing something about these new dreadful threats to society uncovered by statistics of the medical lobby. The blackmailing line goes “Impose this tax or you are being negligent about our fellow citizen’s health.”

Politicians like the rest of us are undoubtedly sincere in their quest to cure the unhealthy. The “tax improves your health option “offers politicians a bonus. If they cure the deviant unhealthy life styles of the population of their vile habits it will save the public health system a bunch of money.

And as a bonus they could swipe a bit of extra tax money on the way by. A win win win proposition indeed.

The fact is taxing say sugar to curb obesity does not work. Denmark tried it for a year. Taxing tobacco, alcohol, salt, sugar does absolutely nothing to cure individuals who have come to medical grief by their use of these things. It is preposterous to think a tax can cure. Some governments are stalling on the “increased taxes cure the sick” proposition.

Particularly in the idea that taxing alcohol improves your health. Smokers have been turned into the hated and despised of society so taxing them is a political pleasure and it’s likely they don’t vote. Drinking remains respectable, just. Some drinkers unlike the smokers are powerful members of society. They vote. Likely it is all that will save them from further incursions of the Inland Revenue into their wine cupboards.

The arrival of the medicos with tax solutions is a challenge for citizens wishing to protect their freedom and the contents of their pockets from preposterous proposals. It will require confidence on the part of people that they are the experts on how they can and should live their lives. They will have to dispute with government, the academic community and the political elites just who has personal sovereignty of their persons, themselves or the government.

They have no power to resist taxes and laws directed at correcting their behaviour. Laws and taxes which are futile and damagingly corrosive of self respect and their ability to conduct their lives can easily be imposed on them.

It should be possible to convince a group so intelligent as doctors to stick to medicine and continue to treat people as individuals and not cop out with a group guilt tax solution.

Wednesday, August 19, 2015

I think the official permission to kill birds which are protected by other statutes is a form of "noble cause corruption"

Those charged with enforcing the law are corrupted by a noble cause.

Under the Clean Power Plan, the Energy Department projects that wind-generation capacity will surge from 66 gigawatts in 2014 to some 200 gigawatts in 2030. But for that expansion to happen, the federal government will have to give wind companies formal permission to kill some of our most iconic wildlife. And that’s where the raptor meets the turbine blade.
How do you break through this kind of corruption.

You have to insist that either the original law be repealed or amended in light of the new and noble cause. Or you must enforce it.
Arbitrary suspension  for a "noble" cause is corrupt.

It is sadly reminiscent of Pravda.
A particular ideological line has to be supported at all costs.
The ice is melting, the world is warming.
Facts contradict that
In this piece there is another reason for the calving of the Ice Berg the build up of ice.
It contradicts the ideological line.
Simple choice for the editor.
Leave out the actual reason for the calving of the Iceberg and stick to the "party" line.
The ice is melting the world is warming
All together now repeat "The world is warming the ice is melting."
The trouble with this is twofold.
It masks reality. The reason given for the calving is not the real reason that it happened.
The world has not warmed for 18 years. The ice is not melting.

The story building as it does on a real thing, the iceberg did calve and reinforcing as it must by the current ideology that the world is warming the ice is melting.

The story reinforces a mental reality at variance with the true reality.
As the desired reality departs further and further from the real reality
there can only be one political outcome.
Those who disagree with the official reality must be silenced. They must be discounted,
made into figures of hatred, of truth denial by the true believer and guardian's of the official reality.
We have two hopes for reality to be understod and the affairs of the world conducted in a dialogue of reason and rationaty addressing the reality that is.
The internet and freedom of speech.
The Internet is robustly constructed.
Freedom of speech is not.

I suppose one can only hope for another epiphany.
Like that point in 1989 when a billion people said that they had been lied to about reality.
And threw out communism.
A thomas Kuhn shift.
One has to presume that at one point there is a change of paradigm, of understanding, a tipping point where what was once "truth" is seen in a new light for the falsehood it once was.

One hopes but then Orwell's ghost enters the conversation and you are reminded that language is being devalued.
That the currency of thought has been spent, the definition of reality has been turned upside down and inside out.
Looking at history you would have to say that even when the barbarians breached the gates, even when reason was banished for centuries betterment won out.
That however was when rulers were mortal men.
Now that all power has been vested in the Government empowered by the most powerful of technologies, and desiring to control even the most inconsequential aspect of human behaviour we risk the loss of distributed decision making, financial independence and individual freedom.

How are trends, fads, ideologies which wreak havoc halted?
How are the sectarian religions overcome by reason, humanity and decency? How is civilization preserved.
Who stopped the inquisition?