Another IRD Win, Of Course – The Alesco Case

This stuff is boring now. For all the reasons this blug keeps banging on about, IRD have not lost a major case for over a decade, nor are they likely to from this point. If you want to read the details of this latest case, it’s on Granny Herald here.

The Cactus has written on it this morning here, and I’m going to borrow her quotation from the former article:

Ernst & Young senior tax partner Jo Doolan said this morning's decision was an "alarming result".

"Even where taxpayers have real businesses behind what they are doing, the Commissioner can still rewrite the tax outcomes, often years after the transaction is finished," Doolan said.

"This is a worrying. It reinforces the feeling of many inbound investing corporates that the NZ tax environment is too uncertain. It may discourage them from continuing to do business here," she said.

University of Auckland Business School senior lecturer in tax, Mark Keating, said this morning that the decision was a "complete slam dunk" for the IRD.

"Not much joy for taxpayers here," he said.

Look at every post on my blog: this result was entirely predictable. I simply repeat below the comment I’ve made (edited a bit) on Cactus Kate’s post:

… there's a (great) blog that runs in New Zealand with the by-line:

'Civilisation is a movement toward privacy, an Orwellian surveillance state the opposite, and tax legislation, especially tax administration, has become the legislation and administration of surveillance and authoritarian rule, in contravention of the rule of law, and common decency. '

Every member of the judiciary hearing tax cases here has been through our state school curriculum which inculcates in them the socialist ethic of the 'common good', hence they all believe the wallets of individuals and corporates only exist to be divided amongst the total population to breed the welfare state. With the classical liberal Westminster principle shamefully struck down in New Zealand, no individual or corporate will find justice in our tax courts anymore; they are only the place that outright state theft is given the official sanction. Courts that once, in proud Western tradition paid for in blood, stood between the state and the individual, have turned tail entirely, and have become the chief agents and rubber stamp of Big Brother. Through taxation and a philosophically bereft judiciary, judging over a stupid people having to fund a profligate politick, where it matters we are a hard left country, as has been the West for some time.

And not just a country immured on left politics: obviously to destroy the notion that a man's wallet is his property, and only exists to be taken and shared out equally, you need a police state, which tax administration gives the judiciary and the politicians who are happy to give IRD every privacy busting, snooping, interrogatory, seizing power they require.

Indeed, I've become bored with bringing case after case of this up, and that department's increasing use of retrospective application, proving the death of individualism, classical liberalism, freedom, in the face of a mobocracy not having a clue what I'm ranting on about, and whose only response is the slave touting of ‘why don’t you go live somewhere else’ - you imbeciles.

Find me a sea-steader with a comfortable pad and decent flush toilet system and I would seriously consider the off.

It’s no coincidence that the one revolution that has had long term good - which is being destroyed at pace - that revolution in America, started as a revolt against the taxation thugs, because taxation is where the truncheon hits a victim’s backside of the police state.

Just saying.

/rant off

Update 1:

Also unsurprising, National touting David Farrar, on Kiwiblog, is just another Big Brother Statist. Don't worry about the principles involved in this case, David, or the retrospective application, or the arbitrary state it signifies.

Update 2:

Nice comment from Brent Gilchrist, tax advisor, on the (paid content) NBR thread:

Quote:

The real problem with such outcomes is identified in the IRD justification that the taxpayer "acted outside of the intended scope" of the rules. The problem for taxpayers is that the "intended scope" is often never clear at the time new tax policy is enacted, so IRD watches use of the laws and develops it's "intended scope" policy along the way if it becomes clear that the black letter tax law creates an outcome IRD simply does not like. If the black letter tax law was badly written because it did not cover the intended scope, then amend it, under urgency if it is a big enough problem. Hell, even amend it retrospectively if the revenue leak is too big and identified too late. Then at least Parliament becomes directly accountable. Under the current approach IRD can in effect retrospectively alter tax policy, heavily penalise taxpayers for their audacity in applying the actual written law and state that their position reflects the intended scope of the law. Taxpayers then must attempt to find evidence of what the intended scope might be in order to get over the guilty till proven innocent burden on taxpayers. Trouble is, the intended scope is what IRD eventually says it is, or what IRD tells the Minister of Revenue to say it is.

Update 3:

Christchurch Press headline: 'Tax Experts Call for IRD Sanity'.

Clueless.

IRD long ago ditched the 'it's out job to be fair' subterfuge, so we know what to expect from them, running as they do, the governmental fencing racket.

Where we need sanity, read philosophy, as I've said over and over, is our judiciary. It is the judiciary that is historically there to arbitrate and keep safe the citizen from an out of control state; and that is where the capitulation has been which has caused the most harm, for the reasons I keep explaining in this blog ... the group-think we are all indoctrinated with from our most formative period of youth, by Gramsci at the head of every classroom (my by-line above). IRD will only take a case to court if they are confident on winning.

I realised years ago from watching the classical liberal Westminster principle being bloodily dismantled by a judicial bench characterised above all else by molly-coddled infantilism, that the death spin our society was in is terminal, a view given credence by tax experts having no clue to our constitutional arrangements either.

If our politicians were interested in legislating for the truly free, Western society, then in the current constitutional review, they would be looking at incorporating the Westminster principle as integral to our constitutional arrangements. But instead of that we have the opposite, statism, exemplified by that princess of the Emptiness of Airheads, Jacinda.

There Is An Inter-generational Theft: It Shows In The Tax System, And Government Debt.

Apparently to keep, or develop, a blog readership, there must be new content, which is not easy for someone working full time, so I may as well use the comments I make on other blogs where they are relevant to the themes here. More importantly, this blog is the central repository of the brain of Mark Hubbard, so when the men in the little black vans (either the ones with pies and Playboys in the briefcases, or the ones in the bottom postscript with the panoply of police-state laws on their side) come for me, then you’ll be able to refer to this, for this is what I believed.

The Cactus has an interesting post up (as always), making an argument, via housing, that the generational theft oft talked about in the MSM is a nonsense. I agree with her regarding housing, but not otherwise, though, would also disagree with the MSM argument that this is something new: it’s not, indeed, that’s the problem, as it’s been happening since the inception of the Welfare State, working through the tax system. The two comments I put up on The Cactus’s thread state my position well enough – the below is the amalgam of them:

I do think there is a generational theft, indirectly, though have never thought of it in relation to housing: you are pretty well right as far as that is concerned - and farm succession, for that matter. However, as in my Trotter blog of two days ago, especially the postscript quotation of Mauldin, regarding the chickens coming home to roost finally from 70 years of accumulating unsustainable government debt chasing an economic illusion (the welfare state), and we are the generation to witness the collapse of western economies because of this; plus the update of Mankiw who showed since 2009 the middle class in the US are net tax takers, not payers, in a manner similar to the middle class welfare we have here through tax transfers such as Working for Families; I focus this issue solely on taxation: that is, to support the baby boomers, on top of and due to the Keynesian train wreck that is crunching up all economies, progressive taxes/rates over the next twenty years are going to have to rise, and rise dramatically. Taxation is theft, and that theft is set to rise to the levels seen under Muldoon, and the 90p in the pound under Healey, and when Cunliffe has my wallet from 2014, he'll use the baby boomers as the excuse to empty it at an ever increasing rate to build a state I have no agreement with.

Which is to say, to make my point succinctly; the welfare state has been, since inception under Micky Savage, founded on an inter-generational theft through the tax system, as the increasing government dollar spend has always outstripped current taxation: proof? Governments have always had to borrow to meet present unfunded commitments. If our welfare states had been affordable, not reliant on the deeper tax slavery of the next generation, and the next, then there would be no government debt. And we are the generation where the debt racked up is bankrupting entire western nations.

I will be paying more tax than my parents did, as well as financially supporting them. That's the 'theft'. I don't mind supporting my parents, but I sure as hell do the taxation that is making the whole problem of the welfare state worse, and paying for which I've lost my freedom to do with my money as I please, and my freedom per se.

Postscript: while on the topic of inter-generational theft, regarding the enforcers of it, I noticed a three column IRD situations vacant in the Press yesterday, looking to hire another Schutzstaffel of auditors (yes, plural): as if the current recession – and there is one outside of the rural sector - wasn’t bad enough, government wants to make your life in the Gulag of Forced Altruism behind the IRon Drape harder, scarier, and just plain more miserable. And public sector job losses? Apparently not where enforcing the Ponzi scheme of Big Brother’s welfare state is concerned. At the hands of Messrs Dunne and English, it’s getting uglier out here for free men and women; in fact, downright vicious, as we all sit on our hands, trying to be invisible, yet are jackbooted further from the civilised, voluntary society.

Worthy of note, was that according to page real estate, the ad was by far the biggest advertisement in the whole situations vacant, which is apt, considering the bigger that department gets, the fewer vacancies there will be in a private sector that is the most persecuted scapegoat in our society now. We need, desperately, a Western Spring: but don’t look to me for it - look at the whites of my eyes, I’m terrified, hell, I just put Schutzstaffel and IRD together in the same sentence, and I think my old mum thought I was bright: pfui.

Reflections on One Month of Blogging - For the Bloggers

At the risk of sounding like an American management guru, that is, over-reaching and annoying, if not cloying, I’m a man who tends to get a bit OCD on benchmarking and goal setting. Despite I started this blog at the end of May, while on holiday, I’ve only really been posting content over June, plus I put sitemeter up on June 2^nd so I could make it onto Ken Perrott’s monthly blog rankings at Open Parachute to see where I could get my blog to after just one month. Being new, I’ve posted more this month than I will have time to from now on, given work commitments, however, I did set this month to try and get a readership. I apologise to those I’ve been self-promoting myself on, though note, I’ve always been on topic, you’ve always had the ability to delete any such post of mine (no hard feelings), but I’ve done it because I’m not spending half an hour, or three quarters of an hour, writing a post, for only three people to read it: I’m here to change some minds.

I’m also here because I’m writing a novel. I have some grave doubts about that project at the moment: my first degree was a BA in English lit, that's my passion, but while I can pick up anybody else’s book and tell whether the writing is good or not (ie, professionally edited, or self-published), for some reason, I have absolutely no judgement when it comes to my own writing – none at all. I re-read what I have written and swing from euphoria to reaching for a wine bottle. So, work in progress in the meantime, no promises …

My blog byline pretty much gives the direction of this blog, though note the name itself comes from the fact that the protagonist in my novel runs a blog called ‘Life Behind the Iron Drape’. And yes, that sounds all very self-referential and post-modern, though don’t get carried away with that: the post-modernists are, of course, evil incarnate.

I believe that there is a lot of content here for one month, as measured by ideas: I’ve set the frame-work for what I think is important in the free society, namely, that I think there should be a free society – truly, a revolutionary thought these days - which is not the one we have now. I’ve not had time to post my magnum opus on the problems with democracy, though I’ve covered why our tax legislation is the litmus test of how it’s all gone wrong for the freedom lovers, how privacy is so important to this, and how that has been voted from us, and, of course, the importance of free markets (read every other post). Though the most personal paragraph I have written about myself was:

Unfortunately my advocacy of laissez-faire capitalism - noting the crony capitalism we have is to capitalism what sea horses are to horses - has never been about money; it's only ever been about that wonderful, evolutionary thing that capitalism, and only capitalism, is based on - the voluntary transaction. I'm a freedom freak: peace baby, the true sixties legacy, not those suited communists in the Greens Party whose every policy is the advocacy of force. Only on the voluntary transaction can there be a voluntary, free society. I said unfortunately because this has meant that while I'm comfortable, I'm not rich enough to build a space station. That's what I would do if I had money in real quantity. I'd build a space station and remove myself from the ugly, brute society we've created for ourselves, yet again. As generation text say, 'I'd be outa here'.

I like this paragraph because it is set to dispel that myth whereby the Left and the State Crony Capitalists seem to think they have some sort of moral mandate on compassion: they don’t, in fact, the opposite. I have no truck with either the Left or the Conservative State-Worshipping Right. Over time both groups create the cruellest, most cannibalistic societies possible, and always, of course, police states where you have no privacy, or freedom from the Humphrey Applebys’.

Our societies have become tyrannies all over again by replacing the tyranny of God with the all-knowing state channeling the envy and greed of the tyranny of the majority thinking they can have a free lunch with no risk: we’ve voted in secular theocracies. In previous centuries the simple minded believed they were not capable of running their own lives, God had to, and now enough of us have thought the State must run our lives, sacrificing everyone else to that bloodied altar of the common good, that it is the society we live in. This is why I know, with certainty, I will never be a free man: a nascent classical liberalism has been destroyed, utterly, where it mattered: the judiciary. It will end badly: our societies are morally bankrupt, on a path to increasing civil violence, and our planned economies are failing, as they were always going to. The welfare state was an illusion from the get-go. My favourite self-invented phrase this month was the ‘Keynesian hubris of debt’.

So, to the purpose of this post. Assessing how I'm going after one month. The blog rankings for June will be interesting, I assume I’ll get in on the bottom rung somewhere. By lunch time today I’ll have made 5,000 page views (not counting my own), which is an average of 167 per day – higher, of course, on days I put up fresh content. I’d love some input from fellow bloggers, either in comments or email (top left of screen): think back to when you started, where you are now; how is 167 page views per day for one month? To me, it sounds a bit pathetic. If I can’t get it to approaching 1,000 within six months, I will definitely being reassessing this whole venture, as much as I’ve enjoyed it, unless I’m getting far more comfortable with the novel.

Some interesting stuff and statistics;

I’ve made it onto three blog rolls; Lindsey Mitchell’s, Paul Walker’s at Anti-Dismal, and Richard Goode and Tim at the idiosyncratic Eternal Vigilance. Thank you all three of you – that’s heart felt. I probably get about ten or more daily links from Lindsey’s blog, and about three or four from Paul’s, plus looking through the logs, two or three every couple of days from Eternal Vigilance. All the rest of you, if my oeuvre is in your park, stick me on your blog-roll: I’ll certainly reciprocate on my own if you are missing presently. By the way, I’d love to have Lindsay Periogo’s SOLO on my blog-roll, but can’t seem to figure that out – if anyone has a solution, I’d love to hear it.

Of all my ‘tactical embeds’ to NBR and Interest.co.nz :) , again, always on topic, the latter site brings by far the most links back to this site, although, perhaps that’s unfair on NBR, because many of their embeds are made to paid content, so the audience is much thinner, and probably works during the day, compared to the socialists and statists that read Bernard’s statist offerings. As a one off, my embed in NBR’s Dotcom thread last night has been the single biggest source of links.

My most successful source of links, however, are my tweets, so Twitter certainly has a place, once you can get a body of followers. And the odd retweet from The Cactus, certainly hasn’t hurt – cheers Cactus.

Getting back to my benchmarking, when starting this endeavour, looking at Open Parachute’s monthly blog rankings, I was looking at Whaleoil’s 800,000 odd page views a month, and now realise what an achievement that is, so kudos to the Whale. Mind you, a lesson from it also: if Whale and I had exactly ten permanent readers, then the rankings would still kill me: Whale can put up to twenty posts a day, I’ve been doing one every two days: so with the same ten readers I would show an average of five page views per day, Whale would show twenty – it’s impossible for a hobbyist to beat a full time blogger, so I shall head somewhere for the middle ground, and as a three month target, say 500 views a day, albeit that sounds a bit, well … 500 views a day, okay perhaps in a country where 5,000 book sales are considered a best seller.

And that’s it, work time. Any input would be appreciated. Thank you for reading my blog.

... Hah, I'm just 18 page views off my first 300 page visit day. 

UPDATE:

Over lunch I've been looking at my sitemeter stats, which give quite a different rendering to Blogger's own stats: and nowhere near as good. On sitemeter I'm on, not counting my own, 2592 pages views for 26 days, so that means an average of roughly 100 page views per day. Mmmm.

I wonder why the variance? 

UPDATE 2:

I forgot to add a brickbat for Granny Herald. Trying to get a comment past the fossils who run that site is truly like trying to get an escapee over that other Berlin Wall. The Internet is one big open discussion place in the comments, but not to Granny Herald who ensure no outside link ever makes it through their censorship: in a demonstration of why the business model they still cling to is failing, they insist on running an Internet portal as if the Internet doesn't exist.

A Tale of Two Dividends: Asset Sales II

This to the uninformed mercantilist, newly patriotic Left, and to the good’ol uninformed mercantilist, nationalistic, conservative Right, both of whom in an orgy of misplaced passion lit up Twitter last night with indignation at the government having passed assets sales legislation by a single vote, which Clayton Cosgrove called a ‘travesty of democracy’. You were partly right, Clayton, though missed the major point that democracy has become the travesty –because a majority vote doesn’t necessarily make something right, does it? Though in this case, for once it was. So for all those emoting on the TV3 news this morning about investments for their children, and their children’s children, further missing the points that our forced investment in the welfare state through these assets has ended us all up in children begetting children, and that currently as you are neither entitled to dividends from these assets, nor have any say in how they are managed, regardless,  you don’t own them anyway, I offer the following. In these, the worst of times, whole economies falling over under a hubris of debt, and the best of times, because we see, again, the disastrous place where the Keynesian form of socialism takes us, I put to you this tale of two dividends.

To really set the xenophobes aflame, the first dividend of $1,000 is going from the asset sales to a family in China that have invested in Mighty River. As a businessman has previously put to me, a mad, bad, sad ‘dividend outflow'. Only, is it? The dividend is paid in NZ dollars, useless to this family, so they must first exchange it for renminbi, meaning they must find someone to sell their NZ dollars too. Fortunately for them, via the beauty of markets, though they are never going to know them, an American family wanting to tour NZ buys the local currency, transfers it electronically back to a bank account in New Zealand, and the entire $1,000 is then spent in the only place it can be: here, in the cafes, restaurants, and on services. So, as no one has answered on my previous post, I again ask the patriots, where is the outflow here? Thus where is the problem?

The second dividend of $1,000 goes to Ma and Pa Kiwi. Thank goodness, intone the Luddites, the pressure from the uninformed has ensured a majority ownership in New Zealand hands still. Oh, no. NO! Ma and Pa what the hell are you doing! Oh for goodness sake, they just used their dividend to purchase that brand new LED TV they’ve always wanted shipped here from Taiwan. Surely, mercantilists, this is a disaster? The whole $1,000 is now only growing the economy of Taiwan! Dividends used to buy imports, this is a disaster for our economy.

Fortunately, I shall push the narrator’s wise head in here to sooth the sweating brows of those who feel wronged. Nay, betrayed. The only thing I am attempting to show, is that just as exports are merely the cost of our imports, that in this tale of two dividends lies no argument, none, zilch, zero, nadir, against privatising and selling ‘our’ assets. And my plea is for all of you to please use your minds, and figure this stuff out, because your emoting has me imprisoned in this slave state of taxation. In other words, we all need to grow up. Plus why have you all forgotten the best way to a peaceful world, is global trade based on the voluntary transaction, and that includes cross border investment.

Oh, ps, thankful for inspiration, and bowing down before the Cactus ;)  Further debt owed to Paul Walker of Anti-Dismal, for the 'dividend outflow' heads up.

Related: Asset Sales I.