[wingworks]

We (New Zealanders) are already getting taxed 1.4% on wealth effectively, if your on a tax rate of 30%+ (most people).

Most people just don't know about it. Due to the FIF rules. Any international investments you have get taxed like this (it's not so clear cut, but more or less). The only exceptions are NZ investments and Aussie investments, maybe. There is a tool to check if an aussie share is except from the FIF rules. e.g. Aussie ETFs aren't, even if they invest in only aussie stocks...

So everyone with a Kiwisaver (retirement scheme), aka most people, have large portion invested overseas, and thus are paying the 1.4% p.a.

It also discourages high net worth people from moving to NZ, as they usually have investments outside of NZ, which will get taxed once they move here (after a few years exception).

The small "win" we do get is you can (cost bases) invest up to $50k overseas without the 1.4% FIF rules applying, (though dividends are still taxed). But like no one knows about it, and managed funds can't take advantage of this, so most people don't utilize this, especially not low income people, who generally aren't that well educated on finances.

Don't get me started on our lackluster retirement scheme, Kiwisaver, with near 0 tax incentives, and propping up the housing market prices.

[robocat]

There's heaps more invisible wealth taxes that increase the marginal tax rate by a few percentage points. Rates, Insurance, increased financial liabilities, means testing, unequitable seperations, oodles of time wasted managing money, yadda yadda. And if you want to keep up appearances then the costs skyrocket up.

If you don't have anything then you can avoid certain costs, or sometimes you can get subsidised.

The wealthy also get some financial boosts e.g. house appreciation. And white collar crime has cheap convictions (or you can avoid consequences)

I've never had kiwisaver because I believe in the value of optionality with my own money. I severely hate locked up money. Being able to deploy money has gained me a small house worth of money. The FIF rules are a cunt to manage and Sharsies are SHIT - they've promised to deliver an FIF report but haven't done so.

[sidewndr46]

Interestingly the actual website for Kiwisaver describes it as a "savings scheme". In the US we just have our own national Ponzi scheme, Social Security

[wingworks]

I think our Kiwisaver is more like the US's 401k. We also have NZ Super, which you start getting at 65, and isn't asset tested (yet). But most can't live on just NZ Super. Though some living frugal and have paid off their house, do live within super, even some renters living do make it work, but it's very bare bones.

While our NZ Super isn't asset tested, our residential care subsidy (elderly care) is asset tested, and is very expensive. When you get old and don't die suddenly, then it's likely your assets you've accumulated over the years will be used to pay for your care (though there are some way around it, but not usually cost effective unless you have a large amount of assets).

But, the elder care the govt gives you (if you can't afford it aka no assets), isn't very pleasant, so you really should plan for it while you're working age, and have investments large enough to cover the costs (which most in NZ don't do).

I don't think we have insurance here that covers elder care.

I believe the guys across the ditch (Australia), have a better retirement system setup. While in NZ our Kiwisaver by default contributions are 6% (total. 3% employer, 3% employee), been this since it started just about, while in Aussie, the current min default total is 11%. Though Aussie's govt supported retirement payments are asset tested, where as they aren't in NZ.

I think having a higher min default is probably best for everyone, as most people don't change from the default.

[throwaway2037]

If you think US Social Security is a "Ponzi scheme" (it is not, by definition), then do you also think all other highly developed nations are running Ponzi schemes because their national pension is paid from current accounts? Something that I see rarely discussed: Most national pension schemes need means testing. If you already have reasonably large savings, investments, or passive income, then you don't need the full amount of national pension. You can receive less. The remaining portion can be redirect to those in greater need. One thing we have learned in economics in the last 10 years, when poorer people receive direct cash payments from govt's, they spend it into the economy as a much greater portion than those wealthier.

Also, the US has 401(k) savings plans. It is pretty similar to Kiwisave.

[dgfitz]

> If you already have reasonably large savings, investments, or passive income, then you don't need the full amount of national pension.

Says who? According to whom? Who gets to make that call?