Comment by robocat | Hacker News Reader

Comment by robocat | Hacker News Reader

Parent Full thread

> Keeping $60K out of every $100K extra salary I make is plenty of motivation to work harder

That's good that it motivates you. It doesn't motivate me any more. I'm not interested in "investing" more time for the reasons I have said.

> the taxes paid aren't burned, they mostly go to things I care about.

I'm pleased for you. I'd like to put more money towards things I care about.

> The income tax rate isn't all that relevant to the costs and benefits of starting a company

I am just less positive than you: it feels like win you lose, lose you lose bigger. I'm just pointing out that our government talks about supporting businesses but I've seen the waste from the repetitive attempts to monetise our scientific academics.

> The rewards for founding a successful company mostly aren't subject to income tax

Huh? Dividends are income. Or are you talking about the non-monetary rewards of owning a business?

> NZ has a very light capital gains regime

Which requires you to sell your company to receive the benefits of the lack of CGT. So every successful business in NZ is incentivised to sell. NZ sells it's jewels. Because keeping a company means paying income tax every year. NZ is fucking itself by selling anything profitable - usually to foreign buyers.

The one big ticket item I would like to save for is my retirement fund. But Labour/Greens want to take 50% to 100% of capital if you have over 2 million. A bullshit low amount drawdown at 4% is $80k/annum before tax LOL. Say investments go up by 6% per year and you want to withdraw 4%. Then a 2% tax is 100% of your gains. Plus I'm certain they will introduce means testing for super before I am eligible. And younger people are even more fucked IMHO. The reality is I need to plan to pay for the vast majority of my own costs when I retire, but I get to pay to support everybody else. I believe in socialist health care and helping our elderly, but the country is slowly going broke and I can't do much about that. I believe that our government will take whatever I have carefully saved - often to pay for people that were not careful (My peer-group is not wealthy so I see the good and the bad of how our taxes are spent). Why should I try to earn more to save?

> It doesn't motivate me any more.

I find it hard to understand how $60K means no motivation but $100K would be highly motivating.

> I'd like to put more money towards things I care about.

You said later that you care about the public health system and helping the elderly. That's where a large percentage of our taxes go.

> Huh? Dividends are income. Or are you talking about the non-monetary rewards of owning a business?

No, I'm talking about selling all or part of the business. I agree with you that it's a problem our businesses often sell out to overseas interests who hollow out the company. But the general pattern of making most of your money by selling shares in the business is completely normal worldwide.

Perhaps "loss aversion" is important to me: I'm not a spherically rational Homo economicus.

Our society mostly works because of our non-monetary rewards, not because of monetary incentives. My teaching and nursing friends work for their own satisfaction, and more money is not a high priority to them.

I am not particularly motivated by money. I suspect you are a businessperson that believes money is strongly motivating? I chased financial success for 15 years when I started from $0: however I now hope I have enough and I hope it won't be unfairly taken from me. Yes, money was a big incentive then (and my personal costs have been very high), but now I have other goals.

I suspect I psychologically find high marginal taxation demotivating (48% if we include GST). Maybe because I have too many acquaintances and family sucking at the government tit. I see where government money goes because I have a wide variety of acquaintances including retirees, elderly, unhealthy, and unemployed. Yeah, I know they are not living the high life (well, maybe my drug-abusing anti-social acquaintances think they are).

> No, I'm talking about selling all or part of the business

Which requires an intense amount of work, and sometimes a significant loss, and usually requires selling 100%... Why should I sell at 4x earnings when I can hold on to the business - even if I don't want it? Taxation has too much influence on my investments because rebalancing across other investments has too high a cost/risk.

I guess I'm an idealist. I believe in startups, and I believe they help all New Zealanders. But the incentives of our taxation system mean that founding a startup is foolish: I don't recommend to anyone that they should be a founder (even though I have won the gamble). The unrecoverable costs of anything but spectacular success are too high. The non-monetary rewards are poor in my experience. The expected median return for a startup founder is about $0. Our social systems and taxation systems need to encourage business inception and growth so that all of NZ can be better off.

Thank you for your questions. It is always good to be asked why!

Reply on news.ycombinator.com