Tuesday, April 20, 2010


The Herald and Stuff both have stories this morning about TradeMe entrepreneur Sam Morgan complaining about the unfairness of the tax system. The absence of a capital gains tax means he was not taxed on the sale of his company, while his "lack of a proper job" and donations to his charitable trust mean that he pays no income tax. Morgan calls this unfair, and he's right (what's even more unfair is that the government plans to reward people like him with big tax cuts). But having said that its not right, he then says "but what am I supposed to do?"

Here's a suggestion: he could stop dodging his taxes. Because contrary to Morgan's implication, that situation where he pays no tax has not arisen naturally. It is the result of deliberate measures taken by his accountant(s) - such as those charitable donations he mentions - to ensure that he pays nothing to the state on his income. If he thinks that's wrong, he should put his money where his mouth is, and instruct his accountant(s) to ensure he pays his fair share. It's that simple.