Wednesday, April 28, 2010

Cat is out of the bag: The rich don't pay tax

Tom Scott's cartoon in The Dominion Post of April 22, 2010.

Two days earlier, Fairfax Media carried an article headlined "Trade Me founder Sam Morgan says tax burden falls on workers". It began as follows:

One of New Zealand's richest men says he effectively pays no tax.

Sam Morgan, who created online auction website Trade Me in 1999 and sold it in 2006 for more than $700 million, has criticised the tax system as unfair to "working people".

Flush with tax-free cash from the sale of Trade Me, he said the system meant he effectively dodged the tax man. "I was lucky enough to sell my company in a country with no capital gains, so I paid no tax on the sale.

"Now I've got no income effectively, because I don't have a proper job, so the tax that I pay is minimal.

"The tax I do pay, I throw money into my charitable foundation. I can't touch that money, it is for charitable purposes. I pay basically no tax. And that's not right, but what am I supposed to do?"

Mr Morgan, 32, was estimated to have made at least $227m from the sale of his business to Australian media company Fairfax, publisher of The Dominion Post.

He is now a member of the Fairfax Media board. According to the last annual report, a non-executive director earns about $155,000 (A$120,000) a year.

For the rest of the article, click here.

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