In a world of pressing problems one of the bigger, longer term ones is due a good looking at because if we don’t, when we get there we will want to shoot ourselves.

IRD has been looking at the cost of stuff and where that money comes from.

The trouble, and this is not new, is we have more older people needing more money and fewer younger people to work to raise the money to pay the bills.

This is more than Super. It's health.

It's pretty much everything.

Currently 16% of the population is over 65-years-old. By 2060 it will be a quarter.

The IRD conclusion is that people will likely have to pay more tax.

Really? Is that it?

Well, no.

Somewhere in the advice they mutter something like "we could always cut costs". Bingo! Give those people a prize.

And why that idea is not top of the pile of ideas, I don’t know.

Because here is what I do know.

Most of the money to pay for all this comes from you and me. Personal tax is over 50% of Government income, its 52%.

Companies pay 17%. GST is 25%. A lot of GST is us as well.

In fact our top tax rate is 39cents. Add GST on to that you are at 54%. Add the bits and pieces on top - the ACC, the road user charges - and top income earners will be parting with 56-57% of everything they earn.

And the IRD advice is we will need more please.

So how much more? And at what point does it become ruinous? At what point do the young, bright things move offshore? The ones of course that haven't already.

So let's take stock.

We are highly taxed. Remember at the other end we have no tax free component in income. We are a low wage economy. We have a massive savings issue with KiwiSaver at an average of $30,000-ish and a fiscal cliff in a bunch of years where the main idea is we will bleed you some more.

Spot the red flag. So, what to do? And how urgently do we do it?

Ideas please.  

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