March 7, 2010 12:02pm by David Farrar

The unasked question

Pat Baker, a $10 million landlady and grandmother, is bristling about being blamed for wrecking the economy.

The Whangaparaoa retiree owns 53 Hamilton houses, bringing in about $700,000 a year in rent.

Yet she feels persecuted for providing so richly for her retirement after Government moves this month to axe housing’s tax shelter status.

“My husband and I worked hard,” she says

“We never had highly-paid jobs but we did have good opportunities to improve our situation. We saved and invested in something tangible which everyone needs.

“Now I am a 73-year-old widow. I manage very well. I am not a poor old-age pensioner because I took steps when I was younger to invest and accumulate wealth.

“But now property investors are maligned in the media. That’s not fair.

First of all one has to say congratulations to Pat Baker. I think it is commendable she has worked so hard to save for her retirement. I wish more people would do so, rather than reply on the state. I have no criticism of Pat Baker’s drive to do well and be well off, indeed rich.

But this is a debate over whether our tax policy is fair, and I am amazed the Herald did not ask the logical question. Of the $10 million of housing that generates $700,000 a year in rent, how much income tax did you pay on that income last year?

It is quite possible that no income tax was paid, as interest on some of the 53 properties was greater than the $700,000 of rental income.

It really is a shame the Herald did not ask the question, because the article is somewhat pointless without it.

Hat Tip: Dim-Post