By Alex Tarrant
The Prime Minister needs to tidy up his argument opposing a capital gains tax.
[FYI, updated to include transcript of exchange with Key in Parliament Tuesday morning (below)].
Now, he's allowed to hold his point of view, and good on him for drawing a line in the sand and standing by his word. But in terms of his rhetoric, his words one day need to follow coherently from his words the day before.
One of Key's main arguments for opposing Labour's capital gains tax is it will be a new tax that will drive a dagger through the heart of growth (his words, not mine).
Yet then he argues that New Zealand already has a capital gains tax, so we don't need to bother with what Labour is proposing.
Well what is it? Would Labour's CGT be a new tax, or will it just mean an existing form of taxation is tightened up?
The current system to tax capital gains in New Zealand (which he uses as an argument for not needing one) was called inconsistent by the IRD and Treasury in a submission to the government's Tax Working Group in 2009. Here's a little comment from that submission:
New Zealand’s current approach to taxing income from capital is inconsistent. This is resulting in the same form of income being taxed in different ways, at different rates, or not at all.
Not exactly a ringing endorsement for the status quo.
And for those asking, here's how our current capital gains tax structure works, and why perhaps it's not actually very good: It's all to do with whether income is revenue or capital in nature.
Revenue income's pretty easy to figure out, with the easiest example being wages. If you make revenue from your activity you get taxed - you worked in order to get income, so you pay tax. Yet confusion arises when assets are held on the 'capital account' (rather than the revenue account).
I'll leave the rest of the explanation to the IRD and Treasury:
A less obvious example is the taxation of share gains. Whether or not realised share gains are taxable depends on whether the seller of the share held that share on capital or revenue account.
This is often difficult to ascertain as the tax rules turn on whether the dominant purpose of acquisition was for resale. Often it is difficult to know and demonstrate with comfort what the dominant purpose of any particular share acquisition was (especially where there may be more than one purpose). The uncertainty is compounded where taxpayers buy and sell some shares for profit and buy others to hold for dividends (but later sell them).
Further, identifying whether or not a number of share sales makes a person a trader is also an area of difficulty.
Which is to say: Bob buys a rental property with the intent of selling it in 10 years for a capital gain (he's told the IRD this). He therefore gets taxed at his given personal tax rate on the gain he made due to the rising property price.
Meanwhile, Dave decided to buy the identical apartment next door at the same time, and sold it at the same time as Bob for the same price. However, Dave had bought the property primarily so he could collect income from rent (the same rent Bob got) during those ten years (he's told the IRD this). Now Dave's had to sell the property because his marriage broke up, see - he's not selling in order to get a capital gain, because that's not why he bought. Dave doesn't pay tax on the capital gain.
So how does this fit in with the Prime Minister's argument?
Well, Key is saying there is no need to change anything because we already have a capital gains tax. At the same time though, he is arguing a capital gains tax would drive a dagger through the heart of the economy.
If he's that opposed to capital gains taxes, then 1) why use an example of a capital gains to argue against a capital gains tax, and 2) if they're so bad, then why isn't he doing everything he can to get rid of the capital gains tax we do have? Surely he can't have it both ways?
And before you say anything, if Key thinks that the status quo captures everyone it should - ie all of those who bought with intention to sell for capital gain later on - then he must have rocks in his head. If the IRD and Treasury thought that was the case - ie, it's working - then I'm pretty sure they would have made that little note in their report and there would have been no need for consideration of a capital gains tax.
Whats more, if Key uses the 'we've-already-got-one-so-don't-need-to-change-but-having-one-is-bad' argument, then isn't he endorsing situations where the exact same types of income might be taxed differently? He is endorsing inconsistencies and irregularities in our tax system.
I thought he didn't like inconsistencies and irregularities in the tax system, which was one of the central reasons for commissioning the Tax Working Group.
I'm obviously wrong.
Key's reaction
I asked Key about this on Tuesday morning, on the regular 'caucus run' in Parliament. Here's the transcript:
[AT] Your argument against a capital gains tax is that it will ‘drive a dagger through the heart of growth.
“Yep.”
[AT] Yet then in the same breath you’re trumpeting giving the IRD NZ$100 million to tighten up the current capital gains tax regime.
“Yeah, and that’s because we have a capital gains tax system in New Zealand, that’s my point. When people argue that we don’t have a capital gains system it’s not true.
“What we don’t have is a comprehensive capital gains system, and for all of those people who say, ‘the IMF and everybody else advocates for a capital gains tax,’ they actually advocate for a comprehensive capital gains tax system, which doesn’t even exclude the family home.
“That means you go and do the research about what these people are actually saying, they want.”
[AT] But what Labour is saying is it’s not going to be a comprehensive capital gains tax, so it’s going to be pretty similar to what we’ve already got, would you accept?
“Well if it’s similar to what we’ve got why do we need to change?”
[Another journo]: Are you worried that the idea of a comprehensive capital gains tax, albeit one that excludes the family home, is getting a bit of traction – there’s a lot of experts who seem to be backing it...
“No I don’t agree with that actually. Look, we need to go and see what they propose on Thursday. But what I can tell you is that, if you go and have a look, it’s a very complex law, and you’ve got to make sure that you don’t have unintended consequences.
“And we’ll have a bit more to say about that on Thursday.”
[AT] But if Labour’s policy [interruption] would drive a dagger through growth [Key: “Well it will”] is not much different to what we’ve got [Key: Well that’s your proposition], why don’t we go about trying to get rid of what we’ve got?
“Let’s go back to the fundamental point. Does New Zealand need another tax? And the answer is, not under a National government. We’re going to be back in surplus in three years, we’re going to create 170,000 jobs over the next three or four year, we’re going to have debt topping out under 29% of GDP, we’re going to have a tax system which has good integrity to it.
“If Labour want to go and bastardise the New Zealand tax system, and take GST off fruit and vegetables, have a capital gains tax which might see a whole lot of people pay less tax not more and some people paying a lot, and have unintended consequences of what they might do, they’re welcome to do it.
“It’s called an election, let’s go and campaign on those things.”
[AT] But if capital gains taxes are so bad, then why don’t we get rid of the one we’ve currently got?
“Ok, this is a circular argument. Thanks very much.” [Walks off to caucus.]
(Updates with transcript of Tuesday morning exchange.)
65 Comments
Alex, nice article...I've always talked highly of John Key but he is looking like an idiot on this CGT issue...he's stated that a CGT won't address the housing affordability issue because Australia has a CGT and high house prices (paraphrase)....therefore he is acknowledging that we have a housing affordability issue in NZ...and the question to follow is "John Key, if a CGT is a poor option, what options are you proposing to address the housing affordability problem?"
He is right in the fact that a blanket capital gains tax will slow things down, at least in the short term.
The existing laws should just be enforced. All those speculators flipping houses during the boom should have been paying income tax on their capital gains, as that was their income.
Always interests me when people call for more taxs,doesnt seem logical that individuals want the govt to steal more from them,almost like the wife that keeps going back to the husband that beats her.I guess the only logical reason they ask for more tax is that they themselfs dont expect to pay it!.
That didn't sound arrogant at all - now I see what you meant. I'll be more like the above in future ..
It's physics that says that all investment is parasitic - as all investment presumes to earn a reward (profit/interest/dividend) which presumes to be redeemable via the purchas of goods and/or services.
You didn't answer my question, and you won't answer this one either, but......
Do you know of a good or a service not requiring work to be produced?
"...all 'investments' are of course, parasitic".
Let me give you a few examples of investments that you could use to test your statement:
- A farmer invests in new stock or a new tractor.
- A music teacher invests in a new grand-piano.
- A writer invests in a new computer.
- A landscaper invests in a new power tool.
- A wine maker invests in upgrading his fermentation tanks.
(I could go on…)
“It's physics that says that all investment is parasitic…”
Sorry mate, but I am starting to doubt your understanding of physics too, not just economics.
The parasitism I had in mind, is the wide-eyed wonders who insert 'money' somewhere, and expect 'more' back. That's doing nothing useful in itself, but expects to 'buy' something tangible with the 'more'. That's the bleating flock who 'want their money back' from the failed finance companies, who expect a return on shares, deposits and the like.
It's parasitic on the work done by those tractors, vats and pianos.
All of which are a physics issue.
Alex13 obviously sees them as 'investments', expected to furnish a 'return'. I'll grant him that there are real items, tangible, but I don't see them as 'investments'. They are a representation of work done, of energy expended (I'll leave OUT resource depletion and resultant pollution - Natural Capital :) in their making, and of work to be done in the future.
Some of these activities are more parasitic than others, in real work terms. The piano teacher, for instance, uses calories as she gets frustrated over a pupils lack of progress (well I remember). She charges a fee, then heads to the supermarket, buys some bikkies that the tractor had a hand in.
In energy terms, shes assuming she can buy edible calories, produced using fertiliser calories, tractor-build calories, fuel-use calories, transport and processing calories.
I'd call her parasitic.(and not just because I hated Piano). Sure, we may accept that as a society, but to see her as 'productive' is to ignore the real underwrite - energy.
Essentially, we are counting the wrong thing.
That might have been OK too, if we ran a 1:1 system - you'd just make less money (be able to buy less results of 'work done') collectively as the energy supply decreased, and per-head as the population increased - and/or both. What we did was lever ourselves ahead of the supply, and when it topped out, well, you had to be in trouble.
Key is sounding very much like Muldoon in many ways now.
Muldoon kept the focus on "competent economic management", even while presiding over a hollowing out of the NZ productive economy. At the same time denying it and saying good times are around the corner (I can still remember him saying "Remember, I've still got our triple-A rating!"). Key is doing exactly the same.
Key refuses to raise the age of superannuation, or tax people's passive capital gains - just as Muldoon was determined to protect the wealth of the ageing Rob's Mob at all costs, even if it marginalised the younger generation.
Both distrusted and worked to destroy any initiative to improve NZ's dismal savings record - Muldoon trashed the compulsory super; Key has been doing the same to KiwiSaver thru the death by a thousand cuts.
When people suggest something you don't like, resort to emotive language and loaded arguments ("dagger thru the heart"), even if they contradict one another, so long as you know that they will successfully mobilise your support base. Move from the smiling benevolent non-threatening friend-of-all to the stern pontificating patriarch who threatens a wasteland if their prescription isn't followed blindly.
Scary, ain't it!
Cheers to all.
And why should "Rob's mob" i.e., people of his age group and older, as the generation who fought the second (and first) world wars, not receive universal National Superannuation in their old age as a peace dividend for the sacrifices that they made? We are all the beneficiaries of their efforts.
By the way, I don’t remember National Superannuation marginalising any generation, let alone a younger one. That sounds like wishful thinking on your part. And rubbish him as much as you like, but Muldoon did have a triple A credit rating, so there was no need for Labour to flog off all those SOE, in the 80s eh?
David: Ha ha! Good one!
Bring back the good old days of Rob! Ditch a superannuation scheme that would have provided us with more assets than the Aussies do, on a per capita basis, in favour of a "present earners pay for past generations super" scheme! How could that penalise the young!
As a result of Rob's decision (& Oz introducing a similar one later), Australia has over five times the share market (again on a per capita basis). Silly Oz, who needs a share market anyway?!
Haven't had such a good laugh in an age! Thanks for it David!
Cheers on a windy morning.
Well you know what they say, Philly. Small things amuse small minds!
But I notice though that you have assiduously avoided addressing any of the points I raised while you rattled on with making your own.
So front to this question then and answer it yes or no.
It was wrong of the Muldoon government to pay the generation who fought the second (and first) world wars, universal National Superannuation in their old age as a peace dividend for the sacrifices that they made? Yes or No?
And as for the rest of your comments, what is the evidence that Australia’s share market is 5x bigger than ours due solely to their compulsory superannuation savings, as you claim?
Nobody's talking about reducing NZS for people who are now receiving it. The economy can afford to pay today's NZS. Discussions about reform to NZS do not affect even the youngest of the present generation of pensioners, let alone anybody who fought in WWII.
The problem is the following generation - those who are now in their 40s and early 50s, the results of the post-war baby boom. Because of demographic factors, there will in the next decades be a higher number of over-65s in proportion to those of working age, so the cost of NZS as a proportion of the economy as a whole will be much higher.
To afford it, following generations of taxpayers - many of whom will be less well-off than the pensioners they will be paying for - will have to either pay more tax, or go without the public services that today's taxpayers are benefiting from.
That's what the Government needs to be thinking about now.
Useful article Alex. It should get published further afield. Key et al might well rue the day they initiated x, y, z working groups, only to constrain their tor and ultimatley ignore well thought out advice. Must have seemed like a good idea at the time.....
Rue - now there's a good word = bitterly regret. Maybe not because they will lose, (this time, but ....) but because they know they could have and should have taken action when it was "blindingly obvious" that they should.
I wonder what stopped them?
Cheers, Les.
So let me get this straight. Currently there is no CGT in NZ on shares or property. So they are both treated equally in this respect. But a CGT should be introduced to stop people investing in ‘unproductive’ property and make more of them invest in ‘productive’ shares. But if you introduce a capital gains tax then property and shares will still have the same taxation treatment. But this doesn’t make any sense.
You can’t say that in the absence of a CGT, investment favours property (as their taxation treatment is the same, no CGT), so therefore introduce a GCT to encourage investment in shares, but then their taxation treatment is still going to be the same. So where’s the incentive? You can’t have it both ways.
What do they say about people who live in glass houses not throwing stones, Alex?
Property investors buy property with borrowed money and expect to make a loss throughout the period they own them.The only reason for buying property is for speculation of capital gains. By slapping on a CGT, the incentive for buying property decreases. People who buy shares tend to own them outright or with much less leverage. They expect their shares to pay and increase their dividend. There will still be a CGT on selling them, but regular dividends will start to make them a more attractive product.
For a CGT to be effective it must be offset by reductions in income tax. It has to be across the board (exceptions for primary residence) for the sake of fairness and to remove loopholes. However, apart from the first $5,000 earnt, and tokinism on fruit and veg, Labour are unlikely to do this. So sharemarket investors will still be paying high taxes on their dividends, the middle classes will still be burdoned with the bulk of the tax bill.
So property investors should be taxed on their windfall gain if they realise a capital appreciation. After all, it's not the intention they had when they bought the property for it's yield, so whats the prob of paying CGT on something they didn't bank on? Hey, and they get to keep 85% more of something they didn't plan on!
David, no.
As the PM keeps saying (to support his argument against Labour's policy), we do have a capital gains tax - if the IRD can prove that when you bought an asset, you bought it with the primary intention of selling it again for a capital gain.
And that obviously isn't working - the evidence being the govt just gave IRD NZ$110 million in order to tighten things up. That IRD and Treasury paper was pretty scathing of it too.
So what we have is a PM arguing against a capital gains tax (it'll drive a dagger through growth etc), yet he is giving more money to IRD to sure up the status quo (an 'inconsistent' capital gains tax that allows the same form of income to be taxed differently).
The argument of whether a more comprehensive capital gains tax on shares would drive investment away from the stock market is completely different to what I'm arguing above - the piece is about the PM's argument.
Yep, sure, a more comprehensive capital gains tax might be a disincentive for buying shares, I'm not arguing that it won't be.
Cheers,
Alex
Well the Prime Minister is right, we do have a capital gains tax. Those who say we don’t and we need one asap are wrong. If they are that uninformed about our taxation system how reliable can any of their other statements on taxation be? I like policy development to be evidence based and not based on idle chit chat and Grandma Joan’s expert opinions.
I disagree, I think the current law is working very well now that National are in power, and are making sure that IRD is actually investing appropriate resources into collecting it. After all it does cost money to collect taxes, so I don’t see that as a sign of the current law in any way failing, but rather, that National are clearly committed to not allowing property speculators to get away without paying tax on their capital gains. Evidently under Labour, collecting capital gains tax during one of the worst property speculation periods in this countries history clearly wasn’t a priority. And now all of a sudden it is? What a shame everybody’s beloved Labour Party didn’t do that while they were in Govt AND the property boom was taking place. A bit late to be bolting the door after the horse has bolted don’t you think? It seems to me that Labour couldn’t manage its way out of a paper bag with a big hole in it.
The current law works well because it distinguishes between speculation and investment intentions. A comprehensive CGT tax will not do that. A comprehensive GCT provides not one ounce of taxation incentive to engage in productive investment, whereas the current CGT law provides that incentive. So in that respect the Prime Minister is right. It will thrust a dagger into the heart of economic growth in NZ. And the claim that introducing a CGT will somehow magically incentivise productive investment by New Zealanders is utterly spurious. It will in fact provide no incentive at all.
By the way, how many ‘investors’ in the real estate market do you see buying and selling, in quick succession, multiple properties? Not many I bet. Most property investors I know hold properties for years, in some cases, decades.
Yeah but again, that's trading not investing, and it's been like that here for many years, even back in the 80s from memory. Of course, if I'm not mistaken share traders can also write any share trading losses off against their gains when calculating how much they have to pay. Under Labour's proposal I don't think they will be able to do that, so that incentive for participation in the share market will also be gone under Labour.
If you buy shares to hold for the long term because of say the dividend yield or the long term growth prospects of the company, and you then sell them, there is no CGT tax to pay. And that's a good thing in my view because it provides an added incentive to investors to risk their money by putting it into shares (companies) for the long term. A CGT may well provide a disincentive for them to do that. Why not just leave your money in the bank and pay tax on the interest. It’s a lot safer; at least you know you’ll stand a good chance of getting your money back. That’s not the case with long term investments in shares.
Look all Labour’s CGT tax proposal is going to do is to raise more tax for them to spend on their voter base. Let’s stop beating around the bush here and pretending its anything other than that.
All this talk about a CGT is going to make a fairer tax system or provide an incentive to invest in productive assets is a load of old codswallop. This is about Labour/Greens buying elections it’s as simple as that.
According to the IRD website, there never was a 10 year rule, it has always focussed on 'intention' not duration ( but that's another discussion). But why does a capital gain change in nature, just because it's 10 years old? Answer: It doesn't. And that, I suspect, is the IRD's thinking.
Just the first ref I could put my hands on, there's lots more..."
For example, you buy a property with a firm
plan to resell it for a profit.
"The property market falls and you decide to hold onto it instead. You rent it out for 15 years and then sell it when the prices are again rising rapidly. Any gain on that sale 15 years later is likely to be taxable." ( IRD pamphlet 361)
There's a huge, gaping loophole in the existing CGT that has not been addressed: someone buys a property that produces a consistant annual loss, with the help of some slick accounting (and after interest, rates, insurance, maintenance etc) and has done so from the day it was bought. They subsequently sell for a profit and don't pay CGT, claiming that was not the intention when it was bought. er.. so you bought it to make a loss ... right.
This is just about too silly to believe but that is what has happened in thousands of cases. If John Key refuses to acknowledge what is obviously going on - other's taxes subsidising speculaters - he's not fit to be PM. And don't get me started on selling our power stations.
I totally agree with you Kiwidave.
The rule of thumb I use is that if you can claim the costs of building an asset up, then the gains at the end should be taxable. If the losses are economic and relevant to taxation, then the gains are economic and relevant to taxation.
Surely!
But maybe I'm a loony Commie! (thats what has been suggested as a result of my support for CGT or similar).
Cheers
If you are a "loony" Philly, you are in good company it appears:
'ACT to consider capital gains tax'http://www.sharechat.co.nz/article/94e080de/act-to-consider-capital-gains-tax.html
Those Canadians, huh.
So much cognitive dissonance out there these days, very uncomfortable.
Cheers, Les.
Try this one by Gareth Morgan:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10737829&ref=rss
"Tax applies if the purpose of your investment is to make a capital gain, in theory. I say in theory because a paradoxical feature of our investment landscape is the large number of assets that do not yield an income rate of return even equal to the risk-free rate the Government pays on its bonds.
Why then, you would wonder, would folk invest in assets whose income return is so deficient, if their purpose of investment was not capital growth, and why if this is the true objective do they not pay tax on capital gains? They will argue they're waiting for the long term when the income will grow, so really they are after income." And:
"But Labour should at least be congratulated for addressing what we all know is the biggest tax rort in the country and one that has cost us all dearly in terms of efficient allocation of capital, economic growth and employment. "
Oh they are not fighting, they are letting it look like Labour are the provocateurs , now with Act mysteriously considering it , JK should be able to introduce it while saying that if he didn't it was coming anyway. It was coming no matter what in some guise or which party on our political landscape delivers it unscathed through parliament. The discussion just sucks people into the theatre of it all.
Well I asked Key about this this morning and he exasperatedly walked off after I kept asking him if capital gains taxes are so bad, why don't we get rid of the current one? Now he's saying wait until Thursday and ask then.
Managed to get on Goff's nerves too asking about whether they'd considered any impact on KiwiSaver funds, given their love for the thing.
"It's just two more sleeps Alex," he replied.
Problem is, (and I'm a bit embarrased saying this) seeing as I've been reading so much on the topic in the last week, I'm actually dreaming about it too!
I think I need to get out more. :)
While the effectively tax free treatment of property capital gains is a significant factor in house unafordability in NZ, I think that the basic problem is a very rigged market in the supply of residential land and building materials. In a free compedative market a slight increase in price will result in a large increase in profit for property developers so their output should increase rapidly. Classical ECC 101. (You can say what you like about the Yanks, but at least their property production market reacted efficiently to the jacked up supply of cash for housing, new houses poured out.) Our present property market is reminiscent of the car market after the 2nd World War when if you could buy a new car you could run it a year and sell it for a profit. A crazy situation in an efficient free market.
CGT will certainly help, but there are other perhaps more important reasons for a CGT. For example our inabilty to resist selling good buisnesses with great futures to each other and overseas parties. I have had conversations with the senior managers of companies who matter of factly say that the major focus in running the buisness is to maximise it's value in a takeover. Frequently the aftermath is a procession of restructurings etc that eventually diminish the enterprise. (Not all restructuring however are inappropriate)
The Germans have very complex and tight tax laws. Their ecconomy is hardly suffering. A large proportion of their companies remain in private and familly hands. The companies seem to thrive with this continuity. Similar comments could be made about Japanese companies. A CGT may help curb this and focus some managers and boards to running buisnesses for the long term benifit of their share holders and the country. Not just the next quick buck. In these conditions the present property investors may find more honest value investing in enterprises that we will all benefit from.
Targeting the rot – not tenants.
A CGT should be designed to penalise the rot – the property speculators. It should be a graded tax. People/ businesses, which buy and then sell within 2 years pay far more, then the ones, which keep property and sell after 10, 15 years.
Interestingly was speaking with a German on Friday night.. He said that Germany is a horrible place to work and most people hate their jobs.. he also said the German debt clock is accelertaing so fast the numbers cant be seen. Who wants to pay 5 times the price for a product that can be bought from China for nix.. Americans used to but can't afford to now... Germany may not be in such a good economic place...
You spoke to a German who broad swept on behalf of their country! I was told by a guy on this blog yesterday that Nz had never been in better shape , so took it as true.
Never underestimate the rise of the 4th Reich , can I say that? Plenty of peOple still want to buy quality , not everyone loves made in China crap eh. With Chinese foreign markets going broke they have been attacking the likes of Brazil , look into what he expansion looks like over there , & how the Brazos are trying to defend themselves. Will try to find the link
In the Herald:
"The IMF, the OECD, Treasury, the Reserve Bank, and, inconveniently for the Government, a growing number of business people including the Exporters and Manufacturers Association, and the Productive Economy Council (PEC), have all made the case for a capital gains tax.
Even the Tax Working Group has acknowledged the "major hole in the tax base concerning the taxation of capital, which is manifest in high investment and low returns for the property market".
And the Government's own Savings Working Group has also pointed out that 50 per cent of our housing bubble (larger than bubbles in the US, Australia and the UK) was due to the lack of a capital gains tax."
http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10737616
... & now add Don Brash (ACT) and Gareth Morgan.
So who are the dispassionate economists & commentators who are saying that CGT is such an evil thing?
Cheers to all
Good on the EMA for supporting a CGT.
Alex - you should get onto the person in charge now and same at Business New Zealand to get their support confirmed. Good on em' I say.
Cheers, Les.
I agree Les, I was most impressed.
A CGT would tend to work against the personal interests of their members, who will clearly be significant property holders.
So it is to be admired that they are prepared to put aside their self-interest in favour of long-term national economic welfare.
Quite encouraging to see our business leaders doing this.
Cheers
C'mon Alex - get onto em' and let's see what they got to say,.... or, maybe get onto Tapu Misa and clarify who she meant by the "Exporters and Manufacturers Association" - easy mistake to make, eh, given similarity of the three letter acronyms.
I still think it worth checking what EMA and Business New Zealand say about all this CGT stuff - surley they want the best for their members too.
Cheers, Les.
Interesting that Brash supports a CGT, in principle anyway.
I am surprised. Usually the right-wing parties reflexively reject the very concept, obviously to defend the interests of their base support, and for self-interest. Key is an example.
Morally, a right-wing politician should be as supportive of an equitable tax policy as anyone else. But few do, for obvious reasons.
I am impressed at Brash for doing this. But it is naive - Act supporters will give him a good dressing down over it, & it won't help his polls. At the end of the day, he is a political innocent at heart.
But... the first time I've admired Brash for a long time - so bouquet for him.
A bit more constructive than Maori-bashing. But probably less politically wise!
Cheers to all.
Hi P hope you're well today.
What I think we are seeing is politics of the worst kind here with all actors playing their part to script. Once all others have conveniently shown their cards JK can nicely sell the new taxes to his core voters , simply as "'it was coming anyway". JK is not smart he is a cunning rat, no different from eachoher. Once Brash has cleared the path , he will then be finance minister after the election to manage the theft.
Are we seeing The game or not ?
Philly - I doubt Brash will be allowed to support a CGT, even if he wants to:
'Nicolson named as new ACT candidate'http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10738021
Anyone know how many farmers/farms there are in NZ? About 80,000 or so, this might be a bit out of date, in more ways than one:
'Farming without subsidies in New Zealand'
http://newfarm.rodaleinstitute.org/features/0303/newzealand_subsidies.shtml
"Today New Zealand has around 80,000 farm holdings on 15.5 million hectares (38.3 million acres). The number of farms has held steady since subsidies were removed*; land area has fallen slightly as marginal land has been turned over to forestry or allowed to revert to native bush." * Never removed nil effective taxation on capital gains though. Am sure I saw an article on Int.co about banks not now lending against anticipated capital gain for farms now. Seems this particular subsidy went further than just farming.
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