The Green Party has revealed its first policy it will take to the September 19 election.
It is proposing those not in paid full-time work, including students and part-timers, receive a ‘Guaranteed Minimum Income’ payment of at least $325 a week after tax. People with kids or disabilities would receive more.
To put this payment in context, single people on Jobseeker Support currently receive $251 a week.
The payment, which looks a bit like a universal basic income, would be paid for by extra revenue generated by the introduction of a wealth tax and two new income tax brackets.
Wealth tax, higher income tax brackets
People would pay 37% tax on income they earn over $100,000 and 42% on income over $150,000. These two tiers would sit on top of the existing tiers - the highest of which requires a tax payment of 33% on income above $70,000.
The Green Party is ditching its call for a capital gains tax, following Prime Minister Jacinda Ardern ruling this out under her leadership; instead calling for a wealth tax. This would be set at 1% on net wealth over $1 million and 2% on net wealth over $2 million.
It would be calculated on an individual level, so couples with jointly-owned assets would only start paying if they had combined net wealth of over $2 million.
A person with a $2 million house and a $600,000 mortgage, has a net worth of $1.4 million. So they'd pay 1% on $400,000, which is $4000.
The tax would cover the likes of property, shares, bonds, business assets, valuable art, and normal household items and vehicles worth more than $50,000. Assets held in trusts and those held offshore would also be covered.
Asset rich, income poor retirees would be able to defer payment until they sell their assets.
The tax is expected to apply to the top 6% of wealthiest people in New Zealand and raise $7.9 billion in its first year.
Having two new top income tax brackets is expected to raise $1.3 billion a year and affect 341,000 people - about 7% of the population.
Speaking to interest.co.nz earlier this month, Green Party co-leader James Shaw made the point that the quantitative easing being done by the Reserve Bank has heightened the need for tax reform to redistribute wealth. He was concerned the $60 billion-plus being pumped into the economy via the banking system would flow through to asset owners, not the real economy. Shaw noted that following QE being done in other parts of the world in response to the 2008 Global Financial Crisis, asset prices have increased more than CPI inflation.
$100/week per child for all families
Coming back to the Guaranteed Minimum Income, this would replace the student allowance and put money in students’ pockets regardless of what their parents earn.
Single parents would receive a top-up payment of $110 a week after tax, and people living alone would receive a $30 top-up.
The Green Party also wants to give families a $100 a week universal payment for each child under three years of age.
Looking at the welfare system more broadly, it would change abatement and relationship rules so people and their partners can earn more from paid work before their income support entitlements are reduced.
These changes are expected to cost $6.7 billion - $2.5 billion less than the additional tax revenue generated from the wealth tax and new income tax brackets.
Separately, the Green Party wants to legislate to require annual minimum wage increases in line with the median wage.
ACC reform
The Green Party is proposing to level the playing field between the support people receive when they can't work due to an injury, versus due to an illness.
Under the current system, ACC provides higher payments (in the form of compensation for lost earnings) for people who were employed at the time of an accidental injury.
In what would be a major $5.9 billion overhaul, the Green Party wants to turn ACC into an ‘Agency for Comprehensive Care’ so that it covers income support and work-accessibility support for everyone with a health condition or disability regardless of the cause.
It would also change ACC’s minimum payment approach so everyone gets at least 80% of the fulltime minimum wage regardless of what their income was when their condition emerged.
This would effectively create publicly-funded sick leave for people who need an extended period off work, for example to recover from surgery or chemotherapy.
The Green Party is proposing to phase in some reforms in 2021, and the rest in 2023.
Here are its costings:
See this document for the Party's new policy in full.
529 Comments
Where did Key grow up?
How many people are currently on waiting for state housing these days compared to then?
Was Key the leader of a governing party - thereby having the power to implement legislation to mitigate property increases?
What was wage inflation like when interest rates were high, did this make servicing a mortgage easier or harder?
Is GST considered a progressive or regressive tax?
Can you do your homework too?
Well I can't say I'm gonna do that level of research. What I can say is that the waiting list for State housing has grown regardless of who is in Govt.
As for property increases, that was/is a natural flight for Capital gain. Legislation really had FA to do with it other than maybe Immigration settings
Wage inflation back then was about 3% give or take
GST is a consumption tax - I personally believe that food especially should be exempt. Without that, it could be argued it's a regressive tax
Wage inflation back then was 3%? bwahahaa.
Try ~15% p.a (310% total) over the period -1970-1980 ) according the the RBNZ inflation calculator.
And sounds about right to me Minimum wage in '72 was 68c, by '81 it was $2.10, and '81 was the worst point for minimum wage relative to average wage, minimum wage was 30% of average in '81.
Interest rates aren't the only factor, this goddamn boomer meme annoys the shit out of me.
I happen to have the letter from Housing corp that details the offer of sale of the first house a relative purchased, in.1981, in One Tree Hill, Auckland
House price $26,000
Deposit $2500 (yep, 10% Deposit)
Mortgage 35years, 3 years @ 5%, 3 years @ 6.5% and then balance at 9% (or prevailing rate at that time)
Monthly payments of $119.06 initially.
Minimum wage in 1981 was $2.10, average ordinary time wage was $7/hour. So the monthly mortgage payment represented less than 60hrs work at minimum wage. at the 9% rate, it would have been $184 per month, still only 90 hours at minimum wage. And at average wage, it was 17 hours at the discounted rate, or 26 hours at average ordinary time wages, not even 1/4 of a single average wage to service the mortgage. Maybe a quarter of a single average wage after tax.
Piss off with "the boomers had it hard" line, its complete crapola.
So house prices have gone up from say your $26,000 to now around $900,000 - perhaps a bit more in your suburb. That’s an increase of around 35x initial purchase price.
If wages were to rise by the same amount to give equal buying power - which must only be fair as FHBs don’t benefit from zero interest rates while saying a deposit, that would mean the average wage should be around $250 per hour ($7 x 35).
Can we just confirm on average everyone is receiving $250 an hour to pay for their homes or have I missed something?
Sounds like you’ve had it pretty good in my view!
The RV on that property is now $1.1m according the the Homes.co.nz website. $1.025m in land value (660m2) and $75k in improvements (which looks about right from the google streetview pic)
And yeah, the owner did okay out of it, by the time of her divorce in 1986, the house was valued in the $80k range, and the mortgage cost $22,000 to settle. Them boomers had it rough I tell ya.
And nope, the only time I see $250/hour rates is when i'm paying the dentist!
Haha Boatman, it won't, as I'm sure you're well aware. What does is appeal to the unwashed masses and the 'woke' brigade. Uncosted, unworkable, and unpalatable and unachievable. What they forgot or ignored is that there are some quite wealthy Labour voters too who will ensure this dies on the altar of reality
What is "wealth " and who is wealthy ?
Why is $1,0m in assets "wealthy" when the average Auckland home is close to that ?
I will simply add my children to the title on my home and the "value " will instantly be divided by 5 ...............and we will never ever have to pay the proposed tax
Given so many people remit money to families in the islands or to India , they will never accumulate assets to pay this tax
Lots of ways to cut it eg mortgage down to the the exemption threshold and the kids own the mortgage or just give it to the kids now and 'rent' it back off them. Transfer cash and shares to them and they kindly give you money for travel, replace your car and do lots of other nice things for you. Just because they love you. And it'll drop you back into a lower personal tax bracket. Win win.
Obviously you would pay significantly less in income tax earning $120k here compared to $180k in Australia.
You'd also pay less income tax in NZ earning $180k in both countries ($50k in NZ, $54k in Australia) since Australia has higher tax rates than NZ does (37% over $90k, 45% over $180k).
NZ has the 8th lowest top tax bracket (out of 36) in the OECD. It's not crazy to think we need to adjust them. The biggest issue isn't that our top tax bracket is too high, it's that our bottom tax bracket is, and the higher rates kick in too early. Middle class people pay more in tax in NZ than they would in Australia, while high income earners pay less on this side of the ditch.
More like an own goal. You don’t think National and ACT aren’t going to play on swing voters’ fears. This isn’t designed to bring centre voters over, it’s designed to shore up the far left vote. If Muller can’t whip up an anti left frenzy out of this he doesn’t deserve to lead.
There are probably a lot of younger voters Expat that this could well appeal to. They don't own assets, nor earn in the top tax brackets. It could be aimed at winning the millenial/non home owner segment of society and based on the falling rate of home ownership, is growing in political force.
Don't underestimate millenials - Jacindamania took off because she was a relatively young woman with political nous. Love her or hate her (and regardless of the comments on here, she's now an international star), she represents a generation that have had enough of boomer ideas about how the world operates.
Trouble with Muller and Nats in general at the moment is that they don't appear to stand for anything. Did you read the extended article in the weekend Herald? Lots of platitudes about doing things differently, but no actual detail, no actual stance on anything. Average millenial is going to interpret that as corporate speak for saying lots about nothing at all.
Is there detail on how that would even be done? Who owns the asset, it is in trust.. For example a discretionary trust - each beneficiary shares the asset value evenly and returns it as such in their tax return? But they have no specific legal claim to that value, it is by nature discretionary.
Without doubt a softening play in cahoots with Jacinda.
You are assuming asset prices won't be affected by a wealth tax. I would expect a 2% asset tax on farms to decimate values. Hell that's more than most farms can earn. Even a %1 tax would have a huge affect and be very difficult to pay from income, think of all the holiday homes that would come onto the market.
The reality is the Aussie banks got first go at the udder and there's bugger all left.
Will the banks be required to pay tax on the value of the mortgages they hold? If an asset owner is allowed to deduct the value of his mortgage when calculating his net equity, the mortgage holder owns an asset in the form of the mortgage. This mortgage represents a portion of the value of the asset, and typically is held by a bank, but not always, and usually is diffused through the bank's own creditors.
Especially people in poverty who keep churning out children they can't look after, some of whom see each additional kid brought into the world as more free money from the government to spend on their own needs and vices and neglect those kids. They should be given an incentive not to keep breeding. Don't ask me how I know this, it really is the mindset of a certain strata of society.
Or drop to part time hours. Giving up 7.5 hours a week at $30 before tax to gain $325 per week after tax (equivalent to $65 per hour before tax or $43.33/hr after tax) makes a lot of sense. You would need to be making over $65 an hour before tax to be worse off dropping to part time hours!
When rich people / experts / media are so allergic to the very word GCT which is a fair and just tax and also prevelant world over, they will pounce on wealth tax and is a waste of time as will never ever be in NZ.
If JA can take do a U turn and say no to CGT, can again do U turn specially now after panademic or can go for vote on CGT in this election.
I read a number of posts that Greens are an "environment party" - they are no longer that.
While initially that was so that is no longer the case. This was clear in the lead up to 2017 elections. Metiria Turei’s admission of benefit fraud was widely applauded among the majority of the Green Party and two environmental MPs Kennedy Graham and David Clendon – renowned and repsected for their work and lobbying on climate change - resigned in protest of Turei remaining. Under considerable public backlash - especially from the more conservative Forest and Bird element - she finally did. Both environmental focussed MPs then asked to be reinstated - the only reaction from Greens executive was to drop both from the Party List.
Turei as co-leader was ex-McGillicuddy Serious Party and the Greens had been overtaken by a lot of flotsam driving a “social justice” rather than environmental agenda. Even Shaw’s position - despite his commitment to the environment – is seriously under threat.
The announcements today have nothing to do with environmental issues rather this extreme left "social justice" focus.
The way I'm seeing it is, the govt has a crisis coming, it has two choices, increase taxes or cut spending. Most likely they will tweak the tax system but still be forced to cut spending.
What a lot of fun it's going to be for a Labour party, housing bubble deflating, tax take falling, while you promised all you buddies a payout and spent, spent, spent.
Any asset tax will knock property values, more than the markets going to do on it's own.
Who can possibly even begin to accept a government policy that will demand knowledge and accountability of every asset that you own and who will then keep a ledger of it, on you in fact. Your bank account(s), your house, your car, your paintings, chattels, everything. For heavens sake this is a doomsday book scenario. The government will know all about every tax paying citizen. This proposal is both immoral and illegal surely. Not bloody likely I would expect all to agree. This is State sponsored intrusion and control of individuals and its a dangerous, very dangerous threat to our privacy and liberty. Big Brother is getting ready to pounce.
Fox. The greens wealth confiscation policy was not 'conceived in NZ'. It's all about class struggle. Engels believed inheritance of private property enabled family to be a tool for the maintenance of capitalism. It allowed Bourgeoisie families to remain wealthy and thus continue to rule over the proletariat and maintain class injustice.
No farms sell for GV plus or something related. Many farms have other than straight earning values, views close to town sea etc. Mine is influenced by subdivision, so similar land 10 miles away is a lot cheaper. My GV has no bearing on my earning potential but what my neighbour got for his 2 acres.
Yes it has always been obvious that the mechanisms in place to capture local body rates calculated on property value would be conveniently accessible. But the local councils have flogged that horse to death long ago. For example we are aware of a elderly retired couple with a new house, out of the EQ rebuild, paying more than twice the rates of the house next door of the same sized structure and land. Is that equitable? It’s nothing more than a home replacing their old home.
Wealth tax is fine, however their attempt at a UBI is a joke given it's not universal (you don't get it if you work full time)...great way to throw more money at students etc and be a bit more subtle.
It's the income tax hikes on top of the wealth tax that are absolutely beyond the pale. The auckland battler on 150k who owns their own home would be absolutely soaked - and that's not really what I'd call 'wealthy'. The Greens plan is a vicious assault on the middle class.
Jeremy Corbin would be proud of them .
Problem with wealth taxes is they have simply never worked .
Wealth is fluid , it gets spent , it gets given away , it gets lost or loses value , just as often as it increases .
And after you stop working and earning , you need it to supplement the Super , which is simply too little to survive on
I don't think they are talking about a general wealth tax, for that they would need capital controls and it would be a dogs breakfast. I think the idea is to capture a segment of the economy that has created substantial wealth, and yet has gone untaxed. Thats houses and land.
An example would be wealthy Americans living in Otago who pay little more than rates. Peter Thiel for instance and his 20 million dollar + house and land would get hit with a 2% property tax and I think he should, he drives on roads, needs a police force, hospitals, stable government etc..
You keep repeating "it is an asset tax" ( presumably because you like the idea or parts of it ).
It is not what their proposal says - anywhere. If I am wrong please point me to the part where it does , in any shape of form.
You are right when you say a wealth tax does not work without capital controls ... it does not imply either that they get it or are planning for something that does not.
Peter Thiel actually pays a goodly amount of tax here in the form of GST. Not sure I understand why a tourist with local assets should be taxed more than one without - the latter still needs and consumes public services you mentioned.
The gov't ruled out a capital gains tax and for a capital gains tax to work you need capital gain. Most of potential capitals gains have been wrung out of the system by Aussie bank lending.
Can you backup your statement that Peter Thiel pays a lot of gst? as much as I admire him i doubt he contributes much to the economy.
Even when he does not visit , he pays to maintain his property , he pays rates . All of those things include GST.
As to the first part of your response it just not on topic - I asked you where the Greens are talking about asset tax as opposed a general wealth tax , you
are talking about CGT and capital gains ...
Thats nonsense, he never pays enough rates to even build the road up to his house.
How the hell to you run a general wealth tax? It would be beyond bonkers, tax creates incentives and disincentives, the incentive of a wealth tax would be to live somewhere else.
When i was young we had very high taxes but lots of deductibles so we spent, way more than we do now. That's why rural towns were so vibrant.
Today they are shadows of their former selves as tax is syphoned off to the big centers.
I am assuming that the Greens have no idea what they are doing, but looking to gain votes. Have no understanding of how tax incentivises or creates disincentives to invest.
Confused now ..
"How the hell to you run a general wealth tax? It would be beyond bonkers" - indeed , totally agree.
"I am assuming that the Greens have no idea what they are doing, but looking to gain votes. Have no understanding of how tax incentivises or creates disincentives to invest." - again , agree completely .
So where did the "they must be talking about an asset tax" come from ???
I know but it's what they mean once someone explains the options.
It's important that we encourage the wealth creators, not the speculative borrowers or we end up with huge debts on unproductive assets and all escape routes are difficult if not impossible. That's where we are today, a business unfriendly environment, with money made buying each other's houses and very little in productive business, which gets taxed and regulated to oblivion
So when you say "asset tax" you actually mean "tax on townies houses" ?
interesting semantic contortions you forced yourself into ..
- Cannot have wealth tax as it need capital controls etc.
- Cannot have a land tax as it will catch your farm
- Solution: define assets as city houses , only ,may be with grand houses owned by overseas millionaires included - everyone hates them anyways.
Have you you considered ample opportunities for arbitrage / avoidance / evasion ?
If this was ever passed into law ( not that it will be .. ) I would stop working ( and paying income tax to the tune of 100K/year ) , move to a farm ( while having someone work it ) - or re-emigrate. What is the net benefit t o NZ in either scenario ?
No it should definitely be on farms. The advantage would be that land would reflect it's earning potential rather than a land banking operation. Lots of young farmers are shut out of ever owning land due to high asset prices relative to returns. Every farm a sold in the last year around here, has gone to corporate large scale farming operations, less and less people are owning more and more, and more and more people are owning less and less. Its creating inequality.
It's very hard to avoid an asset tax, if it's on the land register someone has to pay tax. I could always start a charity ;-)
I also think asset taxes would lead to a correction in values so I would lose money on my farm hopefully it would half its value. At 3 million I would be paying 30k plus 10k rates, if it goes down to 1.5m im paying 15k which it could do. Im happy for it it to drop below a million I don't want to sell it and the children will inherit the place. Valuation is meaningless except for rates.
If possible I think we should stop PAYE tax. The deductibility of interest mens many farmers with debt don't pay tax ,or very little.
So there would be no rates.
But you have calculated how much less rates you would be paying (" At 3 million I would be paying 30k plus 10k rates, if it goes down to 1.5m im paying 15k which it could do").
I know it is annoying to have to hold a thought - but please try.
Councils would have to tax either on fuel or by poll, preferably Gov't would remove roading from councils, they are inefficient, wasteful bureaucracies at the bet of times.
I am expecting some very tough times.
Why the agro, can you not debate without getting angry?
A little while ago a writer who went by the name of "Chalkie " exposed the sale of a large NZ business for something like $700m to Hong Kong interests. The purchase was funded by a loan of $700m from a subsidiary of the Hong Kong company, presumably secured by a mortgage over the NZ company. Result- net asset value held in NZ $00.00. I believe the funding for the purchase of the Crafer farms was arranged on similar lines.
https://www.tvnz.co.nz/one-news/new-zealand/invisible-man-national-mp-j…
Looks like Labour + NZ First is the lesser of two evils...who could vote for a party whose member won’t talk to the press for 2 years!!!
https://www.ato.gov.au/rates/individual-income-tax-rates/
The Aussies have got it right in regards to their income tax bracket allocation. I would pay the same tax as I currently do in Aussie but those on lower incomes would be better off. Add a land tax and we can get back to more important policy.
Is that meant to be offensive to the person who doesn't own land, or a gloat about owning it yourself? We've been told regularly on this site how much money people have made by owning land and how much they will make in the future. Given the financial benefits received which everyone says are fantastic and unbeatable, it would only therefore be fair for holders of that asset to pay more taxes - would it not?
I'm in favour of a land tax, but with lower income tax as an offset. Aim is to sponsor working vs debt specualtion. It will also force property assets to trade and commercially realistic prices (aka farms and land bank assets).
Higher tax, and asset tax together...political suicide.
Mate you are in total LALA land. If you tax a farms land holdings, who are already making barely 1-2% (on a good year) you'll drive them under. Farms are already trading at Earnings potential. The days of speculators are long gone. Reducing income tax on an effectively non profitable enterprise is a zero sum game. If you make no profit then reducing income tax doesn't have much impact. Adding a Land tax will put most farms into deficit. It's time people in NZ just got a good hard dose of reality and accepted that some people make money and some people lose money.. that's life
Not saying farmers dont work their slats off cos they do, but farm land is over inflated based on its profit making ability. Clearly some farmers are in debt in a way that only the bank makes money....why?
Is it any different to residential specuvestors. They farm debt as well, primarily for tax free future gain.
Or would they prefer the elected officials to design policy over the past decades that hasn't eroded their financial resilience by punishing savers and rewarding debt leveraging? Then they wouldn't need assistance, which further inflates assets prices, to cover unreasonable living costs we have??
Yes but if you warned people about the economic and social impacts of pumping asset bubbles with excess debt creating using ever lower interst rates post GFC - you got labelled a doom and gloom merchant. We now need to sleep in the bed we've made/reap what we sow. One result could well be 'have nots' voting for wealth taxes in large(r) numbers - which it appears the Green are trying to tap into. Fair play to them, I say (doesn't mean I'm a supporter or voter...but can see the marketing strategy they're using).
Only taxing property without a mortgage incentivises everyone to have a tiny mortgage on their property even if they don’t need one. Taxing the in mortgages equity in a property immediately hits first home buyers whist incentivising the wealthy to draw 100% on the mortgage (providing alternative security such as government bonds to the bank). Taxing all wealth is an auditing nightmare and incentivises the establishment of foreign domiciled trusts that own all you wealth over 1 million on your behalf (some already do this, but if you make the price difference between having your wealth in NZ and having it overseas too high it’ll become “standard practice”). Not sure this policy was thought through at all...
Hello Independent_Observer, is it not beneficial to encourage people to be responsible with their choices and money? Is it no accident that millionaires became millionaires due to choices in their life? If we keep giving money out, will it not have a couple, maybe more, unintended consequences 1) People will continue to expect handouts 2) Companies will charge more because they know families are getting a top up.
What do you think just happened to save the inflated NZ property market and NZ businesses? We just handed out billions of dollars to everyone. So to your point, 'if we keep giving money out, will it not have a couple, maybe more, unintended consequences? People will continue to expect handouts. Companies will change more because they now families are getting a top up.'
So want to think about what has just happened the last few months and is happening right now? The government is paying businesses to stay afloat, some of which could well be zombie companies, some of which pay not tax because they never make a profit. But they expect the government to pay their wages in hard times. Why are the rules different between businesses and individuals? Should we not then pay out monies to businesses during tough times per your argument?
But perhaps they then should pay more taxes so individuals don't need to? There are no free lunches, but everyone just got a free lunch in the tens of billions to prevent mass unemployment and asset price falls. This is why I'm not going to whinge like a Karen about these policies as somebody has to foot the bill - why not target the asset owners who have had free lunches for the last 20+ years while we drive interest rates to zero or the businesses that never make a profit, only losses, so they never pay income tax? Or the landlords who for years made 'losses' on their investment properties then offset them against their own income to avoid/minimise their tax bills - while the value of their house went through the roof - while we then have to pay accommodation supplements to those who now can't afford to pay their own homes?
Where do we draw the line as to what we can afford as a country, our leaders should have invested the money we gave them better and the country as a whole along with all the people the live here could all be taken care of, the old the young the sick and the poor, but for years it has all just been eroded
Where do we draw the line as to what we can afford as a country, our leaders should have invested the money we gave them better and the country as a whole along with all the people the live here could all be taken care of, the old the young the sick and the poor, but for years it has all just been eroded
This a policy for millenials? Very few of which will have net assets of $1 million or more and they'll be thinking, great less tax for me, more for the rich boomers who tell them to eat less smashed avocado. Sounds like a reasonably strategy if that is their target market.
I miss the linkage between a change in taxes and one having goals and ambition. Are people such losers that they would give up their personal goals and ambitions because of a tax change? It would make me question who really has ambition if that were true.
‘Oh the greens changed the rules, that’s it, I’m not going to do anything?’ Really? Sounds pretty weak to me and you’d be the type of person who would be likely to fail regardless of tax setting as you’d prefer to blame someone else for your own shortcomings. But that wouldn’t be you of course - you’d be proactive and take responsibility because you’re ambitious and that is to be admired right?
And what message/a are our current tax settings sending to our younger generations?
I’ll help you out....don’t bother working hard as you have to pay PAYE if you want an honest income. Leverage up on cheap bank debt and speculate on asset prices and create one of the largest property bubbles in modern history, risking the stability of our entire economy. Do this and it’s tax free capital gains and if you do it right, no income tax either as mortgage interest and other expenses are greater than income - annual losses!
Sure our current tax settings are so wonderful? We may look back in this period of time and shake our heads collective at how the short sightedness and greed cause a long period of stagflation and misery for many.
Or we could apply policy that will limit that type of risky behaviour, which it would appear the Greens are doing, but of course why would you want to do something as silly as limit asset price speculation as it might be sending the wrong message future generations. That’s right..did your boomer parents that own rental properties tell you that?
That's fine, you can't see the damage the landlording culture is doing to our society. Preying on other peoples wages in the form of rent is creepy in my view. Good for your parents - if they have more than $2 million net in assets then they've done well and shouldn't be afraid of paying some tax.
@independent -observer ........dont be daft . My kids are millennials , they are ambitious , keen to get ahead and aim to earn over $100k per annum .
Why would they WANT to be taxed into poverty under this ludicrous scheme ?
I would personally encourage them to migrate to Aussie if it ever happened
Ok the crux of the issue Boatman. Your children ‘want to get ahead’. Get ahead of what? Other New Zealanders?
That is what has been happening and people have been getting left behind - and as a result we end up with a party like the Greens coming out with policies like this.
You cause these outcomes because you and your children want to ‘get ahead’ of others in society and those others as a result need support. We have to work together not against each other for this to work. Otherwise we will have to continue to take from the rich to support the poor.
I’ve been on $100K+ wages for a significant period of time and paid a decent amount of PAYE over the years. I’m against speculation on capital assets as I can see the long term damage it is going to cause. But I care about those who haven’t done as well as me so I have no issue paying taxes if it makes their lives better. If we could encourage that mindset I think NZ would be a much nicer place to be - as opposed to this weird, passive, aggressive, fearful, self interested and self centred behaviours.
2I NDEPENDENT OBSERVER ........We dont want to get ahead of anybody , we just all want to get ahead in life , be successful and enjoy life .
Have a successful marriage , raise kids , own a home , travel a bit , enjoy sport , contribute to society , and make a difference
We live in a competitive world FFS .
And we Kiwis ARE competitive , why would we bother to support the All Blacks if we were not competitive
No problems with the higher tax rates.
So they are going to tax you on the money that you have saved after you have worked hard and payed tax on it? Not everybody is a slimy tax dodging ....... It seems totally un-principled. I think they should be doing something aimed more accurately at those who have been dodging tax for years.
-The property and land speculators.
-The tax dodging large overseas companies.
-Those who borrow on capital assets so that they can milk inflation.
-Those who can arrange their part of their life and income so that it accrues overseas (dodging NZ tax) while they and or their families incur costs in NZ when it suits them.
- Those overseas entities who own huge capital assets in NZ without contributing anything significant to the country.
etc, etc
I could end up voting National, possibly NZ First. You could never trust a Labor coalition with the Greens any where near it based on this. This could cost Labor the election. The choices are just ghastly.
@Laywoman......................dont worry this idiocy could just be the final nail in the coffin for these Green idiots .
Its a death wish for the party .
The basic mimimum income of $650 / week for a couple , is more than the super , and will make thousands simply stop working
At my age , give the two of us 650 a week ( tax free) , with no mortgage , no debt , and a new car ............and I will certainly stop working .
40 + years of working every day , I would happily retire early , enjoy my hobbies , play more golf , spend more time sailing , and more time socialising and travelling
It sort of makes sense but the big question is how assets are valued. The only one where it is easy is shares, the values are observable daily.
Two houses though with the same CV could be worth massively different amounts in reality - the CV is formulaic and can't really factor in improvements etc.
There would be a major incentive to undervalue assets for cash flow reasons, so the proposed tax could really only coexist with a CGT (offsetting the incentive to undervalue)...bringing us back to square one.
The Spanish Government with pretty much the support of the whole congress has just introduced a "Minimum Living Wage" which is pretty much the same as the Green Party is proposing here, probably more countries will follow, but as much as it will save a lot of pain during this crisis it is not fair to sell it as something similar to a Universal Basic Income as it lacks what really makes it effective, its universality. This will help and hopefully it is a step towards the UBI who knows.
LOL , give my wife and I, $325 .00 a week each and we will simply sell up my share in my practice in Auckland, sell our home and move to the South island pay cash for a home and STOP WORKING .
For us $650 a week in the bank every week is the same as earning $1,000 a week before tax .
I could spend more time on my yacht , playing golf and winning the Pub quizz at the local .
I might even write my memoirs
The two of us can live very well on that amount with no mortgage and no debt .
The whole policy is a joke
For what you say you have fulfilled most of your life objectives already, unfortunately most people have not and they will keep working to be able to get a house or a yacht, unfortunately $650 a week is barely enough to pay a rent, not even talking about raising a family. The idea is to keep people just above the poverty line, and preventive policies like this save massive amounts of taxpayers money in the long run which would otherwise go to reactive policies such as social services or police.
You're missing his point: if everyone who is comfortable enough to do this just retired early and had a much less stressful life and spent time with their family, there'd be no one to pay the tax to fund this. We are massively reliant on a small core group of taxpayers and this makes us even more reliant on them. If they lose interest in NZ or working for other people, then there's no one to pay the bills.
I see perfectly what you mean but this point makes no sense dice is supported but just gut feeling, furthermore if the Curren taxpayers are supporting too much weight already that’s a sign the tax system is flawed, specially when it comes taxing who can afford paying more.
This whole set of ideas has shades of Kiwibuild over it .
Delusional
Impractical
Unworkable
Pie-in- the -sky
Disconnected from any common sense
Detached from reality
Any wealth tax is firstly 100% dependent on having the cashflow to pay the tax
Secondly , you need to be able to assess the true value of the wealth ................imagine the arguments this could raise ?
Any Tax requires 4 basic principles .............the four principles of fairness, certainty, convenience and efficiency. Fairness, in that taxation should be compatible with taxpayers' conditions, including their ability to pay in line with personal and family needs..................and most importantly be administratively feasible
Man...this is going to be the most interesting election in a while. Mind you without binding referendum, or other legal binding of election promises, it is all just hot air.
Let's face it, NZF promised only 10000 immagrants a year and received a lot of votes on that basis. Numbers show NZF has dementia on that promise.
THIS TAX IS NEVER GOING TO SEE THE LIGHT OF DAY .
This requires a major shift in our entire tax system , and to think that a minor party with support of around 10% of voters will bring about a total seismic shift in our entire tax system .............. well its never going to fly .
The logic that the people posting here who think this idiotic policy has merit always fascinates me! That those who work hard, save, educate themselves, go without for long periods of time to achieve a future goal and usually with a bit of luck thrown into the mix end up with something of value by the time they retire should be taxed into the poor house so that half-wit politicians can decide how to spend your money is beyond stupid. When are you idiots going to realise their is no human utopia - we are a ultra competitive species and always will be. Others have already said it - life is all about choices!
If you actually studied human evolution then you'd be aware what gave our species a massive evolutionary advantage was being intelligent enough to work 'collectively'. I find the simplistic mental twisting of 'survival of the fittest' to justify the current societal construct amusing, especially as your whole premise is based on a misunderstanding of the actual concept you quote.
Sorry mate, I co-own a small business. Hence why I'd rather see business / workers promoted (lower business tax and PAYE) and speculation on assets discouraged (land tax, capital gains on property). Better luck next time with your assumptions, maybe do some more reading before misconstruing scientific concepts to fit your narrative next time.
Not only pompous but patronising too ! Read plenty about human evolution. Just because we can work collectively does not mean we choose to. Well done running your own business. I would also love to see lower business taxes, however this moronic policy from the Greens is not about making all Kiwis better off its purely an envy tax! Do you honestly want to work your arse off to pay a whole section of society to sit at home and do nothing because its far easier than getting a job? Good luck to you if you do!
Graeme Hart will be up for nearly $400m in additional tax. Do you think he is going to pay that or do you think he might choose to live somewhere else? Anybody seriously wealthy will probably leave and pay $0 tax. It will be the ones that have a nice house and some cash that will pay not the extremely rich
Yup, it is a tax that will fall disproportionately on the middle, who have footed the bill for everyone else in their working careers as part of a core group of net taxpayers, who are then expected to dip into their pockets for the rest of their lives for having a free-hold house.
Just checking that tis means that if someone drops from 37.5 hours a week to 30 or 35 hours a week they get $325 after tax (or 16,900 per year) on top of their salary? That works out to a measly $130 per hour after tax ($195/hr before tax) for those 2.5 hours dropped from “full time” (or $43.33 per hour after tax if you have to drop 7.5 hrs instead - equivalent to $65 /hr before tax). To not drop from full time to part time you would need a before tax salary of $126,750 (assuming the top tax rate is 33%. - with the new tax rates people on even higher salaries would be tempted to drop to part time).
I quite like this plan. Could I retire a bit early and get the $325 and my wife too? Also my young adult children? We could all have part time jobs as well.
Being of reasonably modest wealth if everything is split between my wife and I the tax would be a lot less than what my family would receive in total. I can't imagine the country could really afford it if someone like me would be better off. Unless I am calculating things wrong.
The unintended second order effects of this terrible policy would be a sight to behold - it will require at least 1 billion dollars/year in administration and compliance costs. It certainly makes a CGT on realised profits look palatable. The income tax proposals are IMHO equitable. I can see a lot of gold being purchased in the coming months...
It's a political suicide note. There is nothing Green about a wealth tax, its simply a socialist ideal.
The greens should have simply planted a few policies re green issues which folks would have been inclined to support.
Winston Peter's Xmas just came very early.
Why wouldn’t everyone making less than or equal to $65 an hour give up 7.5 hours of work a week drop to part time so as to gain $325 per week after tax (equivalent to $65 per hour before tax or $43.33/hr after tax). You would need to be making over $65 an hour before tax to be worse off dropping to part time hours!
Scary, but nevertheless latest poll had Labour on 50% & greens on 6%, looks like we are going to get the biggest tax overhaul in decades come September. To think otherwise is to just put your head in the sand. I imagine we will get a watered down version of the wealth tax with labour. 1 million will be increased to 1.5 per person etc.
One thing that frustrates me is how obstinate National is when it comes to tax. I mean realistically why can't we introduce a capital gains tax & use revenue from this to lower income & business tax rates. This will cool off the housing market & encourage people to put money into real businesses. Further with lower income rates peoples after tax income will be increase further increasing their capacity to buy a home.
The average 30 year old New-Zealand couple can no longer afford to both own a home (without a massive mortgage) & start a family. This dream is dead. It is pretty much pick one or the other. Further These people are not voting national, when they should be. National need to realise this & enable a policy platform that will win them back these middle class votes. This will require structural changes to NZ's tax system, accept it.
I share your frustration with National's lack of ambition when it comes to taxes, but I think you're over-egging the impact of a CGT in a property market with low interest rates and supply constraints. Now a stamp duty with a multiplier effect (0x FHB/Family home, 2x for a second home, 5x for a third home, etc), that's how you really stick it up'em.
I share James Shaws sentiments in regards to the impact on asset prices that Qe and other Monetary policy has, and will have, on asset prices. Govt fiscal spending will also find its way into asset prices.
My view is that the growing wealth inequality , over the last 40-50 yrs has its roots in the nature of our Global monetary system , with its inherent "financialization" of almost all assets. A debt based fiat monetary system that has resulted in a massive devaluation ( decline ) in the purchasing power of money.
Throw on top of that the deflationary forces of globalization , in regards to wages, and I can see why real incomes have been in decline.
Does the Green Party have the answer..??? Their solution is pretty basic... Take from Artha to give to Martha.
This takes us into a deep debate about equity/inequity, fairness/unfairness etc...etc.
In regards to first principles, it does not address what I see as the underlying causes/drivers of the rising wealth inequality.
What is the best way to share the "economic pie" more equitably, without too many distortionary higher order effects ( unintended consequences)...??
Ray Dalio has written a good piece here.: https://www.linkedin.com/pulse/why-how-capitalism-needs-reformed-parts-…
"The problem is that capitalists typically don’t know how to divide the pie well and socialists typically don’t know how to grow it well." ( dalio)
I think that I might just have to take a loan from one of my children to the value of $999,999 against my house. That way I have no assets, and they stay below the taxable threshold for the new "wealth tax"
Of course I would have to make a private loan to them, for the money to loan to me, but that would be untraceable and undocumented, so nobody would have any taxable assets. The Greens are going to make a fortune for the accountancy trade.......just wait till you see the loopholes start opening up.
Any person who is very rich, will already have moved their money and asset control to another tax constituency, so only those of us suckers not able to afford to move our money overseas will pay the cost.
This article has to be the most commented on interest.co.nz article in terms of time since posting since the last election results.... and I’ll add my opinion onto the pile. It feels impossible to implement - balance sheet based taxation! Plus it will cause capital flight as others have mentioned which results in less investment in New Zealand. The unintended consequences will be worse than any gains if implemented. But ultimately it won’t be implemented because Labor wouldn’t do CGT as it was such a lightening rod - no way this passes the sniff test in a coalition negotiation. Political suicide.
Well firstly, lets be honest.. there is zero chance of this happening so they can pretty much propose anything.. but NZ First against it and Labour know its political suicide so just wont happen.
That said... WTF are the greens thinking.... they continually just signal they are a party with no clear understanding of its roots or where it stands on the political spectrum.
There is just no oxygen for a party to be left of Labour.... and NZ First is seen as the party to hold them centrist. Greens would be much better served proposing sensible, sustainable and well considered environmental policy and thats all... its abundantly clear they have no understanding of economics at all and do themselves a disservice with this sort of 'thought'.
Honestly, the Greens thoughts on economics and taxation have absolutely no bearing on what policy will look like after the election ... so why do they bother?
Question (just thinking aloud and would appreciate comments): If this wealth tax comes in, then Mr and Mrs Jones who have a family trust with assets over 2million...well, could they not then just sell there properties (for a dollar) to the multiple adult beneficiaries, effectively advancing the said beneficiaries of their inheritance, and reducing the assets so that noone gets hit with that wealth tax.
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