'A Labour/Greens Government would introduce a Wealth Tax'

National leader Judith Collins claims Labour would get around its promise of no Capital Gains Tax by doing a Wealth Tax instead

8th Oct 20, 12:14pm by David Hargreaves

National Party leader Judith Collins is claiming a Labour/Greens coalition Government would get around Labour's promise not to do a Capital Gains Tax by introducing a Wealth Tax instead.

The Greens have previously outlined plans for a Wealth tax, and Collins on Thursday seized on a Newstalk ZB interview Green leader James Shaw had with Mike Hosking in which Shaw reportedly said because Jacinda Ardern had ruled out a CGT, the Greens had come up with the Wealth Tax proposal.

"It’s clear a Labour/Greens Government would implement a radical Wealth Tax," Collins said, saying the Greens' Wealth Tax "was specifically designed to circumvent [Labour's] promise not to introduce a Capital Gains Tax".

"Both Jacinda Ardern and [Finance Minister] Grant Robertson have admitted to personally favouring a Capital Gains Tax. A Wealth Tax will serve the same purpose without breaking Jacinda Ardern’s promise to New Zealanders,” Collins said.

“This will strike fear in all New Zealanders who are working hard to create a better life for themselves and their family.

“Hard working New Zealanders already have to pay income tax, company tax and GST. Taxing the assets they invest their income in – whether it be a new business, retirement savings or a house – would amount to double taxation and a raid on New Zealanders’ nest eggs including their KiwiSaver.”

National's Finance spokesperson Paul Goldsmith said he believed a Wealth Tax would be "unworkable in practice, as those who have built up a nest egg are often asset rich but cash poor".

"A retiree in Auckland with the recommended savings at retirement, and a mortgage free house at the median value, would pay more than $7000 per year under this new tax," he said.

“Taxing those who get ahead will also encourage our best and brightest to take their skills and capital offshore to places where entrepreneurship and success are encouraged.

“Put plainly, a Wealth Tax will make New Zealand a much poorer society."

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

193 Comments

by GV 27 | 8th Oct 20, 12:21pm 1602112862

We're what, a week into advance voting, and National are finally tapping the correct keg. They're right, but they've left this too late.

by powerdownkiwi | 8th Oct 20, 2:19pm 1602119969

It's stupidity, stupidly repeated.

Wealth is the ability to access real stuff; processed parts of the planet, delivered to you by the doing of work, which takes energy. Period.

Money is proxy; an assumption that said parts will be future-available. We are at the global juncture where those bets are increasingly off. So tax - which was a precentage-cream of a resource/energy flow, allowing public work to be done with the energy/resources.

The screamer/bleaters will all be those who hold bets or want to hold bets, complaining that a percentage of the bets are to be taken away from them.

They don't seem to know the half of it. That's the least of their worries. The debt-issuing system collapsing is what they should be contemplating. And what wealth will be, post-event.

by rastus1 | 8th Oct 20, 12:28pm 1602113314

Well with asset prices exploding what else might one expect? We cannot simply sit and watch as the the chosen grow wealthier and wealthier off the backs of others. Something has to be done or we will see a wave of social unrest. Has Judith an alternative?

by MadMax | 8th Oct 20, 12:57pm 1602115033

They’re not the chosen - they’re the go-getters.
It’s off their own bat, the losers and bludgers want to tax the go-getters because they’re too lazy and useless to educate themselves and work hard and smart
Bit of a generalisation, but broadly speaking it’s the brutal reality

by al123 | 8th Oct 20, 1:04pm 1602115484

Some of them might be. But most of them probably had a very ordinary path to that wealth - get an ordinary job (teaching for example), buy house, contribute to pension scheme, keep doing ordinary job moderately well for 40-odd years, retire. I have plenty of older relatives like this, and there is nothing particularly 'go-getter' about them - they just happened to have been born at a time when following this script ends up fairly easily with you being a multi-millionaire (at least in some parts of the country).

by MadMax | 8th Oct 20, 1:22pm 1602116523

Well compared with the losers blowing their weekly income on ‘essentials’ like $5 lattes, Netflix, iPhones, labelled clothing, car finance, credit card finance etc. they look like Warren Buffet

by Plutocracy | 8th Oct 20, 1:31pm 1602117118

You'll be reassured to know that millennial's save at a higher rate compared to older generations then.

by al123 | 8th Oct 20, 1:38pm 1602117517

Sure, if you compare the ordinary sensible people from one generation with the worst extreme of a younger one, the sensible people will look like good. But it's not clear what your point is - if you're trying to argue that the reason younger people are having problems building wealth is because they're spendthrifts, it's a myth that millennials are somehow more profligate than their predecessors. In fact their savings rates are higher than both gen x and boomers were at the same age.

by MadMax | 8th Oct 20, 1:45pm 1602117920

Yep, very good points

by youngdumbandbroke | 8th Oct 20, 1:56pm 1602118568

The proof being that so many boomers have nothing to show for their working life and hence rely on the pension

by Comyn | 8th Oct 20, 2:32pm 1602120750

Really? Where can you get the data on that statement? Is that from having a chat with chums? Or you have access to savings accounts spanning the last 70 plus years?

by Plutocracy | 8th Oct 20, 3:55pm 1602125745

https://www.treasury.govt.nz/publications/research-and-commentary/rangi…

Here's NZ data from 2016. There's been studies globally finding the same, but I'll let you dig those up if you feel the need.

Contrary to popular opinion, successive generations of households appear to be saving at significantly higher rates than earlier generations did at the same age.

by company of heroes | 8th Oct 20, 2:33pm 1602120836

Those you called "losers" keep this economy running, without them most of people will have no job to work and no food on the table. You wont be able to sell your house at higher price. Why would people save money these days? There is barely any return from savings in bank.

by frazz | 8th Oct 20, 2:59pm 1602122373

Always get in first on a Ponzi Scheme...thats what your winners did Madmax...didnt take any smarts or go getting on their behalf?

by imhenry | 9th Oct 20, 7:40am 1602182458

How ho! Hum

by Independent_Observer | 8th Oct 20, 1:11pm 1602115892

Its funny how its the losers and bludgers (renters) who pay the go-getters (property investors) incomes/mortgages eh? How bizarre.

It almost makes you think the go-getters are the losers and bludgers while the losers and the bludgers are the go-getters who actually earn an income from the productive economy. Odd world we live in.

Bit of a generalisation, but broadly speaking it’s the brutal reality

by sadr001 | 9th Oct 20, 10:57pm 1602237477

If property is a sure way to success then why not simply buy some? I'm in my 20s and I regularly see property being sold for about 2x median individual income ( Scene 2 apartments are beautiful and cheap ). In cities like Christchurch you can buy houses within 30 mins of the cbd for about 3 or 4 times the median household income, surely even if you are yourself a tenant somewhere else, if you think property is a sure way to wealth you would buy some and be a landlord at the same time?

by Lanthanide | 8th Oct 20, 1:11pm 1602115916

Yeah, good at choosing their parents, their upbringing, their health and innate abilities.

by MadMax | 8th Oct 20, 1:28pm 1602116938

Those are terrific excuses!!
You must have worked really to have honed them all down to just four.
Some losers have a lot more excuses, so you’re doing a lot better than them.
Keep working on them

by Plutocracy | 8th Oct 20, 1:36pm 1602117401

Do you think any those things mentioned can play a part in determining one's success? Think carefully about it, your response gives valuable insight into your own intelligence and will prewarn me if I'm dealing with an idiot.

by MadMax | 8th Oct 20, 1:41pm 1602117662

Yes, of course they absolutely do
None of them should prevent someone from striving and achieving their goals
Energy is better spent figuring out how to achieve their goals, than whining about why they can’t

by Plutocracy | 8th Oct 20, 3:33pm 1602124432

Thank god! (metaphorically speaking only)

I'm glad you agree they can have an impact on future success. No, they're not the sole determinants of success but when people do start off with significant disadvantage it can be hard to get ahead. This should at least be in part acknowledged in any discussion.

In addition, I don't think the people 'whining' are the same group of people that you seem to elude to. Most of the people complaining are the ones who have done everything right; studied / become qualified, started working, saved hard etc. However, despite following the supposed 'rules of society' they still can't get ahead due to rampant asset appreciation and rent creep. In my opinion their outrage is justified, as success in New Zealand is moving further from individual merit and more towards having inherited wealth.

If you truly cared about promoting individual success based on merit then you should be opposed to the current system and asset speculation. If you aren't then you're just another hypocrite.

by Beanie | 8th Oct 20, 2:56pm 1602122186

Just go to just about any property auction and you will see inherited wealth (ie a young couple with the bank of mum & dad alongside) outbidding individual merit (the young couple doing it on their own).

by rastus1 | 8th Oct 20, 1:12pm 1602115926

..rubbish. Leveraging up to buy a rental is not what I'd call go- getters. The system is now so corrupted that it is in fact the go getters that are being shafted. There are plenty of 30ish yr olds who have got themselves through uni, worked there butts off since graduation, bright educated and go getters.. but are left in the dust as the system enables the ponzi to explode even higher. This madness is driving NZ into a spiraling decline that will effect us all in the end. Take you blinkers off.

by MadMax | 8th Oct 20, 1:23pm 1602116629

Also known as risk vs reward education... :)

by Independent_Observer | 8th Oct 20, 1:34pm 1602117262

I would argue its the complete opposite.

by MadMax | 8th Oct 20, 1:37pm 1602117450

Of course you would :)
Best of luck to you

by Independent_Observer | 8th Oct 20, 2:03pm 1602119001

Well the risk free rate is near zero so there can't be much risk at all in the system. Not sure why central banks world over shat their pants earlier this year if there is no risk - either that or economic theory is now a falsehood and we're all being completely mislead by the most powerful of economic forces (the central bank).

by karl seastrand | 9th Oct 20, 12:10pm 1602198607

Just check out the Australasian banking stocks YTD as an indicator of risk

by Plutocracy | 8th Oct 20, 1:36pm 1602117370

Speculators are being artificially backed by the NZ government and the RBNZ though. Where's the risk? They're being coddled.

by karl seastrand | 9th Oct 20, 12:12pm 1602198766

like the 36 handicapper proudly holding the winners trophy aloft for all to see.

by frazz | 8th Oct 20, 3:01pm 1602122498

Max..did you have a degree, and by the off chance you do did you takeout a student loan?

by loveyourwork | 8th Oct 20, 1:28pm 1602116918

Indeed! I'm 25 and still holding on to my go-getter ambitions of starting a few businesses however it's deflating when those who subscribe to the ponzi seem to be "making" more than you would turn in a successful business - from doing next to nothing!

by MadMax | 8th Oct 20, 1:36pm 1602117386

Good on you, it’s def not easy
There are a lot of experienced and validated mentors that can help and support you for free in your endeavours
Countless books and videos as well to help you along on your journey, ignore the lazy masses
The rewards are well worth the struggle
Best of luck to you

by MadMax | 8th Oct 20, 1:43pm 1602117782

You’re much younger than Ray Kroc and Colonel Sanders

by Sluggy | 8th Oct 20, 3:24pm 1602123891

It is hard work, the whole property market is stacked against you, but it is possible. At least you will actually earn the money you make.

by Brock Landers | 8th Oct 20, 6:48pm 1602136110

He will be taxed on the money he makes. The rest will go to his landlord.

by mealsonmeals | 8th Oct 20, 9:12pm 1602144778

And MadMax the "go-getter"

by Sluggy | 9th Oct 20, 9:14am 1602188070

Whatever mate. I dont see property as any kind of holy grail, it is currently the lazy mans path to great BBQ stories and self flagellation.

by J.C. | 8th Oct 20, 1:47pm 1602118063

It’s off their own bat, the losers and bludgers want to tax the go-getters because they’re too lazy and useless to educate themselves and work hard and smart

This is what Mike Hosking reckons. For many NZers, Mike's words are salient.

by linklater01 | 8th Oct 20, 2:24pm 1602120277

MadMax,

Judging from this and other posts, you would have made a great Victorian mill owner. In case you are wondering, that is Not a compliment, but a character assessment. The rich are so because they deserve it and the poor are there to serve them-that's just how god wanted it.
I am one of life's winners-retired at 57 and now at 75, better off than ever, thanks to soaring property and stockmarkets, but I am well aware of just how lucky I have been. I had loving parents, I was well fed and received a good and private Scottish education. My old school tie helped open doors. I have enjoyed good health. many are not so fortunate as I know from my work at the local Foodbank.
I am sorry for you-you lack any empathy or insight into those less fortunate.

by J.C. | 8th Oct 20, 3:18pm 1602123527

Judging from this and other posts, you would have made a great Victorian mill owner.

Or an internet troll. You should never take this stuff too seriously.

by karl seastrand | 9th Oct 20, 12:19pm 1602199186

nice accurate post... except the claim to being well educated and well fed...in Scotland.

by Cheetahlegs66 | 8th Oct 20, 3:21pm 1602123673

Thanks. We got ahead by sacrifice, old cars (2002 and 2004), buying 2nd hand clothes and having the odd takeaway. The priority was save, save ,save. My work colleagues laugh at me, despite having similar incomes I am the individual who is freehold and has set myself up for an early retirement (Pre-56 in 2022). I could have gone to disney, bought nice cell phones. Hell I could drive a nice Audi (new even!) but the driver was being able to retire early. Now some jealous idealists want to take my money :-(. Over the last 30 years of work life I calculated that my equivalent imaginary twin could have easily spent another $15k/yr by dinners, nice clothes, car and travel. I elected to save and invest. Getting ahead takes hard work, second jobs but that is just too much to ask these days. Every dam deadbeat feel entitled to state housing and money for nothing. Yes, there is a lot of hate here but the Greens can slime off and die.

by J.C. | 8th Oct 20, 4:11pm 1602126668

We got ahead by......

OK. Nice work. The last 30 years have been great for building nest eggs even without oppressive debt. But let's think about now. There are people 10 yo, in their teens, and those in their 20s. Extrapolating your efforts as a blueprint for the future only has just a little relevance to them.

by Brock Landers | 8th Oct 20, 6:52pm 1602136333

The vast majority of your "wealth" has been derived from central bank money printing.

by dcnbwz | 9th Oct 20, 5:33am 1602174781

"Bit of a generalisation" - no, your entire statement is an absolute generalisation. Straight out of the National Boomer playbook.

by philip east | 9th Oct 20, 8:25am 1602185125

The go getters who accumulate wealth via inflation , the bottom line here is that NZ needs infrastructure and those who earn very little can not fund everything .
Lets be thankful for all that easy money but also be responsible and give a little back , its no big deal we will still be loaded .

by hemihua | 9th Oct 20, 10:55am 1602194123

Really? Did the go-getters 'go get' the RBNZ to lower the OCR? Did they 'go get' the RBNZ to begin the LSAP programme? Did they 'go get' the RBNZ to drop LVR restrictions? You're kidding yourself if you think asset price increases have been 'earned'.

by DaveB1978 | 8th Oct 20, 4:10pm 1602126615

The problem comes when you tax paper wealth. The value of a house can go up and down. People can be forced to sell assets to pay the tax. It could force people to lose control of companies they control due to having to sell shares to pay the tax. This could be a problem for startup companies that are loss making in the early years but be become valuable over time. Think Xero (Massive increase in market cap but losing large sums of money). It would really suck if the business you had been building without getting much income from suddenly meant you had to sell part of to pay Wealth tax and then was destroyed by shareholder disputes.

by karl seastrand | 9th Oct 20, 12:24pm 1602199457

Obv tax would be deducted from your estate or upon sale of the asset.

by Due Diligence | 8th Oct 20, 12:43pm 1602114195

Would be terrible for the country. I doubt they'll try it. Scary thought though, and highlighting the possibility will win National some votes. Judith should've been making a bigger deal about this weeks ago.

The Europeans have been abandoning their wealth tax experiments for good reason. Even the Tax Working Group said a wealth tax would be unworkable. One of a hundred reasons they are unjust is the fundamental disconnect between requirement to pay and ability to pay - taxing income that doesn't exist.

by Carlos67 | 8th Oct 20, 12:39pm 1602113956

Still not to late, its the reason you do not vote until the 17th October. Sure labour have it in the bag but this is not going to help them. There is no way I would vote for any party that takes away $7K of my hard earned savings that I have already paid tax on. Any party that also proposes a CGT also gets the one finger salute, I worked my ass off paying down the mortgage doing some shit jobs and was prepared to take the risk.

by mfd | 8th Oct 20, 12:45pm 1602114333

The Green's proposal includes the ability to defer taxes until assets are sold, so you can think of it as an inheritance tax if you prefer.

Personally, I'd much prefer to see a land tax or a proper inheritance tax, but it's better than nothing, and I think a more equal society is something that benefits everyone (speaking as someone likely to be paying more tax as a result)

by GV 27 | 8th Oct 20, 1:01pm 1602115273

Deferring taxes until after death is a cop-out for a poorly designed tax. Of course, govts could just spend less and not require taxes that are so aggressive they need to be collected from beyond the grave, but that's too hard, apparently. You're kidding yourself if you think this will result in anything other than bigger government departments that achieve even less and spend more money trying to avoid being held accountable for it.

by mfd | 8th Oct 20, 1:15pm 1602116133

I disagree with your premise. I'd prefer the government to go after my money after I'm dead than when I'm alive - I won't need the money anymore. A system where inheritances are untaxed not only attacks equality of outcome, but also equality of opportunity. How can a country be fair when a section of the population becomes wealthy purely through the efforts of their parents?

by GV 27 | 8th Oct 20, 1:21pm 1602116492

Outcomes shouldn't be equal. Opportunity should be. What incentive does a government have to manage spending or design sensible tax policy if it can just tell people to defer them until after they're all dead and buried? None. How can a country be fair when the government which has already proven its nonchalance towards actually being accountable to the electorate is given a blank cheque underwritten by income it has already taxed once? Bad luck for people who need those inheritances to pay down 30 mortgages, but great for politicians who campaigned on reform but then looked the other way once they were getting the ministerial salaries. It's how it has always worked, but suddenly, once we just agree to be taxed in death, it's going to be different somehow? Pull the other one.

by mfd | 8th Oct 20, 1:27pm 1602116836

How can opportunity be equal when two young people can be identical other than one receiving a million dollar inheritance? There is no level playing field when some can live off trust funds or buy a house outright using their parents money.

Sure, bad luck for those who wanted to pay down their mortgages with their inheritance. Even with a 100% inheritance tax, their luck only reverts to that of the family down the road with no inheritance to look forward to. Anything lower than 100%, and they retain their advantage, as well as all the less obvious advantages of being born into a wealthy family.

by GV 27 | 8th Oct 20, 1:35pm 1602117336

Because everyone should get a warm healthy home, with parents who can afford to spend time with them and be educated in well-resourced schools in safe communities. That's it. Rather than address the issues causing $1m houses directly, your default is to jump to any amount of additional tax and justify it on the basis of 'equality of outcome'. That's perverse. I would love to see house prices at a sane level. But I'm not going to use that as a smokescreen for ongoing and politically-motivated taxation. At some point you're going beyond solving the problems that have lead to the current situation and using the circumstances to advance a different agenda.

by mfd | 8th Oct 20, 1:56pm 1602118585

I did not justify it based on equality of outcome. I explicitly state that I am talking about equality of opportunity. You'll note in my first post I also talk about land tax, which would be one of my preferred ways to reduce house prices - I do not disagree with you that lower house prices would be a benefit, that simply wasn't the focus of my comments.

Yes, I do have an agenda here - I am arguing for a taxation system that targets things which are harmful to society (inheritance, excessive or unproductive land ownership/land banking) in preference to the current system which primarily taxes income and thus is a disincentive to actual productive work

by Independent_Observer | 8th Oct 20, 1:31pm 1602117093

Could all NZer's have the opportunity to be born in the 1945-1970 period then please GV27? If not, oh well good luck to you as our monetary policies are designed to work against you, not for you.

by GV 27 | 8th Oct 20, 1:38pm 1602117523

I'm well aware of that. I'm not naive enough think lazy and incompetent governments are suddenly going to become competent and able to execute rational policy if we give them the power to repeatedly tax us after we're dead. I'd much rather solve the problem in my own lifetime so my children (and ideally myself) can escape 30 year mortgages on million-dollar four-bedroom family homes. If you're OK with governments creating problems and then handing you the bill to maybe possibly fix the problem, then you do you. Just don't expect me to pay for it.

by Independent_Observer | 8th Oct 20, 1:58pm 1602118715

I don't think either side is any better than the other. National said they would fix the housing affordability problem then decided that they would exploit it for political points by supporting price rises and celebrating it as a success. So should we blame John Key then and now Labour are trying fix economic policies that were too favourable to a free market model and created a distortion? So people would then be paying for a National created problem which you could now be paying for. I don't see it that way - I just see it as a broken economic ideology (neoliberalism). My preference was a comprehensive capital gains tax - especially for multiple property owners. But given that is unpalatable, lets tax the shit our of property investors with a wealth tax to try and fix the problem.

by GV 27 | 8th Oct 20, 2:39pm 1602121163

Your wealth taxes and CGTs capture everyone, Kiwisaver, freehold owner occupiers who have never had an investment property in their life - businesses... everyone. It's a 200 megaton bomb going after a blowfly - the parties who are pushing aren't actually interested in fixing house prices, as evidenced in the last three years. Pursuing a wealth tax fits in with other ideals, but associating it with housing makes it more palatable. As for a 'National-created' problem - house prices rose faster under Labour 2000 - 20008 than they did up to 2015, and they're racing off again under this government. Adding more tax to the mix won't solve a problem that governments don't actually want to solve, it will just make everyone poorer.

What we need is a surgical strike - stamp duties that scale with interest or value of properties held, discounted for FHBs/Owner-occupiers or for investors who buy off the plans to stimulate development. Even the dissenting TWG said a longer brightline would achieve basically the same outcomes as a CGT once you addressed supply issues, without the huge administrative burden. We can do this if we actually want to solve the problem we have, but we won't get anything done if it's just being used as a smokescreen to implement a wealth tax to further a different agenda.

by Independent_Observer | 8th Oct 20, 3:02pm 1602122537

Which political party is providing what you ask for at the election?

by DaveB1978 | 8th Oct 20, 4:15pm 1602126914

So yet again they put the boot into the slightly wealthy. You own a couple of rental properties and then have some tough times that force you to sell and you have to pay tax. You own 100 properties and use the capital gains to buy 100 more and you don’t have to pay. This doesn’t seem fair at all.

by dcnbwz | 9th Oct 20, 5:34am 1602174847

Great to see you advocating for a capital gains tax

by Basil brush | 8th Oct 20, 2:18pm 1602119925

What 'risk' did you take in purchasing a house?

by karl seastrand | 9th Oct 20, 12:56pm 1602201407

Carlos67...People born in or around 1967 (like me, and you I guess) have, mainly by luck, unfairly benefitted more than anyone by having their own property portfolios, often as well as a huge unearned bonus from their boomer parents property profits( either already or coming soon). Can't you just be happy to have earned(LOL) so much that you can give a little back to others unlucky not to be born when we were without feeling it is unfair? I can.

by Independent_Observer | 8th Oct 20, 12:46pm 1602114385

I think that Judith is right on the point that Labour will likely form a coalition with the Greens and then will implement a wealth tax (not specifically a capital gains tax).

So I disagree with you that 'I doubt they'll try it'.

by Due Diligence | 8th Oct 20, 12:50pm 1602114628

It would be political suicide

by Independent_Observer | 8th Oct 20, 12:57pm 1602115044

It looks like doing nothing is going to be economic suicide which generally results in some form of revolt/political reform. Not sure which way you prefer.

by Foxglove. | 8th Oct 20, 1:51pm 1602118260

More threatening though are the potential mechanics. Who exactly compiles, stores and maintains the data on the people so as to assess, collect and audit the tax payable. It would have to embrace all New Zealanders, to target only a perceived range or sector would be a breach of civil rights. That means the government will have an agency to keep a dossier on all of us and along with that have right of entry to check annually the status, fate and whereabouts of each persons assets. This is a concept of Orwellian dire proportions. A threat to civil liberty and it is not welcome anymore than any balanced coherent political party would propose it in the first instance.

by al123 | 8th Oct 20, 2:01pm 1602118877

An agency that has a dossier on all of us and the right to check annually on your finances? We already have an agency like that - the IRD.

by Foxglove. | 8th Oct 20, 2:19pm 1602119974

No way. Not the fixed assets of an individual. The IRD knows what I earn not what I own.

by al123 | 8th Oct 20, 2:32pm 1602120779

And the first is totally fine, but the second is an Orwellian nightmare?
And if what you own makes any kind of income, then it is highly likely the IRD knows about it.

by Foxglove. | 8th Oct 20, 3:43pm 1602125037

Income tax has been around since Ben Franklin complained about it. But if you are talking about a government compiling and maintaining a record of all of its citizens assets then that is Doomsday Book criteria. As far as I can recall the last “regime” that implemented that doctrine in the Western world at least, was Nazi Germany.

by lowercase capitalist | 8th Oct 20, 2:42pm 1602121329

The IRD knows how much I transfer in and out of my brokerage accounts, It knows how much I paid for my house, it knows how much my mortgage is. They can get access to my credit card records. Its not difficult for them to work out what I own.

by Foxglove. | 8th Oct 20, 3:24pm 1602123850

We have just had an elderly relative go into government hospital care. The first question asked was did that identity own a house. Why not simply ask IRD then if they know the owner’s identity of every property in the country. Just a simple computer data base cross check would cough that up surely.

by al123 | 8th Oct 20, 3:44pm 1602125068

Because there are rules about information sharing across government departments? Giving different branches of government the ability to share any information they have about you with any other branch of government without your consent would be pretty Orwellian.

by Foxglove. | 8th Oct 20, 4:34pm 1602128095

You mean to say immigration nabbing students in loan arrears at the border didn’t get the info from IRD. Governments of either cloth, have in fact organised, in the name of both accuracy and efficiency, enhanced information sharing between government departments and they have made no secret about it. This is why the Official Secrets Act was introduced as both a safeguard and a necessity re information confidentiality, now replaced by the Official Information Act. It defines and/or protects confidentiality of government data going outside of that orbit, not within it.

by wee willy winkie | 8th Oct 20, 9:06pm 1602144395

We have assets in a trust for a mentally disabled child, who will likely survive us by about thirty years. I would not like to think that that fund would be taxed over and above its present income tax obligations.

by Theoracle | 8th Oct 20, 6:27pm 1602134867

Ah yes but on what planet does any party come out ahead of the election with their honest coalition preferences?

by Foxglove. | 8th Oct 20, 6:59pm 1602136792

Well to be fair the Clark/Cullen government admitted and campaigned on hiking up taxes. 39% on over $60k if I remember rightly. But the story was It was all Jim Anderton’s policy and they had no choice but to play ball, that’s how coalitions work don’t you know. This is a replay but this lot now though are not even that transparent. Wait until after the election and let the cat out when nobody can do anything about it. Judith Collins has been both slow and remiss. She should have sought a irrevocable assurance from the PM during the debates that the tax policy announced by Grant Robertson would not be compromised by the demands of the Greens. Very disappointing, she should be sharper and quicker than that.

by Lanthanide | 8th Oct 20, 1:14pm 1602116088

Grant Robertson has already said the only tax increase they're going to pass is the one Labour is campaigning on.

by Foxglove. | 8th Oct 20, 1:25pm 1602116712

Well Grant Robertson then needs to come out now and unequivocally re-state that undertaking. That is Labour will not renege on that regardless of what any junior coalition partner demands. If that is true then it is easily said and it takes all the wind out of the argument. But if Robertson fails to do so, then this column is obviously offering the potential truth of the matter.

by karl seastrand | 9th Oct 20, 1:01pm 1602201707

How do you know when a politician is lying?
His lips are moving.

by stuart786786 | 8th Oct 20, 2:01pm 1602118905

If quoting and following Ttax Working Group, why not follow them for CGT and why do cherry picking.

Not wealth tax but CGT is just and must. If have to pay tax on deposit investment why not tax on property investment. When a person earn $500 a week has to pay tax but speculators with millions get away free. Unfortunately people in charge of advising and framing policy are deep in property investment / speculation so hard for them to do something against their interest.

It is just like asking a criminal to frame law against crime.

by Due Diligence | 8th Oct 20, 2:46pm 1602121605

CGT is just income tax. Fundamentally different and a logical argument can be made for it with appropriate rollover allowances, unlike asset taxes (wealth tax/LVT).

by lowercase capitalist | 8th Oct 20, 2:49pm 1602121781

> The Tax Working Group did not recommend CGT or a Land Tax. People can make all sorts of excuses as to why, but the fact remains they did not.

https://taxworkinggroup.govt.nz/sites/default/files/2019-03/twg-final-r…

From page 15, Summary of recommendations:

The majority of the Group recommends a broad
extension of the taxation of capital gains.
Recommends including gains and most losses
from all types of land and improvements
(except the family home), shares, intangible
property and business assets.

The working group absolutely did recommend a CGT.

by Due Diligence | 8th Oct 20, 5:47pm 1602132442

I was actually thinking of the family home, but this isn’t a fair criticism because their terms of reference excluded it. I don’t support CGT, but at least a logical argument can be made for it.

by Theoracle | 8th Oct 20, 6:29pm 1602134979

This is true. The government department I worked for all avid red supporters also contained a massive number of multiple property property investors. They just kept it very quiet around voting time.

by iconoclast | 8th Oct 20, 12:48pm 1602114539

As always, a smorgasboard of words of what-if's and maybes, and could-be's
What about finding out how much tax has been gathered from the bright-line tax system, how many properties have been caught up in the bright-line tax-bucket. The 5 year bright-line system is a proscribed CGT. Maybe it's working. Who knows. Guess we'll never know

If they can't administer the Bright-Line-Tax system, what chance of running a wealth tax.

by Advisor | 8th Oct 20, 12:42pm 1602114175

Also Judith Collins on taxes: "Let's try to be more like Taiwan, without adopting a 40% top tax rate on high-earners and a capital gains tax on land and building".

Hard working New Zealanders already have to pay income tax, company tax and GST. Taxing the assets they invest their income in
Of course. Hard work is undoubtedly what comes to mind when we see the wealthiest 6% in NZ. That's why the party favours taxing fruits of labour but exempts windfall gains on speculative bets.

I haven't researched much into wealth tax but a party that says removing FBB and reducing bright-line test to 2 years should make the housing market more affordable has lost all credibility in my mind.

by Independent_Observer | 8th Oct 20, 12:36pm 1602113799

More like speculating on asset prices using cheap debt....

by Squishy | 8th Oct 20, 12:42pm 1602114171

Judith isn't trying to win an election, she knows that is a pipe dream, but she is trying to fall into favour with Nationals traditional supporters to extend her own grasp on power. Why else would you appeal to farmers in a country that's very heavily urbanised? It would be shooting yourself in the foot.

by Advisor | 8th Oct 20, 12:55pm 1602114904

I agree. She may not be outright denying climate change but sure seems to be opposing the action against it.

I have to give this one to Labour as well- I was in Seattle last summer and saw NZ-made products flying off the shelves at their high-end specialty stores driven by our clean-and-green image. We can't compete with developing countries in the bulk commodity business for long.

Smaller countries such as Israel and Netherland championing green tech R&D are raking in a lot of cash by providing advice on efficient water use, vertical farming and flood management to the world.

by stuart786786 | 8th Oct 20, 2:05pm 1602119108

Of course. Hard work is undoubtedly paying tax (people working in super market, offices, farms...) but it people HARDLY working NOT paying tax.

by Independent_Observer | 8th Oct 20, 12:35pm 1602113754

Tax away I say. And if people don't like it they can leave - and that would be great because it will kill two birds with one stone....generate much needed tax income to pay down the debt just generated to bail out those with too much debt (how odd..?) while reducing the demand on our housing 'under supply'. Honestly sounds like a win/win to me (and I'm an investor but can see past my own selfish interests and see what is best for the future of the country and younger people).

by Carlos67 | 8th Oct 20, 12:46pm 1602114379

Yeah no thanks IO, where is the thumbs down button ? Perhaps Interest.co.nz should have that option, or one that just subtracts from the thumbs up button and makes some comments here go negative.

by Independent_Observer | 8th Oct 20, 12:59pm 1602115144

You must be looking forward to the new government coming in then...I think Judith is right on the point that they'll likely try it under a Greens/Labour coalition and it means that Jacinda hasn't mislead the public with a capital gains tax - as its a wealth tax...

I would have previously disagreed with this policy but seeing what our current monetary and fiscal policies are doing to distort markets and peoples wealth - I think we need to start heavily taxing those with assets to give future generations a fair shot. You disagree...that's fine, we each get to have our say.

by MadMax | 8th Oct 20, 1:08pm 1602115694

Trouble is that the financially illiterate masses, with no economic sense or education, (hence their position), are allowed to vote.
They then vote in a populist ideologue who hands out free money - voila Venezuela/Zimbabwe
Our hardworking, prudent and frugal forebears would be weeping
Dumbasses on their iPhones, Q anon on their Facebook, watching Kardashians - instead of building, creating products, delivering needed services
Blaming the establishment and all and sundry, everyone except themselves

by Independent_Observer | 8th Oct 20, 1:29pm 1602116944

'Trouble is that the financially illiterate masses, with no economic sense or education, (hence their position), are allowed to vote'...tell me about it...the popularity for policies that create financial bubbles which the past have always shown result in economic ruin. Our society is just full of such idiots eh who all think they can become rich by speculating on asset prices using someone else's debt and expect there to be no risks associated with this! What turkeys...(50% sarcasm)

by MadMax | 8th Oct 20, 1:47pm 1602118077

Fair call :)

by refactornz | 8th Oct 20, 1:22pm 1602116561

It would only last 3 years as there would be a landslide victory to the party that promises to repeal it.

by Independent_Observer | 8th Oct 20, 1:27pm 1602116823

Have you run the numbers I take it on how many people would be affected? Must be the majority of society then if it would be a landslide - is everyone now a millionaire?

by refactornz | 8th Oct 20, 2:02pm 1602118962

No, but many aspire to be within their lifetime.
We all need to save and accumulate wealth over in order to have a decent life in retirement. Older people vote in higher numbers than young people.
And we also know that the bands wouldn't be adjusted upwards to account for inflation (just like income tax bracket creep).
As CGT has been rejected by the voting public, Wealth tax will be as well. So to introduce it by stealth would be to lose the following election.

by Independent_Observer | 8th Oct 20, 2:08pm 1602119280

That's a big assumption around the bands. Again happy to be proven otherwise.

I don't think the CGT was rejected by the voting public. Labor were voted for because they were going to pursue that at the last election - then couldn't pull it off - possibly because of NZF?

You're assumptions might be more self interest than public interest/utilitarian view.

by refactornz | 8th Oct 20, 3:20pm 1602123635

The bands is an assumption, but I think a fair assumption given the history of wilful income tax bracket creep by both major parties.

Labour were voted in to fix house prices. CGT was a possibility, not the primary reason. Jacinda wouldn't have said, "not while I'm PM" if she was sure she had the numbers.

by Independent_Observer | 8th Oct 20, 4:58pm 1602129528

Clearly not the numbers for a capital gains tax but perhaps the numbers for a capital tax. One persons loss, another persons gain. I'm sure your accountant will find a way around it if implemented.

by Njay | 8th Oct 20, 5:14pm 1602130482

I haven't heard anyone in my work circle, social circle or family for that matter who is against a CGT. And might I say, a fair few of them will be negatively affected. Winston stopped it dead trying to protect his diminishing voting numbers and we know who they are.
When the CGT was discussed last year, the head of the property investors association was the first to come on TV and tell us all how terrible it would be, pushing up rents etc.. So what happened then, the Government basically shit themselves. Everyone seems to think that a CGT is political suicide but I just don't see where their numbers are coming from. The other suggestion I would make, is instead of wasting time with referendums on pot and so forth, why don't we have them on the things that really matter. As someone mentioned on this site earlier, not sure in this thread, why not have a referendum on immigration numbers in this country. Shut the borders for years I say and let supply catch up then house prices will have no choice but fall. Also, I have never voted to allow mass immigration in this country as I think we have more than enough people here now. So how do I or we, get heard on this. The politicians I thought were elected to manage the country on our behalf, so can someone please show me the mandate they have for mass immigration. The other point also, bring in some new rules around lending to investors for property. Maybe stop being able to leverage off one house to buy another as was discussed in a thread yesterday I think. If you want to build a portfolio, well save the deposit in cash for subsequent houses you want to purchase and see what that would do. Maybe just maybe then people might start a business that would create jobs rather than just buy houses. Oh, starting a business is bloody hard work that's right, and takes lots of out of the box thinking, not like just buying another house.

by Brock Landers | 8th Oct 20, 7:05pm 1602137131

TOP and the Maori party both have policy against mass immigration.

by refactornz | 8th Oct 20, 9:30pm 1602145857

The problem with the CGT as proposed was that it was too broad and had no compensation for inflation. It was tougher than most CGT overseas. If they'd limited it to property and put it at a reduced rate of say 15% then it might have worked.

by Audaxes | 8th Oct 20, 12:36pm 1602113775

NZ stock market at record high according to RNZ - why not investigate the factors underpinning such enthusiasm to capitalise future asset cash flows in such parlous times? A satisfactory outcome may propose to seek an alternative to brute force wealth taxes.

by Carlos67 | 8th Oct 20, 12:42pm 1602114142

Its now because term deposit rates of like 1.2% are now a total waste of time. If they were back up at 6 to 8% I would have been totally creaming it.

by pin3cone | 8th Oct 20, 12:42pm 1602114178

Could it be as simple as interest rates being so low that people are just taking on the risk in the hope of reward?

by Audaxes | 8th Oct 20, 12:58pm 1602115124

The idea that “low interest rates justify high stock valuations” is really a statement that “low interest rates justify low expected stock returns as well.” Those high stock valuations are still associated with low prospective future stock market returns.

Worse, the notion that “low interest rates justify high stock valuations” assumes that the growth rate of future cash flows is held constant, at historically normal levels. If, as we presently observe, interest rates are low because growth rates are low, no valuation premium is “justified” by low interest rates at all.

Presently, the combination of record low interest rates and record high stock market valuations does nothing but add insult to injury.

...the iron law of investing is that a security is nothing but a claim on a future stream of cash flows. Valuation is a crucial determinant of long-term returns. The higher the price an investor pays for those cash flows today, the lower the long-term rate of return earned on the investment..

The corollary is also true. The lower the long-term rate of return demanded by investors, the higher the price moves today. So clearly, changes in investors' attitudes toward risk will strongly affect short-term returns.

If investors become more willing to take market risk, it is equivalent to saying that they are demanding a smaller risk premium on stocks (that is, a lower long-term rate of return). Prices rise as a result. Now, the fact that current stock prices are higher also implies that future long-term returns will be lower, but that's part of the deal. Link

by Independent_Observer | 8th Oct 20, 1:00pm 1602115244

As Dalio was suggesting a few months back, we may have a lost decade or so ahead of us.

by fortunr | 8th Oct 20, 1:17pm 1602116244

"The lower the long-term rate of return demanded by investors, the higher the price moves today."
Very true. I am fully expecting all asset classes, including housing, to generate a far lower long-term rate of return in the future than what experienced in the past. I would be extremely surprised to see the same returns as seen in the past.
If I was forced to make a guess, I would expect long term net returns (10 to 15 years horizon) around these values:
- cash: slightly negative
- bonds: around zero, with the possibility of a slightly negative return
- property: between 0 and 1%
- precious metals: between 1 and 2% p.a.
- shares: between 1 and 2%
All quite lower than what seen in the past.

by Independent_Observer | 8th Oct 20, 1:24pm 1602116666

Yip - if you look at Shillers CAPE ratio which has been pretty accurate at determining returns from the adjusted P/E ratios. I'm not expecting fantastic futures returns because we've already had them 2010-now! Wouldn't surprise me if asset prices are pretty flat for a decade or more.

by karl seastrand | 9th Oct 20, 1:08pm 1602202134

Why not estate taxes ensuring there are no loopholes for trusts or death bed gifts? Could be coming.

by pin3cone | 8th Oct 20, 12:38pm 1602113886

“This will strike fear in all New Zealanders who are working hard to create a better life for themselves and their family."

Personally, much less so than if National were to regain the government of NZ.

by Squishy | 8th Oct 20, 12:38pm 1602113934

All other things being equal tax must be collected somewhere. If not on capital gains or wealth then on income.

Also the there is a hidden cost to not taxing because it means the country is put at a disadvantage on infrastructure etc. which increases the cost of goods, service and some types of assets for all of society.

by MadMax | 8th Oct 20, 1:10pm 1602115842

What about financial transaction taxes or taxing the FAANG companies

by Theoracle | 8th Oct 20, 7:18pm 1602137894

Or stamp duty.

by Fritz | 8th Oct 20, 8:44pm 1602143073

Stamp duty is not a bad option.

by refactornz | 8th Oct 20, 1:33pm 1602117235

Or on consumption, user-pays. And reduce wastage with smaller more efficient Government.

by Henry_Tull | 8th Oct 20, 12:38pm 1602113938

If you were looking for a "because" redistribution of wealth.
Look at anything by Thomas Sowell
Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it.

- see the bio in standard below, plus happy pic with now pt minister of health & education & state services (its not the intellect).

Happy days from 2009 in Hungry
https://youtu.be/ZSMYa-JOwKg
Comrades the second thing I am reminded of is more somber, and that is.
As a movement we have not won
I don't just mean against the neo-liberal agenda we are all fighting ...

https://thestandard.org.nz/ardern-to-lead-iusy/amp/

https://en.m.wikipedia.org/wiki/International_Union_of_Socialist_Youth

by Independent_Observer | 8th Oct 20, 12:43pm 1602114190

Just out of interest Henry - how would you describe central bank interference in 'free markets'?

by Henry_Tull | 8th Oct 20, 1:27pm 1602116841

Good point, central banks now have become something they were not previously.
Example:
https://youtu.be/L-D2wu01UW8
- near horizon. Strange bedfellows.

The fight against the neo liberal agenda comments you refer to are from 2009. Well before the central bankers grouped together. NZ has an issue in that its not clear who, if anyone/group has oversight of the RBNZ.

Plus back in 2009 the context was the PM being international leader of the world wide Socialist youth movement.

Question for you. Have you got a favorite State of Socialism that you use as example?

by Independent_Observer | 8th Oct 20, 1:51pm 1602118292

I'd now argue the entire developed world is socialist given what I've witnessed this year - but we pretend we're still living under a free market model.

Scandanavian countries are nearly almost listed as the happiest countries in the world and as far as I understand live under a democratic socialist government/s. So to answer your leading question - should we become the Soviet Union or Communist China...no, but it would appear we're becoming socialists by stealth - even though right-wing supporters deny it. Even Trump is a socialist now...look at the ridiculous amount of government spending and deficits he has raised just to try and keep his right-wing support! Its socialism keeping the anti-socialists happy (even though they will deny that truth!) If they don't want socialism, we should just let everyone lose their jobs and take massive pay cuts and see if Trump stays in government.

by Henry_Tull | 8th Oct 20, 3:06pm 1602122774

Here is a look through of the history of Socialism and Capitalism
https://youtu.be/0iRvEPcQV3I

Thing is:
The entire Developed World is not Socialist.

Where it has been run, people have suffered terribly.

by Independent_Observer | 8th Oct 20, 5:03pm 1602129820

I'm happy with the history thanks. More interested in whats happening now and it appears to be socialism saving a broken free market model and right-leaning folk not complaining one little bit.

by mikekirk29 | 8th Oct 20, 1:06pm 1602115614

So, in perfectly economic and non-political reality terms, China (a communist country?) has been an economic failure?
Japan and Germany intervene in their economies more than USA and they are a miserable failure too eh?
As is Taiwan and S Korea, where State manages economy extensively.
Central banks intervening all the time and governments give them licence to do so remember.
All v free market eh?
As Rockefeller said, free markets are bad for profits and as Adam Smith said, any bunch of businessman will be trying to establish a monopoly whenever possible.
best of experts is that $32t is sitting in offshore accounts and cannot be taxed.
Rich are so community and societally responsible eh?
They want all advantages of law and order, educated workforce and NHS etc but don't want to pay more for it, as % of income taken from lower orders rises as a consequence of rich avoiding it

by Henry_Tull | 8th Oct 20, 1:30pm 1602117048

In China reform stopped at the door of the CCP.
No political reform, more locked up now than 20 years ago.
Commercial reforms, but still no property rights, hence the obsessive short term is seen in business. (Remember - Poor rule of law)

by Mnky | 8th Oct 20, 12:42pm 1602114143

A Labour/Top government could have a system that increases productivity, incomes and exports while reducing speculation...

https://www.top.org.nz

by paashaas | 8th Oct 20, 2:26pm 1602120419

"A Labour/Top government" - said what ? TOP will not be in Parliament , now or ever ...

by donny11 | 8th Oct 20, 1:05pm 1602115544

I wonder if the wealth tax would apply to businesses or just individuals? I It would certainly apply to trusts.

This would actually be quite an effective way in both bringing to an end NZ's housing pyramid scheme, while at the same time not damaging businesses in the "real economy", assuming businesses are exempt. Property developers etc. would still pay the same tax under a wealth tax as they do under the status quo. Assuming that businesses are exempt.

In general the "wealth tax" would kill the mathematical advantage property specvestors have over real businesses & see a shift away from land/house banking & into "real businesses". Young people will be able to buy a house at a reasonable price without a lifetime supply of debt & then go out & start a business, employing people & adding real value. Long term it may be a good thing for the NZ economy.

Guess it really comes down whether PM Ardern wants to make some real changes to the live's of NZ's or just wants to be another show pony.

Interesting times.

by bw | 8th Oct 20, 1:05pm 1602115521

It isn't Wealth!! that's the problem - it's the Residential Property Market. If that gets rebranded as "This is where the Wealth of New Zealanders is!", then there's the problem in one hit.
No one wants to stop productive businesses or farmers etc. from plying their trade and adding to their bank balances that way. Income Tax is all that's needed for them. If they then want to buy a property to rent out with their OWN after-tax profit, go for it!
But speculative, tax-free, property gains? That's going to be the downfall of this nation if that's all we have. And whether 'something' is done about it now or later, something eventually will; or it will be done on our behalf.
If Labour, or whoever gets in this election, has ONE task of necessity that's vital to the future of this nation, it's to restructure the residential property market in all of its forms.
Will they? Judith reckons they will, judging from her words. I have hope, but time will tell.

by GV 27 | 8th Oct 20, 1:04pm 1602115457

What good is going after residential property investment if you're going to salt the earth for businesses as well? You can target property investment, the TWG showed Ardern has no intention of that. This is about something else.

by bw | 8th Oct 20, 1:15pm 1602116106

We don't salt the earth!
Lange had no intention of targeting the farmers to rebalance the economy 40 years ago either. But he did - because he had to.
Ardern faces the same quandary. She HAS to fix the property speculation market here. Has to.
We shouldn't be here; John "You don't get out of debt by borrowing more money" Key told us that 10 years ago, and look what happened - nothing!
More debt that flows inevitably into property speculation isn't the answer.
One way or another, it's going to be stopped. Those who choose to ignore that fact are welcome to their opinion. But if that view doesn't prove costly to them as individuals, then it will to us all, collectively.

by donny11 | 8th Oct 20, 1:10pm 1602115828

Will you "salt the earth" for businesses though. If it is just individuals & trusts that are caught under the wealth tax umbrella then businesses will be wellbusiness as usual. As I said above the property developer, who actually adds real value will not be taxed any more. The guy who land banks though a trust will get smashed. However the guy that land banks doesn't add any value so who gives a shit

by GV 27 | 8th Oct 20, 1:16pm 1602116176

Trusts are a common ownership vehicle for a lot of different businesses, not just landbankers.

by donny11 | 8th Oct 20, 1:57pm 1602118647

I guess what would work would be to apply the wealth tax to the shareholders of a business not the business itself.

by mikekirk29 | 8th Oct 20, 12:57pm 1602115042

So, NZ will have 54% minimum debt to GDP and national wants to cut it in 14 years, to 36% and do so without raising revenue from tax rates increasing. Just by "growing the economy" which they believe and repeatedly avow, government cannot do, only the private sector. Meanwhile cutting taxes will get growth going that will cut debt to GDP ratio. That is what began said in 1980 when USA debt was under $1t. It is now $27t and rising fast. It was called Zombie economics. "Trickle down": as Americans say: "don't piss down my neck and tell me its raining". Poor little rich folks had it all their own way for 40 years, and still bleating that taking some of their asset inflation gains off them will kill the productive economy. What the hell would they know about the word "productive" in NZ' FIRE economy. What is NZ productivity gain over last 10 years, per person? It is abysmal. Who is it that determines investment per worker? Oh yes, that would be the employers. So, where have they been putting their investment in that decade??

by mikekirk29 | 8th Oct 20, 1:01pm 1602115271

The pathetic hackneyed meme of "hard working" whoever. Like anyone in works "hard working". Pure waffle.
Also, only 55% of NZ work FT and a lot of that is due to employers liking PT as its un unionised and easier to manipulate , (flexible in newspeak). A quarter of pop over 18 is retired , so is their wealth all hard earned? According to what god like authority of normative judgement? About 50% of the wealth is owned by 6% of pop and this has been so for donkey's years and they lobby v hard in media to keep it just that way by attacking any potential for the rest of the pop to get a fair share. Horror: communism

by youngdumbandbroke | 8th Oct 20, 1:59pm 1602118766

Opportunistic, not "hard working"

by Plutocracy | 8th Oct 20, 1:04pm 1602115480

Yeah nah Judith.

House prices increasing at 50k per annum and rent cost outpacing CPI inflation is actually the biggest barrier preventing young New Zealanders from creating a better life.

by Pietro | 8th Oct 20, 1:06pm 1602115577

Labour’s tax policy:

‘No income tax changes for 98% of Kiwis
On personal income earned over $180,000 a new top tax rate of 39% will apply – this change affects 2% of earners
No new taxes, or further increases to income tax next term‘

A wealth tax would be a new tax, therefore it has been ruled out.

A wealth tax would hit elderly Auckland people the hardest. A widow with a modest $1million home would pay 1% on all other assets, savings, any pensions, jewellery, car, and so on. Let’s say $500k taxable, a modest enough figure for all assets. That’s 5k in tax, plus accountant’s fees and medication for the stress. Big chunk of the super gone. Now someone in Westport with a modest home and similar other assets won’t have to pay a cent.

All moot, though, as Labour say not new taxes’. Perhaps the author of the article might have referred to Labour ‘s announced policy?

by GV 27 | 8th Oct 20, 1:07pm 1602115675

"No income tax changes for 98% of Kiwis" is "We're not offering any form of tax relief, even adjusting for inflation, for 98% of Kiwis" but with different spin.

by AndrewRiddell5886 | 10th Oct 20, 10:09am 1602277746

You do realise that the Green's wealth tax proposal exempts any assets of less than $50,000 value from the calculation, is based on an individuals net wealth, and includes a deferred payment option.

Which addresses all your concerns.

by Hummy | 8th Oct 20, 1:09pm 1602115753

Only will make government want asset prices to increase more and fast. Stops people from wanting to achieve. And more people on the teat. Bad idea and definitely no team spirit approach.

by bw | 8th Oct 20, 1:13pm 1602116003

Explain that to me, please.
Are you going to want to buy an asset that is tax-free today that will incur "38%" ( or whatever) tax tomorrow? Or, as a result of the first sentence, fall in resale price, as others no longer what to buy what you have?

by Hummy | 8th Oct 20, 3:54pm 1602125698

It's not what you want, but what government want. It's all rigged anyway, inflation does not run at 2%. As housing goes up 8% a year and that often account for 40/ 50% of income.

by donny11 | 8th Oct 20, 10:07pm 1602148021

The worst offender was the removal of land from the basket of goods in 1999. If they hadn't done this then I imagine the CPI would be few percent higher. Doesn't matter any way. Just look at the money supply, increases in this drive inflation over the long term

by brisket | 8th Oct 20, 1:15pm 1602116107

The National Party hates people who work for a living (except farmers). They exist to protect the capital gain and collected interest that a certain generation has come to expect is theirs by right. I am surrounded by hard-working young people; their labour earns less in a year than their parents’ extra properties. It’s a sick, perverted, unstable society where National can paint themselves as the party of ‘hard work’. If they mean it, slash income tax and tax rentierism. Will never happen.

by Quiet Desperation | 8th Oct 20, 1:35pm 1602117332

If you need a laugh right now, I highly recommend wasting 3 minutes on this. Aimed at the Australian government, but might as well be here: https://youtu.be/8qj83LE2Mpw - they also make PG versions for schools/children.

by Audaxes | 8th Oct 20, 1:55pm 1602118509

Unvarnished reality is harsh.

by treadlightly | 8th Oct 20, 1:50pm 1602118239

Contrary to common knowledge, taxation does not finance the government. If the government did not create currency first through its own spending then we would have nothing to pay our taxes with.
Beardsley Ruml was a director and chairman of the New York Fed and he had this to say. Since the end of the gold standard, "Taxes for Revenue are Obsolete". The real purposes of taxes were: to "stabilize the purchasing power of the dollar", to "express public policy in the distribution of wealth and of income", "in subsidizing or in penalizing various industries and economic groups" and to "isolate and assess directly the costs of certain national benefits, such as highways and social security"
https://en.wikipedia.org/wiki/Beardsley_Ruml

by Due Diligence | 8th Oct 20, 2:14pm 1602119646

Treasury/parliament/all govt departments are funded by taxes and bonds (debt). The fact that RBNZ (a completely separate branch of government with statutory independence) "prints" NZ currency does not change this fact. RBNZ would not gift Jacinda a cent no matter how nicely she were to ask - RBNZ would tell her to do what Grant has been doing to date - sell bonds or increase taxes if you want more money.

by treadlightly | 8th Oct 20, 2:42pm 1602121352

I think that we have had this conversation before. You have your views and I have mine.

by Due Diligence | 8th Oct 20, 2:47pm 1602121664

These are facts, not matters of opinion.

by treadlightly | 8th Oct 20, 10:21pm 1602148867

Any simple application of logic and mathematics would prove your "facts" wrong. Try some study of economist Wynne Godleys Sectoral Balances and Stock Flow Consistent Modeling.

by stuart786786 | 8th Oct 20, 1:55pm 1602118503

Judith Collins is ......need say more.

Wealth Tax is no good and will never be introduced in NZ but CGT should have been introduced long time back with exemption to family home or may be farmers and business if have so much resistance and afraid of losing voter - Like found a way to ban foreigners buying house in NZ, having promised no CGT (as if ...) can put it on just housing only to start of, as that is what is going out of hand -So not do a U turn and keep your promised (as if...)....thour your first promise was to introduce CGT but took a U turn as it suited you and not the country.

by Averageman | 8th Oct 20, 2:00pm 1602118827

The real issue is the massive disconnect between incomes and houses. The lazy will always do poorly. The go getter will always do better.

Govt needs to reign in excessive borrowing/bank profit that's being used to exploit everyone in the wrong end of it. It's almost like a form of mass enslavement.

Only real option is vote for the land tax, and reduction in income tax. Promote real work. Punish speculative debt.

See TOP.

by stuart786786 | 8th Oct 20, 2:08pm 1602119332

Yeah why not. Let their be extreme party like TOP on TAX to offset other extreme parties and have a balance but voting TOP may be a vote wasted so nect bedt to give few % more to Green though even they are .....

by lastredact | 8th Oct 20, 2:21pm 1602120060

"Asset rich, cash poor" = rich, but is yet to cash it because they could get richer. A generalisation, I know, but true in many cases.

by Due Diligence | 8th Oct 20, 2:34pm 1602120848

An individual purchases a home for a certain amount of money. It provides a certain level of utility and amenity to that individual. 30 years later it is worth many times the original purchase price in real terms, even though they have not improved it in any way and it still provides them the exact same level of utility and amenity as on day one. How can you possibly claim they are now "rich" without yet realising the capital gains by selling? They have no more money than on day one and are enjoying the same level of utility and amenity from the home as day one.

by al123 | 8th Oct 20, 2:39pm 1602121188

Because being rich isn't just about how much cash you have in the bank? Otherwise practically no one would be rich - we'd have practically zero millionaires l, because I bet basically no one keeps that amount of money in a bank account.

by Due Diligence | 8th Oct 20, 3:11pm 1602123088

So articulate to me why the person in my example is richer than they were on day one. Their house is no better than on day one and they have no more money than on day one. The fact that it is worth more is meaningless until they realise the capital gain by selling. Keeping in mind that under a wealth tax like the Greens and TOP are proposing, their annual tax based on the supposed additional benefit they are receiving would have gone up vastly.

by al123 | 8th Oct 20, 3:08pm 1602122912

No - the fact that it is worth more, in real terms, is meaningful. A person who could realize a million dollars by selling assets is a lot better off than a person with 20k in the bank. What it means is that if they need a million dollars for something - say spending the next ten years on a cruise, or buying a campervan, quitting work and spending the next 10 years traveling the country, or deciding to blow it all by living in a hotel til the money runs out, or deciding to move in with relatives and blowing the million dollars on holidays. They have options, which is the point. The more the realizable assets you have are worth, the more options there are available to you.

by Due Diligence | 8th Oct 20, 3:14pm 1602123296

You think that “having options” even if those options have not been realised is a taxable benefit? They have more “options” than on day one and that should be subject to annual tax, even though they have no more money and the exact same utility from the house? Mental gymnastics.

by al123 | 8th Oct 20, 3:21pm 1602123682

No, I didn't say anything about tax - I think that was not in the original post, as I didn't see it before I replied.

All I was doing was explaining why a person who has assets is richer than a person without, even if those assets have not yet been realized. Do you understand why now?

by Due Diligence | 8th Oct 20, 3:45pm 1602125114

No, having "options” does not make one rich. And this certainly isn't a form of benefit that should be taxable.

Do you think that they should be taxed on this "wealth" that takes the form of "having options"?

by brisket | 8th Oct 20, 4:00pm 1602126003

So no asset should be taxed, regardless of how much its market value has increased? Because it's the same thing it always was? How far do you extend this concept? Is salary the *only* thing that should be taxed -- the money people have made from actually working?

by Due Diligence | 8th Oct 20, 4:31pm 1602127870

Absolutely, no asset should ever be taxed. This is common sense and the mainstream view for good reason. We don’t pay rent for our own assets.

Council rates are really a service fee although they are called a tax. And the FIF regime should be done away with.

Income tax (including CGT) and expenditure tax is sufficient. Poll taxes and asset taxes are immoral. The latter is both immoral and illogical.

by lowercase capitalist | 8th Oct 20, 6:14pm 1602134085

Tax pays for roads, policing, border security. Things that give your assets value, how is tax not just as much a service fee as council rates?

by al123 | 8th Oct 20, 4:02pm 1602126136

I'm not sure you understand what money is, then. You might as well say that no one is rich then, even the person with 1 million dollars under the mattress or in a bank account, because being in posession of bits of paper doesn't make you rich, and digits on a spreadsheet doesn't make you rich. The whole point of money is that it is a store of value- and the more stuff you can exchange the money for the richer you are. Assets are also a store of value.

by Due Diligence | 8th Oct 20, 4:55pm 1602129349

Why don’t you try answer my question?

Do you think that the person in my example should be taxed on this "wealth" that takes the form of "having options"? This is an article about wealth taxation after all.

If you do, then you should also be of the view that money sitting in the bank (not income tax on the interest earned from that money) should be taxed annually until it virtually disappears, all on the basis that the money affords its owner “opportunity”.

by al123 | 8th Oct 20, 6:48pm 1602136095

Ideally, no. I didn't say anything about taxing "opportunity" as you put it. I was just explaining to you that storing your wealth in a house rather than in the bank doesn't make you any less rich. It just makes you less liquid. So here is my question: do you accept that now?

But the complicating factor is that a lot of taxpayer money goes into preserving and propping up wealth, mostly into things that increase the value of residentisl property assets. Given that it does, and that there is no CGT, then I can see the argument for it. I would prefer a CGT, with some provisions around family homes.

by SimonRo | 8th Oct 20, 3:39pm 1602124784

Ugh. The word 'tax' is broken.
If only there were a three letter word for what new zealanders actually want - a government to waste less money while providing the necessary direct and indirect support for those who are struggling.

by youngdumbandbroke | 8th Oct 20, 3:47pm 1602125253

We want quality government intervention, not quantity

by b21 | 8th Oct 20, 3:42pm 1602124965

Great news, a wealth tax is very much a needed to compensate for the growing inequality that has been punishing the country for too long already. Preferably should be applied to gains in non-productive assets such as stock and housing, let's see what we get.

by Due Diligence | 8th Oct 20, 3:46pm 1602125178

You'll be getting sweet F A sunshine

by b21 | 9th Oct 20, 4:56pm 1602215760

Care to explain?

by Uncle Bulgaria | 8th Oct 20, 4:17pm 1602127063

New Zealanders like theimage of fair go and equality but not out of their own well-lined pocket. We should just admit it, Kiwis are a naturally greedy people. Comes of the colonial mindset where you had to scramble and stow away everything.

by Independent_Observer | 8th Oct 20, 5:08pm 1602130135

Had this conversation with a group of baby boomers yesterday. They were complaining about how depressed and stressed younger people were and how inequality might be a cause. I mentioned that we could change policies to make it fairer given that advantages they've had with monetary policies favour capital asset appreciation. Firstly they didn't understand what I was talking about - it was too complicated. And apparently a wealth or capital gains tax could go to hell.

So yes you can't be both the cause and the solution to a problem - but you can pretend you care all you like without actually doing anything about it I often find/found those from the greatest generation to be wise and caring then I'm not sure what they did to their children.

by Fritz | 8th Oct 20, 5:34pm 1602131663

Yes I agree. We talk up our egalitarianism, but that is rubbish. Just like we talk up our environment, and that is rubbish. Egalitarianism died in the 1980s, and self interest has grown by the decade.

by Fritz | 8th Oct 20, 5:02pm 1602129723

This would be excellent news if it happens. I doubt it will however, I think Labour are going to have a lot of power after the election.
The wealth tax was one of the key reasons I voted Green.

by ale12345 | 9th Oct 20, 6:30pm 1602221443

I really hope they bring this concept to education. The brightest hardest working students can share their grades around to the bottom of the class and everyone will be better off!!!

by Allears | 9th Oct 20, 10:56pm 1602237374

Way too late Judith. National have lost this crucial election by not discrediting the loonie left. Ardern and her well documented communist connections. The inevitable Wealth Tax that’ll be introduced next year. National have been far too weak in this campaign and the great exodus from NZ shall commence by about Feb 2021.

by AndrewRiddell5886 | 10th Oct 20, 10:05am 1602277538

Just to inject some reality into the misrepresentation by National, under the Greens wealth tax proposal, a couple paying $7,000 under wealth tax would have debt free assets of $2.7 million.

How many couples have that?

(Answer - sweet f.a.)

by Rowntree | 11th Oct 20, 11:09am 1602367753

Collins is desperate for some oxygen. She has no credibility in financial matters what so ever, and in blind desperation to slow tanking support for National under her leadership she will make silly, scaring comments. Don't worry, it is thankfully unlikely Collins will get to have any influence. We must encourage thrift, and encourage asset accumulation through not only home ownership but investment in wealth creating assets like businesses. At the same time we do need to have a fair and transparent tax base to ensure we can provide essential public services while managing public debt. A capital gains tax which excludes the family home is not the end of the world but Ardern has firmly ruled that out. The question is - how do we fund government in a fair manner?