By John Pagani*
At the risk of hectoring a little, let's look at some of the criticisms of Labour's tax package today, and ask some questions back.
* "We don't need a new tax. It will plunge a dagger through the heart of growth."
Well how do you intend to pay off the debt? What is your big idea for changing the our economy?
It's been lagging for years, and we will continue to spend more than we earn overseas unless we stop giving tax breaks for investments that don't help jobs and exports.
* "The economy is doing fine. Our tax system is the envy of the world. We can't change a thing."
If it was fine why do we have a huge number of kids who are unemployed, and skilled workers heading overseas looking for higher incomes?
What we need are higher incomes and more jobs. And to get them we have to start driving investment into more productive parts of the economy.
We won't get there by selling down our assets.
* "It is all about soaking the rich. It's a tax grab."
Something like 98% of people people will pay less tax. It's just that the other 2% have a lot more access to microphones. (Or should that be megaphones?)
Is it ever possible to broaden the tax base and make it more efficient without being accused of a tax grab? We are more reliant on personal income taxes than just about any country in the world. A capital gains tax makes the tax system work better.
True, you're not 'rich' just because you get a good salary over $150,000. But you have had a windfall tax cut at a time when we couldn't afford it. The new top rate is just reversing out that windfall.
You're not rich just because you've bought an investment house, but the new tax doesn't stop you investing in housing. It just reduces some of your gain - you still keep 85% of the income you get from capital gain.
Labour has made a big call with this package. It is going to upset a lot of people who will have to pay tax that they don't currently. But a lot of others will get a break they need.
At least it's looking forward at some news ways of doing things. What do you think will happen if we keep doing things the old way?
*John Pagani is an independent political consultant and writer who has worked as an adviser to Labour Leader Phil Goff. He writes his own blog at http://johnpagani.posterous.