By Chris Trotter*
Nicola Willis, somehow managing to keep a straight face, claims to be the defender of working people. That the deputy-leader of the National Party, by no means a stupid woman, is prepared to offer up such a ludicrous proposition indicates just how deranged our politics have become. That there are working-class voters out there who will take Willis’s claim seriously should not, however, be received as proof that National has quietly embraced socialism. Rather, it should be taken as a measure of just how emphatically so many of Labour leaders have rejected it.
Not all of Labour’s leaders, however. Not while David Parker remains a member of Chris Hipkins’ Cabinet. Parker is a stern critic of economic inequality, most particularly of the way New Zealand’s tax system allows the über-rich to avoid paying their fair share of tax. For nearly two decades he has championed the introduction of a Capital Gains Tax (CGT) finding sufficient support among his own caucus colleagues and Labour’s rank-and-file to embed the policy in a succession of Labour election manifestos.
Not that this broad-based support within Labour was sufficient to propel a CGT across the line. At the summit of the party there has long been a junta of past and serving Labour leaders who invariably dismiss the whole idea of significant tax reform as electoral poison. Those members brave enough to defy this junta are subjected to the Labour eye-roll – a gesture signalling both political naivety and economic stupidity – from which its victim’s career seldom recovers.
It is worth teasing out both the causes and the consequences of the baleful Labour eye-roll. Above all else, it represents the idea that there are some policies which are simply unacceptable within the context of the neoliberal order introduced by the Fourth Labour Government and consolidated by its National Party successors.
New Zealand’s reasonably flat income tax, supplemented by its highly regressive Goods and Services Tax, is sufficient to keep the country’s no-frills welfare state coughing-and-spluttering along – but that’s all. More importantly, the filing of land, wealth, inheritance and (most especially) capital gains taxes in the “Under No Circumstances” file, makes damn sure the welfare state stays that way. More than that, New Zealand’s tax system presents no serious impediments to the steady accumulation of massive personal wealth. Nominally “progressive”, the tax system’s actual effect is to exacerbate inequality – not reduce it.
Those who position themselves as “centre-left’ on the political spectrum are supposed to know all this and, more importantly, to have come to terms with it. They are further supposed to understand that any attempt to change the arrangements that have now been in place for the best part of 40 years will, inevitably, be met with the most vicious resistance. Any politician, or political party, setting out with the intention of seriously addressing inequality – i.e. of dismantling the neoliberal status quo – are asking for the worst kind of personal and political trouble, and, most assuredly, they will find it.
All of which makes David Parker’s commissioning of the IRD’s and the Treasury’s reports into the “fairness” of New Zealand’s taxation system a decidedly subversive act. Not least because, for the first time, the New Zealand voter has been given the hard data on who gets what out of the system. The conclusions to be drawn are not exactly flattering to the very rich. If those advocating for a CGT and other redistributive tax measures may be compared to a revolutionary band hiding out in the mountains, then Parker’s reports are the equivalent of a bloody great ammunition dump!
The brute fact of these explosive reports on tax, like the brute fact of the controversial He Puapua Report, points to a Cabinet riven by powerful factions that must, somehow, be placated. Or, if placating them is not an option, bringing potentially dangerous moves to a sudden halt by issuing a “Captain’s Call”. Knowing that she could count on the support of Winston Peters, this is exactly what Prime Minister Jacinda Ardern did to prevent her own cabinet, caucus, and Green Party allies from introducing a CGT in her Government’s first term. She made it clear that a CGT would only be introduced over her dead political body.
Those who doubt this analysis should consider the recent statements of Foreign Minister Nanaia Mahuta. Questioned closely on New Zealand’s stance in relation to the AUKUS anti-China agreement linking Washington, London and Canberra, Mahuta stoutly stood by her assertion that the biggest threat facing her Pacific neighbours was Climate Change. Delivering a stinging blow to those public servants who have been briefing intensely on behalf of those who would have New Zealand become a sort of AUKUS auxiliary, Mahuta declared that her country’s foreign policy would be determined by “the Cabinet” – not unelected “government agencies”.
The only sensible reading of these comments is that serious disagreements exist within both Cabinet and the Labour Party caucus over the merits, or otherwise, of aligning New Zealand too closely with those powers seeking to “contain” China – still the country’s biggest trading partner. It is entirely possible that Mahuta, who (successfully) led the charge on Three Waters, has put herself at the head of the faction determined to confront the negative impact of colonialism in the South Pacific – not just in the past, but today.
All of which suggests that Labour’s ability to hold the neoliberal consensus together is nowhere near as strong as it was under Helen Clark and Michael Cullen, or the troika that emerged triumphant from the ideological conflicts that divided Labour between 2008 and 2017 – Jacinda Ardern, Grant Robertson and Chris Hipkins. Thanks to Peters, NZ First, and Covid-19, Ardern was (just) able to keep Labour’s lid from blowing-off during her first term. Paradoxically, by leading Labour to an absolute majority in 2020, Ardern only made it more difficult to say “No” to her cabinet and caucus.
The carefully planned “coup” which (with Ardern’s assistance) placed Hipkins in the Prime Ministership on 22 January 2023 may now be viewed – at least in part – as an attempt by the Troika to re-establish its control of the Sixth Labour Government’s overall direction – mostly by reining-in the factions’ more outré policies. Clearly, this attempt has been met with only partial success. Pressure is building inside Labour for serious change, and Hipkins is clearly struggling to contain it.
Certainly, his refusal to slip a few rounds of Parker’s ammunition into his prime-ministerial rifle and open fire on National, came as a deep disappointment to Labour’s members and supporters. A feeling that was only compounded by his evident lack of enthusiasm for responding to the unfairness exposed in the IRD’s report with tangible tax reform.
It is this perception of Labour not being willing to take the bold steps necessary to improve the lot of working-class New Zealanders, that Nicola Willis is exploiting for all she is worth. Those disillusioned by Hipkins’ reticence are, however, unlikely to spot the contradiction in the National Finance Spokesperson’s position.
What is National defending working people from, if not Labour’s refusal to do anything meaningful about the inequities of the tax system? But, if Labour’s not about to do anything about tax, then why is she insisting (on the basis of at least two independent sources!) that redistributive tax reform is exactly what Hipkins, Robertson and Parker are plotting to announce just days out from the October election? Both of these claims cannot be true.
Leaving us with another, related, question: What is a massive pile of ammunition most likely to call into existence, if not the people, and the guns, to use it?
156 Comments
https://www.spectator.com.au/2023/01/elite-revolt/
"..............Public sector employment traditionally involved a trade-off between wages and job security. Wages would be a little below those in the private sector, but public servants were largely immune to recessions and the risk of lay-offs. Today, the public service still offers high job security but higher than market wages. And when bureaucratic benches are full, excess elites move into corporate administration and compliance, the corollaries of bureaucratic expansion.
Once in their roles, it is these elites who design and implement policies to reduce competition and market-risk to benefit incumbents and their progeny. The public service is replete with multi-generational family dynasties out of public view......."
Thanks, that link's a great read, equally applicable through most/all the Western world. Trust the Aussies to call a spade a bl**dy shovel.
This also rang bells: "It is considered ‘sound government policy’ to shovel as many youngsters into university as possible, subsidised by the taxes of the many who will never attend university. As usual, government subsidies result in over-production, in this case, of graduates with fancy qualifications. And when they cannot be absorbed into the economy, the surplus elite seeks to capture institutions which provide the pay and prestige of the elite without the prerequisite achievement."
Nats policies won't be any better. Their idea to motivate people to get ahead is to offer lower tax for the wealthy and then encourage them to invest in rental properties.
Voting Nat or Labour is pretty much tossing a two headed coin. Different heads but the same outcome....
"Lower tax for the wealthy." I had no idea the company tax and trust rates were to be reduced? But let's parrot the usual " National...rich mates...wealthy.'
Working class kiwis have had it tougher under a left leaning Government in the last 5 years then for a significant period prior.
The only unfairness exposed by the IRD HNWI report was their poltitically motivated inconsistent methodology in comparing high wealth families income that included unrealised capital gains versus ordinary wealth kiwis that excluded unrealised capital gains. 2/3 of NZdrs live in their own home, 1/3 of those do not have a mortgage so that is "ordinary wealth". Unrealised capital gains are not "income".
We all know that this is a politically self serving comparison of apples and oranges designed to throw the envy tax dead rat on the table to distract voters from co governance/government.
The Sapere report was conclusive on one thing, the rich pay a higher percentage of income tax on their taxable income that anyone else does. Half of NZ households pay no net income tax after credits, 12% are paying half & 3% are paying a quarter of all income tax so how fair is that ?
Unrealised capital gains are not "income".
That's nonsense, you confuse taxable income with economic income.
Case in point, between 1995 and 2012 Apple shares rose 6,750%. $10k became $675,000.
Your trying to tell me because the shares weren't cashed in and realised that you had no income!!
Ummmmmmm the discussion is what should be considered as taxable income.
Of course it is academic thats the nature of the issue - these are academic constructs..
You do realise welfare/wff and Student loans are based on economic income, not taxable income - for a reason.
The discussion still needs to be grounded in everyday reality. Otherwise it smacks of looking for a argument to drag things into the net simply because the government wants a slice of a pie they haven't figured out how to get their hands on yet - and it's pretty transparent when you take 300 rich families, measure their tax paid against unrealised gains and then pedal it as a reason to slug ordinary Kiwis with more and more tax when you can't even figure out how to index an income tax bracket more than once a decade (and counting).
"you confuse taxable income with economic income" ?? Rastus a change in value is not income of any form, unless it is realised in some way or another either by selling, using as collateral to borrow against or selling share in. Jut what is "economic income"? Are you suggesting that the value change of an asset should be taxed, even though the owner may gain no benefit from that change in value by not taking any action to gain benefit from it?
I am highlighting that if a company makes a surplus and pays a dividend, it is taxable to individual.
But if it does not pay a dividend and retains the profits, the owner still gains those profits - but they crystallize int the share value and avoid the tax to the individual. If the individual need cash - sells off some shares or borrows against the increase.
BTY, I don't agree with a cpa gains tax. Doesn't work. Prefer an asset tax on all assets, no escape.
And we need lower tax, but spread across all. Remove all artificial investing bias currently created by distortionary tax rules.
"But if it does not pay a dividend and retains the profits, the owner still gains those profits - but they crystallize int the share value" You're assuming the share value increases with those retained profits. Rakon is an example where the company retained its profits, not paying a dividend, and the share price fell.
Don't agree with any form of an asset tax. it is just an envy based tax and will discourage investment by those at the bottom trying to get started.
Lol - those at the bottom can’t get started there Murray because 120% of their wages (earned from labour) are being chewed up paying for rent and basic consumer items like food/power/fuel so they are reliant on a top up fro the government to survive each week.
Meanwhile, the person or group they pay 50% of their income to (their landlord) arranges their affairs (before the recent deduction and ring fence changes) to pay no tax at all on that asset (that takes 50% of the other persons wages) and extract maximum $$ from those below them in the social/financial construct.
They are the regulatory settings of a system that is bound to fail and fail badly at some point - quite possibly in the near future (noting the rate at which large parts of society are becoming anti ‘the rich’)
No it's not. Taxing a landlord because he's screwed his tenants won't achieve the change that is needed. Regulating the market will. But the Government, any Government is too afraid of pissing off the banks and the wealthy to do that properly, so we will never get any action that will do anything other than penalise the people at the bottom, including the young.
Rent controls are a part, but many argue they don't work and in part they are correct, but that is because they were applied in isolation. My view is that the housing rental market needs to be properly regulated and suggest the following are essential requirements; Rents capped at 25 - 30% of the median take home pay (not gross) for an entire house, all rental properties must have a warrant of fitness, all landlords and property managers must be licensed (can't be escaped by having a property manager), and property that is sold which has been a rental is automatically captured for tax on any change in value, (it is a business asset). I haven't considered the possibility of sub-leases ie flatmates but there is possibly some rules needed there too.
Good points and agree in theory - although rents capped at 25-30% would cause tens of thousands (if not more) landlords to nearly immediately sell their rental portfolios (forced by the banks) as they would be far too cash flow negative and would induce a huge housing market crash (I'm not joking). The amount of supply would be huge and at current prices, there is very little demand.
Wouldn't this be viewed as an act of envy by landlords/mum and dad property investors - which you argue isn't allowable in the NZ political landscape?
You will completely screw their business model if you suggest this and yet wealth taxes are not allowable - because these specifically are based upon envy?
I don't understand how cognitively you separate these views, unless you've been brain washed by either National/Act political group think/mind control.
You're discussing the process of implementation now, but yes i do realise for many it would be catastrophic, especially if just dumped on the country. But consider this, who is more important in this country the young, low and middle income earners or the wealthy minority? I suggest that the majority are far more important, as is their future. the failure to prevent the current shambles makes it that much harder to correct, but that is not a rationale for not correcting it. So many problems across our society stem from the cost of housing that is making our country much poorer daily. I doubt most people realise just the degree of the ramifications of excessive housing costs on people and society as a whole. If the landlords view it as an act of envy, who really cares? They're the ones who refuse to charge affordable rents, who trap and deny people from being able to choose to buy their own homes, from being able to build a decent lifestyle and security, trap children in poverty, and are even an underlying contributor to a lot of crime by desperate people with little or no hope. The entire economy suffers because a small sector of it screws everyone else. Tax is not a solution, but would allow the politicians to profit from their failures.
Deal with the point in time - year end. Profits retained instead of paid out. All things being equal the shares will rise in proportion to the profits.
Thus you have income for that period. At present we choose (mostly) to not tax it. Some countries do.
Apple paid no dividends for years. The shareholders still had income, but were happy for it to be reinvested in the company by Mr Jobs and not paid out.
Me thinks you are confused with inflation based income on non tradeable assets - such as the family home.
Add in share buy backs using cheap debt - and the interest expense of the debt to offset any profit in order to pay zero tax for the year…
Income earners relative to asset owners don’t stand a chance.
I honestly believe we’re living through a period of very crony capitalism.
And the higher that asset values have become, relative to incomes, the less opportunity that low income earners have to enter into the asset markets to get the benefits of the tax advantages - so what results is that wealth inequality just gets worse and worse over time. And as I point out in another post, in the west, our wealth inequality is as bad as it’s been since the 1920’s…ie were creating the conditions for another 1929/Great Depression/domestic and geopolitical instability moment in history. And we’ve been creating it through poor regulation of asset markets/wealth/taxation.
That is not income rastus unless you are one of the small minded who drools over asset values telling themselves they are rich. A change in value is not now, never has been and can never be 'income' until something is done to change it into 'cash flow'. Some paper 'value' cannot be used to buy something or pay a bill, with some other process occurring which effectively converts that 'value' into something more meaningful (and that ain't the tax man calling).
Cash flow is just an asset in a liquid form - it does not define income. You are stuck on the mindset that the tax definition of income is final and fit for purposes of tax collection. Well most would disagree with that - especially paye earners.
A change in value may be driven by the accumulation of retained income (eg Apple shares example), but with some assets the change in value only represents inflation. Why should tax not be paid on those that structure their income to be by way of asset accumulation?
You are confusing the correctness of the 'whats is income argument' with wether or not the tax laws should be changed - that's another debate.
What is your definition of rich (in a financial sense) if it is not the ownership of assets?
What about Rakon Rastus? They retained earnings but their company value through share price fell? As i said a change in valuation cannot be considered income unless something occurs that makes it income. Shares go up and down all the time. I doubt many people view those variations as actual income or losses until they try to cash them in.
I said all things being equal Murray. If they made a profit and the shares declined, then the declined by less due to profits.
Can I ask my employer to stop my wages and instead give me shares Murray? Would you be okay in not considering that income and pay no tax?
BTW, many CEO's get millions in share issues. Not income you think?
What are you talking about HSL. We're discussing theory here. Share price appreciation is not taxed until they are sold, and the proceeds from that are then taxable. That is not invented it is fact. A company's retained earnings are taxed at the company, but despite what rastus claims, retained earnings does not necessarily lead to an increase in share price. He cites Apple, a US company, I cite Rakon a NZ company. Which of those are untrue? (Note I hold Rakon shares).
Welcome to capitalism, that's how your enterprise survives & grows into sustainability, providing secure & ongoing employment.
Think you're far too focused on clipping the ticket, like many socialists who can't get off their couch & promote other nonsense such as company turnover tax.
Apples income was already taxed. Dividend distributions are taxed. Retained earnings (a component of a companies wealth) are after tax.
Personally I am ok with capital gains tax. The proviso being it is on real, not nominal gains that have also been realised, that it is simple, broad based (everything including peoples houses, shares, businesses etc) and includes the ability to have a mechanism to capture capital losses.
The printing of money has distorted the real value of assets over the last few years and, as witnessed in the housing and share markets, corrections in real terms are playing out. It appears we have debased our currency and are then trying to tax the nominal gains. I am not sure that is fair or equitable.
Investment should be encouraged and rewarded. We have incentives for Research and development and preferential schemes for film makers etc to stimulate the economy. Why would we disincentivise our best and brightest by creating an overly burdensome tax system? Beware the unintended consequences of well intentioned ideas.
Well that is income, and profits should be taxed irrelevant of if you retain them or not. However owning a house and it going up in price because someone else bought some other house is not. If companies where not able to offshore profits to some tax haven it would be alright.
While I might agree that these ultra rich people are making profit through capital gains as a business, I don't think anything the government does will actually effect them, they will simply get their accountants to find the next loop hole. Who it will effect are people who saved all their lives to have a house or two to give to their children (probably because they don't see a way for them to by their own since house prices are so ridiculous, I think most parents want the best for their children) or have a retirement that wasn't just NZ super.
Unless ... using as collateral to borrow against
And there you have it.
A change in value of an asset should result in further investment. That's how the supply curve works. The problem is that too many 'rich' people think buying existing houses is what they should be doing.
And that, is not, by any economic stretch of the imagination, "investment".
In economic terms, investment means the creation of something new that provides additional goods or services.
Thus, a CGT by forcing non-producing assets (e.g. existing houses) to be taxed if their price rises, it forces the "investor" to reallocate resources that do, in fact, create additional goods or services. (Note that a house only adds productive capacity the first day a person lives there. After that, there is no additional productive capacity added on a year by year basis.) But a new house, bought by an "investor", is in fact adding capacity because the "investor" has provided capital back to the builder so the cycle of productivity can continue.
Chris I'm not against people having to pay tax when they 'realise' a change in value of an asset. But that is not what is being discussed. A CGT would be a tax on any upward change in value, and don't for a moment think that a decline in value will automatically be a deductible, irrespective of whether the owner does anything to realise that value change. The tax report from last week does not identify whether the wealthy asset owners took action to realise any change in value of their assets, it just identified that their 'wealth' grew and they didn't pay tax on a portion of that growth. A pretty serious obfuscation of the matter that has garnered a big reaction from people who don't understand the issue.
Did you realise that in the west that our wealth inequality is at similar levels to the late 1920’s, just before the asset price crashes/debt destruction and depression?
And yet do you want to tell the poor people who have been left behind, and can’t afford the pay for groceries at present, that they don’t understand the issues because they’re not wealthy enough to afford an accountant to structure their financial affairs in manner the limits the taxes they pay? (Ie to park any $$ they have in assets that pay no tax on…eg property, or non dividend paying shares..) And yet they don’t have $$ left over each week to ever consider buying assets because they have no surplus of income each week - often because 50% of their wages are going to their landlord who up to now has been using the property as a tax dodge.
I tell them today to challenge the politicians and ask them why they haven't done their job that they were elected for. Why they haven't represented all the people of NZ and not just the rich ones. I tell them to challenge the Pollies to stop blocking them from getting ahead. i also tell them envy taxes will not achieve what they need.
Because western democracies are running a system of crony capitalism - where the regulators are themselves the wealthy. That is why nothing changes, even if the poor vote for ‘envy taxes’.
And this isn’t good…history shows that when this happens it results in periods of social and financial instability (which I’ve been warning about on here and in public for years - but get laughed at and ridiculed as a doom gloom merchant by those who are benefiting from the status quo, at the expense of other parts of society (who you think are envious of their financial success).
Would it be hard Murray to view the issue as one of financial and social stability - as opposed to taking the easy mental path of simply thinking that taxing the rich is simply just a tax based upon envy? When in reality it might be about restoring social and financial stability?
Love this discussion IO. Viewing it from a perspective of financial and economic stability from the way you have put looks like just painting the pig a different colour. Regulating the market properly is also about financial and economic stability. The report that started this discussion smacks too much of envy rather than a pragmatic approach to support the economy.
by murray86 | 1st May 23, 11:25am
Love this discussion IO. Viewing it from a perspective of financial and economic stability from the way you have put looks like just painting the pig a different colour.
But introducing taxes to remove excessive distortions is regulating the market! But you don't want this because you view it as an act of envy.
So you ask above - 'why don't the government do anything to avoid this' and then say they shouldn't because its an act of envy....and governments are scared of people like you because they don't want to lose your vote.
Can't you see this view is the problem - and not the solution?
And you suggest rent controls are a possible solution set at 25-30% of income...this would be viewed as a form of envy by property investors/landlords as it would ruin their business model and would force many to sell their properties.
I just don't understand the concept of one set of regulations (that would harm one group) as envious, but another set of regulations (that would likely harm the interests of the same/similar group) as not being based upon envy.
How you create this distinction in your mind I find very confusing.
"why don't the government do anything to avoid this' and then say they shouldn't because its an act of envy....and governments are scared of people like you because they don't want to lose your vote." IO you're applying a distorted interpretation to what I have said, perhaps to suit your own bias. I don' say "why don't the government do anything to avoid this", I said they should regulate the market. That is quite different. Applying a tax is not regulating the market. It is responding to public angst because they haven't done their job in the first place and they want to be seen to be doing something and it is a lazy, easy way out but it will not now or ever fix the problem.
this problem is not unique to NZ. there is a CGT in Aussie, as other commenters indicate, and other taxes but the housing problem is there too. So tell me why it will fix it in NZ?
'Applying a tax is not regulating the market'
Yes it is - IRD has things called 'regulations'...they are used to regulate how the economy functions.
Regulatory stewardship Regulatory stewardship (ird.govt.nz)
Good tax and social policy systems are an essential part of a fair, efficient and productive economy. Taxes raise money to finance government spending, which is essential if New Zealand is to provide the healthcare, education and other government services that its citizens expect. The tax system is therefore a major national asset.
Inland Revenue is also the agency that delivers a range of social policies such as child support, Working for Families, KiwiSaver and student loan repayments. These social policies help increase fairness and improve outcomes for New Zealanders.
The work of the department is governed by Acts of Parliament administered by Inland Revenue.
Sorry Murry I think you're in lala land on this one and can't see how you got yourself into this confuddled mental state.
Taxation is a tool that the myth today states is required to fund government activity. This is not true. But having said that the Government does in part endeavour to regulate markets through taxation, but consider how effective that is? Not very. Even the example given elsewhere like Aussie where there are taxes; have they prevented the problems we have in NZ. From what those who claim to know the market are say, the answer is no, so not effective in regulating markets. What taxes do though is provide more money for politicians to misuse - is that a good thing?
Not all Western Countries are working against the "working class". The 2017 Tax Act in the USA caused $60 Billion in extra taxes to be paid on property (primary homes) because the old act allowed all Home Mortgage Interest and Rates to be deducted from Income-lowering income, and thus lowering the Tax paid by the Upper Class. Thus like the NZ Labour Party protecting their NeoLiberal roots the Congressman in the wealthy suburbs were up in arms that Trump managed to get that change through and tried to get Biden to undo the damage to their rich upper class ($150,000 to $750,000) households. They failed. Meanwhile Corporations are paying more tax as well than was the case prior to 2017, and the Middle Class (under $150,000) households are paying less tax. Mind blowingly last year an extra $800 Billion of Income Tax came in and the Biden Administration couldn't figure out why. That's how effective the 2017 Tax Changes were. They only problem the US has is Spending--Tax Collections keep rising.
I agree - cap gains tax is not a good idea for many reasons. But one cannot escape the inequality of the tax system in its present state (namely burden on the middle class paye).
The real answer is an asset tax. This is being kept off the agenda because it is absolutely feared by those that would get caught - being everyone.
CGT is providing the necessary distraction from discussing an asset tax. Chloe is too ignorant of tax to see it.
Whats wrong with CGT - surely its only paid when gains are realised?
Most comparable countries to NZ have one and it works just fine. I have no issue paying it - but then i understand and believe that everyone needs to contribute toward society fairly.
I see the only real opposition as being from those that would need to pay it not wanting to do so.
PS - the argument that Govt isnt spending that money wisely is then a separate discussion affecting us all.
What's wrong with it? It's complex, cumbersome, easily avoidable, relies on an increase to get the tax (incentivizing bank/govt created inflation) and distorts the markets.
Quick example. Exempt the Family home and we have created a tax free investment . So... we will invest more into that asset class as a result (a 10% tax free gain on a $2mill house is better then 10% on $200k house). i.e we incentivize big expensive tax free homes.
Wrong. I paid Capital Gains tax on my rental in the US, as everyone there has for 100 years. And the answer to your question about over investing in the Primary Dwelling is also covered in the US. Only $500,000 gain for a couple is excluded from Capital Gains in the family home--above that amount falls subject to Capital Gains.
I'm guessing any gain being taxed would mean people being herded to the banking system to make up the shortfall that would be required to purchase a similar asset back again?
I like how government policy created the enormous asset bubble but then government also says because we have devalued your cash, in terms of what asset it can buy, we want some of that back for "X" pet project. One thing a CGT won't mean is cheaper property. That experiment has already been done.
Not only created an asset bubble but paid an extra 5 billion for the pleasure of it. Happy to pay a CGT in a world where the govt doesn't squander tax receipts and thinks that employing more people in the public sector is economic growth.
Yes the $5 billion is the cost of providing liquidity to the banks by buying back bonds when interest rates where high and then selling them when interest rates where low. And now you want a CGT based on 311 persons lets look at the quality of management in the public sector. Making the trough bigger doesn't mean better outcomes.
murray86, I hear you.
At first glance, a CGT that requires tax to be paid on an un-realized capital gain does seem a tad harsh. Many other tax jurisdictions with a CGT work on realized gains, i.e. when the asset is sold. But this 'pain' only exists on some assets types.
The one asset type that far, far too many are focusing on is rental property, be it housing, farms or factories. I.e. you can't sell a few square metres every year to pay the tax bill. (But! If you can't cover the annual CGT bill then perhaps the asset is being used uneconomically?)
With a share of something, you can sell a bit each year to pay the tax bill. (As an aside, people love to say that if you bought 1000 shares in Apple way back when, they are now worth xxx millions. In fact, almost all holders without significant additional incomes, have chosen to sell down to pay their taxes. Even Musk, Jobs, Gates, etc do this regularly.)
But an annual CGT, as proposed by the Tax Working Group, would be especially useful in NZ. Why? It would get the woefully bad investment that is NZ housing re-evaulated EVERY year and force these terrible investors to focus on what a) a good return actually is, and b) the fact that good returns come from accepting risk and actually creating additional goods and services. (See my post below on how CGT actually can and does increase productivity.)
My personal preference - at this point in time only - would be to allow the asset owner to chose to be taxed on only realized capital gain or annually, and once it became annual, there's no going back.
Giving the asset owner this choice lessens the perceived impact. (Smart investors would probably all chose to be CGT taxed annually.) I accept we wouldn't get as an immediate benefit as we would if people, en masse, suddenly started re-evaluating their investment decisions and house prices started to fall even further.
Another preference would be be to tax every asset, including the family home. Excluding the family home is massively distortionary - especially at this time in NZ. For example, most people around me, including me, have had their kids and are living in houses far too big for them. Other people need them. And the developers need the land in the inner city area I live in. If the family home is excluded from an annual CGT tax bill, there is little incentive for us to move to free up this land for others that need it more.
The Tax Working Group had a stab at designing a CGT. Other tax jurisdictions do CGT differently.
In my view, that's the only area for debate, i.e. How we do it. That it must be done is a no-brainer.
Sorry Albert202, I didn't make that point very clear. It's about when the CGT is collected.
If the collection of CGT is done annually, as per the Tax Working Group proposal, the CGT bill would focus the owner on the cost of holding the asset every year. This is the incentive to move and free up the asset for others or other purposes. For many of us, it becomes a kind of land tax, or a wealth tax. (Obviously, we'd expect our other taxes to be reduced to make the effect neutral overall - at least to start with.)
However, if the collection of CGT is done only when the asset is sold, i.e. when the capital gain is realized, too many older people will just sit on the asset and, if they're not cash rich, it will fall into a state of disrepair. If they choose to retain the asset, as in the case with housing, and to rent the asset then there is no chance of the asset being re-used for something else with a higher ROI. All the while, the economic value of the asset is wasted.
If the CGT collection is done annually, we reap far more benefit from it as it frees up capital, especially land. A CGT collected only when the asset is sold is also distortionary.
Note I said also distortionary. The other distortion is that owner occupiers have chosen to buy / invest in an owner occupied house. Why should they get an effect tax break over the person who choses to spend their money on other things, like maybe, building a business?
Nope! Not even a good substitute for proper regulation of the economy. Smacks too much of envy and socialism and not balance economic management.
At what point do you think it is appropriate for you to judge that someone else's home is too big for them and must be sold? Why wouldn't you apply that then to their car too? And where is the end to that?
There isn't a limited supply of cars, we can create new ones. There is, however, a limited supply of land and we cannot practically create any more of it.
That is the key difference between land and other assets, the natural monopoly of land and poor utilization leads to lower productivity which harms the wider economy and our competitiveness on the world stage.
Murray - what are your thoughts on property investors using equity (from rising property capital values i.e. not considered income) to buy more houses?
They have been using untaxed capital appreciation to compete with FHBs using taxable income (savings from wages and paying PAYE/Resident Witholding Tax). Is this fair? (I personally don’t think so).
And in many years recently, untaxed capital gains in property have been higher than many peoples wages from productive labour.
It’s a recipe for social and financial disorder - as we are now seeing play out around us in our housing market.
Realising that change in equity to borrow against should expose them to tax because they are "realising" that change in value. In other words they have change the appreciation of their assets value into income that they have put to use.
The underlying problem though is the Government's utter failure to properly regulate the housing market, leaving the banks to rampage through the economy unchecked.
We're in agreement here Murray - I think that allowing property investors to use capital gains/equity release as the deposit for additional properties is one (of a number) ingredients that has caused this mess of a property market.
This shouldn't have been allowed - cash deposits only should have been allowed.
I.e. to buy additional homes, property investors would need to have sold a home, or saved the deposit, in order to buy additional homes.
I suggest that the popular view is not what you are saying Donny. Virtually all discussion regarding Capital Gains is referring only the the 'value' of assets, and no mention is made of sales, or any other means of realising the change in value. So "gain on sale of asset" which is taxable already, is not a part of that picture.
Case in point, between 1995 and 2012 Apple shares rose 6,750%. $10k became $675,000.
Your trying to tell me because the shares weren't cashed in and realised that you had no income!!
If you sell Apple shares worth $675,000 for $675,000, there is no profit; i.e. no income. Usually a share price rises because the company is making more profit, or is expected to be making more profit in the future. The company will be paying tax on that increased profit.
Unrealised capital gains are not "income".
Realised capital gains are not "income" either. The sale of a property brings about a change in the disposition of capital rather than an acquisition of income. After all, the seller of a property may well be intending to reinvest the proceeds in another property, or even in the stock market; in which case the there would be no change in the amount of capital he owns. If capital gain is not taxable prior to sale should a mere change in the the disposition of capital be taxable.
"else there is entirely no point to investing in assets. Selling any asset for profit should be considered generating an income. Shops do it every day!"
Shops don't sell their assets: they sell their stock in trade. A supermarket doesn't sell its buildings, it sells cans of baked beans etc.. The purpose of investing is to make profit from productive activity, or from rent, not from capital gain. The latter, if it eventuates, is largely a fortuitous side effect.
Good point mikesh. You buy on the same market you sell and 1 house = 1 house. Owning a house for most kiwis is the only way of escaping the relentless devaluing of fiat currency. A capital gains tax would relegate home owners to the same miserable position as long term holders of cash.
I enjoyed your insights Chris, thank you. I would not benefit financially from a CGT, but it's a logical choice to harvest more tax without hurting the productive parts of the economy. Tax revenues need to be spent better, but given the state of our health system, schools, roads and water infrastructure more money is also needed. It's just a shame that even in the face of data pointing to a change being required in our tax system, none of our political leaders have the backbone to take on the challenge.
You've been distracted by the red herrings! CGT is a BS envy tax that is being used to deflect people from Government failures to regulate markets. Add to that the tax myths that are being perpetuated by vested interests that don't understand that the Government doesn't have to tax to fund programmes that produce an economic return. But a big part pf CT's article suggests he believes the welfare state is 'stuttering' along. I would actually suggest it is out of control and holding back if not crippling the country. I'm not arguing against support for genuine need, but NZ has gone far beyond that now. All theses are distractions that divert people from realising that narrow interest groups are gathering their coat tails in an effort to gain power in an election year.
When you live in Australia for a while or any other OECD country and see people paying CGT like it's no big deal, Kiwis look like a bunch of toddlers throwing their toys whenever it comes up. Asset owners are massive beneficiary group in NZ when compared to other countries.
People were throwing their toys when they got rid of plastic bags at the supermarket, it was the right thing to do and now it's just part of life that you don't think about anymore. This is what CGT would be like and we've have more money to pay for better services or reduce the burden on workers. It's the right thing to do and the issue is never going away until we actually implement it. We should just copy Australia's system and be done with it.
It's much more progressive with the top rate being 45c and the bottom $18,500 of everyone's earnings is tax free. They also pay 2% extra for medicare levy. GST is 10% except for it's exempt on fruit and veges. Then they have a CGT which is usually half of your income rate. So wealthier people pay a higher percentage of tax than in NZ for sure.
The family home is exempt from CGT in Oz. The 48% tax rate is on income over $180k, twice average. Next year the Labor Government in Australia is continuing with the tax cuts legislated by the previous Government. This lowers the marginal tax rate on all income up to $200,000 to a maximum of 30%. Once implemented, 99% of New Zealanders will be paying more income tax than someone on the same salary in Australia. With lower 10% GST. Also many ways to reduce property stamp duty including FHB exemption.
Aged care is much more regulated with a max 80% of the pension payable for care & you do not have to lose any of your accommodation payment unlike NZ.
They pay more per household in nominal terms and percentage terms. But because they have higher incomes before tax - they have greater disposable incomes after all taxes are taken out. Further, they have many more choices on how to avoid paying taxes if they're focused on paying down the mortgage.
And taxes in Oz are everywhere! Income & GST we understand in NZ. But then they also have CGT, Stamp Duty, Medicare, Mining, Customs, many corrective taxes (e.g. alcohol & ciggies), Fuel and even some financial taxes that are disguised are "levies" ... and that list is not exhaustive by any stretch of the imagination.
Their tax system is far better balanced than ours. Far better! That's how come young Australians get ahead whereas our young people are screwed by the wealthy older cohort and remain in debt for far longer than Australians do.
Unfortunately its the murrary86's self serving mentality that is replicated widely on conservative radio that means the status quo will unfortunately rein. As someone that earns a 6 figure income with a 7 in front of it I should be jumping on that bandwagon but I can see the social shit show that we face when we are stuck with an inequitable tax system. Income regardless of source needs to be taxed, we have too great of a dependence on income tax.
Why do you think my view is self-serving Albert? I note you have six up ticks too, so what interpretation are people putting on my comments that they do not have the courage to express?
With your six figure income starting with a 7 means you have almost 10 times more coming in than I do. So why do you think my view is self serving and not what I genuinely believe is best for all the people of this country? And where have I argued that income should not be taxed? Have you paid attention at all?
"...harvest more tax without hurting the productive parts of the economy."..."but...more money is also needed" There in those two conflicting statements, CITM, I think you have encapsulated the dilemma, which has not been addressed by the IRD study...which might have been expected.
The main take away from the study, repeated ad nauseam by the media is simply that the rich pricks should pay more tax. Not a good start to any comprehensive discussion about taxes including the efficient use of existing tax revenue.
a CGT, but it's a logical choice to harvest more tax without hurting the productive parts of the economy
A little known economic argument for a CGT is that it could actually increase productivity. Sounds odd but it has been born out by economic analysis. Consider this ...
A NZ "investor" buys an existing house. 20 years later they sell it for double what they bought it for. You'll hear them crow about what a great "investment" it was. But was it?
Using the Rule of 72 the capital return was about 3.6% ... before inflation! The rental return in the later years may make this number better but once all costs are taken into account it is not much better than inflation - maybe a few percentage points for the vast majority of NZ's "property investors".
Now if a CGT tax is added in, a real investor wouldn't look twice at such a deal. Ignoring the fact that a real investor wants to create additional goods or services (the economic definition of investment), the return would totally suck and the real investor goes looking for a better investment.
In NZ, these so-called mum & dad investors buy existing houses thinking they are doing real investment. They're not. They're mainly driving up the prices of houses while the banks who are lending them the money to do so are about the only businesses making money from the "investment". (And a few real estate agents, obviously.) Meanwhile, we're all losing out because our taxes are being used to subsidize accommodation for those that can not afford it because the price of houses is being driven up by the scarcity factor.
A CGT in NZ would force these these mum & dad investors to invest in real investments that actually creates new and additional goods and services. They'd get a higher return on their investments for taking on a bit more risk. And most importantly - they would NOT need to borrow huge sums from banks to do it as they could buy a "share" at a time.
So if you've ever wondered why NZ's productivity is one of the lowest in the developed world ... It could be because we're only one without a CGT !!!!
Couldn't agree more. Unfortunately the attraction is lack of risk in buying the renter-I mean growth risk. For 50 years the average Aucklander would have been a mug if he didn't get in on all the non stop growth that the Auckland market has served up. Compare that to buying stocks and lots of the same people would have taken a beating in their portfolio at times. Sure if they had nerves of steel and didn't sell at the lows they would probably have come out fine, but that is not how human nature works for many. Not having a Capital Gains tax on investment properties has done exactly what you have stated. It's going to take a different type of "Winston" to change the tax code. We need a 1940's ear Winston-not the 1970's variant.
The problem is Chris that what perhaps your suggestion of "real investment" is is buying shares on the share market. But I'd suggest that despite the hype it is not real investment unless the purchase is an IO (initial Offering) which is when a company is first sold as shares and is usually to raise funds to further invest in the company. Other than that it can quite difficult to invest in ways to produce real goods and services without buying or depositing into a fund. The government here doesn't seem to want to encourage that.
Not just initial offers. There are rights issues and new shares issues. Also Capital Notes that may convert to share. And debt issuances. We don't see much of this on the NZSE but in more developed markets they're very common. Many overseas companies don't like banks much and will go to the market to raise new capital.
And then there are property syndicates large and small ... In the UK, some are just 10 or so investors buying up a run down building and turning it into something nice to on-sell.
So many options to buy new. NZ "investors" really aren't that sophisticated.
Agreed.
Indeed on some rights offers I've had concerns on the intended use of funds raised, but the risk is that any shareholding will be diluted if the offer is not taken up. But you are correct, although you have to have speculated first by buying shares in the company.
It's just a shame that even in the face of data pointing to a change being required in our tax system, none of our political leaders have the backbone to take on the challenge.
TOP has a tax reform proposal: https://www.top.org.nz/fair-tax-system
CGT is against the NZ psyche, so there is very little chance of any Government introducing it, in the next decade or so.
Asset Tax may be an acceptable alternative. Say those with Assets of more than $25 mil, pay annual tax of 1%or 2% on the assets value exceeding $25mil. The Family home to be exempt. This may fly ?
I have to ask why when a party claims to be the "defender of working people", that they are immediately labelled as "embracing socialism" or being socialist? why can't they just be arguing that they are embracing the principles of democracy, where everyone is supposed to be able to participate equally, rather than tracking to the polarised capitalist or socialist extremes?
But this article is not actually about tax or other inequities, but rather about extreme factions endeavouring to derail mainstream parties which are in power. I would suggest that Hipkins is right to deny them much of a voice in the run up to an election lest they condemn Labour to the dust bin of 'has beens'.
What happens, if it turns out to be, that the mainstream political parties you refer to, are in this time of crony capitalism, the problem?
And anyone who opposes them are 'conspiracy theorists' or 'extreme factions' (as you describe it) because they don't control the state owned media and can't control the narrative and so their views are silenced and/or ridiculed? The general populace just believe what they're being fed by the mainstream parties (via the mainstream media) without ever independently thinking and analysing and researching the issues.
It all starts to sound a bit 1984'ish/Orwellian like doesn't it - which to me is very scary.
BTW - this appears to be the platform that guys like RFK Junior are tapping into at present - and which Elon Musk is trying to expose via his free speech mandates on Twitter (without the government control).
It is CT who identifies that factions are trying to take over the Labour party IO, not me. Besides i do think the mainstream parties are the problem. they've bought into a narrative that has created huge problems for the country and don't appear to have a vision to fix it.
David Parker dropped the ball in this interview.
Could not give a good answer to a question on imaginary income.
Parker asserted that unrealised capital gains can be spent....which is obviously untrue.
Eg. The "on paper" value in your house ....
"Parker asserted that unrealised capital gains can be spent....which is obviously untrue....." So I cant use the unrealised capital gain in my primary residence to use as a deposit for another house and then rinse and repeat? Or to buy a boat, or invest in a new business? Seems that one can spend unrealised capital after all. This spending of unrealised capital is the golden ticket to prosperity in NZ is it not?
This spending of unrealised capital is the golden ticket to prosperity in NZ is it not?
It is. But there are other ways of countering that aside from tax - for example TOPs proposal;
Requiring a deposit of 100% of the value of an existing home when purchased for investment purposes. This ensures property investors don’t just use the value of an existing home to purchase another (reducing property speculation)
https://www.top.org.nz/affordable-housing
Note, this is only for existing homes - so new builds as investment property are not captured. So simple - killing two birds with one stone as it encourages investment in new infrastructure, which is where it should be encouraged.
Underrated policy announcement from them, investors buying existing stock really isn't actually providing much in the grand scheme of things. If we can encourage investors to build new supply that would actually start to fix the problem.
The current setup is basically incentivizing investors to not create anything new and instead tighten the market so they can extract more from existing houses without actually having to create anything new. It's parasitic to the wider economy.
So your issue is actually leveraging - which is a credit control issue, not a tax issue. The only reason to pursue it as if it was a tax issue is to further some other ideological end. And we already have other tools to address this - the fact RBNZ and the Minister of Finance keep dithering on a proper DTI is no reason to completely upend the tax system. It does, however, have the side-effect of dragging in a whole new tax base, which a government that's bloating out of control is probably salivating at the mouth for
Taxing unrealised gains will not make the government or RBNZ any better at making financial decisions, but it will let them wee away more money from taxpayers on their own projects without having to contemplate who is getting any value out of the exercise, if anyone at all.
Multiple ways to tackle the issue GV. Tax is one part of the tool kit but not the only one.
Tax is still structured in a way that encourages investment in real estate rather than other productive avenues.
I will once again state that I do not support a CGT on unrealized gains, but a land value tax on the unimproved value of the land would help incentivize investment away from speculation as well as take pressure off of incomes, whilst balancing the tax load equitably between everyone.
...Not really, because you now have ordinary Kiwis leveraged to the hilt largely for land because of decades of systematic failure at a council and central government level. So tilting our entire tax system on the basis of this report (when the report points out very little of that wealth is held in land compared to actual, tangible business) would have a bigger impact on everyday people, who are likely to have their house as their biggest asset (should they be so lucky).
And in the event land prices do dip, Crown revenues will need to be propped up somehow, and given our experience with income taxes not being adjusted, there is a near certainty that we would end up with an LVT and income taxes at their current levels. Never mind you would be entrusting people who see no issue with our current mess of a relatively simple system to design a new one from scratch. The odds would not be in our favour.
Ordinary Kiwis with one house would not be severely impacted by a low LVT that is bought in over time.
And just because something has been done wrong in the past doesn't mean we can't fix it in the future. Unless you have any better ideas to fix decades of systemic failure at the council and government levels. It's like saying it wouldn't be fair to cure sick people now because other people have been sick in the past so we should just keep everything the same.
The report was a hit piece and of limited value, but it's an undisputed fact that the majority of the wealth in this country is tied up in land. Land in itself is not productive, but it can be utilized productively. Our current system does not encourage the productive use of land and part of the appeal of bringing in an LVT would be to encourage more effective utilization.
And if you were to structure it sensibly, you would do something like rates, where you start out with a certain amount and collect that amount evenly between the rated values of all properties, that way revenue would be stable and predictable.
Could even rise it during inflation to quell inflation rather than using interest rates and would have a more evenly distributed effect if we are spitballing here.
The argument was that unrealized gains can’t be spent..clearly I provided an example where that is not true. That paper equity in your house is being used as a means to bring spending into the present rather than realise those gains when the house is sold in the future.
".so whats a reverse equity mortgage? Yep...spending of unrealised cap gains (and opening capital)." No, a reverse mortgage is when the property is sold to a buyer, but the seller remains in occupation for the term of the mortgage. So if there is capital gain in the sale it is still realised. It just doesn't get paid to the seller in a lump sum. ANY CGT might take a share of the payments.
Poor Nzers chance of progressing is through developing skills and education, and that is Labour, Adern and Hipkins major failing. While Adern basked in the covid limelight, a generations future was being destroyed.Extra tax revenue to this government is like advancing $10,000 to a problem gambler, and expecting it to fix their problems. They need to improve financial discipline and make spending effective.
Marama Davidson $900,000 of $75m spent on alleviating homelessness, and Jan Tinettis incredibly weak response to "Sundays" questions on over 50% truancy are this weekends examples.
Dead right. The current tax take in this country is at record levels. A large part of this comes from unindexed thresholds and high inflation giving govt 'windfall' tax collections from the pockets of mainly middle and lower class PAYE workers.
And we have very little to show for it. Poor education, crime, health outcomes and a huge infrastructure defecit.
I agree the tax system needs a rebalance between the tax take on labour v capital but only if any tax on capital is used to lower tax on labour.
However I do not trust this Labour govt. Any increased tax will be used for pet projects and on election bribes.
The abysmal quality of government spending and the squandering of the current record tax take is a disgrace.
I've never voted for anyone except Labour (or their equivilents in other countries I've lived in). I've allways concluded that their overall set of policies will be better for the country & society than any alternatives.
But not this time.
Unless they commit to an overhaul of the tax system to make it fairer I'll be voting elsewhere. Cowardice when Leadership is required is 110% unacceptable!
Probably TOP or Greens. If that's a wasted vote - then so be it.
Chris likes to talk about the working class - but who are they? It does appear to assume that small business owners are not working, nor contractors, farmers, scientists, people with university degrees etc etc
Mahuta's dealing with the impact of colonialism in the Pacific! - what, by assisting the CCP to take over as the new colonial power
And regardless of the merits or otherwise of a CGT, Jacinda had the opportunity to overhaul the tax system to make improvements - the opportunity but not the leadership skills and in my view not the smarts either. Lets hope Nicola is better at both
As a frontline health worker, I definitely work for a living. And as a government employee I have had to endure a decade of watching my salary go backwards against inflation, and the NZ median income generally. Australia starting to look good once the kids are old enough to look after themselves
Well put Chris. Who is brave enough in our Parliament to use this information to radically change our tax system to help address inequality? The answer is on-one. The vested interests and their lobby groups have such a hold on the ruling parties there is no chance for change currently. I am disgusted with the current set up. The working class have no elected representatives any longer. We were effectively broken in the nineties. When National start defending the working class with no pushback or mockery I know the world has gone mad and we are toast.
Pretty sure pushing this is just be another nail in Labour's coffin. Surely this whole debate just misses the point that the real problem with surviving in NZ is house prices and thus rent and mortgage requirements. Land tax, and eliminate lazy land based debt speculation. Leaves capital gain out of new companies that employ people and pay a lot of tax on the way.
This is the way.
The political party that stands up and says "the current tax system is not working, we are going to change it" probably gets my vote. If it is a "wealth tax" balanced against income tax cuts then I win socially. If it a flat tax, then I win financially. Currently, however, as a working professional I lose through all of my income being taxable, and having to watch the country collapse under social inequalities and neglected infrastructure.
The debate isn't about government expenditure. The debate is around government revenue.
The most credible argument is that it's not sustainable to continue solely relying on middle NZ's PAYE income to fund everything. That we need to be getting revenue from a broader range of sources, especially as asset rich retirees start to flood into the system and put even more pressure onto a shrinking pool of income earners.
Maybe not, but it might feel like I was better rewarded for my hard work. It might also promote investment away from property speculation. It might also lead to a society which is less divided.
As a middle class professional with a house I'll get taxed either way but I'll be happier if it makes NZ a better place.
Well said.
GV seems to be ignoring the concepts of Pigouvian taxation, where one of the purposes of tax other than generating revenue is to discourage behaviour and offset negative externalities.
When speculation is rewarded with tax-free gains and working hard is no longer correlated to higher incomes, the disassociation of effort and reward makes society as a whole more fragile.
Yes while no one is studying it, I think there is a huge demotivating effect that happens to young people when witnessing a property boom like we've had. This is a negative externality to the wealth effect that the reserve bank was trying to achieve through the pandemic.
Some young loose hope in their future especially if they don't have wealthy parents. Others that know they can get a deposit from their parents, see that that's where they will make their money, not through any work or innovative business. I have a nephew who has seen everyone making a quick buck through property and thinks that's the answer to his future success. Seems like a lot of wasted potential to me.
Even if we cut all the spending on useless consultants and other worthless bureaucrats, we would still have a massive infrastructure deficit. Massive superannuation increases will be incoming as the boomers retire. Crumbling health systems that need massive increases in frontline staff investment to stay afloat. What are your answers to these issues other than cutting spending?
You can't tax your way to prosperity but you also can't budget your way out of poverty. The talk about a CGT isn't so much about getting more revenue as it is getting revenue from somewhere other than incomes as realistically that will be a shrinking pool as the demographic crisis hits.
https://jobs.mbie.govt.nz/job/Wellington-Senior-Policy-Advisor-%28Incom…
Even though these lying pack of ba#$@rds said that the income protection tax was cancelled. Here they are advertising jobs for it.
Thank you David Seymour for letting us know. Luxton would have but he hasn't read the jobs yet.
Both National’s and Labour’s(to date) positions are unconscionable.
There is no justification for the rich to be subsidized by the poor.
Futhermore the lack of capital gains, inheritance and wealth taxes simply distort investment flows as they seek the lowest tax outcome rather than productive use of capital.
Ardern had an absolute majority and wasted it.
For how long does NZ remain the outlier in the OCED. The only one without a capital gains tax.
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