A Wealth tax should be the new baseline of a tax reform conversation in this country. Use the bright line to have a de facto CGT for housing speculation, even if the goal line is subject to changes of Govt. TPM and Greens have run on this, and we know parts of Labour are keen. TPM and Greens should unite and make this a bottom line negot…
A Wealth tax should be the new baseline of a tax reform conversation in this country. Use the bright line to have a de facto CGT for housing speculation, even if the goal line is subject to changes of Govt. TPM and Greens have run on this, and we know parts of Labour are keen. TPM and Greens should unite and make this a bottom line negotiation in any future coalition agreement.
Electorally a Wealth tax side-steps the long simmering aversion to having to pay tax on the family home, a concern I hear constantly from very-much not wealthy relatives and friends. If you can clearly campaign on a tax that 98% of the population won’t pay and can offer something universal and substantial in return (say, expanding free schooling to include ECE, free yearly GP visits, including dental treatments in the public healthcares system, lower GST, etc) - boom.
It also better addresses the root rot in our economy; concentrated pools of stagnant money sitting in non-productive assets. Better to have that flowing to more parts of the soil.
Windfall profit taxes that are triggered during periods of high inflation to punish and discourage corporations from taking advantage of inflationary periods to expand their profit margins should also be an easy sell. It could also be a part of a concerted suite of packages to better protect us from the sources of inflation in the future (alongside on-site solar energy production and EV rollouts to hedge against oil/gas fluctuations, and higher tech, decentralised food production to hedge against extreme weather damaging crop yields).
Good call. But why have so many European countries ditched them in the recent years? Lots of them had them and now, apparently very few. Presumably the antis would seize on those reasons to oppose them
Wealth can be hard for the Inland Revenue Department to pin down, and easily moved beyond its reach overseas.
Except the fixed and visible wealth of land and buildings.
Which is why land tax and capital gains tax make more sense than a broad wealth tax.
And land tax already exists as local-body rates.
Which leaves capital gains tax on the sale of fixed property, including the family home.
Susan St John and Terry Baucher have proposed a form of this which, to make it politically acceptable, would effectively exempt the first $1 million of property value, excusing most home owners from this Fair Economic Return version of a CGT.
I hope Labour brahmins will give it serious thought.
Re "the long simmering aversion to having to pay tax on the family home, a concern I hear constantly from very-much not wealthy relatives and friends" - yes. I know someone who struggled for several decades as a homeowner, in the early stages having to get flatmates to cover the mortgage, having to top up the mortgage to pay for repairs and facing difficult personal/relationship issues later on. They eventually sold for a good capital gain but it's hard to begrudge them that considering how hard much of their life as a homeowner was.
A Wealth tax should be the new baseline of a tax reform conversation in this country. Use the bright line to have a de facto CGT for housing speculation, even if the goal line is subject to changes of Govt. TPM and Greens have run on this, and we know parts of Labour are keen. TPM and Greens should unite and make this a bottom line negotiation in any future coalition agreement.
Electorally a Wealth tax side-steps the long simmering aversion to having to pay tax on the family home, a concern I hear constantly from very-much not wealthy relatives and friends. If you can clearly campaign on a tax that 98% of the population won’t pay and can offer something universal and substantial in return (say, expanding free schooling to include ECE, free yearly GP visits, including dental treatments in the public healthcares system, lower GST, etc) - boom.
It also better addresses the root rot in our economy; concentrated pools of stagnant money sitting in non-productive assets. Better to have that flowing to more parts of the soil.
Windfall profit taxes that are triggered during periods of high inflation to punish and discourage corporations from taking advantage of inflationary periods to expand their profit margins should also be an easy sell. It could also be a part of a concerted suite of packages to better protect us from the sources of inflation in the future (alongside on-site solar energy production and EV rollouts to hedge against oil/gas fluctuations, and higher tech, decentralised food production to hedge against extreme weather damaging crop yields).
Good call. But why have so many European countries ditched them in the recent years? Lots of them had them and now, apparently very few. Presumably the antis would seize on those reasons to oppose them
Wealth can be hard for the Inland Revenue Department to pin down, and easily moved beyond its reach overseas.
Except the fixed and visible wealth of land and buildings.
Which is why land tax and capital gains tax make more sense than a broad wealth tax.
And land tax already exists as local-body rates.
Which leaves capital gains tax on the sale of fixed property, including the family home.
Susan St John and Terry Baucher have proposed a form of this which, to make it politically acceptable, would effectively exempt the first $1 million of property value, excusing most home owners from this Fair Economic Return version of a CGT.
I hope Labour brahmins will give it serious thought.
https://www.auckland.ac.nz/assets/business/our-research/docs/economic-policy-centre/pensions-and-intergenerational-equity/PIE%20Policy%20Paper%202022-2%20Fair%20Economic%20Return%20revisited.pdf
Re "the long simmering aversion to having to pay tax on the family home, a concern I hear constantly from very-much not wealthy relatives and friends" - yes. I know someone who struggled for several decades as a homeowner, in the early stages having to get flatmates to cover the mortgage, having to top up the mortgage to pay for repairs and facing difficult personal/relationship issues later on. They eventually sold for a good capital gain but it's hard to begrudge them that considering how hard much of their life as a homeowner was.
When you factor in the amount of interest one paid on the mortgage of the family home, do you really have a capital gain or is it a paper one?
It's a complicated issue because our economy is basically a housing market.
I don't think one tax will solve it. It has to be a combination of taxes, incentives and a massive house building programme.
Another way to limit windfall profits is to reintroduce the regulation of excess profit back into the Commerce Act.