No. Our consumption tax (GST) is a sensible tax, and a rise in GST with a reduction in income tax would not only be productive, but with tourism being one of our top earners makes a lot of sense. Even gets rid of the nonsense of a tourist tax.
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so the top rate of 33% does not look so bad in conjunction with the flat rate gst, which you don't have to pay if you can invest your savings in investments for the capital gain.
the tourist tax is a questionable one...
i agree dropping the income tax rate and introducing a cgt could boost production.
I do a lot of travel around the world - tourist tax is nothing really.
Increasing GST is a good and bad idea.
Unfortunately it hits the poor the most because they spend all their money on things that attract GST.
My, I travel overseas and that doesn't attract GST.
Also, reducing the tax as compensation sounds good - except over 50% of tax payers effectively don't pay tax with WFF etc.
So reducing from 0 doesn't really help them.
So a double wammy for them.
I don't know who you are agreeing with. I said GST, not CGT. The worth of a capital gains tax depends on its design. It certainly should contain a repatriation clause. And in spite of what the hoi- polloi think, investment in real estate is treated no differently from shares or any other commodity investment. Besides, traders in real estate are taxed at their marginal tax rates at present.
The aging population should have had the means to look after themselves before they become aged. Every dollar going to something like a quioxite windmill that is climate change is a dollar they can't use to support themselves.
Less kids means less suffering ill health in bad conditions.
We need migrants (low paid) simply because local NZers dont want to do low skill work. Dont get me started on Nationals manipulation of the labour market with their pay equity meddling. There is zero excuse for not having enough tradespeople to build houses - if christchurch earthquakes wasnt enough to give these apprenticeships an endless supply of job seekers then nothing will. Proof to there being alternatives to getting a meaningful job to pay for an affordable house.
As with all taxes, the devil is in the detail.
Family Home will be exempt apparently - that introduces distortions in the same way that stamp duty creates with houses in Australia. For instance, a potential unintended consequence is that, owner-occupiers spend a lot of money renovating and improving their homes at the expense of investment of productive assets (or even over-capitalising) which makes existing homes less affordable to first home buyers.
Housing rental stock. Presumably the CGT would apply when sold so we could see further hoarding of properties by larger groups and ma/pa investors bailing out because they fear a CGT (non rational as you have to make a gain to pay tax) and we end up with rental stock being illiquid for affordable homes.
Farms, businesses. So when does the CGT apply - do we set a baseline value at 'valuation day' for all post valuation day gains... good luck with administering that.
Do we have a carve out for long term holders of farms/businesses (beware hoarding effect).... what about baby boomers who are selling businesses - do they increase price to compensate for CGT and are all those baby boomers looking to sell have interested buyers now let alone with a CGT? Will that stifle investment in productivity?
What happens to capital losses?
These are all things to be worked out... what about the effect of inflation reducing the value of money.... what index do you use for this...
I'm glad that someone else has to sort this out... and potentially the extra tax returns to be filed and sort.