"most other countries made concessions when they brought in goods and services tax to alleviate the regressive nature of the tax NZ didn't which in my view makes it more unfair "
Just as you typed.
Printable View
"most other countries made concessions when they brought in goods and services tax to alleviate the regressive nature of the tax NZ didn't which in my view makes it more unfair "
Just as you typed.
Do I have to spell it out then. Read the whole of the re quote of your post I copied in post #256. Simple comprehension exercise. You stated NZ didn't make any concessions when GST was introduced and in fact they did as explained in my original reply and confirmed by FP.
I don't have a problem with CGT in NZ. But I do have a problem when CGT erodes and discourages investment in NZ. Without investments, you lose jobs, it's that simple. If you disadvantage those that have the $, then you will have what many other nations experience, a 'flight of capital' (Brexit is a good example)
We're not trying to encourage foreign trusts in NZ. What we don't want is to signal the global investments community that NZ is anti-investment and pro-tax. Every OCED nation has foreign trusts laws and it was about time NZ tax laws had aligned to their level. But to talk of a CGT that is not aligned to how other nations treat CGT?Quote:
Does NZ really want to encourage people with foreign trusts, on the whole they sound like a bunch of rotten, selfish self-centred scumbags should we really be helping them. Let them flee somewhere else.
Foreign capital investing that involves building or improving industry/assets in NZ is no doubt good for the country, not so sure if buying existing businesses and farms and taking the dividend offshore is a good idea or even worse thin capitalisation(see link below).
http://www.stuff.co.nz/business/opin...carpet-rollout
Also you have to stop thinking NZ is a major player in the global scheme. It has no real currency controls so $ can flow freely in and out. When you have something like a CGT that thwarts investment in NZ by foreigners, then it will impact everything. Your Kiwi Saver, your economy, jobs, nothing will escape, and sadly it translates to a lower standard of living. Anotherwords, do you understand how dependent NZ is on foreign trade and investment? Just because farmers can sell more product at lower exchange rates (makes them more competitive), on the other hand you have to import goods that NZ doesn't produce AT THE higher cost (as most trade is based in USD). Also how do you produce an income generating asset in NZ when locals alone don't have the funding? You realise that when the NZ gov't privatised it's assets, a lot of it went to foreign ownership. Ever questioned why?
Again IMO, a very weak NZD is a drop of standard of living in NZ. Again quite simply because NZ is a very small country and is more dependent on international trade than what large nations can simply produce their own products. NZ will never be in that position.Quote:
Also came across a bit of history regarding this company while looking for the chalkie article.
http://www.stuff.co.nz/dominion-post...lingtons-power
I don't buy the capital flight threat, worst case scenario income generating assets and land become more affordable to NZers and a declining NZ dollar makes our productive exporters more competitive.
I think you can always put a negative or positive spin on something.
As I said before, tax concessions are nothing new and almost every OCED nation has it. I do not believe it's an excuse that NZ needs to have a simplified tax roll for the sake that "the avg NZ person can't understand what concessions are and who don't believe accountants know what they're doing". It's a poor excuse. Not trying to be anti-CGT. It's just that the world has become a small place and if NZ sends the wrong message, the general population as a whole will suffer.
I do not see how a tax when your purchase goods or services from your net income is any more justifiable than a tax when you sell an asset for a profit.
To keep it simple, CGT should not have an exemption for the “family home.” By creating such a major exemption, household capital investment decisions will be further distorted. Of course a CGT on the family home would mean tax cuts in other areas to maintain the neutrality on the amount of revenue raising. IMO It would be better not to introduce a CGT than to introduce one with such a major exemption.
The absence of stamp duty, capital and capital gains taxes with a resulting concentration on GST and Income tax is regressive in effect.
Its all a bit hard until we see the detail. I spent the weeknd putting in a couple of hundy worth of new irrigation lines and a hundy on a bucket of fence paint. I'd be expecting to put this onto the capital value of my home (plus the value of my labour) before getting taxed on any increase in value I might get when selling the home.
Great fun! Every home owner keeping receipts and books (might as well hire an accountant) for everything they do on their own home to satisfy the CTG police. As to how much you apportion to your labour, maybe the IRD can publish "labour rates" every years as they do for car mileage :)
I agree Every tax involves compliance issues.
Imputed wages (deductibility and PAYE etc.) for the home-owner and the work she does on her own home would be great for Cullen to get his teeth into!
I am not sure about irrigation but Wouldn’t a lot of maintenance costs be expensed against income not capital? Which in relation to owner-occupation is not taxable as imputed rent in NZ is not taxable and imputed rent is an area that as far as I know has not been touched on by the tax review.
I don't disagree with all that you say, a lower dollar increases competitiveness and as you point out NZ is more dependent on international trade. A lower dollar is a drop in your standard of living and an increase in the price of imports. I have read economic textbooks that say this. How big a drop might be hard to measure.
I don't think NZ is a major player globally in anything (other than maybe rugby and sailing).
I just don't buy the argument that a CGT will cause capital flight and cause the ruination of our society. If the well-off are threatening the rest of society because their wealth is so great they can destroy a country pandering to them and letting them become even more powerful won't make society any better.
Did you read the example of the wellington electricity lines company above? Do you believe Asian investment in Auckland's housing market has been beneficial to anyone other than those selling up? How much went into new houses compared to existing. I don't know myself but don't see foreign investment as the be all and end all. I may be proven wrong but you will probably be gone long before you get a chance to say I told you so.