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  1. #1
    The Good Banksie's Avatar
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    Default The Opportunities Party

    Am I understanding their tax policy correctly http://www.top.org.nz/top1? That they are proposing a tax on the theoretical rate of return on all assets you own including your primary residence?

    I am all for greater equality but I don't think this will do it. Isn't it just redistributing wealth from the old (who are living in their own mortgage-free property, drawing little income) to the young (who are drawing income but don't yet own assets)? Sure those with large asset portfolios will have to take on more of the tax burden but so will the average grandmom and grandpop.

    I don't think he will get much traction with this.
    Last edited by Banksie; 08-12-2016 at 08:19 AM.

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    Banksie wouldn’t greater equality mean a redistribution of wealth from the rich to the poor (or society as a whole).
    Details are a bit vague but the idea in theory seems OK to me.

    It is a wealth tax as I see it not an old versus young debate. Admittedly the older generation hold most of the wealth. I think we would need to see the levels of income TOP is proposing. I suppose in theory if your return on equity based on an average house came out to about the same as national superannuation then there wouldn't be any additional tax to pay for a superannuitant living in an average house with only national super for income (e.g. $500,000 @ say 5% equals $25,000. Nat Super for a couple is $33,935 so you would need a rate of close to 7% before they had to pay anything).

    It sounded like this might not be the case and a debt would accrue against the house (e.g.a $1mill house at 5% is $50,000 less super 33,935 then tax to pay on $16,065 at whatever rate the wealth tax is set at). Gareth has explained that only 20% of the population would be worse off. Maybe as we get some details as to how it would work in practice we can judge better. Your QV might become pretty important but it is already relevant for rates anyway.

    Please note I am only guessing how this tax will work in practice.

    At least we have a party trying to make the tax system fairer, all the current govt. has done is raise a regressive GST rate to reduce a progressive income tax rate while ignoring capital gains or wealth taxes. Why the majority of fair minded people aren't enraged by the national govt over the last few terms is beyond comprehension. Self interest will always win in the end but we must be getting to a point where even the average home owner can see something is not right and we need change otherwise society starts to become worse for everybody.

  3. #3
    Legend peat's Avatar
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    Yes the theoretical fairness of the tax proposal would appear to far outweighed by the political considerations. Most people wont understand this and hence it is unlikely to gain electoral traction. Even a PWC tax expert on the radio yesterday thought it was quite a good and equitable idea (devil in the detail of course e.g. 5% imputed return seems a bit high at the moment) but would be burdened by administrative overhead, and lack of understanding by the masses.

    It wont happen, but actually it would create a much better environment for productive investment.

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    Its just too difficult to understand. Will not gain any traction whatsoever is my view. Might be nice in theory and equitable but the masses need something easy they can actually understand and this is not it.

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    What is the political consideration? That people will be afraid they will pay more tax so won't go for it. That makes 80% of the population morons and they get what they deserve when they go to the polling booth and vote for the next John Key cause he seems like a nice guy. John Key has done his best to make NZ more unequal without rocking the boat and a job well done I might add. I wonder if the masses are too stupid, lazy or fearful to vote for change or a combination of all three.

    As far as being too hard to understand how many people really understand the current tax laws? Not many I would guess otherwise how do accountants get away charging what they do. I don't like change myself but can't help feeling the path NZ is on won't be making our country a better place for the majority in the long run and we need to do something. I guess I am in a minority.
    Last edited by Aaron; 08-12-2016 at 10:22 AM.

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    Actually I should tone it down as me suggesting anyone is stupid, lazy or fearful is hypocrisy of the highest order.

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    Quote Originally Posted by blackcap View Post
    Its just too difficult to understand. Will not gain any traction whatsoever is my view. Might be nice in theory and equitable but the masses need something easy they can actually understand and this is not it.
    You can add to that the enormous complexity in valuing cars, art, property, shares and various assets every year for your tax return.

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    Quote Originally Posted by fungus pudding View Post
    You can add to that the enormous complexity in valuing cars, art, property, shares and various assets every year for your tax return.
    Exactly FP, I already struggle (I have an accounting degree) with the FIF rules on foreign investments. Imagine if every Kiwi had to do this with the added complexity you mention above.

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    Bring it on! This party will only attract the left of centre voters. The bottom line is that those who made it are not going to want to give back to other who may not have even tried. As to taxing assets, watch the programme Posh Pawn on the box. A simple piece of jewellery can be tossed into a suitcase and transported to the UK or somewhere and converted into cash. If you live an outwardly simple life, then you will not attract the tax gatherers. And gathering such taxes as proposed will require an army of civil servants who just might just cost more than they gather.

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    Too hard to understand is bull****. Just like a capital gains tax is too hard for John Key to implement.
    Paul Henry was saying it is like communism or that people won't aspire to anything if we tax wealth. What a load of bull****. We tax income and goods and services, no one has stopped working or buying **** they don't really need.

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    Quote Originally Posted by Aaron View Post
    Too hard to understand is bull****. Just like a capital gains tax is too hard for John Key to implement.
    Paul Henry was saying it is like communism or that people won't aspire to anything if we tax wealth. What a load of bull****. We tax income and goods and services, no one has stopped working or buying **** they don't really need.
    Its not bull **** Aaron. It would be a bureaucratic nightmare and just would not work. Look how he bumbled and fumbled on PH this morning. It reeks of socialism and big brother telling you that a $100k car is better for you than a $500K car. It diminished the chance to choose. His policies would also create huge loopholes and behaviours to hide or minimise wealth.
    As an aside, how are the plebs going to be able to value all their assets? Get a valuer in... the costs would be astronomical.
    Keep receipts from all purchases and keep a register.... likewise.
    It's not a policy that would resonate with voters and I think he has done his dash.

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    I imagine the valuation of your car and furniture would need to be simplified but would be in there to tax people who moved their wealth out of real estate into art or cars to get around paying a wealth tax. I wonder if gold would be considered currency like it is in the GST Act and therefore exempt(I doubt it as it would be an easy loophole.)
    Socialism/Communism the definitions are too close. We know communism doesn't work but we have had a watered down version of capitalism long enough now to know that it isn't working either. Anyone like the National government that makes society more unequal is evil in my opinion. I am sure the national MPs are only thinking of improving their own situation and don't set out to hurt the less fortunate but that is what their policies will/are doing.

    How about a government trying to make life fairer for everyone. I understand nothing will be perfect for everyone and nothing will ever be perfectly fair but NZ is better in my opinion if we have concern for one another rather than just thinking about ourselves all the time. I know I am too selfish to do it myself so that is why I am happy to let the government do it on my behalf through taxation and redistribution.

    The wealth tax does come with the assumption that everything you spend on, you should be considering a return on your investment but isn't that what a good capitalist would do anyway.

    Maybe we need to wait for more detail before getting into a debate about it.
    Last edited by Aaron; 09-12-2016 at 04:43 PM.

  13. #13
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    Quote Originally Posted by Aaron View Post
    I imagine the valuation of your car and furniture would need to be simplified but would be in there to tax people who moved their wealth out of real estate into art or cars to get around paying a wealth tax. I wonder if gold would be considered currency like it is in the GST Act and therefore exempt(I doubt it as it would be an easy loophole.)
    Socialism/Communism the definitions are too close. We know communism doesn't work but we have had a watered down version of capitalism long enough now to know that it isn't working either. Anyone like the National government that makes society more unequal is evil in my opinion.
    It is hardly the government that makes society unequal. It is those in society who are risk takers, hard workers, and those lucky enough to be talented/gifted.

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    Quote Originally Posted by fungus pudding View Post
    It is hardly the government that makes society unequal. It is those in society who are risk takers, hard workers, and those lucky enough to be talented/gifted.
    Personally I think the issue is about making the tax system fairer. Why is taxing hard earned income more acceptable than taxing wealth. More so when central banks around the world bailed out the "risk takers" in 2007-2008 and continue to bail them out with easy money and low interest rates further pushing up the value of their investments.

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    Quote Originally Posted by Aaron View Post
    Personally I think the issue is about making the tax system fairer. Why is taxing hard earned income more acceptable than taxing wealth. More so when central banks around the world bailed out the "risk takers" in 2007-2008 and continue to bail them out with easy money and low interest rates further pushing up the value of their investments.
    The only fair tax is a levy system where everyone pays the same dollar amount (poll tax) Not acceptable generally, but it is fair. Next to that a percentage based tax, aka flat tax. The unfair taxes start when progressive taxes are enforced. Tax based on ones ability to pay is quite acceptable to the majority of taxpayers, including me, but for Allah's sake - don't ever pretend it's fair. There is NO justification for calling it fair, anymore than basing the price of weetbix, wheelbarrows or whisky on your income or assets.
    Last edited by fungus pudding; 11-12-2016 at 11:37 AM.

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    Quote Originally Posted by Aaron View Post
    Personally I think the issue is about making the tax system fairer. Why is taxing hard earned income more acceptable than taxing wealth. More so when central banks around the world bailed out the "risk takers" in 2007-2008 and continue to bail them out with easy money and low interest rates further pushing up the value of their investments.
    Depends entirely on your definition of fair does it not? I for one do not think taxing wealth is fair at all. Its already been taxed during the income phase and so why should people who are frugal (thus have some wealth) have to pay more than others that fritter it away.

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    Quote Originally Posted by blackcap View Post
    Depends entirely on your definition of fair does it not? I for one do not think taxing wealth is fair at all. Its already been taxed during the income phase and so why should people who are frugal (thus have some wealth) have to pay more than others that fritter it away.
    No. But if you advocate robbing Peter to pay Paul, then you will find a good few Pauls to support you. It's envy politics- quite unworkable and unsaleable, especially when promoted by Morgan who I do not think is a popular character among the hoi-polloi.
    Last edited by fungus pudding; 11-12-2016 at 11:53 AM.

  18. #18
    The Good Banksie's Avatar
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    Tops second policy, immigration, is out http://www.top.org.nz/top2. I like the idea that it makes it easier for skilled migrants to come here. I immigrated to NZ as a skilled migrant 7 years ago, but since then it has gotten harder and harder to do that. With the current points system I probably wouldn't have made it in. (Yeah, yeah, probably a good thing I hear you say ).

    The current progression, once you have your residency visa, is permanent residency after 2 years and citizenship after 5 years. I think the citizenship ceremony should be when people are tested for an understanding of the constitution and I don't agree with him suggesting that it should be 5 years paid work in New Zealand before permanent residency is allowed. It could stifle entrepreneurship in skilled migrants as they will not be able to risk their businesses struggling and not being able to pay them for a period of time. Also, what about skilled contractors who live here but earn all their money contracting overseas? Surely someone who lives and spends here but earns elsewhere is a good contributor to NZ.

    If they do lift the qualifying period for the superannuate it would be nice to give migrants who haven't worked the full 25 years another way to buy in with additional contributions. After all skilled workers arriving here at 45 and working till 65 would be contributing a great deal of tax during what is potentially the earning peak of their careers.
    Last edited by Banksie; 18-12-2016 at 02:16 PM.

  19. #19
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    Quote Originally Posted by blackcap View Post
    Depends entirely on your definition of fair does it not? I for one do not think taxing wealth is fair at all. Its already been taxed during the income phase and so why should people who are frugal (thus have some wealth) have to pay more than others that fritter it away.
    I'm still getting my head around the "fairness" part. As I read it I may have $10,000 in the bank or shares and I get taxed taxed on it. And you might have $10,000 in a house or car and not getting taxed. Either way we both got taxed on the journey through to this point.

    What we are also forgetting is there is a promised drop in PAYE and GST which woudl affect every one so that seems fair.

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    Quote Originally Posted by Banksie View Post
    Tops second policy, immigration, is out http://www.top.org.nz/top2.
    Lots of bits to this policy so wont dwell on them all.

    - Test for Permanent residence. Presuposes we have a Constitution. Which we dont. As for the Status of the Treaty of Waitangi that ends up being a philosophical answer. And a question that doesnt define being a New Zealander anyway.
    - Reform the Points system. Only issue is "contribution to the economy". If that threshold isnt met then move on, you dont get in.
    -Exploitation of migrant worker. No amnesty. But name/shame employer,heavy fine and compensate workers. Eg the owners of that company that sold for hundreds of millions this week should be disgusted with themsleves.
    - Updating the Skills Shortage list. Morgan gets it. Immigration doesn't. (He really ought to have "fire dept of Immigration workers as they are incompetent" in his policy as well.
    - Reform Study to Work regime. Biggest con in town. About time someone suggested tidying it up.

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