ACT's David Seymour - i like his style.

[Ferg]

Treasury said last year that the wealthiest Kiwis' effective tax rate is less than half of middle New Zealand.

Did that report reclassify some items as income that are outside of the Income Tax Act as it currently stands?

[Bill Smith]

David back to being a d*ck.

Swarbrick added the Government's policy comes after IRD and Treasury said last year that the wealthiest Kiwis' effective tax rate is less than half of middle New Zealand.

But Seymour was quick to hit back at Swarbrick's comments.

"This is what I mean by demonising people and this is what I mean by the politics of envy, that's my challenge to Chlöe is to stop doing that," he said.

https://www.msn.com/en-nz/news/natio...6a532fe7&ei=47

Pointing out that those with a lot of wealth effectively pay half of what everyone else does in tax, hardly seems like demonising anyone. Actually it highlights an issue that could be adjusted to make NZ a fairer place. It puts some perspective on the issues around taxation and pertinent to the issue they were discussing.

You post discredited rubbish like this and wonder why you get disparaged.

[Aaron]

You post discredited rubbish like this and wonder why you get disparaged.

Assuming you mean the statement that the wealthiest Kiwis' effective tax rate is less than half of middle New Zealand.

I don't think it has been discredited. If the statement has been discredited I would be interested to hear the argument discrediting it.

The greens idea of taxing unrealised capital gains I think is a bad one but taxing realised capital gains might even things up if income tax and/or GST is reduced.

[Aaron]

Did that report reclassify some items as income that are outside of the Income Tax Act as it currently stands?

It considered economic income which includes untaxed capital gains.

https://www.ird.govt.nz/-/media/proj...20230420234159

To me it begs the question why are these gains not being taxed when every dollar of labour is taxed? Particularly when every other developed country has a capital gains tax. Are we on a similar path to many third world countries?

Not to worry though our current government has put a stop to IRD gathering too much information, apparently ignorance is bliss according to Chris and David.

Treasury also had a paper on wealth but they didn't have a two page summary.

https://www.treasury.govt.nz/publica...ibution-wealth

[Panda-NZ-]

No CGT and now interest deductibility back on.. what was that about free rides Chris?

[mistaTea]

No CGT and now interest deductibility back on.. what was that about free rides Chris?

Where we got into a real tizz over CGT is where they wanted to make exceptions for political expediency.

So property would be exempt if it is the family home.

And then they started to say that if it was on 'Maori Land' it may have to be exempt otherwise it would be a TOW breach.

And then Kiwisaver were going to be exempt for some reason...

And then it was not going to be a nominal value of say 10%, any gain was going to be treated as 'capital income' and you would pay up to the highest income tax rate on it.

And it just got so convoluted.

From memory it was really the owner of my local fisn 'n chips shop that was going to get nailed.

I personally do think that some sort of CGT is warranted, to spread the tax base.

But if you are going to do it, then you set a reasonable rate and no exepmptions.

CGT is either fair or it isn't. If CGT is fair... then why should I buy my home for $1M, sell it 10 years later for $2M and pocket the $1M capital gain with no tax paid?

If you cannot get it over the line politically because a lot of your voters have a big chunk of their net worth tied up in their property, then forget the whole thing. I don't see how it is 'fair' for my local panelbeater to get nailed with a CGT when someone can make way more capital gain selling their house.

I don't think we will see a CGT any time soon. Not because it isn't fair to have one, but because it is a political nightmare.

[Blue Skies]

Once again Seymour's shows he's firmly wed to ideological dogma instead of outcomes. That's why he's so damaging. He only see's part of the whole picture. Same with Charter Schools.

Just when the property market had turned to First Home Buyers outnumbering Property Speculators, which is what we desperately need, Seymour's responsible for reintroducing distortions to the market, enabling Property Speculators able to offset all the rent against their mortgages buy multiple properties, once again outbidding & cutting First Home Buyers out of the market.


In 10, 15 years time, do we want higher levels of home ownership, with higher levels of equity & stability in communities, OR higher levels of families living in unstable situations in rental accomodation with little equity in their local communities ?

Never mind the ideology, ask yourself, which policy around interest deductibility would provide the best outcomes for the country. Labour's or Nat/ACT/NZF ?

[Aaron]

But if you are going to do it, then you set a reasonable rate and no exemptions.

Agreed make it as politically palatable as possible but at the end of the day John, Jacinda, Chippy and Chris all realised that the average NZer wants a better country, they just do not want to be the one paying for it, so it will never happen unless a party gets in and brings it in on principle rather than trying to hang onto power. Michael Cullen mucked up an opportunity by making it too complicated and expensive.

It is not the politics of greed or demonising successful people as David would say, it is about broadening the tax base and making it less hard on the person who works everyday pays tax on every dollar but who has no house or wealth so when targeted inflation drives up asset prices and reduces debt it would appear our tax and monetary systems in combination are not very equitable.

If wages were rising at the same rate as assets, then inflation targeting might seem less unfair but I don't think this is happening. So the worker gets the tax burden and when monetary policy drives up inflation they pay the inflation tax through a cost of living crisis without the gains of asset price appreciation and debt repayment getting easier.

[mistaTea]

Agreed make it as politically palatable as possible but at the end of the day John, Jacinda, Chippy and Chris all realised that the average NZer wants a better country, they just do not want to be the one paying for it, so it will never happen unless a party gets in and brings it in on principle rather than trying to hang onto power. Michael Cullen mucked up an opportunity by making it too complicated and expensive.

It is not the politics of greed or demonising successful people as David would say, it is about broadening the tax base and making it less hard on the person who works everyday pays tax on every dollar but who has no house or wealth so when targeted inflation drives up asset prices and reduces debt it would appear our tax and monetary systems in combination are not very equitable.

If wages were rising at the same rate as assets, then inflation targeting might seem less unfair but I don't think this is happening. So the worker gets the tax burden and when monetary policy drives up inflation they pay the inflation tax through a cost of living crisis without the gains of asset price appreciation and debt repayment getting easier.

Yes, Cullen recommended this incredibly convoluted sytem for CGT that would just be a nightmare.

He certainly didn't put any of these 'bright ideas' forward when he was Finance Minister I might add.

But a nice pet project for him later in his career, and I am sure he was remunerated nicely for his 'good advice'.

CGT with no exemptions whatsoever (not even for Maori) and it could work. Just don't expect to be re-elected, and the next lot will probably reverse some if not all of it because they will crucify you running up to the next election on the subject. Plenty of examples of a particularly sad looking mom and pop wondering why the govt is taking a slice of their Kiwi Dream when they sell their house at a profit.

Ha!

[Ferg]

It considered economic income which includes untaxed capital gains.

So the answer is yes - their paper reclassified items as income that are not currently taxable per the Income Tax Act. So the report is at best conjectural, at worst disingenuous.

If you are keen for a non-inflation adjusted CGT you are welcome to lead by example and make voluntary contributions to the NZ tax pool by adding such 'income' to your self assessment each year. Let us know how you get on with that.