Capital Gains Tax

[SBQ]

https://www.marketwatch.com/story/why-raising-taxes-on-the-rich-isnt-so-crazy-2019-12-09
Wealth taxes wouldn’t destroy the economy — they’d make it better.
The economy would benefit directly from a more equal distribution of income because middle- and low-income families spend a greater portion of their incomes than the very rich do, so more money would recycle through the economy.
Inequality of wealth creates other problems. The top 1% are socking away a greater share of the nation’s wealth; so much so that regular Americans are starved for the capital they need to buy homes, invest in schooling and start new businesses.
Are taxes on the rich unfair? The poor are constantly being reminded that life isn’t supposed to be fair. Get over it.

The US already has already addressed taxing the wealthy. It's called the Estate or Death Duty tax which kicks in on amounts over $11 Million USD.

Article says the top 1% need to pay more? I agree they do. But in NZ, let's be real, how wealthy are the top 1% of NZ residents? I would say.. not so wealthy, definitely not when you compare income levels of the upper middle class in the US. There would be only a handful of NZ rich that are in the $500K/year income? Whereas in the US in that 1%, you're going to find a lot more earning that kind of money.

If CGT is implemented, then the NZ gov't & IRD need to consider removing existing taxes such as FIF (on those with overseas assets). The biggest impact CGT would have is the Kiwi Saver scheme ; it would mean NZ's tax code would look more and more like how the IRS and Australia and most other nations with CGT, address taxation.

[moka]

The US already has already addressed taxing the wealthy. It's called the Estate or Death Duty tax which kicks in on amounts over $11 Million USD.

Article says the top 1% need to pay more? I agree they do. But in NZ, let's be real, how wealthy are the top 1% of NZ residents? I would say.. not so wealthy, definitely not when you compare income levels of the upper middle class in the US. There would be only a handful of NZ rich that are in the $500K/year income? Whereas in the US in that 1%, you're going to find a lot more earning that kind of money.

If CGT is implemented, then the NZ gov't & IRD need to consider removing existing taxes such as FIF (on those with overseas assets). The biggest impact CGT would have is the Kiwi Saver scheme ; it would mean NZ's tax code would look more and more like how the IRS and Australia and most other nations with CGT, address taxation.

If we are talking about capital gains tax or taxing the wealthy then we should be looking at wealth not income. Apart from a few well-paid CEOs the way you get wealthy in NZ is from capital gains, not income. And yes Estate or Death Duty tax should be re-introduced.
https://www.stuff.co.nz/business/mon...-will-tell-you
It shows the top 1 per cent of individuals owned around 20 per cent of the country's wealth at the end of June 2018, and the top 10 per cent owned 59 per cent of the country's wealth.

[SBQ]

If we are talking about capital gains tax or taxing the wealthy then we should be looking at wealth not income. Apart from a few well-paid CEOs the way you get wealthy in NZ is from capital gains, not income. And yes Estate or Death Duty tax should be re-introduced.
https://www.stuff.co.nz/business/mon...-will-tell-you
It shows the top 1 per cent of individuals owned around 20 per cent of the country's wealth at the end of June 2018, and the top 10 per cent owned 59 per cent of the country's wealth.

While i'm not against taxation, why is it no one really addresses 'how much taxes' should a person pay in NZ? In my recent post here I made the comparison of the top 1% earners in NZ vs the 1% in America. What NZ politicians seem to miss out is how much more is expected out society to pay in taxation?

Perhaps question why NZ Gift Duty and NZ Estate Death taxes were removed in the past? I think the answer was more along the lines of NZ's failing brain drain and flight of capital overseas. You had NZ charities that struggled because of the Gift Duty that limited donors from achieving anything (I recall Jane Cameron ex-Katmadu wanting to make a generous gift in NZ but ended up moving to Australia). We live in a global world and there are no laws 'yet' that stops a person from declaring non-residency in NZ (so easily achieved by just flying to Australia). Where I grew up in Canada, a decision to declare non-residency is not so easy achieved because one can't simply say they just want to move to another country. A green card or residency visa is required in the US if a Canadian wants to live there. It's not so simply as a Kiwi hopping on a plane and flying to Australia when ever they want to.

So this brings back to my original point, if you want to compare the top 1% of the people in NZ, look who they are? Are they really make a lot of money or wealth? More importantly, are they the LAST egg left which Jacinda Ardern has been cautious about imposing CGT (or any new tax) to them? Believe me, Canada has had it's fair share of wealth leave the country throughout he 90s and 2000s (mostly due to brain drain and the wealthy sending their assets abroad).

@ Panda-NZ: I don't really agree with either. The gift duty can be changed though so people can't switch between structures to avoid tax as easily. sadly its another legacy item from sir john and sir bill to resolve.

Move to stop all the tax avoidance so people pay what they should be paying here instead IMO.

As I said before, what level of taxation is acceptable? NZ gov't has to be very cautious about this because again, we live in a globalised world. Residents will find out that they had enough and will leave. The US has all of the above (gift tax, death duty, etc..) but like their income tax brackets, the thresholds to be paying a lot of tax is way way up there. To be in the 1% top earner, one needs to be well over $500K a year income, in addition to also having capital gains tax. But for the vast majority, and i'm talking those that have enough after-tax disposable income to pay for medical insurance, they can structure their finances so they pay very very little taxes.

So I ask again, how much taxes should a NZ resident be paying? More specifically, how much should the top 1% should be paying in NZ? Because these groups of people are the most likely to move to more tax friendlier places like in the US (as what we've recently seen from the EU's hunt for taxes).

[Panda-NZ-]

As I said before, what level of taxation is acceptable? NZ gov't has to be very cautious about this because again, we live in a globalised world. Residents will find out that they had enough and will leave. The US has all of the above (gift tax, death duty, etc..) but like their income tax brackets, the thresholds to be paying a lot of tax is way way up there. To be in the 1% top earner, one needs to be well over $500K a year income, in addition to also having capital gains tax. But for the vast majority, and i'm talking those that have enough after-tax disposable income to pay for medical insurance, they can structure their finances so they pay very very little taxes.

Every country will be looking to raise taxes soon. These views are pretty out of date, you may not have noticed the huge numbers of skilled people busting down our doors atm to come in. It will be even more in the future as climate change causes resource and water shortages. Taxes are way down the list.

We need a fair return from these people.. How much should they pay? more than 0% for a capital gain.

[dibble]

While i'm not against taxation, why is it no one really addresses 'how much taxes' should a person pay in NZ? In my recent post here I made the comparison of the top 1% earners in NZ vs the 1% in America. What NZ politicians seem to miss out is how much more is expected out society to pay in taxation?

Perhaps question why NZ Gift Duty and NZ Estate Death taxes were removed in the past? I think the answer was more along the lines of NZ's failing brain drain and flight of capital overseas. You had NZ charities that struggled because of the Gift Duty that limited donors from achieving anything (I recall Jane Cameron ex-Katmadu wanting to make a generous gift in NZ but ended up moving to Australia). We live in a global world and there are no laws 'yet' that stops a person from declaring non-residency in NZ (so easily achieved by just flying to Australia). Where I grew up in Canada, a decision to declare non-residency is not so easy achieved because one can't simply say they just want to move to another country. A green card or residency visa is required in the US if a Canadian wants to live there. It's not so simply as a Kiwi hopping on a plane and flying to Australia when ever they want to.

So this brings back to my original point, if you want to compare the top 1% of the people in NZ, look who they are? Are they really make a lot of money or wealth? More importantly, are they the LAST egg left which Jacinda Ardern has been cautious about imposing CGT (or any new tax) to them? Believe me, Canada has had it's fair share of wealth leave the country throughout he 90s and 2000s (mostly due to brain drain and the wealthy sending their assets abroad).



As I said before, what level of taxation is acceptable? NZ gov't has to be very cautious about this because again, we live in a globalised world. Residents will find out that they had enough and will leave. The US has all of the above (gift tax, death duty, etc..) but like their income tax brackets, the thresholds to be paying a lot of tax is way way up there. To be in the 1% top earner, one needs to be well over $500K a year income, in addition to also having capital gains tax. But for the vast majority, and i'm talking those that have enough after-tax disposable income to pay for medical insurance, they can structure their finances so they pay very very little taxes.

So I ask again, how much taxes should a NZ resident be paying? More specifically, how much should the top 1% should be paying in NZ? Because these groups of people are the most likely to move to more tax friendlier places like in the US (as what we've recently seen from the EU's hunt for taxes).

The question should be "what sort of country do we want". If you value health, education, a clean environment, well trained police officers, minimally corrupt officials etc it must all be paid for. And if you think outsourcing things is cheaper note that the US Govt still spends a lot per capita on health (cant remember the figures but more than some OECD countries where health is free). So the answer is probably something like tax needs to somehow reflect spending and if residents decide they dont like paying "too much" tax despite enjoying the benefits and depart then good riddance.

[Zaphod]

The question should be "what sort of country do we want". If you value health, education, a clean environment, well trained police officers, minimally corrupt officials etc it must all be paid for. And if you think outsourcing things is cheaper note that the US Govt still spends a lot per capita on health (cant remember the figures but more than some OECD countries where health is free). So the answer is probably something like tax needs to somehow reflect spending and if residents decide they dont like paying "too much" tax despite enjoying the benefits and depart then good riddance.

Which does nothing to address the issue of the proportion of tax that should be paid by individuals. What rate for each individual represents a "fair share" of the burden for these services? Let's put aside the separate and very subjective argument of which specific services and what level of services are essential.

[dibble]

Which does nothing to address the issue of the proportion of tax that should be paid by individuals. What rate for each individual represents a "fair share" of the burden for these services?

Au contraire, context is everything otherwise no need to step outside the poll. CGT is expensive to administer, burdensome and relatively easy to fiddle. To expand the existing CGT it begs the question "why?" If it is merely revenue, increasing GST is far more efficient and its difficult to (legally) avoid. Plus it hits the wealthy harder if that is one's goal. Alternatively rolling out user pays might achieve the same goal (and negate the need for any new taxes). The Q how much an individual should pay absolutely, via what means and how much relative to another person, or corporation, is thus very much linked to what an individual gets/expects in return (micro and macro). It obviously gets very philosophical.

[SBQ]

Au contraire, context is everything otherwise no need to step outside the poll. CGT is expensive to administer, burdensome and relatively easy to fiddle. To expand the existing CGT it begs the question "why?" If it is merely revenue, increasing GST is far more efficient and its difficult to (legally) avoid. Plus it hits the wealthy harder if that is one's goal. Alternatively rolling out user pays might achieve the same goal (and negate the need for any new taxes). The Q how much an individual should pay absolutely, via what means and how much relative to another person, or corporation, is thus very much linked to what an individual gets/expects in return (micro and macro). It obviously gets very philosophical.

How do you know CGT is expensive to administer? Put that question to every other OECD nation that has CGT?

As I mentioned before, you have to assess the FULL tax impact in NZ. Everything from how much corporate taxes are paid, how much tax on dividends and interest, how much income taxes are paid, and how much consumption taxes like GST is paid. I still find for many posters here, they don't know the difference between taxes on 'consumption', taxes on income, and taxes on gain in asset value such as shares and hard assets like real estate. They are NOT all the same.

The wealthier have 2 choices to level the disparity field. Pay more taxes or give their portion of wealth back to society. Many would agree, the former is not nearly efficient as giving to charity. Gov't bureaucracies always creates inefficiencies. After all where did the money come from? No one questioned how the wealthy obtain their wealth from? If it originally came from society, then it's more fair to for them to contribute it BACK to society. I'm not saying they should give ALL of it back, but it's very fair that since they obtain a larger portion of wealth, they have a duty of care to give a larger portion back to society.

[Bjauck]

Au contraire, context is everything otherwise no need to step outside the poll. CGT is expensive to administer, burdensome and relatively easy to fiddle. To expand the existing CGT it begs the question "why?" If it is merely revenue, increasing GST is far more efficient and its difficult to (legally) avoid. Plus it hits the wealthy harder if that is one's goal...

How does gst hit the wealthy harder. I would have thought that the Wealthy save and invest a much greater proportion of their income. Consequently a financial transaction tax/stamp duties would be the way to go and perhaps easier to administer than a GST. Stamp duties on the sales and purchase of investment properties and/or a land tax would perhaps be the easiest to administer and would help relieve the burden from those who rely solely on salaries/wages/dividends/interest.

[moka]

Which does nothing to address the issue of the proportion of tax that should be paid by individuals. What rate for each individual represents a "fair share" of the burden for these services? Let's put aside the separate and very subjective argument of which specific services and what level of services are essential.

The fair share to be paid by individuals is determined by how much they earn e.g. PAYE on wages and salary, or tax on interest or how much they spend i.e. GST. Tax is paid on what you receive in income and capital gains.

Tax is not calculated on what a “fair share” of the burden for these services.

It sounds like you are trying to rewrite the tax laws. The more you receive from the “common wealth” of a country, the more tax you pay. The “common wealth” is what every citizen in a country inherits from the efforts of our forebears over the years. If you accumulate income and wealth then you should pay tax on it. If you are in business you benefit indirectly from all government funded services that support your business, your employees, and your customers. It is not just what you as an individual use. You are an individual and you are also part of a community. The community provides services such as education, health, social welfare, justice etc which all provide the infrastructure for a healthy society, which enable you to run a profitable business.