Capital Gains Tax

[Bjauck]

Couldn't agree less. We have to have some sort of tax or taxes. NZ GST system is extremely effective and easy to administer. Income tax is a necessary evil, and although we all have different views on the rates and progressions, it's relatively simple to apply and administer.

I am not sure that income tax is particular easy to apply and administer as the court cases, accountants fees and laws as to what constitutes income, dividends, profits etc attest to.

Why couldn’t capital transfer taxes (death and gift) be the necessary evil? We have to agree to differ on this.

People are taxed twice before they just obtain the necessities for life - first by way of PAYE deducted from wages and then by way of GST on food and goods. It is highly regressive. Forget about a flat tax - the NZ system has a regressive system with those with the most gains (both capital and income) ending up paying the smallest percentage in tax.

[BlackPeter]

I don't. The big problem is those who are asset rich - cash poor, which describes a huge percentage of retirees in our bigger cities. I know it can be deferred -- which makes it simply a return to the death taxes we used to have and dumped in the early 90s. The thing that follows would obviously be a return to gift duties, or it won't work. Both death duties and gift duties were horrible taxes. I'm sure you recall the dodgy nonsense that went with those taxes. No doubt you also recall the legitimate gifting programs used to avoid death duties. They would re-emerge on day one.
As far as limits on asset values go (individual items at 50k and the proposed total of 1 million), the levels applied on introduction of a wealth tax can be altered at the drop of a hat. Naturally they will be kept low to introduce such a scheme - but a future govt. only requires the stroke of a pen to change it.
Not many countries have such with wealth taxes and the associated gift and death duties, mainly because they are an administrative nightmare.

Nothing wrong with having different views and a good discussion on taxes.

What is a given is that we will need to increase the tax base over the coming decades ... as indicated health costs, super costs, costs to deal with climate change (either try to stem it or alternatively pay for the damage) all will go up. Substantially.

Good on the Greens for being the only party which at least made a proposal how to broaden the tax base ... basically all other parties pretend there is no problem. I am sure there are other ways to solve this problem, but putting the head into the sand will not cut it.

If you don't like the wealth tax - which other taxes would you like to see introduced or increased instead?

[artemis]

A GST increase captures the black and grey economies so produces more revenue than projections based on the legit books.

There is also the option to reduce expenditure. Management mantra - there is 30% waste in every process. I have certainly worked in and alongside jobs just like that. And that's not counting the useless or failed projects and initiatives.

[fungus pudding]

Nothing wrong with having different views and a good discussion on taxes.

What is a given is that we will need to increase the tax base over the coming decades ... as indicated health costs, super costs, costs to deal with climate change (either try to stem it or alternatively pay for the damage) all will go up. Substantially.

Good on the Greens for being the only party which at least made a proposal how to broaden the tax base ... basically all other parties pretend there is no problem. I am sure there are other ways to solve this problem, but putting the head into the sand will not cut it.

If you don't like the wealth tax - which other taxes would you like to see introduced or increased instead?

Study up Laffer economics, specifically the Laffer curve, and you'll find it's indisputable there are two levels of tax, one high and one low, that will produce the same result. In simple terms lowering the tax rate can often produce as much or more revenue than raising it. If too low obviously it will not provide sufficient revenue to run Govt; but if too high it won't either because of disincentives, driving transactions to the black market, under the counter trading etc, or worse still - lack of trading. The trick is to find and apply the lowest effective rate.

[Bjauck]

Study up Laffer economics, specifically the Laffer curve, and you'll find it's indisputable there are two levels of tax, one high and one low, that will produce the same result. In simple terms lowering the tax rate can often produce as much or more revenue than raising it. If too low obviously it will not provide sufficient revenue to run Govt; but if too high it won't either because of disincentives, driving transactions to the black market, under the counter trading etc, or worse still - lack of trading. The trick is to find and apply the lowest effective rate.

There may be some truth with extreme tax and the “Laffer” curve but it depends on other factors and NZ is a long way off from prohibitive tax on the wealthy.....

However I can see why some would latch onto narratives such as Laffer and trickle-down...

https://qz.com/895785/laffer-curve-e...d-reaganomics/

Almost everything Republicans get wrong about the economy started with a cocktail napkin in 1974

[fungus pudding]

There may be some truth with extreme tax and the “Laffer” curve but it depends on other factors and NZ is a long way off from prohibitive tax on the wealthy.....

However I can see why some would latch onto narratives such as Laffer and trickle-down...

https://qz.com/895785/laffer-curve-e...d-reaganomics/

Almost everything Republicans get wrong about the economy started with a cocktail napkin in 1974

You may consider Labours' proposed marginal tax of 39% above 180k is not excessive. I do think it is, and it will certainly require a bit of 'restructuring'. Think back to the shenanigans when Muldoon struck top margin at 66% (pre GST)

[dibble]

Study up Laffer economics, specifically the Laffer curve, and you'll find it's indisputable there are two levels of tax, one high and one low, that will produce the same result. In simple terms lowering the tax rate can often produce as much or more revenue than raising it. If too low obviously it will not provide sufficient revenue to run Govt; but if too high it won't either because of disincentives, driving transactions to the black market, under the counter trading etc, or worse still - lack of trading. The trick is to find and apply the lowest effective rate.

Laffer made up his curve in a bar. There is no conclusion on what point between the two extremes is best. His wisest moment is noting lower tax MUST be linked to increased productivity otherwise any drop in tax is pointless. There is scant evidence to prove giving tax breaks to the wealthy achieves commensurate productivity gains (net of inflation) let alone achieves an overall net benefit to society. Indeed skeptics might suggest is the whole Laffer thing is merely something to cling to to get your lobbyist buddies tax breaks. Look at the logic, do people suddenly work more when tax drops? Do they even have the option to do that? Did everyone you know go out and work harder when National dropped rates to 33%?

[Aaron]

Study up Laffer economics, specifically the Laffer curve, and you'll find it's indisputable there are two levels of tax, one high and one low, that will produce the same result. In simple terms lowering the tax rate can often produce as much or more revenue than raising it. If too low obviously it will not provide sufficient revenue to run Govt; but if too high it won't either because of disincentives, driving transactions to the black market, under the counter trading etc, or worse still - lack of trading. The trick is to find and apply the lowest effective rate.

You can see some interviews with Arthur Laffer on you tube. Have a watch and you can can make your own conclusions as to what sort of person he is and whether his views are pragmatic or ideologically driven. No surprise his ideas appeal to FP though.

[fungus pudding]

You can see some interviews with Arthur Laffer on you tube. Have a watch and you can can make your own conclusions as to what sort of person he is and whether his views are pragmatic or ideologically driven. No surprise his ideas appeal to FP though.

I am simply saying it's impossible to argue with the conclusion of the curve. Consider an increase in income tax rates to 99%. Result - no income for govt. because the economy would be driven to underground, or barter. At 1% - nobody would avoid either earning or declaring it. Absurd examples, but that does emphasize the logic. You are correct - logic does feature in my reasoning.

[Aaron]

I am simply saying it's impossible to argue with the conclusion of the curve. Consider an increase in income tax rates to 99%. Result - no income for govt. because the economy would be driven to underground, or barter. At 1% - nobody would avoid either earning or declaring it. Absurd examples, but that does emphasize the logic. You are correct - logic does feature in my reasoning.

Thanks, absurd examples make it much more understandable. Very simplistic. Much like a flat income tax rate.