Greens favour capital gains tax

[mashman]

Finally, a decent idea...

Finally an answer to the LAQC rort... and a political party showing balls for a change, bravo the Greens

[Jantar]

I thought the idea was to reduce debt. Any new tax, or increasing existing taxs is just going to increase debt. Look back to when NZ's debt was increasing the fastest, it was when we had the highest overall tax take. Look back to when NZs debt was decreasing the fastest, it was when we had the lowest overall tax take.

To reduce debt we need to reduce non productive expediture. Ie the dole, the dPB, and some of the sickness benefit. I'm not saying eliminate these, just turn them from non productive to productive expenditure.

[mashman]

I thought the idea was to reduce debt. Any new tax, or increasing existing taxs is just going to increase debt. Look back to when NZ's debt was increasing the fastest, it was when we had the highest overall tax take. Look back to when NZs debt was decreasing the fastest, it was when we had the lowest overall tax take.

To reduce debt we need to reduce non productive expediture. Ie the dole, the dPB, and some of the sickness benefit. I'm not saying eliminate these, just turn them from non productive to productive expenditure.

How can generating 4 billion in tax increase public borrowing?

You can't force people to work.

[Jantar]

How can generating 4 billion in tax increase public borrowing? ....

In order for there to be a capital gain to tax, there has to a profitable incentive for private investors to purchase that item that will gain gain in capital. Taxing the gains has just made that less profitable and hence de-incentivised such investment. Hence housing market etc slows down, more unemployment and well I'm sure you can see the result, but I'm also sure you don't want to.

[mashman]

In order for there to be a capital gain to tax, there has to a profitable incentive for private investors to purchase that item that will gain gain in capital. Taxing the gains has just made that less profitable and hence de-incentivised such investment. Hence housing market etc slows down, more unemployment and well I'm sure you can see the result, but I'm also sure you don't want to.

I don't buy the de-incentivising argument, as the private investor invests their money where they want... they may see less of a return, but they'll still be making a profit. The housing market isn't exactly booming at the moment and the financial gurus always seem to be encouraging "us" to move away from property. Sounds like a win win to me...

At the end of the day there's a profit being made. Is there a capital gains tax on sold shares and dividends (doesn't seem to be a deterrent)? Is there capital gains tax on your savings? T'would seem odd not to charge tax on every profit making "mode"... It would also seem strange that the property market would be so adversely affected, it's not like there isn't money to be made. It seems to work for plenty of other countries around the world too. So why not NZ?

[Mental Trousers]

Capital Gains Tax is a load of arse. The only time I can see it being a good thing is if it applies to foreigners and not kiwis to encourage ownership to stay in New Zealand. But of course that discourages foreign investment.

[Virago]

It always amuses me that those who obsess about a moneyless society, are invariably more obsessed with controlling (and grabbing) everyone else's money.

[Mully]

Is there capital gains tax on your savings? T'would seem odd not to charge tax on every profit making "mode"...

There's tax on the interest of your savings - which I think is a bad idea anyway. In real terms, there's no capital gain in saving cash cos inflation usually kills that stone dead.

NZ doesn't NEED CGT - if you buy anything with the main intent of making a profit when you sell it, then that profit is taxable (whether or not that tax is paid is another matter. My understanding is that IRD are throwing resource at this issue).

If you buy a rental and claim losses against your income for, say, 10 years, it's pretty difficult to claim when you sell it that your intent from the start wasn't profit.

There is of course an argument that making NZ's love affair with property (above all other investment types) less attractive is a good thing as people will invest in companies and whatnot (which is something I think NZ needs - we aren't going to get anywhere on the back of agriculture, we need to be smarter).

My $0.02

[mashman]

It always amuses me that those who obsess about a moneyless society, are invariably more obsessed with controlling (and grabbing) everyone else's money.

yeah, I wouldn't be affected . Well said Cyclops.

[mashman]

NZ doesn't NEED CGT - if you buy anything with the main intent of making a profit when you sell it, then that profit is taxable (whether or not that tax is paid is another matter. My understanding is that IRD are throwing resource at this issue).

I wish they'd hurry up , then I can get back to my moneyless society

[Mully]

I wish they'd hurry up , then I can get back to my moneyless society

You should get married - I've been a moneyless society since i got married.

[davereid]

There's tax on the interest of your savings - which I think is a bad idea anyway. In real terms, there's no capital gain in saving cash cos inflation usually kills that stone dead.

NZ doesn't NEED CGT - if you buy anything with the main intent of making a profit when you sell it, then that profit is taxable (whether or not that tax is paid is another matter. My understanding is that IRD are throwing resource at this issue).

If you buy a rental and claim losses against your income for, say, 10 years, it's pretty difficult to claim when you sell it that your intent from the start wasn't profit.

There is of course an argument that making NZ's love affair with property (above all other investment types) less attractive is a good thing as people will invest in companies and whatnot (which is something I think NZ needs - we aren't going to get anywhere on the back of agriculture, we need to be smarter).

My $0.02

Good post, but I have to make a couple of calls.

We all have to live somewhere. So buying the first house for you and your family to live in has benefits other than the financial. It allows you to plant a tree, buy a dog, and scratch the kids growth on the wall if you so wish.

An investment property attracts for similar reasons. We know that everyone has to live somewhere, so its a safe bet that we will be able to find a tenant. Even if inflation is rocking, and banked dollars fall through the floor, new houses will always be built with new timber. They will always cost more. So the investment in my house will be safe unless of course I paid a foolish amount for it in the first place.

And agriculture ? I think quality agriculture is New Zealands future. We have amazing luck. A climate warm enough to grow most everything, and cool enough to set fruit. Sunny enough to grow grapes, and wet enough to grow everything else. On top of these natural advantages, we have built a pretty stunning agricultural system.

We might drive past old fred the cocky in his tractor, thinking all the countries wealth is made in Auckland.

But in reality, Fred is likely in charge of a multi million dollar business.

And its a wealth creating business. Freds not counting money made by someone else.

He is turning land into food, and food into money.

While the world suffers a recession, some will chose not to update the PC, keep the toyota another year, and suffer with the old 42" plasma as money is tight.
Growth stalls for manufacturers as customers defer buying.

But no one will defer food purchases. They will be back in the market, every day, with whatever cash they have.

[mashman]

You should get married - I've been a moneyless society since i got married.

, perhaps that's wher my deep seated hatred for money comes from... that you Bush Psychologist (tm)

[Mully]

We all have to live somewhere. So buying the first house for you and your family to live in has benefits other than the financial. It allows you to plant a tree, buy a dog, and scratch the kids growth on the wall if you so wish.

An investment property attracts for similar reasons. We know that everyone has to live smewhere, so its a safe bet that we will be able to find a tenant. Even if inflation is rocking, and banked dollars fall through the floor, new houses will always be built with new timber. They will always cost more. So the investment in my house will be safe unless of course I paid a foolish amount for it in the first place.

I think we're on a similar page - my point was if your main (or sole) intent on buying a house (usually a rental) is monetary gain, then that gain, under current rules, is taxable. Family homes are seldom (if ever) bought with the sole intent of profit making and so are (and bloody well should be) exempt from tax.

If you buy a rental and claim losses against your income, your intent must be to make money somewhere along the line (usually capital gain when you sell) - unless you're unusually altruistic. This gain is taxable. We don't need to put a whole system in place for capturing CGT was most of my point.

An agriculture ? I think quality agriculture is New Zealands future. We have amazing luck. A climate warm enough to grow most everything, and cool enough to set fruit. Sunny enough to grow grapes, and wet enough to grow everything. On top of these natural advantages, we have built a pretty stunning agricultural system.

We might drive past old fred the cocky in his tractor, thinking all the countries wealth is made in Auckland. But in reality, Fred is likely in charge of a multi million dollar business. And its a wealth creating business. Fred not counting money made by someone else. He is turning land into food, and food into money.

I agree, but I think we need to get smarter about it. Simply bunging more cows on a dairy farm will help short term, but look what the runoff does to the streams, etc.

If you do the same as you've always done, you'll get the same as you've always got. NZ (when we're not fighting amongst ourselves) are ingenius at doing things smarter. I think that's something we need to encourage.

IMHO, removing the tax credit for R&D was not a smart move on National's part.

While the world suffers a recession, some will chose not to update the PC, keep the toyota another year, and suffer with the old 42" plasma as money is tight. Growth salls for manufacturers as customers defer buying.

But no one will defer food purchases. They will be back in the market, every day, with whatever cash they have.

Yep - agreed again. But we can't compete as simply a bulk supplier to the world, we're just not big enough. We need to get smarter, and have a quality product that we can sell. Trade on the "NZ Made" brand.

BTW - sorry for the OT, OP.

[shrub]

I've been listening to what people say on here and on the National party and right wing blogs, and it got me thinking about tax cuts. I've realised that they’re kind of the economic version of antibiotics. If your business is struggling, you need a tax cut; if you want to take advantage of global opportunities, first you need a tax cut and if you want to start a business you need a tax cut first. If you’re earning $150,000 a year and struggle to make ends meet, then of course you need a tax cut and the best way to motivate and inspire people to do better is to give them a tax cut. And most importantly, rich and successful people deserve tax cuts and it is our obligation as a society to give it to them.


So if our government gives us tax cuts, New Zealand businesses will succeed like never before and we will probably catch up with Australia – hell, we’ll probably even pass them if the tax cuts are big enough! People will do better in their careers and be inspired to gain skills, improve themselves and work harder. Everyone, especially those on higher incomes, will finally be able to make ends meet and Jesus might even come back.

I wish I’d listened to the propaganda sooner!