Capital Gains Tax finally on a major party's agenda

[Hitcher]

Policies like this aren't targeted at what's good for New Zealand. They're intended to curry favour with Labour's supporters who are unlikely to ever earn more than $150,000 a year, own a business, own shares and probably not even their own home.

[Winston001]

As opposed to policies that are driven by greed. Drop the top tax rate and slash all the policies that help the lower earners.

I know that is a popular view from the left and its a cute sound-bite. However what does it actually mean? The vast majority of New Zealanders are middle-class with modest assets. They only achieve those assets - which represent financial security - by working and saving.

Is that greedy? Trying to have a more secure life than your parents had, providing more opportunities for your children than you had? When people earn income, that is their money. Not yours and not the governments. Taking some tax is a compromise for the benefits of a fair society. Tax is not a punishment vested upon those who achieve.

Policies that are driven by an obsessive focus on the wrong stuff. If CGT is the answer, then what's the question?

What on earth is CGT going to do to grow New Zealand's economy?

Excellent post but this is KB - rational points WTF??

[AD345]

Capital gains tax is well overdue in NZ as our incredibly narrow tax base with its focus on earnings is not going to provide sustainable investment in our future. Unfortunately the CGT proposed by Labour falls far short of the mark.

Not applying the CT to the family home leaves the biggest loophole wide open and is simply pandering for votes. Also to have the tax apply only at realisation leaves the gate open for more dodging and hefty lawyers bills.

A true CGT should apply as broadly as possible, be collected annually on the value of the capital, probably at Govt. bond rate, and also on the extra earnings at realisation.

The mooted CGT from Labour is probably not going to be enough to get them in, but at least we are now having the discussion

[Hitcher]

CGT is also an inheritance tax. If you inherit a property, you'll get hit up for CGT when you sell it.

[AD345]

yep and so you should, just like any other increase in earnings

[Ocean1]

It's never happened before so why the hell do you expect it to happen in the future?

On the contrary, the relationship between marginal tax rates and revenue is inverse. Like so: http://mjperry.blogspot.com/2011/04/...-revenues.html

FFS What's that saying about Idiots expecting s different outcome from the same course of action?

I suspect it's almost as common as idiots spouting shit based on dearly held assumptions without actually knowing what they're talking about.

[rainman]

You miss the point. You contend that a trickle-down effect doesn't work because it fails to completely relieve any responsibility from those who choose not to earn as much as they want.

Sorry, you think people can just choose to earn as much as they want? I'm fairly talented and have worked my arse off for years and I certainly have not had that luxury. Most people don't.

Yeah. 'Cause they've "earned" that right along with the one that says the world ows them a living.

Does it matter?

One of the great myths?
The Sheeple are controlled by the media.

Of course, but I was simply countering Ocean1s view which sounded a lot like "if you don't think like me you can piss off to Zimbabwe".

A few property investors bailed when the LAQC and depreciation on the building was killed

IANA tax expert by any means but from what I can see there's little impact from the new loss limitation rules for the average mom 'n pop investor. If the bank has you guaranteeing the loan (which is gonna be the case) you can probably still claim the rental losses in an LTC (excluding depreciation).

I know that is a popular view from the left and its a cute sound-bite. However what does it actually mean? The vast majority of New Zealanders are middle-class with modest assets.

The important number is not the number of middle class families trying to get ahead (which should be encouraged, of course). It's the vast levels of income of the extremely wealthy. Earning over $150k puts one in a very small slice of our society indeed. We are a little third world not-so-pacific island, with a very small number of wealthy.

Of course in one sense it's not unreasonable to earn over $150k - the narrative of hard work and just deserts has some validity - but when the proles are on $25k a year despite working their arses off and the cost of living is what it is, that does not make for a healthy society. So we get stuck in this dialogue about rich pricks and greed/envy dichotomies that is not very mature or useful, but we flip-flop back and forth regardless.

The solution would be to grow the economy and genuinely lift all boats, but a) that's a fairy tale told to the gullible poor, and b) growth is over; so plan b is for the extremely wealthy to share a bit more. Or more isolationism/less globalisation so we can control production and costs, manage wages, and get back on track to being a cohesive society.

Yeah I didn't think so either.

[rainman]

I suspect it's almost as common as idiots spouting shit based on dearly held assumptions without actually knowing what they're talking about.

I'd love to see percentage of total income earned by the top 1% over time.

Real income, not declared for tax purposes. And yes, including capital gains.

[Ocean1]

Sorry, you think people can just choose to earn as much as they want?

Yes. If you don’t want to starve you’d probably choose to earn enough to buy food. If someone else wasn’t paying for it.

If you want to earn enough to buy a new bike there’s nothing whatsoever preventing you from doing that. You just need to want it bad enough.

Does it matter?

Depends if you appreciate the difference between a self-regulating system and one controlled by positive feedback.

Of course, but I was simply countering Ocean1s view which sounded a lot like "if you don't think like me you can piss off to Zimbabwe".

I think you have me confused with someone else.

I don’t give a fuck where you live, as long as you don’t expect me to pay for it.

[Hitcher]

I'd love to see percentage of total income earned by the top 1% over time.

Real income, not declared for tax purposes. And yes, including capital gains.

If it's arousal you're seeking, I understand that there are many Internet channels that may be able to satisfy your yearnings.

[Ocean1]

I'd love to see percentage of total income earned by the top 1% over time.

Real income, not declared for tax purposes. And yes, including capital gains.

Probably findable. The point is if you tax anyone beyond a certain point they either stop earning or they hide their income. Pretty predictable innit?

Far more inteligent men than me have estimated the break-even point at 17%, tax more than that and you lose revenue, tax less than that and you lose revenue.

[rainman]

If you want to earn enough to buy a new bike there’s nothing whatsoever preventing you from doing that.

If you seriously think that is always true then you're a simplistic fool.

Probably findable. The point is if you tax anyone beyond a certain point they either stop earning or they hide their income. Pretty predictable innit?

Far more inteligent men than me have estimated the break-even point at 17%, tax more than that and you lose revenue, tax less than that and you lose revenue.

Sure, but again, a bit simplistic. Tax is not a nice easy black box with linear inputs and outputs. (Or perhaps, tax is relaitively simple, but people are complicated).

And these intelligent men wouldn't be economists, perchance?

[Hinny]

On the contrary, the relationship between marginal tax rates and revenue is inverse. Like so: http://mjperry.blogspot.com/2011/04/...-revenues.html



I suspect it's almost as common as idiots spouting shit based on dearly held assumptions without actually knowing what they're talking about.

Don't believe the hype! You sound like Bill English trying to justify tax cuts.

As to your second point, suspect no longer. I can confirm you should know you are spouting shite.

Like the ol' saying goes 'Statistics don't lie but Statisticians can be liars'

You are behaving as one of the 200K earners that think they are 'wealthy, rich pricks' that are getting their hard earned cash stolen off them to give to the dole bludging losers that won't get off their arses to earn a crust.
Get over yourself if you are in that category.
The people that boast about earning $6million without paying tax are the ones that need to pay their share. Basing the tax take on income alone was considered iniquitous by a previous Labour govt. and I would think the implementation of GST was seen as fair even though the poorest paid a greater percentage of their disposable income than the wealthy simply because they had to spend all their income to survive. I suspect few people would want to go back to Muldoon's top tax rate of 66%. (John Key's hero by the way)
As I stated earlier the wealthy people I know earn a smaller percentage of their total gain in wealth each year by way of taxable income. To imagine that this situation is fair beggars belief for me. Spreading the tax burden is fair, equitable, desirable and essential.
There is a documentary around at the moment about the transformation of Bogata by a couple of forward thinking Mayors. One thing that was done was to ask the rich to contribute more to help restore the city. A bit like the guy doing the rounds world wide with his begging bowl to help restore Christchurch. The rich came to the party.
The visionary innovations, fiscal control and the morality eschewed by these men transformed a city and its populace. Do you think the National party members of Parliament could be endowed with similar accolades? Have they done anything in the term of this parliament that could be considered visionary, inspirational, for the benefit of present and future New Zealanders. Like Hell. They are hell bent on repeating old mistakes. This is perhaps the ideology of conservatism and the reason that the future of this country is in such a perilous state. They want to repeat past mistakes and hope for a different outcome.

Two old sayings seem relevant here.
If you want to plan for today you cultivate wheat;
If you plan for the short term you cultivate trees;
If you plan for the future you cultivate people.
(Think cutting research and development expenditure, Apprenticeship and other trade training schemes, remedial reading programs etc etc etc.)

The other is from the great poet and visionary Mick Hucknell..
"The wealth of a nation cannot be achieved by keeping the downtrodden down."

So much of the invective I have read in this thread reminds me of these words from the song 'Working Class Hero".

'You think you're so clever and classless and free,
but you are all fuckin' peasants as far as I can see."

[Ocean1]

If you seriously think that is always true then you're a simplistic fool.

It's called the real world. The one where money doesn't REALLY grow on trees and "rich pricks" are as common as pixies at the bottom of the garden.

Tax is not a nice easy black box with linear inputs and outputs. (Or perhaps, tax is relaitively simple, but people are complicated).

Actually, it is, within fairly narrow behavioural limits. That 17% income tax rule is common through every entity where humans control revenue, corperate and private.

It's not complicated people that drive tax higher, it's the politics of ignorance and greed.

[Ocean1]

Don't believe the hype!

Here's another old saying: If you don't have numbers then you don't have facts, what you've got is an opinion.

Enough with the emotiver populist dribble, show me where high taxes have improved an economy's performance.