New Taxes = Election Loss
Speaking at the National Party conference this month, Mr English referred to the committee of tax experts he has established to look at options for restructuring the tax system.
He warned delegates that they must be prepared for possible tax changes that they would be uncomfortable with.
He did not rule out raising GST or imposing a capital gains tax.
These so called "experts" on the tax committee do not have the best interests of centre-right politics at heart. When the mountain of paperwork is cleared off my desk at work since my return, I will post on the stupidity at an electoral level of a definitive CGT (remembering the Income Tax Act now provides for CGT in any instance) or even increasing GST.
ANY new taxes and that's it for the National Party. Over. Why vote for them when there would be no difference in approach to Labour?
Tax and spend.
At least Labour have an honest approach to that principle!
How about going back to the drawing board Bill and looking at government spending?
posted by Cactus Kate at 1:29 PM
23 Comments:
No problem from my perspective! Drop the income tax totally, increase GST to 40% and abolish all other taxes. Spender beware save have care!
CK... Frankly I'm disappointed in you. NZ can hardly be described as having a balanced tax system. It has vast numbers of distortions that divert savings into unproductive assets and reduce growth.
A CGT is not nirvana but as long as the Govt can deliver tax neutrality then I am all in favour of making adjustments that provide better incentives for individuals and companies.
Cactus,
I wonder if you've got your self washed knickers in a twist slightly presumptively on this. The talk seems to be about reducing income tax and raising GST in an effort to move money from consumption. Which is to say, English may be thinking a bit more ACT like rather than Labour like. Also, Labour "more honest", you've been away a long time!
M.
I have no problem with returning to Sir Rogers original idea of increasing GST and decreasing income tax and company tax - all to the same level. We'll really see the country boom ahead when the playing field tilter that is our tax system is sorted and flattened.
Alas Kate you've hit the nail on the head. Dipton Bill likes the political POWER that goes with tax and spend politics.
Paranormal
Thank god finally someone has pointed out the blindingly obvious that CGT already exists in the tax act.
Much as we all like JK there is a limit to how far to the "centre" we will tolerate. The saving grace is labour are crap or the polls would not look so good.
Only voted for them to get the
greens (and maori party) out
of govt. I'd probably have to
do the same again to keep the
greens out.
My fb post to someone going to English's home for tea manana:
You might consider suggesting that unless NZ does something drastic - we're not going to stop the slide. I only see one chance and that is for NZ to become a financial center. How do you do that?????? You study Singapore and Switzerland, and you COPY them. Why will it work???? Because rich folks want to be in a beautiful unspoiled place - like Godzone.
You need :
* Private banking
*Low or no tax on foreign trusts
*Absolute privacy for the principals of Trusts
*Universities geared up for financial management studies
*Bring in experts from overseas to head these programmes, if necessary
More suggestions were in my variouse fb and email messages to Bill............FWIW
when you do write that post think about a restructuring that did not actually add new tax but flattened the tax structure. how about 20% GST 20% corporation tax and a 20% CGT along with a 20% top personal rate. Do the numbers for the property owning middle classes and they get immediate tax gain with a long term hit when they move.
Hmm agree it would be political suicide for national and does Ma English really know what she is trying to achieve with a CGT? It is all too easy to say that the introducing a capital gains tax would cure our love affair with property, prevent the next boom, and result in a more efficient allocation of resources. Also extremely pc to say a CGT is better for the poor as they won't have to pay extra GST on the ciggies, booze and fast food.
Reality check - NZ's love affair with property is because all Dennis and Janice know is paint and papering so they stick with what they know. Financial literacy is the only way that people will even comprehend what efficient allocation of capital means let alone beginning to consider how to effect it. And most importantly as if a CGT will target the rich - how do you think Mr Shewin got to drive such a lovely car and National got elected in the first place.
Political suicide Bill the only problem is he personally seems implosion proof but it tends to hit the party generally instead.
"*Bring in experts from overseas to head these programmes, if necessary"
It's necessary.
Just because you don't like it Cactus, doesn't mean raising taxes is political suicide. Maybe in Singapore or Hong Kong, but not in New Zealand.
Policy does. not. matter.
The tories got in, not because of their (broken) promises for tax cuts, but because it was "time for a change".
John Key is a genius in that he makes everyone think he can provide two or more contradictory policies, at the same time for no cost.
JK runs the "cute honest guy" angle. He does it brilliantly.
Excluding the politicos - in the masses - the lefties all thought JK was a good moderate lefty, and the righties all thought JK was a good moderate reforming righty.
Even many politicos fell for it before the election. A large proportion of ACTies thought he was secretly a reformer. Most still do.
It's hillarious how believe what they want to believe.
The tories will raise taxes, and they'll still get voted in.
Until it's "time for a change" again.
Labour had a "tough bitch" in HC. The Nats have a "cute honest guy" in JK.
IMHO it won't be time for a change until Labour figures out their next angle. "Tough bitch" is so late 90s - won't be usable again for another few terms.
Goff isn't electable without a bit makeover because his angle can only be described as "grey paint". He doesn't have a brand.
If I were in Labour, I'd be putting my vote in for a "loving mother" leader.
The "womaniser" is a great one... but only seems to work well in France and Italy. Love that Berlusconi - at 72 he could date a 13 year old and Italians would still vote for him.
I'll say it again - policy does not matter in politics. If it did, most countries would look more like Singapore.
Why do people believe NZ already has a capital gains tax? Please explain. Right now if you acquire something with broadly a trading intention then you pay tax on gains. Capital gains tax would effectively tax gains derived where the taxpayer does not having a trading intention. We do not have this in the NZ tax legislation as far as I am aware.
Labour cleaned out the coffers and now National can't look like the good guys. I completely agree, I won't be voting for National again if they increase taxes (except the capital gains tax on property)! If there isn't enough money then stop spending, we can't afford it. For instance how much is it costing the taxpayer to enforce the anti-smacking law? A surge in numbers on the sickness benefit has been put down to people who can't work because of drug or alcohol problems and more taxes will be required to pay for this. I think that income earners in NZ deserve better than continuing having their income earning potential reduced to pay for never ending social spending schemes.
Gloria
Good to see that Mr English is open to new ideas. Treasury is wrong as ever on the Income Tax versus GST argument, but the CGT issue is worth exploring. Wouldn't it be interesting if Mr English had the courage to do what Mr Cullen considered, but felt unable to follow through? The more interesting thing is, of course, that people, almost everywhere, who have to make the hard decisions about the economy are no longer swept up by neo-liberal dogma. Apostasy is rife, but where are the tumbrils?
I believe that if you buy anything (including property) with the "intention" of selling it for a gain - then the sale is taqxable - thus the income tax act already provides for a tax on property.
Anon - 6:57 PM, August 14, 2009
"I believe that if you buy anything (including property) with the "intention" of selling it for a gain - then the sale is taqxable - thus the income tax act already provides for a tax on property."
What you refer to are trading gains or profits. Capital gains tax would tax all gains aside from trading gains. For example if you bought an investment property without the sole or primary intention at acquisition of realising a trading profit but instead your primary intention was to generate rental income, capital gains tax would tax these gains. I am truly amazed that so many people do not understand the distinction between capital vs trading and therefore cannot enter this debate as they do not know what is currently taxed and what sorts of transactions are capital in nature and hence will be caught by any capital gains tax regime.
who the f** is the WILLIE guy, seems to know everything. Someone give him a hammer and piece of 4 x 2 so he can fix the wagon !!
Cactus - there is already a capital gains tax right for property?
To cover the situation that everyone wishes to cover for - that is the pattern of buying and selling of 2nd homes/rental properties for profit. Correct, however it is not an automatically collected tax, the IRD has to assess you on it if the taxpayer is not honest enough to declare the gains.
The IRD are just pretty ineffective at enforcing it.
I think acquiring properties for rental income and long term capital appreciation (CAPITAL GAINS) and NOT for sole purpose of profit on resale (TRADING PROFIT) is currently NOT in the legislation.
Are you the same anonymous through this thread? If so please get to your point.
Search through my blog using google or the search engine and I've done posts on this before. Getting bored with it to be honest.
http://asianinvasion2006.blogspot.com/2007/06/hello-ird-look-at-me_23.html
For a start
English "open to new ideas"?
What: more Tax-and-Spend albeit from alternative sources?
Oh, yeah .. revolutionary, that. About as 'different' as swapping Ann Hercus & Annette King from Health to Police Ministries.
Keep hammering the productive sector, Bill, no matter how you do it because we really love it. Just don't, whatever you do, think about *shrinking* the size of govt, though! That would never do.
The only significant difference between this govt & the last lot?
The new boss has better teeth.
Post a Comment
Links to this post:
Create a Link
<< Home