Greens co-leader James Shaw believes his party’s policy to introduce a ‘Guaranteed Minimum Income’ paid for by revenue generated from a wealth tax and two new top income tax brackets would “absolutely” get a look in, should Labour and the Greens form a government after the election.
However, Shaw recognised the amount of say his party would have, would depend on how many MPs it got into parliament and the extent to which Labour needed its support.
Prime Minister Jacinda Ardern on Monday created distance between herself and the Greens’ policy, saying she imagined Labour’s yet-to-be-released tax policy would “look very different”.
She said Labour and the Greens often had similar aims in terms of increasing incomes and reducing poverty, but had different views around how to achieve these outcomes.
She even went so far as to say the Green Party used “heroic” assumptions in its modelling, which concluded a wealth tax would generate $7.8 billion of revenue in its first year.
Ardern said the party didn’t consider behavioural changes that would result from such a tax being introduced, referring to people devaluing their assets or hiding them.
However, the Greens, in its policy document, said it knocked 35% off its initial figure to account for tax avoidance and evasion.
It is proposing to put a 1% tax on net wealth over $1 million and a 2% tax on net wealth over $2 million - payable every year on property, shares, bonds, business assets, expensive cars and art, assets held in trusts and assets held overseas (see more on the policy here).
So, a person with a $2 million house and a $600,000 mortgage, would pay 1% on $400,000, which is $4000.
The Green Party’s modelling suggested the tax would affect 6% of the population, or 300,000 people, meaning it expected each of these people to pay an average of $26,300.
Put to him that this sounded like a lot, Shaw explained, “The numbers come from two sources - one of which is Stats NZ’s Household Economic Survey, which is obviously a long-running data set, and the other is from the Reserve Bank - and they have a different way of calculating wealth accumulation in New Zealand. We essentially took those two data sets and put them together in a model that was developed for us by the Parliamentary Library…
“That is a good a guess as you are going to get in government at the moment.”
Despite Ardern making it clear a wealth tax is a Green Party policy, National on Monday night made a Facebook post saying, “Labour-Greens plan to tax your house, your retirement fund, your business assets, and even your art. Who knows what they’ll tax next?”
Interest.co.nz emailed the party over concern this is inaccurate, as Labour's tax policy is not yet known.
The post follows National’s finance spokesperson Paul Goldsmith on Sunday sending out a press release wrongly saying, “A successful small business person, owning a $1 million house and a business worth $1 million would have to pay $40,000 a year for the 2 per cent wealth tax.”
The person in Goldsmith’s example would in fact only pay $10,000 tax - 1% on their net wealth over $1 million.
Goldsmith told RNZ’s Morning Report he made the mistake as the Green Party’s policy was unclear.
For more on the nuts and bolts of the wealth tax, see the video interview with Shaw:
- How to deal with people trying to hide wealth in trusts: 3min 35sec
- How the value of one's wealth would be calculated: 5min 34sec
- Whether the tax does anything to encourage investment in productive assets: 8min 40sec
- How asset-rich, income-poor people could defer tax payments: 12min 30sec
And here's a more fulsome explanation from the Greens' policy document on how it got to its wealth tax revenue figure:
214 Comments
Goldsmith: "Oops sorry I made a mistake." Given he's not been very forgiving for anyone else, this is either ironic or deliberate.
Cue howls of protest as usual partisan positions articulate themselves. Will I be called a communist again? Maybe a socialist this time..
Sadly there it is for all of us. An opposition that we rely on to hold the government to account can only invent an interloper in quarantine and a finance spokesman who cannot do arithmetic. At least under FFP someone had to stand up in an electorate and be accountable, now any impractical academic type or worse can slide in on the list. All parties are guilty of bringing in absolute shockers, not fit to be in parliament.
“Those with wealth over $2 million would pay 2%” (wording from the Greens website). 2% of $2 million is $40,000. The Greens website or their press release does very little to suggest it’s actually a marginal tax.
Thanks to Jenee T and the above article for clarifying it is in fact a marginal tax, far less radical than the greens.org.nz press release implied. Thus Jolly Penguin, it’s easy to see how Goldsmith originally got his number which he has since adjusted lower based on this new information/clarification. This is something more of our politicians should be willing to do when new information comes to light. Kudos to James Shaw for clearing it up any confusion and articulating the policy in a far more coherent manner than his fellow co-leader (Marama D) did on Sunday.
Its got NOTHING to do with reducing poverty , its got everything to do with control .
These Green MP are earning astronomical salaries in relation to their actual real useful saleable skills .
Frankly if they were to try and get proper jobs they are so hopeless most would be on the dole, unemployable fools
Surely he doesn't put that on his CV though?
"HSBC 'sorry' for aiding Mexican drugs lords, rogue states and terrorists".
https://www.theguardian.com/business/2012/jul/17/hsbc-executive-resigns…
Theologians spend lifetimes erecting 'Sophisticated' (in original meaning of word) lines of argument on the flimsiest foundational faith based assumptions. Much of the humanities is the same, neo-theology underpinned by sacred-cow articles of faith that are only weakly evidenced or even outright contradicted by science, history, game theory, evolution and economics.
JP (Hi - you've been here a bit over a month and as an 'educationalist' can be expected to defend your turf) - the unfortunate fact is that much of tertiary outside the trades and STEM is riddled with expensive credentialism which adds little to national wellbeing but much to private debt.
The financial model sitting behind all tertiary is a thinly veneered bums-on-seats reliance, with the current furor over international students exclusion until probably next year a good example of the financial bind they're in.
By all means tout the expensive Yarts 'studies' - we'd expect no less from a threatened practitioner. But do kindly recognise that an open mind, travel, community involvement, simple materials, books and the Interwebs are for a great many people, a far more complete, satisfying, and most of all a cheap and thoroughly enjoyable way of coming to grips with the Muse. Poster child: the late lamented Barry Brickell......
Threatened practitioner? One of the classes I teach in the humanities has gone from 63 students last year to 93 this year (and enrollments haven't closed). Similarly, spoke to a tech teacher just last weekend and again, massive increase in enrollments yoy. Further education is great - agree the cost is too high (my undergrad degree was free) - but the personal/emotional value in obtaining a qualification is immeasurable to my mind. Only if you really want it, and know what subjects or practical work you will enjoy - kind of like every personal choice one makes in life.
I don't know, but not sure many employers for say, a journalist or a policy adviser role, would accept the argument for being well-read and well-traveled as a substitute for a qualification in the arts/humanities. But I could be wrong!
Back in the '70's, the toilet-roll holder in the back of the Zoology annex had a wee inscription: Sociology degrees; please take one'.
Good joke, wrong target. It should have read 'Economics degrees'.
The only discipline advocating you sell your parachute, because you haven't hit the ground yet and therefore won't.
You are writing this from 2020, aren't you, as it kind of looks like you are actually somewhere in the 50s or 60s. If so, you might need to be brought up to speed with the changing nature of work and the increasing precarity of it in the future.
Joblessness, even temporary and reducing incomes are what is happening, and somehow or other it is going to have to be addressed.
Nonsense. The material/financial wealth of a nation is a result of the productivity of its people. Your logic would have Germany and Japan as the poorest countries in the world and Russia, Venezuela, etc as the richest. Resources have little to do with poverty or wealth.
best definition of productivity , in regards to countries, I've heard is:
Productivity = A work ethic + innovation/creativity . ( In regard to creativity/innovation , education becomes a big deal )
Wealth is a function of productivity + Nations natural resources
JP... how do u define productivity?
You should stick to symphonic constructs.
People can only be productive WITH something. At the end of the day, proxy is a delayed expectation of real purchase. Virtual transactions are merely in-house jostling as to who gets how much when the proxy gets cashed-in.
Venezuela is indeed rich -but like 'Persia', has been embargoed, manipulated or repressed on behalf of 'others'. And Norway will be poor when it's oil is exhausted, because without energy it's 'investments' (in the like of EU shares or in FF-dependent infrastructure) will be just so much waste paper.
Who you sound like an apologist for.
Parties need to have policies for everything. If you're in Parliament (and matter, so not Jamie Lee Ross) then you're asked questions about what your view / policy on subject X is. If you say "we have no policy or position on that subject" then the public are not impressed.
It's part of why ALCP has never gotten close to power, despite being around for decades.
To be fair you can't compare ALCP with the Greens - even if they did restrict themselves to the environment only. Cannibis is a minuscule issue compared to 'the environment' in NZ.
But your point is taken. So, the Greens are too radical when outside of their lane. This means they have zero chance of forming a coalition with anyone apart from the current Labour party.
I'll be surprised if the Greens are back in power this time around. Labour makes them look irrelevant and radical on the environment and social policy respectively.
This means they have zero chance of forming a coalition with anyone apart from the current Labour party.
Who they form a coalition with is decided by the membership. If another party has policies that the members think align with what they want The Greens to do, then they could agree to form a coalition with them.
Obviously the membership were amenable to the current governing arrangement that includes NZFirst. They could be amenable to other parties were they to get into Parliament such as TOP or the Maori Party.
If National changed their policy positions to something that Greens members were happy with, then they would also be potential partners.
It's not really the Greens fault that National have repugnant policies. If National were serious about forming a government, they could look at the lay of the political landscape and make changes in their stances that would be acceptable to the Greens. The entire point of the green movement is to get green policies (which includes social equity) into law. If those policies were already in law, the Green party wouldn't exist. If another party already existed that espoused those policies, the Green party wouldn't exist, all of their members would join that party. If the Greens being steadfast in their refusal to bend their principals results in other parties hewing towards them in order to get a majority, then the Greens are on the path to achieving their aims. Having the Greens bend their policies to suit other parties like National is a betrayal of the entire point of the green movement.
I'll be surprised if the Greens are back in power this time around.
It looks far more likely that NZFirst will not make it into Parliament, than Greens not being in government.
Labour makes them look irrelevant and radical on the environment and social policy respectively.
Given that NZFirst are likely to not make it back, and Labour are not likely to have an outright majority, the Greens being part of a Labour-led government is presently the most likely outcome.
Labour like having the Greens anyway, it lets the minor party take flack from policies that Labour secretly want / are happy with, but don't want to spend political capital on.
Just to get back on point, regarding the article people are commenting on. Some wealth has been earned by hard work and prudent, ethical investing. Some has been inherited, some has made by property speculation. Why should they all be treated equally by punitive taxation?
Of course, the bottom line is that this doesn’t have a s**t show of being enacted, so why worry? Labour should worry, though, because it will siphon off young voters, and alienate older centrist ones. I think the Greens have just pushed Winston over the finishing line.
Of course, the bottom line is that this doesn’t have a s**t show of being enacted, so why worry? Labour should worry, though, because it will siphon off young voters
Which is still a good outcome for the Greens. If they increase their vote share at the cost of Labour, and get more negotiating power in a coalition arrangement, while they may not be able to get this specific tax policy implemented, they may still be able to influence Labour's tax or welfare policies, and also achieve other goals like the electric car feebate.
Greens do a tax calculation! James Shaw maybe. He worked at Price Waterhouse Cooper in his former life so maybe some accountancy rubbed off on him.
"a model that was developed for us by the Parliamentary Library…" What will librarians come up with next. Wonder if James Shaw applied any of his business knowledge to this.
So its patently clear the Greens dont want ANY wealthy people here in NZ, and they dont want ANY private capital which is used to everywhere else in the world to as seed capital start and grow businesses and employ people.
The message is clear , the Greens dont want successful people here , they dont want the Tindalls , the Harts , the Peter Jacksons , the Todds or anyone like them , they must take their money and go somewhere else
What a bunch of idiots
You do realise that Tindall, at least, is a 'leftie'? You also realise that part of Jackons' success is down to heavy incentives / subsidies? (hardly free market ideology)
You may also be surprised how many successful business people are left leaning (sure, it's a lot less than those who are right-leaning, but...)
Tindall, extremely generous individual and forward thinking. He chooses how to use his own money and is in control of it. Tell him he has to hand it over vast sums of it to someone else who wastes it on vanity projects and poxy playgrounds and it might be a different story
Poxy playgrounds! Everything outside your front door is paid for by tax. Civil amenities are more than playgrounds of course - the idea that society provides for the 'common good' is hardly a novel idea. It's pretty well documented that the wealthiest pay the least tax through avoidance - now that's vanity.
I actually agree with you in one sense, and in another I'm also aware of the need to make a statement to international visitors outside our government buildings in our capital. It's a declaration of our values as a form of diplomacy.
But the main question is, do children enjoy it??
Do kids enjoy it to the value of $500k? Is a playground in Parliament anything to do with core business or just evidence of conspicuous carelessness over expenditure that this govt has? Could $500k have been better spent on non-vanity projects that might have actually improved peoples lives - eg how many miss out on life changing or saving medical treatment for want of $500k in the health budget (Pharmac QALY's are at about $20-50k, so that playground cost 10-25years of human life).
Wrong penguin! If you did a little research you would find that it is a very small group of "rich pricks" that pay the bulk of the tax in NZ. The bulk of wage and salary earners pay very little overall tax because the stupid Working for Families welfare system pays most of it back! After being filtered through the overpaid, bloated public service!
You aware of the Tindall Foundation? https://tindall.org.nz/
Tindall is a philanthropist, not a ‘leftie’. Peter Jackson, and Taika Waititi, are giants in the world of cinema and have only done what others in their field have done by accepting government subsidies and using them to great effect. The benefit to New Zealand of films such as Lord Of The Rings is huge in terms of tourist dollars and perception. There’s so much envy and negativity on this site.
If I ever end up worth x hundred million/billion like the names above the very last thing I'd like to think I'd complain about is losing a great wad of cash, which in the overall scheme of that amount of wealth really is an inconsequential amount that I could never spend at the very best of times, to a tax that would help some people out.
One might even argue that would be a good feeling to help a fellow countryman live a slightly more comfortable existance.
The Greens don't understand Private Capital and how it functions, their preference is to confiscate it .
And lets have no doubt here , Shaw is at pains to say its "only1 % "
Well just a reminder ..........GST was introduced at " just 10% " a few years ago , and with inflation the GST tax -take grew in tandem with inflation .
GST is now 15% ..............thats a 50% increase in the rate .
The Greens are just like Communists , resentful, envious and jealous of success
Taking a step back and understanding good intentions, are there any examples where these tax and welfare combinations have facilitated resilient and thriving communities.
People like Tom Sowell offer empirical evidence that these combinations have a history of driving poor community outcomes.
https://youtu.be/1s2Ishme9P0
That's the great left-right divide. Left believe is chucking money at grasping hands fixes problems, when it is clear to right that pervasive, easy to access as a lifestyle choice welfare creates miserable outcomes for people who choose it. The 70-80% of African American and Maori kids growing up without dads are mostly doomed to fail (compared to kids with involved dads), the state can't take the place of 20-30000 hours of good parental support and that ill-considered welfare 'kindness' isn't kind at all, it is breeding misery. Welfare doth mock the meat it feeds upon.
They want 1% from the top tier 6% of earners on assets over 1 million. Hardly radical stuff. I'm amazed at how resentful you are over such a small amount, particularly when we have so many people living in poverty here. It's not like we're talking about the nationalisation of private assets, so not communism by a very long shot.
I appreciate we don't agree, but could you offer more detail in your arguments rather than just slagging off a particular party? I'm actually interested in your reasoning..
about 4 million taxpayers in NZ. 6% = 240000 . $1.36 billion comes out of this. By my calcs that is about on average $5000.00 per person or $10,000.00 for a household of husband and wife. Then on top of that the tax brackets are to be lifted and the local council is taking a wallop of disproportionate rates based on the high property value. If that’s inconsequential trying telling that to those who have to pay.
You must be joking. It's a wealth tax not an income tax.
1 % could be considered loose change on income, but is certainly not loose change on net worth.
If the greens are so keen on wealth then why dont they have a policy to pay kiwisaver for beneficiaries? Simple and effective way to reduce wealth inequality.
Simple as that really. Just ensure everyone who falls into the govt safety net is properly set up to move back to self-sufficiency. Anyone with a chunk of money to their name has more options.
Set up Kiwisaver and pay into it for everyone who can't afford it. It would be compulsory. The last thing someone on the breadline is doing is investing for their future. Yet that is the single thing which is most likely to build their net worth, perhaps even position them to purchase a house in time (rent to own scheme backed by KS funds?) and lift them permanently out of poverty. Instead of bitching about the housing market, put the damn thing to work. Govt is already paying their rent, why not pay a mortgage instead?
The wealth tax is not about taxing earners, since you could earn nothing and still be hit by the tax.
Further, it's not really just 1% because it's applied annually. Imagine you're 65, just retired and single, and have a $2m net worth. By the time you're 70 the government has taxed away 9.6% of that taxable 1million (or 4.8% of your net worth). By the time you're 80 you've paid $182K wealth tax over 20 years, so 18% of that taxable $1m, i.e. 9.1% of your original $2m net worth.
(Update: I had 70/80 but meant 75/85 for ages, i.e. 10/20 years later).
A deferred tax is still paid, so my point still stands, i.e. that thinking of this as just a 1% tax is not getting to the heart of the matter.
Also, it's not deferred until death. It's deferred until the asset(s) are sold. Most retirees will downside at some point, often into a rest home, so they'll likely be paying the wealth tax in their lifetime.
HH there is so much wrong with your maths I barely know where to start...at 70 that would be 2.5% of the original $2m, by 80 (15yrs from 65) it would be 7.0%. On the off chance you live to 100 it would total less than 15%. Obviously this assumes the bands aren't increased in that time. Besides I struggle to see the point in dying with millions of dollars worth of assets, what so you can pass it on to the next generation who by then are probably already drawing a state pension? Seems madness to me.
The high net worth individuals you are targeting are the ones that lead the investment in new jobs and industries. They are mobile, with skills that are internationally transferable and will happily and easily leave for greener pastures - small NZ already has less opportunity than they can get find elsewhere. It would raise nine tenths of FA from the truly rich, and this is just killing the golden goose.
JP
It’s not a small amount if you’re a widow, have assets, say a nice Auckland home value $1.5m, and a modest nest egg, say totaling $2m, and no other income. Not everyone is an ‘earner’, far from it. The interest on a 500k term deposit would earn around $150 a week. Add in the pension and you get @$550 a week, and have to give $200 of that back in tax. And deferral means nothing. Your wealth, and the ability to secure your children’s future, is still being stolen by statists. Don’t mention reverse mortgages, please. They are dreadful, soul destroying instruments which take away a persons dignity. Remind me again. Why should someone be punished for a lifetime of hard work by having this level of stress dumped on them?
$550 - $200 = $250/week which is equal to the single person unemployment benefit.
Yeah, not a great life. Which is why the Greens want that raised.
I think though with your example, the widow plans to live on drawings from those $2m in assets and doubt they would be exhausted within a limited lifetime (i.e., over 20 years you'd have to spend $100K per annum in addition to your interest and super) - even if paying some tax on it.
We just need to be realistic and make sure no one gets left hungry and out in the cold (literally).
@ Kate thats not the point and you know it ........you know that the introduction of any tax is always benign and at a low rate to make it palatable , and to prevent a riot by the public .
"Just" 1% tax on capital is 'unjust" confiscation of something someone else owns and in my case have worked for, and already been subjected to tax when I earned it.
Its simply wrong on every level to take people's hard earned savings away from them .
And a Robin Hood wealth tax will never alleviate poverty , the more you hand to the poor the more they will simply spend without giving it a second thought
You seem a little angry, Boatman. But the time has come to say 'Bollocks'.
I am no supporter of the current Green trajectory (I prefer instead the pursuance of something we can maintain long-term, and no kind of growth, Green or any other hue, qualifies). But your approach is even further from what is needed, to address the human predicament.
And you must be old, and have been the recipient of propaganda, to mention 'communist'. In it's pure form, communism may possibly fit sustainability/maintainability. Capitalism simple can't; as it has proven. But communism quickly morphs into totalitarianism - the scum rises unchecked to the surface - and that, indeed, is a bad place for a community of human beings to be in.
You - like so many here, of so many political hues, conflate money with wealth, and success with 'walking over others'. Private capital is merely the removal of a portion of the Commons, from common ownership. That, by logic, has to dis-invest others. Can't be any other way. You have to have a certain mind-set to to that to others - not one I care to foment. Is your anger a symptom of unease?
Look , say what you may , I have a major problem with a wealth tax .
My wealth was taxed when I earned it, I did not inherit anything, or win the lotto or speculate in houses , and the tax I paid in some years was at very high rates of taxation .
We did not start our working lives with any advantage , my wife was preparing meals in an institution when we got engaged , and I was bust with further study
My wife and I saved vigorously , paid off our mortgage and went without stuff that my peers and our relatives squandered money on, leaving some of them broke today.
They did not save they bought Flash new cars almost every year , took holidays to Aussie or Hawaii , racked up credit card debt on clothes and stuff they did not need , spending $100 a week on booze and ciggies and generally a lot of rubbish
So now its now my Capital that I saved and its taxed by way of tax on interest on Bonds or Bank deposits , tax on dividends, and income tax in my debt -free practice
Now these fools want a second bite of the cake , and take the money that actually generates my income
Its nonsense .
I may just sell up move my capital and retire early to North QLD in Aussie where there not even a suggestion of any ideologically -driven wealth confiscation.
There is a reason that the tax working group dismissed a wealth tax as “a complex form of taxation that is likely to reduce the integrity of the tax system.”
Not to mention the fundamental disconnect between the requirement to pay and ability to pay. Granny will need to remortgage to be able afford to live in her own house. And as it goes up in value the "rent" she must pay to the State increases, even though the utility she gets from the house stays the same over time.
Also nuts to think that eventually the tax paid on an asset will exceed the amount paid for the asset in the first place.
Great way to encourage capital flight.
Imagine owning a cafe earning no money during lockdown, but still having to pay tax on the asset even though it is making a loss.
And almost impossible to properly enforce.
Your experience in practice is probably quite normal, Boatman, and there are a lot of people out there who do well from their earnings only because of the work they've put in, usually far over and above a 40 hour week. Numerous people in the comments section were saying they were at a point where they could stop working, pack it in and just live a far more stress-free life and spend more time with their kids and grandkids, rather than funding those who can work but won't (as opposed to those who can't).
I think many people, once they realise they can liquidate in NZ, live a far more comfortable lifestyle in a low-cost economy (like...Australia) and probably buy a few houses for the family to live in rent-free with them, will start seriously reconsidering whether it's worth being here or not.
Agree. Land Tax should be a pillar of our tax base. Would promote more productive use and over time reduce value to align with it's utility/productivity, making land and housing more affordable. It would also see less economically inactive people taking up urban space that would be better used by workers - alleviating commuter transport infrastructure burden
The local councils have already done that horse to death by assessing on the total GV. but if you do not include the house, home or whatever on the land then that would become a relatively simple exercise piggy backing on the existing mechanisms for rate collection.
A land tax sounds great in principal, but our governing entities have already managed to jack up land prices and make housing unaffordable with relatively little incentive - imagine if they had some skin in the game! I have zero confidence in governments to manage land supplies and we should not entertain a land value tax until they do, and accept the impact restricting land has had on escalating house prices.
And then Boatman, think about this, each year you will submit to the government copies of all your bank account balances, equity holdings together with an explanation of where the funds are now for any reductions. Detail of all trusts, active and discretionary, and any other funds of all of the foregoing nature held overseas. Each year a government official can enter your home and tally up your chattels, vehicles and heirlooms such as paintings, jewellery and ask where the proceeds are for any missing items. And because various pirate scammers are already fishing and recording details about you on the internet the government is thus justified to do the same to make sure you are not concealing evidence. Orwellian Boatman, pure unadulterated Orwellian.
They are also dictating and regulating what is considered wealthy. Everyone has different financial makeups. Some people are asset rich, cash poor, and income poor. Some people are income rich, and asset poor. When you tax wealth over a certain amount, you are essentially double taxing peoples savings which they have previously paid tax on when they earnt it. So it is totally sending the wrong message about saving. It is also penalizing people for being more successful. It is likely going to increase house prices as well, because people will have to tax that new tax into consideration when they sell. So it will also likely increase rents as well. I wonder if there will also be wealth bracket creep, if the amount isn't updated annually, to keep u with house price inflation, because houses increase more than normal inflation (at least over the last few decade or two), so every year, more and more existing houses will be captured by this new tax..
Thats not the point .....the point is any tax starts off relatively benign , ...............its only xx% . This prevents a public backlash
Once entrenched the rate goes up and up and up , way ahead of inflation in the case of GST , irrespective of which Government is in power
Here some questions. Brian Easton in his article is advocating for a change in economic policies, the Greens advocating for a wealth tax. Which is better? Doesn't a society with significant wealth inequities indicate unbalanced economic policies? And isn't a wealth tax a somewhat clumsy solution without delivering a real out come (It takes money from the wealthy by way of tax, but there is no guarantee it will change the lot of the poor)? surely the desirable process is to develop economic policies that creates real economic opportunities for everyone? They shouldn't discourage a person from being able to get rich, but that should not be able to be achieved by paying workers less than a decent wage, or demanding excessive prices from trapped consumers etc.
Folks, a general reminder. There's some pretty rabid, nasty stuff in this thread, as there has been elsewhere of late. Robust debate is fine. But please remember to play the ball not the (wo)man. And note that we do expect basic commenting standards to be maintained. They can be found here - https://www.interest.co.nz/news/65027/here-are-results-our-commenting-policy-review Thank you.
So there you go, Ardern once again showing she is a conservative centrist who won't make the changes necessary to address the things she says she cares about...
All words, no substance - that's Ardern, and her party, right now.
I mean, what's she worried about? Most wealthy people and high income earners don't vote Labour anyway!
Gareth Kiernan - an economist - was on Radio NZ this afternoon, and while he said he hadn't looked at the numbers in detail, he suggested at a high level the thinking behind it seemed sound.
And before right wingers rant on about how left-wing biased RNZ is - they had Heather Roy on the panel.
The Panel has more Right than Left (I'm neither, but I take note) and the mediator is well named, as in 'Where's......'
Otherwise, RNZ are rapidly descending in the direction of shallow and tabloid. Does anyone know why? Whose employment does the change date from?
The free market allocates resources most effectively. Georgism is a mental disorder. Do you think the roof over your head is "unproductive"?
Productive land, as well as residentially zoned land, is not fixed in supply or perfectly inelastic. State meddling in the land market will end in poor outcomes, as it does/would for any other natural resource.
Sound like you might be an advocate for anyone being able to do anything they want with the natural environment. Has it ever occurred to you that the human race does NOT actually own this world? Have it ever occurred to you that it remains long after we as individuals are gone? Does it ever occur to you that perhaps we actually do NOT have the right to just plunder it to our hearts' content.
The insistence that the free market will also regulate itself is also laughable. The market is not a perpetual motion machine, it is not somehow governed by abstract laws operating in a closed system.
When you talk about productivity it seems like you are referring to some zero sum balancing sheet, as if natural resources were infinite and their utility value without consequences. Productivity has also traditionally been informed by ideas of work understood in terms of physical labour over time - wealth derived from speculation or limited supply of goods is not therefore productive, simply profitable.
Equating productivity with profitability assumes that wealth creation is not only potentially unlimited, but also 'natural'.
The first case study / example in the Poverty Action Plan policy document; "Aroha is 19 and has been working full time at a cafe since she left school at 16. When she's made redundant, she decides to do something different, but doesn't know what."
This example is obviously made up, and I know school isn't the be all and end all, but come on, was this copied from a Stuff article? A higher education at every level leads to a higher prosperity in life. She leaves school at 16 to work in a cafe? Why? And why is she renting at 19? And living away from her parents? Transferring wealth from those who made good decisions to those who made poor decisions is not the right way and as I said in the previous thread, not the right message to send.
I think you and I live in totally different universes. In my universe that example has been - precovid - very common. Postcovid, service industries like cafes are struggling, so cafe work for teenagers has disappeared.
People leave school and go renting for all sorts of reasons. The system doesn't suit their learning style, they're being bullied, they're dyslexic, they're motivated to earn money etc. They leave home and go renting for an equally wide range of reasons - it's a dysfunctional / abusive situation, they're independently minded, they need somewhere to live due to circumstances etc.
Reducing these decisions into 'good' and 'poor' categories really depends on your reasons. Such binary thinking is both reductionist and overly simplistic, but I do appreciate it might provide you with a sense of certainty.
This will be an administrative nightmare for IRD, if introduced. And with values of houses fluctuating, even for the tax payers. Accountants must be salivating at the additional fees they will get in managing their clients' taxation. Better stay away from this, Jacinda and Todd. The money saved in administering this monster can be better spent on Education, Health, etc. Greens suck totally.
I do agree with that. Any difficult to administer tax will be subject to rorting. My preference is a financial transaction tax, get rid of GST, another administrative nightmare and introduce an ftt at a tiny % on every transaction going through a bank. It is the very best way to spread the load as far and wide as possible, will see to it that the Googles of the world pay tax here and is unbelievably simple to administer.
Set right, it could even reduce or eliminate PAYE.
7.8 billion paid by 6% of the population. Reminds me of the 4 friends who ate out once a month, when the bill came they split the bill on their relative means, the unemployed person chipped in 10%, the part timer chipped in 20%, the government worker chipped in 25% and the self employed business man chipped in the rest 45%. At the end of the year the restaurante gave them back 50% of the meal price. He wanted to pro rata it, but the other 3 wanted to split it evenly, so a fight ensued and it got split evenly. Next month they had their lunch but the businessman didn't turn up. when they went to pay, there usual shares didn't clear the bill. They didn't have enough money. Does no on either remember what happened to the tax take when the rate was 39%. Make villains of people and the law of unintended consequences will always win.
This reminds me of Muldoon saying that a national economy is like a household budget, but the two are incomparable. Your example fails to take into account how debt operates, not to mention the underlying assumption that societal contributions are only valid if they are financial.
Your conclusion seems oddly threatening. Unintended consequences do happen, but there's no 'law' that governs them.
The outrage this policy generated is interesting. A wealth tax is misguided but contrast it to tobacco tax which is utterly counterproductive. Smokers, generally from lower socioeconomic backgrounds, commonly smoke ~100 g/week @ $2.30 per gram. Assuming ~90% of the cost is tax, then that equates to over ten thousand dollars of tax paid per year per smoker. No wonder New Zealand has such a high rate of child poverty.
Nz has a huge rate of child poverty because people who can't afford to raise kids, or won't sacrifice their hedonic pleasures to raise their crotchgoblins properly keep popping the little buggers out. (Not the only reason, but a significant factor)
Caught up with a mate at the pub the other day and there was a woman there telling us how her daughter just popped out #9..
OMG, 9 kids! How outrageous, this is unthinkable and must be stopped immediately Pragmatist!
My partner is #9, she's got a law and microbiology degree, the next two up are a marine biologist and a dietician, after that you've got a teacher, a shop worker, a farmer, vet, a GP, and the oldest is a nurse.
Stop being such a judgemental bigot.
It's not the number, it is how were they raised. Did these people have nine kids without being dependent on the state? And then there is the environment? I know someone who is number 11 of 13. Amazing family, Dad worked every hour god gave him. No religious basis, just loved kids, and of course, sex!
Doesn't matter what they do. What they are is too many.
This is about the too-fast consumption of a finite wee tennis-ball spinning in space. You are making the (common) mistake of assuming the activities they undertake, generate 'wealth'. They don't. What they do, is allow the actors to receive a socially-agreed amount of proxy, which is a future expectation that it can be swapped for processed parts of that wee tennis-ball. See the problem? We count the wrong thing; we therefore fly blind.
I agree with you PDK but that conversation hasn't been had yet (be that right or most likely wrong in itself) and it most likely hadn't been thought of several decades ago, by the masses at least.
It seems like one of those topics that is too hard to raise so, like you say, we steam on towards oblivion.
One day it'll become more apparent though, hopefully not before it's too late.
Nine kids is more than 4x the number of an average household, no? 4x the childcare subsidy, 4x the places in local schools... bloody hell and I wanted three until economic reality made that untenable and now I'll be lucky to afford two, if I can ever afford to get started.
Not saying the woman in question is on SW but Nz is growing a giant and demanding beast of poverty and handouts. In the other hand we know a couple of families with 5 beautiful children each and they're a sight to behold. A lot of work has gone into them to get them there.
Genetically, we all attempt to reproduce ourselves. Survival of the fittest is the natural curb for all species, ours included.
But only one species has tapped into the future, today. Taking resources without which future generations have no chance. It follows that we had to be cognisant enough to ration ourselves, or collapse population-wise.
We weren't cognisant enough. As a lot of posts here, prove. So we will probably fight over 'what's left', probably at all levels. And end up with remnant popualtions eking out a much simpler existence. A billion, maybe, and maybe less. But lets ignore that and follow the Pied Piper "open the borders, there is a joyous land near at hand.".
dont think anybody seriously thinks the greens wealth tax will ever become law,maybe window-dressing to retain the crackpot vote,we got rid of the silly folk dancing and handknits but we still have a witchy woman with a funny name and look! a crazy tax so we are still radical.
Yeah well, it's not like after all the years of a National/Act government that we have a crackpot flat tax, eh?
Oh and while I am here, "folk dancing", are you another one writing from the middle of last century? "Handknits"? though not sure what is wrong with that, meh, but "witchy woman with a funny name". Way to make sure you are never taken seriously.
Like many I don't think this wealth tax will fly and like any new policy, it will be detrimental to some, while beneficial to others. That's democracy. Falling interest rates and RBNZ's decisions over the past 10-20 years have been extremely beneficial to some (asset owners), and terribly burdensome to others. And those who have benefited most, now appear least willing to show some altruistic spirit. Is it fear or is it greed?
Martin Luther King:
"Every man must decide whether he will walk in the light of creative altruism or in the darkness of destructive selfishness."
So will we continue to walk in the darkness under this neoliberal economic model that is driving inequality? It appears that many on this site are already walking in a very dark place and want to walk further into the darkness - clearly wealth hasn't provided much light to them.
Its never going to fly so don't worry about it. Take many older peoples position of asset rich and cash poor. Do you seriously think you can start charging them over $10K a year on their property while they are on super ? So add that to the council rates of $3K and all the other bills and they are left with nothing to eat. All you will face is massive evasion in the tax payments.
The wealth tax is simply stupid. In low wealth growth environment, it destroys formation of capital (assuming a capital growth rate of 1%, the wealth is halves in 25 years), in high wealth growth environment (e.g. growth rate more than 7%) it under-performs a capital gain tax at the persons marginal rate of 33% (for example between 2015 and 2018, net wealth of top percentile kiwis increased by 10% a year, you would have collected almost twice the tax as a wealth tax would have).
So in good times it under-performs other alternatives, in bad times it destroys and in average times, it slows the progress to good times. Terrible idea. It also creates serious cash flow problems, it will affect business decisions, it has massive valuation issues (no one minds any valuation if there is no consequence to it, but I am sure the IRD simple valuation tool will by totally unacceptable if it puts you in a taxable bracket) etc. A realization based capital gain tax is superior in every aspect.
@believer , correct , this new tax idea is clearly anti-capital , the Greens dont want any wealth or private capital here whatseover in New Zealand , not for anyone .
The Greens have just declared war on Private Capital .
Hugo Chavez did that and see where it got his country
Its the first step in the absolute destruction of private Capital , ( and that Private Capital is essential for growth when you have a Government that is now broke and is issuing new Bonds at an amazing rate ).
An lets make no bones about it Capital is fickle , it does not stay where its not wanted or risks being confiscated , even "just" 1%is enough to make it leave for less hostile places
The Greens dont even want the shared wealth that comes from economic growth, they just want shared misery .
They have no interest in growing the economic cake, rather to shrink it and consume more themselves .
And furthermore, once they have confiscated your savings , they will spend it a lot less carefully than you ever spent your own hard-earned money.
More likely they will be quite reckless with it
You're right , its plain stupid
I know this will fall on deaf ears but do you all really buy that a couple with 3 million in assets will notice a 10 grand tax on their wealth over 2 million? Or that this wealth tax will put off would be start ups or investors? It may However encourage them to put that last million into productive investments and create jobs. Wealth capital or inheritance taxes are very common internationally. In Nz we are so in love with property and so committed to this ‘American dream idea,’ it seems if you even suggest a tiny marginal tax on wealth people lose it completely and call you a communist. Meanwhile labour pays all the tax in this country because if don’t own assists or a business you can’t structure yourself to avoid tax. I say bring it on- let’s finally have a small symbolic tax on wealth in this country. (FYI I am a top tax bracket payer and will be negatively impacted at an individual level by the greens Income bracket policy- doesn’t mean it’s not a good idea for this country)
I assume you are commenting on the brackets? My view would be it would be better if the higher brackets were accompanied by some reductions on lower rates ie 70k which is the current top rate- income is already heavily taxed compared to assets. But I imagine any actual policy passed will be moderated in the end so I see this as more of an opening gambit by the greens.
I assume you are not referring to the 1% wealth tax- if you have more Than 2 million in wealth ( not mortgages) I assume you can find some money to fix the roof.
Oh for goodness sake @actually.... , are you suggesting the wealthy DONT have their investments in productive assets already ?
If so where do you think it is invested ?
Under the bed ?
If they invest in Government stock ( Bonds) then the money is being used by Government for goods and services and for infrastructure development
If they invest on the NZX in stocks , its used productively by the listed entity to employ people and grow our economy
If they invest in philanthropic projects, it is productive in that it benefits us all .
If they invest in Bank Deposits , its the capital the banks lend to those who need it for housing or factories or plant and equipment , trucks , aircraft , vessels etc .
I dont know where anyone gets the notion that the wealthy squirrel notes and coins in the basement of their homes or some other unproductive place .
No of course not- I’m not picturing a Treasure chest here ready to be raided by the communist Rabble. I am countering the argument made by many against the tax that purely taxing 1% will somehow stop people investing which I completely disagree with. As you state wealthy people can and do invest they are not going to suddenly stop doing so due to this marginal tax.
Okay , I have just been called up by the Editorial staff for being too radical ( and personal ) in my posts on this proposed new WEALTH TAX (which is a euphemism for Asset Confiscation )
I have now posted my last comment on this new " Tax-and-spend -other -peoples -money -until- it- runs- out- or- leaves " idea .
Hard to say. There are a lot of folks who think COVID makes this time in history quite different - this is a pretty balanced analysis;
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