The Labour Party is not going to bring back a heavy taxation policy because of a backbench revolt, according to its leader, Chris Hipkins.
He says suggestions to the contrary are wrong.
Hipkins cancelled work on a wealth tax in July, which led to the resignation of his Revenue Minister, David Parker.
Parker had been working on this idea for months.
But several reports suggest the idea is rumbling away in the Labour caucus, which is biding its time.
The reports say the Taieri MP and chair of the Finance and Expenditure Committee Ingrid Leary has spoken in favour of a wealth tax or a capital gains tax.
They say she accepted that it might not be Labour policy now, but that it would be so in the future.
These reports were seized upon by the National Party which says they show what the rank and file of Labour really think, and Hipkins is the only thing standing in the way of new, punitive taxes imposed on the public.
Hipkins says he thinks this comment is "a bit hilarious" and does not represent Labour reality.
"Ingrid Leary made it very clear that what she wants to see is tax fairness which I also want to see and the Labour Party wants to see.
"'She also made it clear that the Labour Party is not going to be introducing a wealth tax and I am not going to be introducing a wealth tax."
"We have made it clear that big changes like that have to be put before the electorate. We have not put it before the electorate, so we are not going to be doing it."
In the wake of this argument, Ingrid Leary told RNZ that imposts like a wealth tax or a capital gains tax were not Labour policy this term, but they could be in the future.
"The Labour tax policy is clear - we are not proposing a wealth tax or capital gains tax if re-elected. Caucus has agreed that position. What I conveyed was that it could be something for the future, but it is not a policy for our next term."
However, the National Party campaign manager Chris Bishop says it is not that simple.
He says Leary's approval of a capital gains tax or wealth tax has won support from elsewhere, most recently, the back bencher Ibrahim Omer.
"The Labour Party caucus is desperate for this," Bishop says.
"They want a wealth tax, they have got the Green Party next to them, who are absolutely gagging for a wealth tax and/or capital gains tax, so much so that they have made it a bottom line of their coalition talks.
"No-one thinks the Labour Party can govern with any other party other than the Greens, and almost certainly Te Pati Maori as well, who also want a wealth tax."
Bishop's argument is that Hipkins' opposition to a wealth tax is not shared by his own party members or his own potential coalition partners and so is unlikely to survive any post election negotiations.
Hipkins says this is rubbish and is pure mischief making by National, which can't even get its own policies right.
35 Comments
The failed neoliberal experiment is over. Parties like National and ACT are past their use by date and simply increase wealth and wellbeing inequality through their policies.
NZ had massive social and environmental deficits which can only be addressed through a fairer tax system more akin to that before Regan and the start of the neoliberal focus on upward wealth distribution.
However, personally I don’t agree with a wealth tax. The reimplementation of inheritance tax is a much better way to deal with it.
I do favour a capital gains tax. People should not be allowed to gain what is effectively income without paying their fair share of tax on it. Almost every OECD country has one. It’s about time we did too.
Our current tax regime is focused on reducing the existing over-investment in property. Disincentives for property investment exist in the blue-line tax and that makes investing in businesses more attractive. If you were to tax capital gains on the sale of businesses you would in essence just make property investment far more attractive.
However I am also in favour of a blanket capital gains tax as this is absolutely the right moral stand. Capital can get a reward in returns but un-earned income from simply holding an asset should be taxes as labour is taxed in my opinion.
I would be supportive of a wealth tax if
If it was used to reduce the countries debt levels, i.e. recover from labours overspending, and go towards infrastructure, schools and hospitals.
If it applied to all wealth equally i.e. maori land and assets at open market valuations.
We do need more tax income to get out of the hole we are in but it shouldn't be used to support the social policies that have got us into this mess.
Big chunk of tax free gains are inflation related. Selling one asset, being taxed on the gain means you cannot buy the same valued asset.
It also relies on gains.
So to ensure the gains the politicians and banksters are incentivized to create heaps of inflation
Straight out asset tax is the better though unpalatable option (unless you are asset poor).
Tell me how you are going to fix the social deficits.
The problem with the LVT and CGT proponents is that they are all in favour of the tax side, but none have the slightest clue how to use the money to actually make a difference to wealth inequality.
Come up with the solution to wealth inequality first. Then come and talk about how to raise the money to pay for it.
The tax first approach is just more punitive B.S. tax based on envy. Yawn.
Hipkins says no tax revolt looming
He also said there was no constitutional changes being made - until the He Puapua document was released!!
Hipkins track record isn't favorable...
A poll run by, of & for the usual suspects with the usual leading questions.
https://www.bettertaxes.nz/about
https://www.bettertaxes.nz/essential-profits-poll
Yeah nah
If rather than being called a wealth tax it was an efficient use of capital tax it would probably be more palatable.
Must admit I'm not familiar with the intricacies but if;
a $1m property investment yields 5% ($50k) and is taxed on $50k,
a $1m landbank investment yields 0% but is taxed on $50k,
a $1m family home yields 0% but is taxed on $50k,
a $100m piece of beachfront maori land in the glistening Matauri bay taxed on $5m,
Then a productive allocation of wealth will underpin a recovery in the fortunes of NZ.
The problem will always be the determination of the correct value of assets.
A totally unrelated story.
Scene: Rome, 44BC. A media scribe approaches a well-dressed man attended by many servants.
Scribe: "Emperor Caesar, a moment if you please, your magnificence."
Well Dressed Man: "Certainly. What is it?"
Scribe: "The public are wanting your thoughts on the upcoming meeting at the Theater of Pompey on March 15. There's talk of...um...consternation. How would you respond?"
Well Dressed Man: "I'm glad you asked. I am well aware of rumour and hearsay, but I can assure you I have complete confidence in the loyalty of the Senate, and I foresee glorious times ahead for the Empire. Viva Rome!"
/Scene
Nothing says "I'm confident of winning" more than asking your rival to stand aside.
I'd actually vote for Raf if I was still in the electorate, but talk about a desperate bit of spin that shreds your credibility.
I suspect their internal polling must be grim as he seems to have taken to touring university flats and the most vocal TOP supporters I know (who have done a lot of campaign work for him) have gone awfully quiet.
Maybe an upset will play out, but seems unlikely.
The time to have sorted a deal was months ago, and presumably National would only want a deal under a firm agreement that TOP would not pick Labour ... but that wouldn't square up with TOP's "we can partner with anybody" message.
I wish the voters were brighter. I.e.
Bringing new taxes does not mean existing taxes would stay the same.
It does not mean that most NZers would be paying more tax.
What is does mean is that new taxes would allow existing taxes to be reduced, e.g. PAYE, GST
What it does mean is that a few - say 25% - will be taxed on other ways but that does not mean this 25% will be paying more tax.
What it does mean is that a very few - say 10% - will be paying more tax as they have income streams that were previously un-taxed.
And what it also means is that of those 10% - some, maybe less than 5% - will be paying way more tax as they've previously been paying very little tax.
What it does mean - and this is the biggest benefit to NZ Inc. - is that many of the massively distortionary effects of the current taxation system will be removed and we will make better economic decisions as a result !!! (e.g. considering buying an existing residential property as an "investment" will go the way of the dodo.)
Rather than jump straight to insulting the intelligence of the voting public, perhaps stop to consider that maybe the reason TOP is so unpopular is that people are smart enough not to elect a party that wants to charge them annual rent to live in their own homes, and introduce race based policy?
TOP votes are essentially wasted, which is better than them going to the Greens I suppose.
We've had death duties and extortionate taxes under Corporal Muldoon and they spent more money collecting them than it yielded.
I was being gouged 66% on my marginal tax rate under the Corporal and decided to do something about it. I was visited at my home by two IRD officials who found nothing wrong. Muldoon's tax legislation set me on a new path which has subsequently been very successful. Thousands of kiwis went to Australia to escape the tax rip-off and never returned.
We are implored to be successful, do useful things, but when you do, you employ people, build businesses, take risks and make a few dollars, socialists then want to confiscate it.
Not exactly the way to create wealth and employment in NZ.
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