When the details of this policy were released, it really didn’t pass the sniff test. It seemed to rely on a huge increase in foreign buyers, above pre-ban levels, and ignored any potential reduction in sales due to the tax itself.
It seemed to rely on a huge increase in foreign buyers, above pre-ban levels
Er, maybe this is the unstated part of their plan? Have a massive housing sell off to wealthy non residents?
We’ve now got both Labour and National having policy torn apart by economists.
Awesome.
We need that thing they have some places in the US where you can write anyone’s name in if you don’t like the candidates. We can just all vote for the briscoes lady or something.
Knowing my luck we would end up with the Chrisco’s lady instead.
Remember Paul the Octopus? I vote we just get an animal and have it decide what we do
Right? Such great choices.
Weirdly, the most sound looking policy to me (admittedly not an economist) is the Green’s. And that’s not something I thought I’d ever say.
Don’t the greens want to do wealth tax though?
Yeah, 2.5% on property and shares worth more than $2M, minus mortgage and other debt, one new tax bracket above $180k, 1.5% trust tax and a new 33% corperate tax. All of which is to pay for a lot of tax relief for normal Kiwis.
But regardless of the actual policies, what I was really referring to is the fact that their policy hasn’t been discredited by groups of economists as not being fundable. It seems, regardless of what you think of the actual policies, to be the most financially sound tax plan out there (perhaps TOPs too, I haven’t looked into it that in-depth yet).
Which is actually pretty funny really. 🤣
There’s something really icky to me about drawing a line in the sand, and saying “this is enough to own, but no more”. It’s something that has led bad places when it’s been tried elsewhere.
I also feel tax should be paid on earnings, not what you own, but at least the start point means most retirees won’t pay it.
I actually hear you on both points. Here are my counter arguments:
- It isn’t a “you can’t have any more” situation, because they do not take 100% of everything above the threshold. A better way to think of it is “you have so much we ask you to contribute a bit more to society to help everyone”. Or perhaps “you are so privalaged you can afford a little extra to improve the society you benefitted from”. Remember it’s 2.5% on assets above the threshold only.
- I actually agree with you, I prefer a CGT for this reason. Capital gains are a form of income, and the fact they aren’t taxed like regular income is, in my opinion, criminally unfair. However, it is not because of some fundamental philosophical position that only income can be taxed, it’s more practical. I can imagine a situation where someone loses their income, but has inherited an expensive house. In this case they may not be able to pay the tax. But the Green’s proposal is better than nothing for now.
Most people will be better off under the Green’s proposal. Only the top 0.1% will be affected, and I think we can all agree they can afford it.
Just to add to this, the 2.5% applies to wealth after the first $2 million, and at $4 million for couples.
Thanks, I thought that was the case but couldn’t find it mentioned so left it out.
Honestly such a great policy…
National’s is worse by far. Massive holes that will require even bigger cuts to public services, and dumping more fuel on the housing crisis by allowing foreign buyers back and giving tax breaks to landlords.
Labour’s will mean spending time in the courts arguing about what constitutes a fresh broccoli for GST purposes. Not the same.
https://www.merriam-webster.com/wordplay/bothsidesing-bothsidesism-new-words-were-watching
For every economist there exists an equal and opposite economist.
