Capital gains is a good policy that build’s the credibility of Labour’s economic and fiscal plan. Labour’s brilliantly run pre-launch has sparked interest and discussion. The destruction of John Key’s economic credibility has been a welcome side benefit. And it is a blow, Vernon Small points out, that Key has inflicted on himself.
The Tax Working Group canvassed the many reasons why New Zealand should have a capital gains tax, before rejecting it by majority decision on the basis it was too complex and hard to administer. According to Auckland University’s Professor Craig Elliffe and Chye-ching Huang this is not borne out by the example of South Africa’s successful introduction of a CGT in 2001. Surely if the South Africans can make such a tax work our officials can too.
The genius of Labour’s (not yet official) capital gains tax is not just the policy itself but the way it has picked the public mood. Support has been near-universal. The Left loves the fairness aspect – workers won’t be subsidising landlords anymore. The Right loves the implications for capital allocation, interest rates, and the exchange rate. The Nats look isolated and hysterical.
Even Bill’s readers like the CGT…
It has been a rare and sincere pleasure to see National walk straight into a trap carefully laid by Labour. Goff and his team haven’t even publicly confirmed their capital gains tax policy but proponents to the Left and Right are winning the pre-launch media framing for them, while Key’s contradictory ranting is undermining his credibility.
Yesterday’s Morning Report interview with Sydney Morning Herald economics correspondent Peter Martin was a real gem. The picture of capital gains tax that emerges is one of simplicity, fairness, and closing loopholes. No wonder the Nats hate it.
The landlords’ lobby group is making a lot of noise over Labour’s, still unannounced, capital gains policy. They say rents will go up, the supply of housing will fall, and it won’t stop house prices bubbles. Examining those claims shows that there would be little impact on rents while housing bubbles would be reduced and home ownership would be more affordable.
The right’s leadership resembles a merry go round of disgraced old white failures. Brash, English, Shirtcliffe, Douglas had their time at the front, were disgraced. Now they’re back. Thompson was fired for his appalling behaviour but got a payout. He’ll be back in due course. While Brash says he’d welcome baby ID stealer Garrett back to Parliament.
Labour have started setting out a bold, fair and plausible policy framework for the election. Rumours of their tax policy have generated more interest and excitement than anything the National government has done in the last three wasted years.
In the Herald today, Mark Lister says the lack of investment in the productive economy is due to the favourable tax treatment of housing. On Thursday, Brian Fallow wrote how Kiwis are being shut out of home ownership by investors who see capital gain from housing as an easy win, and workers’ taxes effectively subsidise property investors who pay none.
The National Research unit has created National pollster David Farrar has taken time out of his holiday to create a graph showing the reduction in tax across incomes. Supposedly it shows National’s tax cuts weren’t for the rich after all – we just imagined it! But the research unit Farrar have avoided some inconvenient facts.
Information about the 22 June Global Day of Action in support of the Financial Transactions Tax (FTT).
*Key says that we will get to vote on his Kiwisaver cuts in the election. Truth is, they passed the law last week and the tax credits are cut from July 1. *What’s up with the dodgy Kiwibank numbers? Plans for sale? *The govt is importing World Cup workers while 270K are jobless. *Key’s jokes falling flat with pissed off voters.
The dairy industry produced 16 billion litres of milk in 08/09. The 17,000 dairy farmers got an average half million payout. So how come they only paid $26 million in tax in total? Are we meant to believe that the average dairy farm makes a million litres of milk for $5,000 profit? Rubbish. They’re creaming it.
As we wait to see just how bad the economy has got under National, and what cuts they will force on us to pay for their follies, Michael Bott’s reports on canvassing in Masterton: “I spent a weekend with a team of Labour volunteers listening to the concerns of the people. A repeated remark was, ‘‘ no matter how hard I try, I just can’t get ahead’’”
Paul Krugman on the real reasons for the economic carnage. Not social spending policies, but the daft economic policies of the right-wing “policy elites”. Our focus should not be on slashing spending, but on National’s stupid, unaffordable tax cuts.
The minor party debate on Q+A was very interesting. Rahui Katene was self-contradictory and vague, like the Maori Party always is. Peter Dunne was pathetic. Roger Douglas slammed the government’s borrowing as did Russel Norman, who pointed out the other three had all voted for National’s debt-increasing tax cuts for the rich.
The Nats have run this country into the ground and say there’s no option but to slash Kiwisaver. The actual cuts they announce will be less than foreshadowed, and we will then be expected to be grateful. It’s the Nats’ old trick. But the reality is there’s no need for Kiwisaver cuts at all. Not while the rich keep the tax cuts National gave them.
John Key has confirmed he intends to slash Kiwisaver to the bone by cutting the up to $1040 a year government contribution you get as a member. Of course, this is the savings budget according to National’s spin. They’re going to ‘encourage’ savings by taking that money from Kiwisaver and giving it to rich individual savers. It’s just more class war.
You’re the ruling government. Which do you choose, tax cuts for 47 millionaires or salaries for 121 new teachers? It’s not a hypothetical question…
Buckingham Palace cleaners aren’t even paid the London living wage while the British taxpayer will have to pay for the royal wedding cleanup. That’s one reason why I’m a republican. The Globe and Mail reports: “The cost of cleaning the streets of Westminster the day before the wedding is estimated by the council at $83,000.”
This Herald story about spin doctor Brad Tattersfield was paid hundreds of thousands of dollars by the Ministerial offices of the Prime Minister, Judith Collins, Paula Bennett, and the Chief Executive of the Department of Labour to “minimise scandal” is one example of the sort of back-room spending of public money I’d like to see cut.
1000 economists have written to the G20, about to meet in Washington, and to Bill Gates, asking for a tax on financial transactions known as a Tobin tax after its originator, or a Robin Hood tax as it is known in the US. 4 New Zealanders are among the 1000; Prue Hyman, Stefan Kesting, Peter Conway, and Petrus Simons. Good on them.
Bernard Hickey sets out the “theory” behind National’s tax cuts, and sums up the impact of the tax package as a whole: “Simply put, it’s not working”.
Why isn’t it working? Well the fact that the theory is nonsense probably doesn’t help…
The PSA is the frontline in our fight against National’s plans to savagely cut our public services. Much in the same vein as the sticker campaign that Eddie posted on yesterday, the PSA has used humour to get across an incisive message: what the rich elitists in National consider ‘nice to have’ is very different from what we value.
A UMR poll shows that 40% of Kiwis support paying an earthquake levy to help pay for the Christchurch rebuild. 22% prefer more borrowing, and 29% want spending cuts. Asked just whether they supported or opposed a levy – 57% supported it. Yet the Nats are choosing cuts instead.
In the last Budget, National cut the corporate tax rate to 28%, which costs $400 million a year and comes into effect today. […]
So what are you gonna do with the 9K of tax cuts you got with your 400K pa job since October? Why not pay 7K to shack up with 65 of the elite and eat a 6 course meal from foreign chefs?… What do you mean you’re not on 400K, you haven’t pocketed 9K in the last 5 months, and price rises ate your ‘tax cut’? You need a real job.
The Nats want us to believe there is no other option than massive cuts to government spending. Roughly, a third of the cuts covers the earthquake rebuilding, another third covers the Nats’ tax cuts for the rich, and the last third covers the revenue loss from this neverending recession. So, how come the Nats can afford another round of tax cuts for the rich?
John Armstrong’s contacts in National are telling him that Working for Families and student loans are the targets for cuts in this year’s budget. He also reveals the real reason for National opposing the widely-supported earthquake levy: putting on a tax would be an admission that tax cuts for the rich were a mistake in the first place.
The tax system we currently have is a relic of the pre-IT age. In the days of manual clerk-handled accounts, it was impractical […]
Unless a leader is horribly neglectful in the wake of a disaster, like Bush after Katrina, I don’t think there is any grounds to criticise them for the immediate disaster response, which is largely out of their hands anyway. But the policy response that follows is a legitimate topic for political debate. And I’m worried about Key’s.
Last week, Treasury issued a press statement saying it had commissioned research on the impact of governments’ fiscal stimulus packages, now published in the influential publication the Economic Journal. One article, “Tax policy for economic stimulus and growth”, had this to say:
Key proved he’s bereft of ideas in his speech on Tuesday. On Wednesday, he showed he’s out of touch. As you know, Key has voted himself $23,000 of tax cuts on his PM salary alone. Labour estimates another $24,000 on his investments – over $1000 a week. Key argues his tax cut is ‘only’ $15,000.
John Key’s government is just two years old but it is already clearly bereft of ideas. His lacklustre speech showed no innovative thinking. There was just his usual bile directed at Labour and the same old failed National formula: asset sales, welfare cuts, and public service cuts masked by restructuring to fund tax cuts for the rich elite.
Bernard Hickey looks at the tax bludgers. Labour’s plans to introduce a higher new top tax rate would raise needed tax from those who can most afford it. But it would also foster more tax bludging by the rich. Rather than throw the baby out with the bathwater by abolishing the top rate, we need to eliminate the avenues for bludging.
