I was glad to have the opportunity to run through the Capital Gains Tax (CGT) policy released by Labour yesterday on Radio Chinese Voice immediately after Question Time.
To give a simple example to the Chinese audience, I said that every dollar from salary or wages you earn you pay tax. But if you have an investment which earns a much greater profit, you are not required to pay tax.
When talking about CGT, it is also important to note that aside from New Zealand, Switzerland and Turkey are the only two other developed countries which don’t have a Capital Gains Tax.
What is more telling is an example given by Labour Finance Spokesperson David Cunliffe yesterday. New Zealand is in a financial hole with a record Government deficit of 16.7 billion dollars and 142 billion dollars of overseas debt but National’s only solution is to sell off our treasured state assets.
Since coming into office, National has looked after their privileged few mates pretty well, but what about the ordinary many and New Zealand’s future?
I would like to quote an email I received from a Chinese constituent (name withheld)
“What about the financial recession? It stemmed largely from speculation; in no way has it helped to grow the economy but created crisis.
Those creators pocketed hefty cash, smiled and went. Good on you Labour, a Capital Gains Tax should have been brought in long ago.”
For financial savvy Chinese, it is not hard to understand that to build a modern, equitable society a progressive tax system will work but National’s regressive tax system will not.
Labour’s policy is for all New Zealanders and our future.
http://blog.labour.org.nz/index.php/2011/07/13/families-struggle-as-food-prices-go-up/
Not only have you suggested more taxes, you have also suggested even more exemptions to the taxes. The only winners will be tax lawyers and accountants.
The governments tax system is a regressive tax system! Yeah right, more spin less substance as usual.
“A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases.”
Last time I looked at my tax burden the more I earned the higher the tax rate and the tax I paid. Even if you take GST into consideration we all pay the same tax rate.
You should really have been glad to introduce this Green Party policy on the radio long ago.
Those creators pocketed hefty cash, smiled and went. Good on you Green Party, a Capital Gains Tax should have been brought in long ago.
The Green Party policy is for all New Zealanders and our future.
@ Raymond
Actually the financial crisis as manifested in NZ stemmed more from poor regulation of the banking sector.
I totally agree with CGT but lets not forget that banks and the remaining finance companies, the institutions whose risky and aggressive lending policies have overheated the market and has screwed us all with the connivance of the last Labour government and the current National one, will not pay a cent more in tax as a result of this policy change.
What will Labour do about heavier regulation of the F.I.R.E. sector to avoid the next crisis?
“Switzerland and Turkey are the only two other developed countries which don’t have a Capital Gains Tax”
So Hong Kong, Singapore, and for the most part, Netherlands aren’t developed countries?
Nice one Raymond.
Funny you mention Chineese and Capital Gains Tax.
Do they have one in Hong Kong? No they do not – I wonder why that is??
Nor does Singapore. Both Asian environments that are doing very, very well.
Also did you tell them (according to labours own papers) that you will need to borrow for years before this generates positive flow?
your own figures say:
* 2012/13 – $122m extra revenue
* 2013/14 – $384m less revenue
* 2014/15 – $648m less revenue
* 1st term – $910 less revenue
* 2015/16 – $466m less revenue
* 2016/17 – $283m less revenue
* 2017/18 – $127m less revenue
* 2nd term – $876 less revenue
How can this be good? it cant.
““What about the financial recession? It stemmed largely from speculation; in no way has it helped to grow the economy but created crisis.”
So what was the main cause of the US recession?
I wish I was an accountant .. what do Labour consider “ordinary many New Zealanders..” Raymond?
I have a question and would be grateful if someone could answer it for me.
As property developers and share traders already pay income tax on the profits realised on the sale of their assets. Landlords holding residential properties do not. If the new system of CGT is implemented will these developers and trader pay capital gains tax instead of income tax or as well as income tax. Is it possible that they may pay less tax rather than more.
I have a question and would be grateful if someone could answer it for me.
As property developers and share traders already pay income tax on the profits realised on the sale of their assets. Landlords holding residential properties do not. If the new system of CGT is implemented will these developers and trader pay capital gains tax instead of income tax or as well as income tax. Is it possible that they may pay less tax rather than more.
@Jabba -”I wish I was an accountant .. what do Labour consider “ordinary many New Zealanders..” Raymond?” Easy – anyone who continues to vote Labour. Anyone else apparently is “rich” which I find remarkably patronising. As, apparently, do more than half of the voters:)
@Dave
Ordinary NZers – median income of $34,000 per househould, the segment of people that carry most of the tax burden and who National screwed over with their increase in GST (Donkey promised he wouldn’t).
http://en.wikipedia.org/wiki/Median_household_income_in_Australia_and_New_Zealand#cite_note-2007_New_Zealand_income_survey-0
who is donkey?? you can’t mean John Key as the site rules ban comments “if you’re abusive”.
and thank goodness I’m not ordinary
@Jabba
Yes I do, just a well publicised nickname with excellent cartons to illustrate his likeness to a mule if you prefer. Already well used on this site.
http://blog.labour.org.nz/index.php/2011/01/27/sell-the-donkey/
The $5000 tax free threshold for people on low incomes is huge. They don’t have the tax avoidance strategies or accounts to set up the loop holes, PAYE all the way.
Not suprising the 30 year high in moves to Australia where median income is twice as high plus lots of social & Health assistance. gee they have CGT to
@Richie, check your facts,In 2008-09, earners of over $70,000 a year contributed 46 percent of the income tax base. This group is 10% of the earning public. So 10% pay nearly half of all taxes. That seems more than “fair”. I would suggest the “burden” as you put it is hardly on a lower income group. Yet these hard working contributing members of New Zealand society are targeted for being “rich”. Pathetic, jealousy based nonsense.
Its funny that Switzerland one of the most stable economies in the world does not have capital gains tax and Turkey which is also preforming very well does not have one. I bet Greece does.
Two wrongs don’t make a right Goff. We are already overaxed and a progressive tax system is unfair for a start. Why should you be penalised for creating wealth or being more productive and then saving your money. Labour is out of touch. At least goff’s demise will bring someone with a bit more intelligence as leader like Parker,
I think that if someone (who is super rich) loves their bank balance more than they love New Zealand then they should move to aussie when the labor government rasies taxes on em. If someone can’t get rich without government help then they don’t deserve to be rich.
all the income should be taxed!!!fair to all.
no more gap!!!