capital gains tax

Are we ready for Maori to push for exemptions to any Capital Gains Tax?

Maori already have a privileged position in New Zealand as more and more race based policies are enacted.

They have grabbed control of Auckland’s mountains and blocked access to Mt Eden. They are demanding land be given to them in Auckland instead of using it for delivering affordable housing. There is Whanau Ora, separate ministries and even a separate television station.

Nearly all of this is provided by the state, but Iwi and Iwi organisations barely pay any taxes, most Maori either get Working for Families or some other sort of welfare and so are net tax takers not net tax payers and yet some Maori want even more.

One such person is Joshua Hitchcock, who thinks Maori shouldn’t pay land taxes or land based taxes. He focusses on Capital Gains Tax but I’ll bet he also thinks council rates are iniquitous.

In the New Zealand context, Māori rights to their whenua is guaranteed under Ko Te Tuarua o Te Tiriti o Waitangi.  In reality, however, Māori continue to hold only 6% of land within Aotearoa – the remainder either having been confiscated or acquired using less than fair methods.  The settlement programme the Crown has undertaken over the past two decades has returned a portion of the wealth stolen from Māori, but this portion is nowhere near sufficient enough to make up for the loss suffered.   Read more »

Now they’re fighting the dictionary?

nonewtaxes

My good friend John Key reckons he is honouring his election pledge about no new taxes.

When is a tax not a tax? When the Prime Minister says so.

John Key has denied going back on his word by introducing a “border clearance levy”, which will sting travellers with $22 in arrival and departure taxes.

Key deflected questions on the matter from reporters following his annual post-Budget speech.

Asked what the difference was between a tax and a levy, he replied “many”, and when pressed, to “Google it”.   Read more »

Vernon Small knows a capital gains tax when he sees one

Now admittedly Vernon Small looks at the world through pink tinted glasses, but he hits the nail on the head this morning by calling John Key’s tax changes for what they are – a capital gain tax.

When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean, neither more nor less.”

Like Humpty Dumpty in Alice in Wonderland it seems our most senior MPs want their words to mean only what they choose them to mean.

With apologies to the egg-man it is straying too far from reality, though, to claim – as both Prime Minister John Key and Labour leader Andrew Little have – that a tax on capital gains is not a capital gains tax (CGT).

Under the current regime we already have a CGT for those in the business of buying and selling houses or shares or whatever. In broad terms it can be avoided if the purchase was for rental or dividend flows, not for capital gains, and you can have that out with Inland Revenue through the courts.    Read more »

Why bother with it at all then, John?

John Key reckons his new capital gains tax rules won’t have much of an impact.

New measures to tax capital gains on residential property will help weed out speculators and foreign investors who trade Kiwi homes just to turn a quick buck.

But some commentators are questioning what effect the new tax rules will have on Auckland’s heated property market or how many traders will be “caught in the net”.

Prime Minister John Key announced a raft of new measures yesterday aimed to help curb spiralling house prices and track the number of foreign buyers purchasing Kiwi homes.

From October, anyone selling a residential property that is not their main home within two years of purchasing will face tax on the capital gain.

This morning John Key told Newstalk ZB he wasn’t a fan of a capital gains tax and the new tax rules were not such a tax.

“What we do in New Zealand is have an intentions-based test so if you buy an investment property, then the question is did you intend to rent it or did you intend to buy it and sell it?

“If you intended to buy it and you sell it then you were taxed at the marginal rate.

“What we are now saying is forget about if you buy it and sell it within two years what your intentions were. Your clear intentions were to buy it to make a profit so you have to pay tax on it.”

Mr Key said the new laws would make it easier for IRD to catch residents and foreigners trying to cheat the system.    Read more »

Big housing announcement today?

Richard Harman writes about a supposed big housing announcement later today from the Prime Minister.

It seems there are rumours floating around Wellington and they have come to the ears of Harman.

Speculation is mounting tonight that the Prime Minister is about to announce a major move on Auckland housing.

He is set to deliver the keynote address at the Lower North Island National Party regional Conference on Sunday and it is thought he will make the announcement there.

No details are confirmed at this stage.

But on Wednesday, Reserve Bank Governor, Graeme Wheeler told Parliament’s Finance and Expenditure Committee there were three options — a capital gains tax, stamp duties or “addressing” the tax deductibility of interest payments by property investors.

Mr Key will not announce a capital gains tax.

He in particular, but most in National’s caucus as well, are ardently opposed to the idea.

Stamp duty on property transactions is payable in all Australian states except Queensland.    Read more »

Why is it that Labour always thinks of new taxes first?

Labour never seems to think about tax cuts, or cuts to “entitlements”, instead they always look to increasing taxes or finding new taxes.

Richard Harman out lines some inside gossip that Labour are planning to tax the dead again.

Labour is looking for a replacement for its capital gains tax.

And one influential former advisor is advocating a wealth tax, particularly the return of death duties.

Instead of Bring Back the Dead…labour seem to be wanting to Bring Back Death Duties.     Read more »

John Key and Andrew Little are on the same page: no Capital Gains Tax

The Government isn’t going to try to take the heat out of the Auckland housing market by introducing a capital gains tax.

Prime Minister John Key has ruled that out, and says if the Reserve Bank thinks it needs new tools to deal with the city’s soaring prices it’s free to talk to the finance minister about that.

The Reserve Bank’s Deputy Governor, Grant Spence, yesterday said Auckland house price rises couldn’t be sustained and a “disruptive correction” could harm the economy.

He said speculators were looking for tax-free capital gains, and the Reserve Bank couldn’t fix the problem on its own.

That’s been taken as a clear signal the government should introduce a capital gains tax, but Mr Key isn’t interested.

“It’s a hideously complex tax,” he said.

“Labour campaigned on it and couldn’t explain it, and when family homes are excluded that means three-quarters of all housing is excluded – it’s just not very effective.”

Speculators should be hunted down by the IRD and taxed to the full extent of the law.  Those who have been trying to sneak it past the goalie aren’t looking at a bright future.   But CGT won’t work if applied to everyone.   The real problems are supply of land, zoning, consents and excessive immigration pressures.   Read more »

Will Labour run on a Financial Transaction Tax?

Labour have a finance spokesman who has never worked in the real world, and basically has very little idea about finance.

It wouldn’t be surprising if he did what the Democrats are doing now they are in opposition, and promote a Financial Transaction Tax.

To pay for the plan, the U.S. would impose what Van Hollen called a tiny fee on market transactions, of 0.1%. A Democratic aide said the fee would apply to any buy or sell transactions, and include stocks, bonds and derivatives. The plan would also limit tax deductions on CEO pay above $1 million.

So far this type of tax has only been promoted by the looney left, in the form of the Alliance and Jim Anderton, Mana, and the Greens.

5. Financial Transaction Tax

The Green Party will:

  1. Involve New Zealand with the group of countries working to agree on a tax on international currency movements, to set up a fund to provide capital for poor countries to improve their social and environmental wellbeing. This would discourage currency speculation without being high enough to impede genuine trade.

Read more »

Robbo continues to show Labour’s condescension toward voters

Are Labour really about to take notice of what the voters are telling them, an historic moment if it’s anything more than lip service.

David Parker the media’s favourite policy wonk who has been awarded plaudits for developing policy and the details behind it…..well not really has been thrown under the bus.

Labour’s manifesto is in tatters as without the inflated forecast revenue from the CGT and the savings in pension there is no cash to fund any other policies, except of course that old favorite of cracking down on tax dodgers.

You do have to wonder what on earth Labour have been doing for their taxpayer funds considering the CGT, pension age, minimum wage have been policy for four years and only now are they noticing that the public think Parker and Labour are idiots.

Who knows maybe even the groupthink the MSM might one day notice their audience don’t like these policies either and start questioning them properly.

Grant Robertson has made his pitch for the party leadership, signalling a crackdown on banks, supermarkets and power companies and a plan to rebuild the party.

As he moved to counter the momentum building behind former party president Andrew Little’s bid, Robertson formally filed his nomination yesterday, signed symbolically by Maori MP Rino Tirikatene and Mana MP Kris Faafoi.

He is expected to launch his campaign in Auckland next week aiming to reverse the 2011 leadership launches where David Cunliffe overshadowed him.

As rumours swirled in the party that Cunliffe may withdraw, given Little’s hit on his union base, Robertson yesterday promised ‘‘a three-year programme to rebuild and reconnect the Labour Party as the driving force for progressive change’’.   Read more »

Fed Farmers and NZIER agree…Labour’s CGT is a dud

Despite some epic dancing on the head of a pin by David Parker, the Federated Farmers commissioned report from NZIER is damning of Labour’s Capital Gains Tax.

A report by the New Zealand Institute of Economic Research (NZIER) reinforces Federated Farmers concerns over the Labour Party’s proposed Capital Gains Tax (CGT).

“The NZIER say the Labour Party’s proposed Capital Gains Tax would not be a good addition to New Zealand’s tax mix as it is proposed, we agree,” says Dr William Rolleston, Federated Farmers President.

“The nature of politics will see the Labour Party try to dismiss the NZIER report.  Yet they must listen to the message because the messenger is credible.

“We commissioned the NZIER to examine Labour’s CGT proposal since it represents a major change to New Zealand’s tax system and has been devoid of critical analysis.

“Perhaps the most concerning aspect of the report comes down to the Labour Party’s revenue assumptions.  In 2011, the Labour Party estimated a 15 percent capital gains tax would raise $17.5 million in its first year, rising to $3.7 billion by 2026.

“The NZIER tell us these estimates are high, since the revenue potential of its proposed CGT is more likely to be half that sum.  In fact it may be smaller.  If this key policy is out by such a margin it asks fundamental questions about the Party’s shadow budget.

“What’s more, the Labour Party’s estimates of CGT revenue were revised up this year.  The NZIER noting Labour’s “…2014 estimates are less believable than the 2011 estimates.”

“Labour also expects to raise at least $1.3 billion from the farming sector but a more realistic estimate is half that sum in 15 years’ time.  NZIER further estimates that the loss in current farm values will be between $2.4 billion and $7.6 billion.  But this will be a one off hit for farmers.

“Lower land values mean lower tax revenue too.   Read more »