Oxfam has issued its traditional demand for a handout. Their wealth report this year informs us that a mere eight people have more wealth than the bottom 50 per cent of the world’s population. This is entirely true of course. But Oxfam’s solution is that we should take it from the rich and give it to the poor. Which is entirely wrong.
Our essential economic problem is that there are not enough rich people. Nor is their extreme wealth a problem. Our problem is poverty, not inequality.
Oxfam’s redistribution argument has been tried before and found wanting. It was the subject of the world’s largest economic experiment: the 20th century. Anyone surveying the rubble of central Europe from the Brandenburg Gate in 1989 knows that the taking and giving solution does not work. What is needed is the wealth creation strategy that we’ve been using in the period of free-market globalisation ever since.
The result of which is this:
I’m someone who doesn’t suffer fools, but even I had to admire the constant stream of sarcasm, anger, derision and disrespect that flows from Gareth Morgan’s fingers.
Just about every Facebook comment he receives gets the treatment.
Liam Hehir writes at the Manawatu Standard:
Two seemingly unrelated things that happened in the last couple of weeks strike me as a good illustration of the problems with how we talk to each other in relation to public affairs.
The first involved Gareth Morgan. A little while ago, the economist-turned-politician proposed taxing all house owners on the equity in their home. Unsurprisingly, more than a few people objected to this idea.
One of those people was former ACT leader Jamie Whyte, who penned a critique of the plan. The nub of the criticism was that Morgan had been operating under a category error by classifying the benefit of home ownership as income rather than consumption. Whyte argued the logic of Morgan’s tax would have silly and impractical applications for the wider economy. And referring to an earlier televised debate between Morgan and Paul Henry on the subject, Whyte argued Henry had the better of the discussion. Read more »
by Simon Gibbs
I saw the announcement about The Opportunities Party’s first policy idea – one which aims to make our tax system fairer. Good on Gareth for thinking outside the square, but I have some real concerns about how it is all meant to work. I also have some concerns about how he has redefined things to fit into his economic word view which differs completely from my own. Ideologies aside, though, here are some questions/concerns for him. Here is the link to the policy document for people to read for themselves – I will be referencing this so would pay to have a read.
In no particular order:
1) A house being lived in isn’t a productive asset it is a liability – the equity is only realised if borrowed against which will be with additional interest costs from a bank holding a mortgage, or if it is sold. This is like arguing that a person who owns a car and then charging them as if they were operating a taxi business when there is no equivalence. A homeowner is a homeowner, a landlord is a landlord. One is using a thing to produce an income, the other is not.
2) The housing market could experience a downturn – if this equity disappears on a grand scale – would that mean tax is paid back from the NZ government or will PAYE on the poorest rise back up? It’s stated that this policy would be tax neutral so can only assume that’s what this means.
3) One of the main reasons for people wanting to own a home is safety. We aren’t all investors and people want something to call their own and pass on to their kids, which brings me to 4.
4) The FAQ says over 65’s can just mortgage their homes to pay tax to the government upon their assumed death or going to a retirement home, that is asking the IRD to speculate and expose themselves to the property market as who’s to say that house prices will always rise. This is surely a death or inheritance tax on top. Read more »
Gareth Morgan is a political fool. He is obnoxious and annoying.
A reader emailed with a complete email trail of interactions they have had with his TOP party and with Gareth Morgan himself. Read and be astonished:
To: TOP Party
Date: 9 December 2016 03:50PM
“Could you please clarify a matter on your tax policy? I am a pensioner with a modest house and car. My taxable income is small. How is taxing my assets gong to leave me among the 80% better off and how does taxing those like me make for a fairer NZ? ”
From: Margeret Mather
Date: 9 December 2016 05:19PM
Thanks for your question, well put. We realise this tax policy will affect pensioners who own their own home and have modest incomes. Those over 65 who don’t have the cashflow can opt to defer payment. Only when the house is sold or transferred will the tax be collected. This is similar to many countries and is often called an estate tax.
The aim of the policy is to correct a major loophole in the tax regime wherein not all forms of income to capital are taxed. That loophole (called the Trump loophole in the US) has enabled many of us to build wealth at the expense of those who don’t own property as well as making housing crazily unaffordable now for future generations. It’s a real issue to make New Zealand fair again.
The Opportunities Party
PO Box 19134
Wellington 6149 Read more »
Gareth Morgan has announced his first policy and it is one that will tax every single asset you have…a car, a boat, a house…all because Gareth Morgan thinks that you shouldn’t spend money like that.
His interview with Paul Henry was an utter trainwreck.
Gareth Morgan, leader of the new Opportunities Party, tried to explain his tax policy to Paul Henry on Thursday morning.
The policy proposes putting a minimum rate of return on all productive assets, including houses and land – so people could be taxed for owning the home they live in, or for having an expensive car.
Henry made it clear from the outset he didn’t agree with the idea.
“I’m calling it an envy tax,” he said.
“Oh ok. Well that tells me where you are,” replied Morgan, and the battle was on. Read more »
Willie Jackson is making the same mistake many other media have or still are making. Thinking that the result in the US will somehow translate to New Zealand.
The polls continue to tell us that our Prime Minister is more popular than ever, and that it will be no contest for National to win a fourth term next year.
But after the failure of polls to predict Brexit and Trump, and the underlying disconnect I see between Government and citizens every day, I am not so sure we won’t see a tight election next year.
The question is, will there be a political figure that those opposed to the Government can rally around?
Some Labour Party MPs are suffering from the same problem the US election exposed with the Democrats: they are obsessed with the politics of culture and identity rather than the real politics of jobs, income and security.
And not just jobs making coffee for tourists – real jobs so people can raise a family. Grant Robertson could not help wading into Brian Tamaki’s gay quake-causing sideshow last week. You are supposed to be Labour’s finance spokesperson Grant… shut up! You have a wealth of material to work with on inequality. There was no value in getting involved with that, you should have left it alone.
Have you noticed people living in cars in your area? Forget the rock-star economy nonsense. It might be better than ever for Key’s mates but for the rest of us we are a low-wage economy. Read more »
Gareth Morgan shows his political naivety in his recent email to people signed up for his spam.
He keeps going on about evidence:
3. Stick to the Evidence
If you disagree with someone, it might be because you don’t think their idea will work. If that is the case, tell them why. Cite the evidence if you can; that is the great thing about the internet, this stuff is so easy to find.
Yet appears not to have seen the evidence in front of his eyes.
At the end of the day, everyone is equal; one person one vote. The Opportunities Party only needs 100,000 votes to make it into Parliament. We don’t need to convince the whole country.
Well Gareth, good luck at getting into parliament on 100,000 votes. 100,000 votes has never been enough to get into parliament under MMP. Read more »
Gareth Morgan has published a passage about the TOP not being a one-man band on his new party’s website.
In reality our team is huge, because we have been drawing on the work of scientists and economists from New Zealand and abroad. Anyone who has followed my work will know that I take an evidence-based position on any issue. That means drawing together the academic and policy contributions of a great many professionals.
The litmus test of how serious Gareth Morgan is will be whether he takes the same approach to campaigning.
Will he take an evidence-based position on campaigning? Read more »
Liam Hehir gives Gareth Morgan a schooling, but I suspect that Gareth Morgan will be like Colin Craig and take no advice except that proffered by NZ’s most wrong political advisor.
Gareth Morgan is founding his own political party, but before we get down to making fun of it, we really should give him credit for putting his money where his mouth is.
A brave thing to do, given the size of the mouth.
Morgan is a successful businessman. However, he first began infringing the public consciousness as the father of Trade Me founder Sam Morgan.
But while he may have started out as a kind of celebrity dad, he has managed to cling to the spotlight by becoming the nation’s most notorious know-it-all.
According to tradition, an oracle stated the philosopher Socrates was the wisest man on Earth. Socrates had a hard time believing this, because he did not consider himself to be wise.
When he then tried and failed to find someone wiser, however, was forced to conclude: “I am the wisest man alive, for I know one thing, and that is that I know nothing.”
One imagines that the profundity of this paradox would be lost of Gareth Morgan. If his public pronouncements are anything to go by, he would be more likely to say: “I am the wisest man alive, because I am the cleverest.”
Where Socrates was a gadfly because he asked questions, Morgan is a gadfly because he has all the answers.
Some of the intractable issues that could apparently be solved if we just acknowledged Morgan’s superior sense of logic include race relations, native bird numbers, the welfare state, the healthcare system, climate change, global fish stocks, North Korea and the performance of New Zealand soccer.
It seems there are few problems that could not be solved by his doing a bit of thinking and then declaring some grand scheme as the obvious solution. All that is required is for the rest of us to surrender our own experience, philosophy and values so that we can bask in the irresistible glow of Morgan’s rationality.
It is apparent that Morgan intends to bring this heroic self-belief to his political endeavours. You see, the reason he’s decided to get his hands dirty is that the solutions to our problems are “easy”. It’s just that our current politicians don’t have the guts to “disturb” voters by implementing them.