Does Andrew Little know how a business works?

Andrew Little has said he won’t implement a capital gains tax, but he is going to wallop negative gearing.

But while ruling out introducing a capital gains tax on housing and raising the age of superannuation, Little said Labour would make drastic changes to negative gearing.

The current system allows people to avoid paying taxes on a property when the rental income they gain from it is less than their repayment costs on the loan.  

The owner may still make a profit over the long term as a result of capital gains, which are also largely untaxed.

“We’re going after those negative gearing rules, there is no need for them,” Little told Three.

“In principle we’re saying, ‘Why should investors who own these investment properties have a tax advantage?’

“And so we’re going to look at that, and that’s part of dealing with the speculators of the market.”

What he is talking about is changing business tax laws.

Every business operates in this way. You pay tax on profit, not on earnings. All income is offset against expenses and if you make a profit then you pay tax.

Andrew Little is now proposing to change this…essentially treating income in a business like they are wages without taking into consideration expenses.

Good luck selling that policy to small business owners in NZ.

It does show that no one in Labour has the remotest interest in small business, as evidenced by having Jacinda Ardern as spokesperson. Her only experience of small business was working in a fish and chip shop.

 

– NZ Herald

 


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