Jacinda and Grant’s little problem with their no new taxes pledge

Yesterday Labour was forced into a flip-flop over taxes. They’ve promised no new taxes until the after the next election. There are several caveats though.

The first is that the seven taxes they’ve already announce stand…so no new taxes means no new taxes except these ones…

Labour’s undefined tax policies left them vulnerable to National attack ads which warned of seven new taxes or tax hikes. Based on the most recent polls National’s strategy appeared to be working.

Now that Labour has backed down on implementing any previously unannounced taxes in its first term, what’s left of those seven scary taxes?

 Capital Gains Tax
 Land tax
 Inheritance Tax
 Water tax
 Income tax
 Regional fuel tax
 Emission trading scheme

Labour finance spokesman Grant Robertson today kicked the first three into touch further than an Otago full back with the southerly behind him.

Capital gains tax, land tax and inheritance tax – All are politically difficult to sell but Jacinda Ardern had made a “captain’s call” to leave them on the table for its tax working group.

By guaranteeing that none of those working group recommendations will be implemented until 2021, they are effectively gone for his election cycle.

The water tax – Scaring farmers up and down the country – stays. But given farmers aren’t big Labour voters and polls have shown broad urban support that shouldn’t dent Labour’s potential vote.

Income tax – It was always debatable as to whether that should have been on National’s list. Labour has been up front about reversing National’s tax cuts which take effect next April.

But because they’ve already be passed as legislation National says this represents a tax hike. Whether this is legit or semantics is likely to depend on your political leaning.

Regional fuel tax – This stays although its only ever applied to Auckland. Mayor Phil Goff campaigned on this issue but National wouldn’t legislate to let him do it. The money would be used to fund Auckland transport solutions.

Emission trading scheme (ETS) – We’re paying for climate change whether we like it not and both Labour and National have signed up to a global agreement on this. But National has exempted agriculture as an industry of national importance. Labour says it will bring farmers into the ETS by the end of their first term.

Then there is the track record of politicians who have pledged no new taxes.

The most famous was George H.W. Bush in 1988 who famously said “Read my lips: no new taxes“, and then went on to implement heaps of them.

Closer to home, John Key also pledged no new taxes. He then went on to introduce several new taxes, Labour claims at least 15 new taxes under John Key.

The truth is that John Key’s Government has imposed at least 15 new taxes:

  1. GST increase from 12.5% to 15%
  2. Increased taxes on KiwiSaver
  3. Compulsory student loan payment increase from 10% to 12%
  4. Increased tertiary fees
  5. The 2012 ‘Paperboy’ tax
  6. Civil Aviation Authority fees rise
  7. Additional fuel tax increase of 9 cents with annual CPI increases locked in for perpetuity
  8. Road User Charges increased
  9. New annual student loan fees introduced
  10. Massive unnecessary ACC levy increases
  11. Prescription fees increased by 66%
  12. New online company filing fees imposed on businesses
  13. Creeping expansion of the scope of Fringe Benefit Taxes – National tried to tax car parks and plain-clothes police uniforms
  14. Lowering of Working for Families abatement threshold and increasing the abatement rate, taking money out of the pockets of families
  15. Imposing a $900 Family Court fee

John Key also promised he wouldn’t raise GST, and then he did.

So, when a politician comes at you and promises that there will be no new taxes or no increases in existing taxes there is a good chance they are lying.

Never trust a politician who is promising no new taxes or no tax increases. They simply cannot be believed.

What needs answering now…is if they’ve cancelled all their new planned taxes, then how are they going to pay for all their promises?

 

-Wikipedia, Labour party, NZ Herald

 


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