Read my lips… no new taxes

Hamish Rutherford has given Simon Bridges a good spanking on Stuff: quote.

In terms of its superficial appeal, Simon Bridges’ pledge of no new taxes is great retail politics.

For all of the nuanced debate which goes on among those who follow politics closely, few things appeal to voters generally in the way that hip pocket issues do.

On Tuesday, Bridges promised no new taxes in National’s possible first term of government and ruled out a capital gains tax for good measure. end quote.

Ruling out a capital gains tax is a good thing. What if there is already one in place by the time National gets back into power? Will they repeal it? History says they won’t. quote.

But while Bridges’ promise may seem like a way to try to capitalise on the cost of living debate, promising no new taxes is either meaningless, unworkable or downright irresponsible.

For anyone hoping that politicians might lead the political debate, or that National would review its direction after losing power in 2017, it is also depressing. end quote.

Nobody believes it anyway. Jacinda promised this. So did John Key. The former has dramatically increased fuel taxes, while the latter increased GST (to be fair to Key, he lowered income tax rates at the same time, making the move ‘fiscally neutral’, but that is not how it is remembered). It is semantics. quote.

Since Bridges took over as leader, the party has promised to shrink class sizes, made supportive noises about public sector pay and recently its MPs have even lamented the closing of NZ Post shops.

The problem with Bridges’ tax pledge was actually exposed accidentally by groups that support a low tax economy.

At face value, Bridges’ promise would appear to rule out measures which are not always popular, but are the necessary and right decisions to take, whether you generally want taxes to be lower or not.

Take the Netflix tax, which imposed GST on digital services from late 2016.

This came after a new type of consumer spending emerged which was not covered by a tax which locally-based services were, effectively creating a small hole in New Zealand’s tax system, which was only going to grow.

As unfortunate as it was for someone who uses such services, it was right that the former National Government moved to close that hole, otherwise even more of the tax burden would fall on the rest of the economy.  Is National saying that when future, not yet envisaged services emerge, it will not move to address the problem?  end quote.

Fair enough. quote.

If anything, Bridges’ policy would make it more difficult for National to deliver tax cuts for ordinary taxpayers because he is ruling out imposing new taxes even for future costs created by particular groups, including ones which we cannot know are coming.

Unless, of course, that is not what “no new taxes” means when National says it, and instead it is just a meaningless aspiration. end quote.

I’d rather hear about what the next National government is actually going to do, rather than what it is not going to do. Will it reduce the fuel levies? Will it reduce the Bright Line Test period of 5 years back to 2, or get rid of it all together? How about reversing some of the landlord bashing policies to increase the number of private rentals available? Where do you start with all the things they could be doing?

‘No new taxes’ is just a mantra. Everybody says it and nobody means a word of it. It is merely something said so as not to frighten the horses. If National really does want to win the next election, it had better start telling us what it WILL be doing in 2020, rather than what it won’t be doing.

 


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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

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