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Richard Davies's avatar

Could Mr Luxon explain how buying and selling existing properties generates wealth? He's added nothing to GDP

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Richard Santillan's avatar

Even the conservative OECD is now insisting that we enact a Capital Gains Tax. Being one of the only OECD nations without a Capital Gains or Wealth tax is killing us. (e.g. Switzerland has a wealth tax instead of a CGT; Belgium, with a much higher income tax, is looking at introducing a long-term CGT...they now have a short-term CGT - like our Bright Line used to be under Labour before Luxon knee-capped it). We used to have a land tax that functioned that like a wealth tax gone by lunch in 2000 by the founders of ACT.

Famously, cashiers pay more taxes than multimillionaires proportionately due in large part to our flattish tax system where we have no bottom-end exclusions, a low high-end income tax, and now capital/wealth tax, made up by the regressive GST increased by National. And this low income is buttressed by one of the lowest spending per GDP in the OECD. Yet we are not poor and remain one of the wealthiest nations per capita in untaxed assets. https://www.stuff.co.nz/business/116750610/feeling-wealthy-new-report-shows-you-should-be#:~:text=%22New%20Zealand%20is%20the%20world's,fifth%20highest%20in%20the%20world.

How can there be any question as to why our health, education, ferry travel, public housing, the arts, science research...etc. are falling apart? Or why productivity is low. One needs to spend money on health, education, research and development, and housing to increase efficiency and keep the population healthy and educated. That is why Northern European, particularly Scandinavian nations that tax and spend far more than we do, have greater productivity.

It is a bit misleading to “balance” a National Party leader and a Labour Party leader’s housing profits. Labour has been talking about CGT for years (albeit they’re quite timid compared to the Greens), while Luxon’s party has been lowering income taxes, lowering the bright line for property, and abhorring any capital gains or wealth tax. The knee-jerk right wing neoliberal coalition of chaos we now have will never do anything but increase this race to the bottom with more tax cuts.

https://www.theguardian.com/world/2023/apr/27/new-zealands-millionaires-pay-lower-tax-rates-than-cashiers-its-time-to-fix-the-system?CMP=Share_AndroidApp_Other

https://www.visualcapitalist.com/top-10-countries-with-the-highest-wealth-per-person/ and https://www.rnz.co.nz/news/national/511249/about-1000-fewer-cancer-deaths-in-nz-every-year-if-patients-lived-in-australia-study

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