Which Party Cares?

A government has to have a certain amount of money to provide services. If it wants to provide a service the money comes from a tax. You want your daughter to have free schooling to the 7th form then thats 80000 or so. You want your dodgy knee fixed thats 40000. You want to retire and collect the pension at 65. The list goes on. The money comes from tax. That is company tax income tax and gst. If the amount of money needed doesnt change then adding another tax like capital gains will allow the others to reduce. When it comes to a capital gains tax on everything except the family home. Is it fair that some people have a source of income that is out of reach of the ird? Family home though. I know some people have recently made a killing by owning in Auckland but the purpose of that home is to live in. The investment side is coincidental

@geeves I see additional taxes. What tax cuts do you refer to ?. ""She also said personal tax cuts were off the table, which meant there was money to fund Government spending. "We already said we wouldn't vote for tax cuts so that frees up a lot of fiscal headroom for us to deliver our programme - that's the major difference in our spending programme between us and National.""" http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11909843 From IRD - Common misconception If I only sell one property or hold a property for 10 years before I sell, I won't have to pay tax. What the law says: Wrong on both counts. It always comes back to your intention when you bought the property. If one of your intentions was resale, you'll pay tax on any profit you make when you sell. It's a popular misconception that holding a property for 10 years means you avoid paying tax. http://www.ird.govt.nz/property/property-selling/selling-property.html

Tax isn't just about raising money. It's also about setting incentives which influence how people behave. Having more taxes, or taxes in different places, doesn't necessarily mean people will pay more tax. There are plenty of examples of incentive setting, but one that comes to mind is TOP's policy for a more comprehensive capital gains tax in exchange for lower income taxes. In any case I'm not automatically fussed about higher taxes. It'd depend on detail, but ultimately at some point we need to shut up and pay an appropriate amount for the society we want to live in, whatever that is.

But Labour say they will not reduce Income Tax. Introducing more Tax will mean people will pay more directly, and indirectly thru increased cost of living. Labour is the Socialist party. Shutting up, paying up & conforming to their vision of society might not appeal to some ?.

@izogi I meant to say thanks for the last link but got waylaid, I will follow through on the two now.

I will vote, but I would be more inclined to vote for the party that was willing to put a sensible, fair and equitable tax regime in place. What we currently have is anything but. GST is a prime example. Most of us, go out shopping, dining, to a movie, whatever, the cost of doing so incurs GST. But GST is not universal, if you are in the position to have additional expendable income, you could invest in shares, houses, precious metals, trade in other financial vehicles and a raft of other things all of which are not included in the current GST regime. Then their are the wide range of entities such as churches, charitable organisations, charitable trusts and businesses to name a few that pay no GST at all. Before any one gets too terse with me I am a business owner employing 16 staff. The business does not pay GST. No business pays GST. A business collects GST on the good and services they provide. In the course of doing business a business incurs GST in its spend to run the company. However when it comes to pay IRD the GST that a business has collected subtracts the GST it has incurred and pays the balance to the IRD. The business therefore has incurred a nil GST expense. As a regular taxpayer and salary and wage earner do you have an avenue for recompense from GST, well at least a legal one. Do you consider this to be a fair and equitable system? I don't. If, according to one politician, the transactions that currently do not attract GST, with some exemptions, had a transaction tax of 1.5%, yes 1.5%, applied it would net the government coffers an extra 20 billion dollars in the first year. They reckon that if a 2% transaction tax was applied to every transaction that takes place with no individual nor entity able to claim any exemptions whatsoever the government would have money to burn. Still think the current GST system is a fair and equitable regime? Income tax is a whole other compost heap of worms. Think about it. You have corporations making profits in the hundreds of millions and pay absolutely no income tax. Think I am wrong, charitable trusts do just that. Even business isn't squeaky clean. A business claims on their balance sheets to having made a 360 million dollar profit, yet the balance sheet also says it only paid tax on 100 million. How so, you may well ask? It transpires that they paid 200 million to shareholders as a dividend, which is claimed as an expense, which is a liability and thus no income tax is applicable, in addition they kept 60 million as retained earnings also income tax exempt for the time being. So here is a company with significant profits that pays minimal income tax. Yes! give me a political party that will put a fair and equitable tax regime in place and I will vote for it with both hands.

Regards the two comments from Kreig above 'You look at policies, predominantly, and take into account track record. I wonder; is it only the staunch National supporters who are claiming this is a popularity race? ' No for the second no, I've never voted National, while I probably would have done when it was Key v Clark, I hadn't been long enough to vote. In the two elections since, my party vote (and let's face it that's the only one which matters) has gone to Labour. It's a popularity vote with Ardern so far, because there's little substance, and no track record or decent policies. Too many vague visions and values, and very little detail on tax. The link from Phil Twyford before reveals their secret tax plans for the working party. And here is Jacinda Ardern again refusing to rule out a land value tax on the home, despite being given plenty of opportunity by the Radio NZ interviewer, instead wiggle room to do just that. https://www.youtube.com/watch?v=T-Lcqm75MVU On another topic, it's short termism, as Jacinda Ardern herself said back in 2012 to not plan to raise the superann age. Either that or it was political lie at time, when she said.. 'Politics can’t just be about making decisions that anger the least number of people possible, it has to be about doing the right thing. Labour’s view that superannuation should be lifted is one that we think needs to be phased in from 2020' Certainly the finances are no better now, pensions less affordable in the future. As it stands with National's current policy I just fall within the range before superann begins to rise (as the National Policy is too short sided, but handicapped by John Keys same ridiculous pledge before he became PM), however I expect to rise well before then. It's just there will be much, much less notice. Most countries made this decision years ago, UK (last century even, and under a Labour Govt), Australia, and most of Europe. For what it's worth I don't think any of the parties care less than each other about moving NZ forward. They care ok, some plans better than others.

Agree with FrankB above, certainly GST isn't a fair tax, it's a regressive tax, and I was against the tax cuts funded by raising in the Nats first term. It is however a tax that is easily collected and difficult to avoid - except I guess where giving tradies taking cash in hand, where they are also cheating income tax too, and I suppose at least they are suffering GST on their purchases, though the buyer not. Corporate tax, indeed business isn't squeaky clean, how an earth Sanitarium the food company producing Wheetbix and other products manages to pay 0% tax? Unfortunately tax avoidance is a big industry, but there's more money it when taxes are higher.

"It transpires that they paid 200 million to shareholders as a dividend, which is claimed as an expense, which is a liability and thus no income tax is applicable," On this bit, isn't it just an extension of the business making its profit on behalf of the shareholders? If the business isn't liable for the tax (because it gives it to shareholders), then the shareholders who receive the dividend become liable for paying the tax on it instead. http://www.ird.govt.nz/rwt/receiving/interest-dividends/rwt-int-div.html ie. The company could pay its standard company 28% on that $200 million, or it gives it to shareholders and they all end up paying some variation between 10.5% and nearly 33% depending on that person's income for that year? Not to say there aren't a heap of tricks people and businesses can probably play around this, and everything else, to make it work in their favour.

@Pro-active: "Labour is the Socialist party. Shutting up, paying up & conforming to their vision of society might not appeal to some ?." No government will have a vision that appeals to everyone. That's a big reason why we have elections.