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.
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.
It would be almost impossible for MPs to avoid every kind of potential conflict of interest without turning into monks. However, the personal tax free profit made on houses by such prominent MPs, who are also paid relatively high salaries, does indeed cast into stark relief the disparity of certain kinds of income being tax free. Why do we need such exceptions? On what basis are they fair and reasonable? Indeed we could do a lot worse than simplifying the entire tax system to a flat percentage rate on all realised income howsoever derived, with a single low income, no tax threshold.
Maybe not a good look for any politician but the law is the same for everyone. Luxon made most of his wealth in the private sector, not from us taxpayers. As a funder of many arrogant MSM journo celebrities I'd like to know their financial position. John Campbell's salary? House sales & profits? etc etc And for many other smart alecs we fund too.
Private sector profits/incomes are also dependent on public investment in infrastructure, education, heath etc. Not to mention corporate’welfare’ ie subsidies. Why separate them out?
Thank goodness we have successful people running our country. Why would anyone give up a high paying job and go into Parliament just to be torn apart by journalists on a regular basis.
Let them get on with trying to make this country a better place to live.
He owned the apartment because Premier House was unavailable.
He sold the house because Premier House became available
He could not rent it because he'd be a 'nasty landlord'
He could not leave it empty because 'homeless people'
Whatever is a person to do when the media et al will find any, any little issue to hold him to while ignoring the other politicians property holdings......as I said when it comes to NZ Media he will always be between a rock and a hard place unlike some others who are and were never held to account.
Other than the issue of the properties being his wife and families as well plus other capital gains not being taxed yet like shares etc It is good track is kept of high income earners funding especially those in leadership’s extra sources of income even if only to check they’re not using their position for insider trading, bribery or corruption and favouritism in law. Of course the opposite applies as well we’re corruption via theft of income and assets is used as a method of control. Which is probably more common and used on poorer people and women. To ensure they are disempowered and prejudiced.
If we have a capital gains tax, you have to include the family home - which is a great idea.
Including the family home would mean the tax would be low rate and broad-based (like the GST) so less distorting.
It would make administration of the CGT a lot simpler than arguing over 'family', 'primary residence' and 'home'.
Not including the family home (otherwise known as owner-occupied) would mean that even more investment would flow into housing, not into anything productive like factories or businesses.
The difference between Jacinda Ardern selling her family home and Christopher Luxon selling "investment properties" was that the owners of a family home (where they've been living) then have to replace their home. When the value of your family home inflates it's not really a gain if you then have to replace it with another house which has also increased in value. I think it's disingenuous of you to quote someone's family home increasing in value as being an untaxed capital gain - which is what the sales of Christopher Luxon's properties was - UNTAXED PROFITS.
Hi Jenny - you've made a good point about the difference between the two cases. I'll continue to think about your point, but I'm not so convinced that they are so different, especially because Luxon's apartment was indeed his family home in Wellington. But, the point really isn't about whether one politician is better than another. If we go down that track we just get into a partisan fight about "my opponent is bad, but my side is good" - the point of my column wasn't to criticise Luxon or Ardern but to raise the problem of whether they are conflicted on these issues. Don't you agree?
Could Mr Luxon explain how buying and selling existing properties generates wealth? He's added nothing to GDP
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
Like what you’re saying here Richard,!
It would be almost impossible for MPs to avoid every kind of potential conflict of interest without turning into monks. However, the personal tax free profit made on houses by such prominent MPs, who are also paid relatively high salaries, does indeed cast into stark relief the disparity of certain kinds of income being tax free. Why do we need such exceptions? On what basis are they fair and reasonable? Indeed we could do a lot worse than simplifying the entire tax system to a flat percentage rate on all realised income howsoever derived, with a single low income, no tax threshold.
Maybe not a good look for any politician but the law is the same for everyone. Luxon made most of his wealth in the private sector, not from us taxpayers. As a funder of many arrogant MSM journo celebrities I'd like to know their financial position. John Campbell's salary? House sales & profits? etc etc And for many other smart alecs we fund too.
Private sector profits/incomes are also dependent on public investment in infrastructure, education, heath etc. Not to mention corporate’welfare’ ie subsidies. Why separate them out?
Thank goodness we have successful people running our country. Why would anyone give up a high paying job and go into Parliament just to be torn apart by journalists on a regular basis.
Let them get on with trying to make this country a better place to live.
Luxon is caught in the hard place and the rock.
He owned the apartment because Premier House was unavailable.
He sold the house because Premier House became available
He could not rent it because he'd be a 'nasty landlord'
He could not leave it empty because 'homeless people'
Whatever is a person to do when the media et al will find any, any little issue to hold him to while ignoring the other politicians property holdings......as I said when it comes to NZ Media he will always be between a rock and a hard place unlike some others who are and were never held to account.
Other than the issue of the properties being his wife and families as well plus other capital gains not being taxed yet like shares etc It is good track is kept of high income earners funding especially those in leadership’s extra sources of income even if only to check they’re not using their position for insider trading, bribery or corruption and favouritism in law. Of course the opposite applies as well we’re corruption via theft of income and assets is used as a method of control. Which is probably more common and used on poorer people and women. To ensure they are disempowered and prejudiced.
If we have a capital gains tax, you have to include the family home - which is a great idea.
Including the family home would mean the tax would be low rate and broad-based (like the GST) so less distorting.
It would make administration of the CGT a lot simpler than arguing over 'family', 'primary residence' and 'home'.
Not including the family home (otherwise known as owner-occupied) would mean that even more investment would flow into housing, not into anything productive like factories or businesses.
The difference between Jacinda Ardern selling her family home and Christopher Luxon selling "investment properties" was that the owners of a family home (where they've been living) then have to replace their home. When the value of your family home inflates it's not really a gain if you then have to replace it with another house which has also increased in value. I think it's disingenuous of you to quote someone's family home increasing in value as being an untaxed capital gain - which is what the sales of Christopher Luxon's properties was - UNTAXED PROFITS.
Hi Jenny - you've made a good point about the difference between the two cases. I'll continue to think about your point, but I'm not so convinced that they are so different, especially because Luxon's apartment was indeed his family home in Wellington. But, the point really isn't about whether one politician is better than another. If we go down that track we just get into a partisan fight about "my opponent is bad, but my side is good" - the point of my column wasn't to criticise Luxon or Ardern but to raise the problem of whether they are conflicted on these issues. Don't you agree?