Apologies to Sir Winston Churchill
Voting 2017 – Taxation
What’s the purpose of an economy? Is it so a few of us can get very rich at the expense of the many? Or is it to provide the greatest good for the greatest number of us over the longest time?
I’m on record as arguing for the greatest good definition (see my documentary Mind The Gap) – which is why I think the following fact from Statistics NZ tells you everything you need to know about why 30 years of neoliberal economics has been a disaster for the majority of Kiwis.
The richest 10% of us now own 60% of the wealth of our country … and the poorest 40% own just 3% of it.
That’s serously unfair.
Which raises the question: How could I use my two votes this September to turn our country back in the direction of a fairer society?
Well, for one thing, I could consider casting them for candidates and parties offering to alter our Tax Laws so the wealthy are reqired to pay more of their fair share to the sociey from which they so greatly benefit.
So I’ve taken a look at what I understand each of the political parties to be saying about Tax reform and added a comment or two about each of them.
NATIONAL – say their economic plan is working so well they want to give us tax cuts.
Well, who wouldn’t want more money in their own pocket? But when DHB’s are begging for money to meet a Mental Health crisis in Canterbury and being told it’s “inappropriate”, when there’s a teacher shortage, when we have food banks and families sleeping in cars and motels because we don’t have enough houses for them – then it seems to me we clearly need more money in the public purse, not less. So Tax Cuts don’t impress me.
ACT – want to cut taxes dramatically but say they won’t cut core services.
How’s less money in the public purse going to deliver better health, housing and education for all?
More trickle down theory? More public /private partnerships like Serco ? No thanks.
UNITED FUTURE – a bit hard to find their policy. You have to hunt through press releases. One page I did find says they want a “broad based low rate tax system” so currently my comment about ACT also applies to them.
If anyone from United Future wants to send me a link to a synopsis of their tax policy I’d like to read it and update my notes if necessary.
MAORI PARTY – I may have missed it but I can’t find a 2017 tax policy statement on their site (other than they want to extend the Tax Credit for all low income families).
Last election The Maori Party Tax policy was No tax on the first $25,000 earned, all food exempted from GST, removal of tax from prescription medicine,implement financial transaction tax which curbs the ability of speculators to make tax-free profits from short-term investments in our financial markets.
Interestingly they went into active coalition with a party that wants none of those things.
MANA PARTY – I also can’t see a current tax policy on their site . Again I’d appreciate a link to a tax position statement.
In the past Hone Harawera has promoted such things as removing GST from everything but tax fast food and soft drinks, a financial speculation tax, no tax on first $27,000 earned in low-income househod, high-earners paying high taxes, capital gains tax (excluding Maori land and family home) and reintroducing inheritance tax.
Perhaps a joint Mana/Maori taxation policy is coming?
LABOUR – say they want to do things like “build thousands of affordable homes, fix the health system by turning National’s years of underfunding around and rebuild world-class.
All apparently without raising taxes.
It seems to me the only way you can spend money on selected policy areas without raising additional revenue through taxes is to take it from some other part of the budget . So what would Labout cut back on?
Then there’s the apparent inconsistency with the 5th statement in their Budget Responsibility rules:
“The Government will ensure a progressive taxation system that is fair, balanced, and promotes the long-term sustainability and productivity of the economy.
This is where I find Labour’s Tax policy confusing. The current taxation system is clearly unfair (otherwise the richest 10% would not own 60% of the wealth) but Little says they are not going to change it.
So what does the promise of the 5th Budget Responsibility statement amount to? How will they ensure “a progressive taxation system that is fair” if they are not going to increase taxes??
Again if someone has a link that explains these apparently conflicting statements please send it to me.
GREENS – Under the Budget Responsibility Rules they say that in coalition with Labour they want to “build a fairer tax system” and that they “will establish a group of independent experts on how best to achieve this.”
Frankly I’m surprised that given all the years they have been in opposition they haven’t done that already.
So the way I read it, under a Labour/Greens coalition, taxation would stay the same until they figure our how to make taxation fairer and until that happens they will be shifting money around from the existing tax take to spend more on social and environmental policy areas. So again, which budget areas will receive less so that their preferred areas can have more?
NZ FIRST – say they want to “replace the existing tax system with a fair and equitable system based on people’s capacity to pay, so that people and businesses who benefit from the higher incomes made possible by New Zealand’s economic potential will bear a greater portion of the tax burden than those with lower incomes.”
So again there is a recognition that the wealthy are not paying their fair share, but also again – unless I missed it – they don’t explain what their new “fair and equitable” tax would look like and how it would work.
They do say they want to remove GST from food .
That’s good – but while recovering that loss of income by chasing tax evaders (as they say they will do) is laudable, it won’t be easy and it won’t be cheap (There will be new costs – everything from additional tax inspectors to court costs.)
So in the coming weeks I’d really like to see some costings and a clearer explanation of how their “fair and equitable” tax reform will work.
THE OPPORTUNITIES PARTY – wants tax reform but not as most of us have thought of it in the past.
They say they “want to change WHAT is taxed not the amount of tax.”
They think that “all income should be taxed, whether it is in cash or in kind.”
Now I’m good with the idea that making a profit on the sale of your house shouldn’t be treated any differently from tax you pay on, say, the interest you earn your savings bank account (if you are fortunate enough to have one).
Where they lose me is when they argue that home owners are effectively living rent free and therefore tax free – because if they were renting their house to someone else they would be taxed on that income. They say that situation is unfair .
They seem to be arguing that homeowners should pay what they call “imputed rent” for the privilege of living in their own home.
However home owners often pay mortgages in order to have the privilege of having a home and security of tenure and they pay rates which is a tax based on the estimated value of their property. A tax which pays for many things that non property owners enjoy – such as rubbish collection, parks, up keep of the city roads etc.
Also not all homeowners are speculators or in it for the capital gain. My guess is that most homeowners are in it because they want security of tenure for themselves and their families.
So I’m not persuaded home owners are getting the totally free ride TOP seems to be suggesting is the problem.
Also it seems to me that if you want better social services such as better health and education then you have to find ways of getting MORE money in to the public purse – no the same amount albeit in a different way
NZ DEMOCRATS FOR SOCIAL CREDIT
They want to abolish GST and replace it with a Financial transaction tax. They are a monetary reform party but I can’t see a policy on personal income tax reform. Again if I’ve missed it please send me a link and I will modify my notes.
Me? I’m still deciding .
I think the established parties of the Left are leaving themselves open to the John Key line “show me the money”.
However I also think the parties on the Right need to ”show me the compassion”.
How can you take less money in through taxation and deliver things like quality education and health?
Through public/private partnerships? Well, maybe where the private arm is genuinely a not for profit (and the executives don’t cut themselves huge salaries) … but private profit driven companies working for the public good? What? You mean like Seco? No thanks.
But, as I say, that’s just what I think. How about you?
Please remember Knowledge is Power – and so is Voting. So talk about the issues that affect us all with your friends and whanau. To have your say on election day please make sure you are enrolled.
Here’s the link: http://www.elections.org.nz