Polity: What tax would Warren Buffet pay in New Zealand?

14 comments on “Polity: What tax would Warren Buffet pay in New Zealand? ”

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1. ianmac 1

   26 June 2014 at 3:43 pm

   No wonder English/Joyce are so upset about the possibility of a CGTax. The silly thing is those very rich like Mr Key would probably not even notice if they had to pay CGT. Someone Labour NZF Internet Party please persue the CGT.
2. Ennui 2

   26 June 2014 at 3:47 pm

   I think that capital gains on shares is NOT the real issue here. Lets face it, we can impose it on shares and company related property quite easily BUT remember it would only become payable on sale of the share or property. The problem there is that the owner may just hold so no revenue or tax.

   The real question is how best to tax capital? Some parameters around that might be:
   1. Defining the productiveness of the capital we tax.
   2. Prevention of rentier attitudes to capital such as capital just appreciating at the cost of somebody else (interest, market price appreciation etc) whilst not “paying” for itself with production or something socially useful.
   3. Designing tax that prevents aggregation of capital.
   • In Vino 2.1

     26 June 2014 at 7:56 pm

     “BUT remember it would only become payable on sale of the share or property. The problem there is that the owner may just hold so no revenue or tax.”

     This is a crock of an argument. If everyone holds there are no sellers and the market dies. If some hold, the price possibly rises, and the sellers can afford the CGT, as they could have all along. If only a few hold, minimal effect anyway.

     I am sure that the glorious invisible hand of the market can cope with CGT here, just as it already has almost everywhere else in the world.

     In the ideal world of true justice there would be NO income tax: what you work for would be yours. Social services would be adequately paid for through CGT and Transaction Tax – a much more socially equitable system. The aggregation of capital would still work, and fund society much more fairly. Only the exceptionally greedy would feel aggrieved.
     • Ennui 2.1.1

       27 June 2014 at 9:09 am

       In Vino, I don’t think it is a crock of an argument or I would not have posited it. It is an observation based upon how long individuals and institutions hold onto their “capital” in the form of shares, stocks, property etc. Take IBM shares for example, the vast majority never get traded, they get held onto for decades. My contention is that this may be too long to make the tax effective, and if capital gains are applied it might send a signal of “hang on”.

       The comment you make about markets dying, we are merely talking the well known bull and bear phenomenon. Some markets go into hibernation, others euphoria. My favourite hibernating share was Poseidon!

       I like your ideal of no income tax, my fear is that without strong counters to capital such as compulsory unionism that those wages will just get pushed down to the pre tax level, and capital take the surplus.
   • DH 2.2

     26 June 2014 at 9:25 pm

     “The real question is how best to tax capital? ”

     I think yr points have some merit, in particular defining productiveness of capital

     I can think of at least two fairly straighforward means of taxing capital gains on property that don’t require waiting for the property to be sold.

     The first is easy, link it to council rating valuations. If the value goes up, time for a CGT bill

     The second is a bit more cunning. It’s a fundamental truth of investing that an increase in the yield is an increase in the asset value (all other variables remaining equal). The yield on investment properties is the rent so the property investors can be taxed for capital gains whenever they put their rents up.

     Either would be dead easy to implement. The rent one would be a fairer system, the investor has a choice there.
     • Ennui 2.2.1

       27 June 2014 at 9:21 am

       I have always struggled with rental property taxes. I dont see any reason why an individuals PAYE can be set off against costs from renting out a property. For example I buy a property and take an income from it, the income becomes taxable. This gets added to my PAYE but I can then deduct costs like depreciation and interest. Its a real scam. ( I have a feeling the IRD changed the rules to prevent capital gains on this tax relief, not sure).

       I like the ideas around how to tax property, it may drive dollars away from real estate. But where would they go? The money fled to hard assets when the return on capital elsewhere diminished and looked risky.
3. vto 3

   26 June 2014 at 4:27 pm

   That is a well written post which describes this phenomenon clearly.

   It is indeed an outrage that people who make money by capital income (gain) do not pay tax…….
   ….while those who make money by wage and salary income do pay tax.

   It is an outrage.

   I have noticed that this thought is catching on, seemingly big-time. The notion that only certain forms of money-making should be taxed and others not is a distortion of the highest form and discriminates to an extreme extent between people and their activities in the world.

   The right wing have no true answer to this, as exhibited by Joyce’s fluster and bluster today.

   Push it hard and relate it to the wage and salary earners …. 2c
4. dimebag russell 4

   26 June 2014 at 7:58 pm

   Warren Buffer is to all and intents an honest man.
   His books are informative and interesting.
   He says he wouldnt last five minutes if he was parachuted into Afghanistan.
   In other words his fortune is a result of circumstance.
   Not so with the creepy gang of tories running the country at the moment.
   They think they are supermen and they did it all themselves but they are really little money grabbers who need money to demonstrate to the world that they are superior type people.
   Nah.
   They just a horde of little wimps hiding behind commercial law and accountants to grab everything they can.
   they are like malignant evil spirits uglifying and destroying all the beauty in the world.
   • Draco T Bastard 4.1

     26 June 2014 at 8:56 pm

     +111
5. xtasy 5

   27 June 2014 at 12:48 am

   BUFF IT, BUFFET, WE HAVE YOU FOR A FUCKING BUFFET, SOON THAT IS YOU DAMNED CLASS TRAITOR, SUCK ON THIS TRAITOR:

   EL CHE, VIVA, VIVA EL CHE!!!
   • Richard McGrath 5.1

     30 June 2014 at 11:22 pm

     I hope you’re not serious. Ernesto Guevara was a psychopathic killer, not averse to shooting children.
     Some quotes from your hero:

     “A revolutionary must become a cold killing machine motivated by pure hate. We must create the pedagogy of the The Wall!” The Wall is a reference to the wall where Che’s enemies stood before his firing squads.

     Che wanted the result of the Cuban missile crisis to be an atomic war. “What we affirm is that we must proceed along the path of liberation even if this costs millions of atomic victims.”

     “In fact, if Christ himself stood in my way, I, like Nietzsche, would not hesitate to squish him like a worm.”

     “To send men to the firing squad, judicial proof is unnecessary … These procedures are an archaic bourgeois detail. This is a revolution!”

     “Crazy with fury I will stain my rifle red while slaughtering any enemy that falls in my hands! My nostrils dilate while savoring the acrid odor of gunpowder and blood. With the deaths of my enemies I prepare my being for the sacred fight and join the triumphant proletariat with a bestial howl!”

     What a lovely misunderstood man he was.
     • McFlock 5.1.1

       30 June 2014 at 11:25 pm

       Could have been worse.
       He could have been a libertarian.
       • One Anonymous Bloke 5.1.1.1

         1 July 2014 at 7:10 am

         Surely any self respecting Libertarian would regard Guevara as:

         “A wonderful, free, light consciousness” devoid of “the necessity, meaning, or importance of other people.”
6. Richard McGrath 6

   30 June 2014 at 11:25 pm

   I think IRD would take a different view on the capital gain from investing $10m. They might just regard the $500,000 per annum or $2m lump sum as that person’s primary income – and would tax it, as well as any dividends.

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