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Goff: no GST hikes or tax cuts for rich

Written By: - Date published: 11:06 am, January 29th, 2010 - 30 comments
Categories: class war, phil goff, tax - Tags:

In his speech yesterday Phil Goff articulated Labour’s position on tax in no uncertain terms and came out very strongly against wealthy tax dodgers :

“Too many people on good incomes avoid and evade paying taxes. It’s not right that some top earners pay a lower percentage of their income in tax than those on the average wage. Some of them move to live as tax exiles, avoiding their responsibility to the country that gave them an education and a start in life – while still expecting and getting their knighthoods.”

People who take from New Zealand but don’t give back are bludgers, wherever they live and whatever their bank balance.”

The biggest bludgers are the ones who avoid tens of thousands in tax and make the rest of us shoulder the burden. And, all the while they cry for more tax cuts. Goff firmly rejects them:

“Labour is still ready to work with the Government, ready to build consensus around tax changes, ready to make changes that will be sustainable.  The offer is there that we will work with them on tax policy, but it is a conditional offer.

The test Labour will apply to tax proposals is whether they are fair, and help the productive sector. There is no way, for example, that Labour will agree to a deal that saw hard-pressed families face a rise in living costs through higher GST while the benefits of personal tax cuts went overwhelmingly to those on the highest incomes.

All New Zealanders need to share the benefit of tax changes – not just the privileged few at the top. Loopholes that allow high income earners to avoid tax have to be closed.”

What encourages me about this speech is not just the good policy on tax but the deeper message. Labour will not kowtow to the wealthy elite who parasite on this country. They stand for the working Kiwi (and the ones who want to work but can’t find a job) who have been ignored by this government. Goff has utterly rejected the logic of the Right that government has to be all about putting more money in the pockets of the rich, taking it from the rest of us if need be. It’s a message that Labour will govern for the many, not the few.

30 comments on “Goff: no GST hikes or tax cuts for rich ”

  1. Does anyone in the labour party think that those rich people that
    they are always knocking, may of decided early on in their lifes
    to chhose a field thast would earn them money, decided to study and
    get A’s at school and go on to university.

    • Pete 1.1

      Hi Brett – do you mean the top earners who pay a smaller percentage of tax than those on lower incomes? The ones that even the National Party has indicated are a problem for dodging their responsibility? (regardless of their feckless response to the problem)

      I don’t see what your point is here.

      I also don’t see why you think there’s a distinction between Labour Party members(?) and people who choose to educate themselves, get As etc? Do you not think that these people exist across the political spectrum?

      Oh, and where does Goff’s speech ‘knock these people (talking in the broad sense, of course)?

    • DeeDub 1.2

      You obviously got LOTS of ‘A’s, eh Brett, ’cause you speak such good England.

  2. gomango 2

    Pot. Kettle. Black. Perhaps Goff could start with his caucus?

    Rick Barker
    Barker Family Trust
    Upton Family Trust

    Brendon Burns
    BP and PL Burns Family Trust
    PL and BP Burns Family Trust

    Steve Chadwick
    Gonzo Family Trust

    Charles Chauvel
    Kittery Trust
    Pepperrell Trust
    Victory Trust

    Helen Clark
    Burke Trust
    FG Clark Family Trust

    Clayton Cosgrove
    Eagle Bay Family Trust
    September Trust (blind trust)

    David Cunliffe
    Bozzie Family Trust

    Kelvin Davis
    Davis Family Trust

    Parekura Horomia
    Panikau A2
    Mangatuna 3, 4, 5, 7 and 8
    Mangaheia 1B3Y and 2G1
    Tokomaru K4A and K4B1 trustee
    Tuatini Maori Township section 1 block vi lot 2
    Rosaleen Aorangi Smith Whanau Trust

    Raymond Huo
    Chesterfields Trust (family trust)

    Shane Jones
    Te Puna o Te Anaru Trust
    Castlerigg Trust

    Annette King
    King-Lind Family Trust

    Nanaia Mahuta
    Mahuta Whānau Trust

    Stuart Nash
    Nash Family Trust

    David Parker
    Karitane Trust
    Sue Wootton Family Trust
    FD Parker Children’s Trust
    Tarras Trust

    Lynne Pillay
    The Pillay Trust

    Mita Ririnui
    Ririnui-Calhoun Family Trust
    Te Aomihi Anne Ririnui-Horne Family Trust
    Riripiti Timi Waati Lands Trust
    Te Arawa Lakes Trust
    Ngati Awa Māori Trust Board
    Pukeroa Oruawhata Lands Trust

    Ross Robertson
    The Robertson Family Trust

    • Lanthanide 2.1

      Yes, all of his caucus would lose out if trusts were taxed fairly.

      What’s your point?

      • spot 2.1.1

        Of course, not all those Trusts are necessarily for the purposes of avoiding/evading (or whatever the term is) tax.

        Perfectly legitimate I would think to use for asset protection, inheritance planning etc etc.

        I doubt he’d set a standard in a well publicised speech that he wasn’t sure is own caucus could stand by.

        • Mr Magoo 2.1.1.1

          Like the maori MPs listed who have maori land trusts most likely for multiple owner title…

          Nice straw man. Also the fact that they have trusts and are willing to close the holes makes them MORE honest, not less.

        • Cactus Kate 2.1.1.2

          Spot

          So it’s okay if Labour caucus members use trusts, but not John Key or the Nats?

          Goff is quoted here as:

          “Too many people on good incomes AVOID and EVADE paying taxes. It’s not right that SOME TOP earners pay a lower percentage of their income in tax than those on the average wage”.

          The only way this is happening is not filling in your tax return (very few) or using the trust or company vehicles to pay less. Goff here is referring to the apparent 100 top income earners who do not pay the top personal rate.

          Labour’s language of avoidance meaning simply “avoiding” the top tax rate of 38 in favour of 33 or 30, means it does bring the entire list here into their own definition of avoidance.

          Labour have fallen into the trap of re-defining “avoidance” to supposedly “rich pricks” using trusts and companies.

          When they are all at it as well and have been for a long time.

          • spot 2.1.1.2.1

            Nah Kate, didn’t say that.

            I’m just assuming that not every asset in every trust has or is tax assessable income.

          • AngryTory 2.1.1.2.2

            Labour’s language of avoidance means simply that you’re earning more than 60K.

            Not content will calling us all “Rich Pricks” now we are criminals and tax evaders.

            Apart from North Korea, no other country in the world – not Sweden, not Norway, not Slovenia or Slovakia or anywhere else in Eastern Europe – nowhere else has a basically unreconstructed communist party like NZ Labour. And nowhere else ever let those kind of scum anywhere ever near government – let alone for ten disastrous economy-destroying years.

            • Pascal's bookie 2.1.1.2.2.1

              So the definition of commn1sm is circa 6 points on the marginal tax rate. Who knew?

            • felix 2.1.1.2.2.2

              Not content will calling us all “Rich Pricks’

              Cullen called Key a rich prick. What does that have to do with you?

              You guys remember funny.

            • lprent 2.1.1.2.2.3

              Oh a boring wingnut with no ideas apart from trite meaningless phrases.

              • 1. NZ Labour was the main party in government for 9 years – not 10.
              • 2. As far as I can see he is complaining about having a progressive personal tax system – the same as every OECD country has. There are higher tax rates for those earning higher incomes. Almost all of which have higher top rates than we do.
              • 3. Most of the countries have social democratic parties that look remarkably like NZ Labour.
              • 4. The ‘Rich Prick’ comment was directed at John Key. This clown is delusional enough to think that he is John Key. Perhaps he should seek some help to cope with his delusions of grandeur.
              • 5. Kind of amusing looking at a fool articulating about things he hasn’t bothered to understand.
  3. tsmithfield 3

    Goff: “Too many people on good incomes avoid and evade paying taxes. It’s not right that some top earners pay a lower percentage of their income in tax than those on the average wage.”

    Duh. So what does he propose to do about it? FFS how long has family support been in place now? How long has it been getting rorted? The new government is waking up to this fact. But how many years did Labour have to do something about it but didn’t?

    The fact is that when governments close off one loophole, they invariably create another one for accountants to exploit. The way to stop avoidance is to make the tax system as simple as possible. Flat tax rates achieve the goal of simplifying the tax system. Then there is no point in trying to avoid the system. With a flat tax rate, the wealthy will probably end up paying more.

    • Daveski 3.1

      Further, let’s ask the question which govt made changes to the tax rates which incentivised those who could afford it to legally minimise their payment of tax. This is where I think Labour has a credibility problem – it caused the problem yet is demanding a solution but when the logical solution is proposed (standard tax rates across companies, taxes, and trusts) it yells and screams. It’s no different to how Labour actively contributed to the housing boom.

      Anyway, with Goff and King reappointed, it’s clear that Labour has a front bench ready to take on the challenges of the twentieth century 😉

      • Zetetic 3.1.1

        Yup. By cutting the corp rate Labour made tax dodging more lucrative. Shouldn’t have done it.

        Btw. How come no other rich country has aligned top tax rates?

    • Draco T Bastard 3.2

      Translation:
      Why didn’t Labour fix it while in power huh?
      huh?
      huh?

      Flat tax rates achieve the goal of simplifying the tax system.

      No they don’t as it’s not the tax rates that cause the complexity. It’s the number and type of things that can be deducted and/or depreciated. A flat tax will be just as complex and not raise enough income.

      With a flat tax rate, the wealthy will probably end up paying more.

      No, they won’t as they’ll still have all their tax dodges that the poor don’t have.

  4. Bill 4

    Wonder what the majority of people would prefer if given the choice…..hmmm….and why their is no mechanism to allow a choice to be made?

    “Oregon voters bucked decades of anti-tax and anti-Salem sentiment Tuesday, raising taxes on corporations and the wealthy to prevent further erosion of public schools and other state services.

    The tax measures passed easily, with late returns showing a 54 percent to 46 percent ratio. Measure 66 raises taxes on households with taxable income above $250,000, and Measure 67 sets higher minimum taxes on corporations and increases the tax rate on upper-level profits.”

    http://www.oregonlive.com/politics/index.ssf/2010/01/voters_pass_tax_measures_by_bi.html

  5. tc 5

    woo hoo….go goff, keep it simple, consistent and repeat ad nauseum.

    intelligent, statesmanlike and delivered without anoyones hand up his back in stark contrast to……….insert NACT gov’t here.

    you can tell from the posts the logic/rationality is fanning the flames of the righteous monty burns types……awesome.

    labor lost it’s way as it tried to appease everyone and a return to core values will see them come back as NZ needs an even handed gov’t not this lot of idelogical pillagers and looters.

  6. Jenny 6

    Time for a Tobin Tax?

    It is said that GST is a flat tax that unfairly loads the tax burden onto working people and beneficiaries, because all the income the working class and beneficiaries, (rather than just a fraction), goes to buy the goods and services needed to survive.

    In comparison the wealthy who have surplus income above their survival needs which they can reinvest to increase their wealth. These transactions are exempt from GST.

    But the rich often avoid paying even their relatively small share of GST as well.

    I once knew a man who lived in Remuera, who owned a bakery.

    All his friends and neighbours got supplied free baked goods.

    His immediate next door neighbour owned a car yard. In return for his friends largesse, when ever his friend needed to upgrade his car, he was always given a hefty discount.

    Another friend and denizen of Remuera, who owned a menswear business, gave this guy a free suit every year.

    This was only two examples that I knew of. I imagine that those wealthy enough to own businesses have a whole network of handing out free stuff from their inventories to each other, so avoiding GST.

    However if you don’t own a factory or business you can’t tap into this stream of free goods and services, and so can’t avoid GST in this manner.

    Of course if this bakery owner’s employees, who actually made these goods, gave their friends free stuff from their work, they would be sacked and possibly arrested for theft.

    • Draco T Bastard 6.1

      Time for a Tobin Tax?

      Yep, and to get rid of GST.

      • Jenny 6.1.1

        Maybe we could start by supporting the Maori Party’s private members bill to remove GST from food.

        • Draco T Bastard 6.1.1.1

          Removing GST only from food is actually a very expensive nightmare. Just ask any of the countries that do that. It’s one of those all or none taxes and it’s better being none.

    • mike 6.2

      We should find this ‘Remuera baker’ and linch him – how dare he have “surplus income” and get his friends do “discounts”

      You bitter twat…

      • felix 6.2.1

        That’s not what she said at all, mike.

        The point is that people who own businesses are in a position to do this and others aren’t. This puts the lie to the idea that burden of GST is fairly spread.

        The poor have to pay their full share of GST because they don’t have access to the means to avoid it. The rich can get around it in many ways.

      • lprent 6.2.2

        😈 ‘linch’ – Why would we want to join two things together? I suspect that you meant ‘lynch’

    • prism 6.3

      That’s like a Masonic brotherhood sharing advantages with each other, giving each other preference. It is the beneficial circle that some get in families where all support the others.
      People with different backgrounds, different living styles, levels of income, different colour, gender, culture can get placed outside these circles. They don’t get the handy mateship advantages and perhaps have little to return from their own small store of advantage.

  7. hix 7

    “Tax bludger”

    I like the sound of that.

  8. gomango 8

    a tobin tax won’t work unless it is levied multilaterally in all markets where trading can take place. Otherwise transacions will just take place in other jurisdictions. And given the propensity of governments to compete with each other for this business there will always be plenty of jurisdictions with no Tobin tax.

    Seriously if a tobin tax was a realistic option it would have happened somewhere in the world by now. Can you imagine a government choosing not to introduce a new tax? The reason that form of tax has never been introduced is because gummints know all the transactions they think they would tax would disappear offshore in a day, leaving the tax burden to be carried by the small and medium businesses who transact FX for their fundamental import/export functions.

    • charlie 8.1

      Working in a sector that oversees the accounts of many of NZ ‘rich’ folk, I see, wealthy families receiving maximum Working for Families Tax Credits (10 k plus) per year. They manage this by running their businesses via companies and flowing income down into trusts, paying themselves minimum shareholder salaries, whilst taking considerable drawings (100k plus)…these wealthy people are literally stealing from those on lower incomes and I can only assume it is because they are greedy, bludging thieves.

      These are the people who through John Keys new tax policies will enjoy higher tax cuts, whilst still receiving maximum Working for Families Tax Credits (let’s not forget that Key is promising an increase to this tax credit).

      To scale this further, these company owners manipulate their income through their companies to avoid paying child support, I see this all to often and to be honest, it is quite sickening.

      These are the type of people, who went through university (probably getting c degrees) on the backs of the tax payer, now those wishing to attend university have to pay and work whilst doing it. Which reminds me of the wealthy families, who through income manipulation can hide their incomes (taking hefty drawings instead) so that their children can receive Student Allowances, while those on lower incomes can’t.

      Sorry folks, I see it everyday, I see these people as thieves, fraudsters, albeit the government continues to make this legal by not closing the loop holes (which incidentally were noted in the recent TWG papers).

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