He is wealthy and he is sorted
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- Date published:
10:58 am, October 2nd, 2024 - 48 comments
Categories: Christopher Luxon, making shit up, national, same old national, spin, you couldn't make this shit up -
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Blogging about politics right now is a bit like shooting fish in a barrel.
What topic do I choose?
What about the cuts to Te Reo resources for teachers?
Recently Erica Stanford decided to cut $30 million from Te Reo tuition on the basis that it was not value for money.
Her decision needs to be rechecked as it appears to be just another chance for National to gang up on Te Ao Maori.
Because the review she relied on appeared to say something completely different.
From Julia Gabel at the Herald:
An independent Government-commissioned review into a te reo Māori course that has just had its funding cut found the programme was in high demand, its providers were “exceptional” and engagement from participants was “outstanding”.”
Or how about Casey Costello?
Hot on news that she ignored official advice on the potential effects of cutting taxes on heated tobacco products and instead relied on “independent” advice that she is not releasing is news that Philip Morris’s device does not comply with recently introducted standards and cannot be sold. And she tried to get the introduction of the standards delayed by two years but Cabinet did not agree.
That $216 in tax cuts is not going to be available to Philip Morris any time soon. Maybe it should be used to help build the Dunedin Hospital.
But the news that usurps all others are two recent comments made by Christopher Luxon.
The background is that his Wellington apartment was purchased in 2020 for $795,000 and sold recently for $975,000. Under the Bright Line Test applicable at the time if he sold he would have to pay up to an estimated $70,000 in tax.
He paid no tax on his profit although to be fair any capital improvements would have affected the tax otherwise payable.
If he sold the property before 1 July 2024 then he would have had to pay tax. But because National changed the law and made the effect retrospective he does not have to.
Making the change retrospective I thought was bizarre. When Luxon bought the apartment he would have known the rules. This decision of itself saved him a whole lot of tax.
Given that background Luxon’s statement that he was wealthy and sorted is as tone deaf as when he said earlier that he took the accommodation allowance because he was entitled.
Perhaps the most jaw dropping comment he made yesterday was when he said “You just fake it until you make it. I have spent a whole career doing that“.
So during the course of one day Luxon asserted his privilege, suggested paying tax is for losers, asserted his wealth, he is better than the rest of us, and declared his lack of skills and abilities coupled with his uber confidence, hence why he has been faking it until he makes it.
He may be wealthy but I don’t think he is sorted. And flaunting his wealth at a time where thousands of public servants have lost their jobs and Health is lurching into an underfunded crisis is not something that will enamour him to the public at large.
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Chris Luxon …paraphrased/updated : "Let them eat shit"
IMO, if there is to be a CGT, then it should apply to owner-occupied property as much as it should to rentals. For example, we built our house in 2014 for $636k. It is now valued in homes.co.nz at over 1.1 million. So, if I sold right now I would have made nearly 500k profit in 10 years. Why should that gain be tax free to me but not to a landlord who flicks off a rental?
The answer is that a CGT on property is in effect a tax on inflation more than anything else assuming that the property sale is followed by a property purchase of similar value. In that case, then there often hasn't actually been any meaningful profit made, especially given the churn of real estate and legal fees.
But in the case of the private house owner and the property investor there is no need to actually purchase another property. For example, I could decide to rent or move into a retirement home on the sale of my property. So, I don't see any fundamental difference between a private owner and a landlord in this respect.
If we are to have a CGT on property, then fine. But apply it equally against all forms of property, not just specific classes. And, there shouldn’t be a tax if the ‘profit’ is just a function of general property inflation more than anything else.
The reason why the CGT does not include the residential home, is because everyone needs a place to live – and to reduce equity in the home each time one moved house would restrict labour mobility.
35/36 nations that have a CGT but exclude the home get this.
Only the place without one, gets these sort of specious arguments.
The argument you use was created by DPF, so that those who own a home join landlords in opposing a CGT.
The idea that a person need not own a home, when working or in retirement, is a concept of a gentry, as landlord, class exploitation of the precariat.
The issue with excluding the family home, is that it encourages the buy-and-flip property speculators, who drive up property prices. They buy a 'family home', do it up (often minimally – a fresh paint job, and new bathroom fittings), and re-sell at a substantial profit within a couple of years. Then rinse and repeat.
I would have been happy with the family home being included in the 10-year-bright line test.
If you need to move cities for work, then you can rent until the 10 years is up (i.e. let your current home, and rent one in a different city).
The IRD does regard the practice of buy and flip as a taxable activity. And it has little impact on property values.
Why the support for inclusion of family homes?
Why go from the only nation without a CGT to the only one with the inclusion of the family home? It makes no sense.
I just explained why.
Evidence that buy and flip has little impact on property prices? It's certainly a driver of sales.
And the IRD may regard buy and flip as a taxable activity in theory, but in practice it's tax exempt (you have to deliberately admit to the IRD that your intention when you bought the property was to do it up and sell it — the numbers doing so would approach zero). 'Oh no. This was going to be our forever home, it's just that XYZ has happened, and we need to sell'
Funny how a nation with a poor economic performance is full of people smarter than those in 35/36 OECD nations.
"Funny how a nation with a poor economic performance is full of people smarter than those in 35/36 OECD nations." LOL!
No doubt, it seems to keep amusing you.
Seriously, bandwidth issues aside, TS is occupying a certain distracting and contrary but respectful political centrist's [/sarc] attention today.
Thirty comments, so far – not that there’s anything wrong with that.
I think the reason CGT on the family home is excluded in most countries that have it, and why it would mostly likely be excluded here, is more for political reasons than actual sound tax-fairness principles. If one family is renting and one owns their house, why should the house-owning family get what amounts to several year's worth of earnings tax free from the capital gains in their property compared to the renting family? It's just a very hard sell to the home-owning public. The bright-line tax is a clumsy way to determine who pays GCT and who doesn't; renovators can just rent their property or keep it vacant to avoid CGT if it's set at 2 years, but setting it higher such as 5 years captures people who buy and sell their family home for genuine life-change reasons; 10 years was completely ridiculous. The only fair way is to just introduce CGT for all property sales, this way the tax per property can be spread out and lowered – fairer for everyone. I just doubt that any political party who supports CGT is brave enough to try to sell it to the electorate.
In 35/36 OECD nations, they have fairer tax than us without including the family home.
You admit/claim making it more fair, would not be politically possible.
They made a fairer tax system possible by excluding the family home. Clever them.Why not do clever things here too?
Our Treasury, TWG's and the IMF say our system would be better with a CGT, excluding the family home.
They see an incentive to invest in the productive economy (which can include new builds), rather than property investment for CG as desirable.
Most see encouragement of home ownership in a society as a positive (stability for the children of a family and the ability to afford retirement). Also labour mobility (discouraged by loss of equity in a home) is both good for the economy. and human freedom.
Further to SPC, if you now want to buy an equivalent property to live in, it will be at today's prices.
Exactly. And that is the point.
All that is happening when property prices increase is that the real value of money is dropping. If you have to pay the same money for an equivalent property to replace the one you have sold, then you really haven't made any money in real terms on the original sale.
Hence, if there is no real profit, why should there be any tax to be paid?
A case against a CGT on the home one lives in.
The same for a landlord who sells a rental and replaces it with an equivalent one for whatever reason. The principle is the same.
How?
One needs a place to live in still. The decision to make a new investment is just that.
A CG is based on the difference between the sale price and purchase price. Whenever the gain is made it is taxed, is what a CGT is.
You do realise you have moved from a CGT on the home, to not on it or an investment property if it is replaced.
Not if you die for example. So, would you be in favour of an inheritance tax in that case?
24 of OECD nations have an estate or inheritance tax.
Generally the exemption from such a tax is above the value of a family home.
Amazing, isn't it – see the entitled dodge and weave, resisting any greater claim on precious wealth with every fibre of their being. Whatever next?
Try making that argument for business profits or interest on your super savings.
"Allowing for inflation" on housing only continues the favourable treatment of land scalping that is causing us so many economic and social problems.
I'm starting to think Christopher Luxon is just a nice diversion for those with the agenda.
Yea, while Luxon is certainly tonedeaf , he seems to be having some distraction effect.
I had called him banal (vanilla could also describe) , but behind his (unintended?) clown act..there are the undoubted heavies, very intent on moving the rest of us towards quite a dark future.
Hes the front person for it, has scripted responses when caught off guard and a coalition agreement designed for 'not my problem, see other party'.
Ive little doubt its a strategy hardly any of those ministers had input to aside from bishop who ran the SM campaign and is oh so handy with the dark media arts.
They've all been well trained on the talking points to deflect, blame others etc and as the media asks nothing on we go.
Luxon seemed to be an anodyne placeholder. But, as I said before, National as a Party must be gritting their teeth at the monumental damage he is doing to their political brand. Breaking election promises is only the start of it. The comparison with Seymour's slickness and apparent effectiveness is dangerous for the Nats' vote.
And I bettcha the Nats will come out looking very egg-on-face-ish when their platforms of tax cuts, (with unstated user-pays-and-pays-again prices attached), “national roads of significant tolling’ and a failed lauraNorder toughie approach come to be evaluated at election time.
Discrediting a leader's personal life to discredit the whole party is silly and desperate.
Luxon is just the face of the party his supporters love and his opponents hate.
Luxon is a cross between his two dopelgangers Muldoon and Tod Muller .
Not like Muldoon who was pure hate and not like Muller who had a social concience.
Discrediting the messenger to discredit the message is as old as the hills.
Smear campaigning is a 365 days a year business + a very serious business it is.
Pitiful and childish but it work as the ignorant, fearful and prejudice always buy it.
Why appeal to intelligence fact and truth when lies and prejudice are more popular.
Tell us what we should like Koina. He is a John Key puppet, but not as smart.
FYI koina…this is a class society run by Capital and Finance Capital. 1% top dogs and elite, 9% enablers and managers, and 90% the rest of us what ever socio economic group we are in from middle class down to destitute.
The bottom 50% own just 5% of the wealth…there are more renting than owning, property owners tend not to stop at just one–like the PM. This country should be a land of plenty but we have homeless, hungry and too many mentally struggling.
Mr Luxon heads a CoC Govt. that has cut school lunches, money for respite care and disabled, NGOs and hundreds of other cuts at community level, spits on environmental initiatives, helps the Tobacco and Mining industries.
So…venal rich Baldrick deserves whatever is coming to him in my view. Opposing CGT while benefiting from its absence is a clear conflict of interest.
Garbage.
The point is the amount of personal gains that just happen to accrue to MOs as a result of their actions.
They are wealthy. They are sorted.
In this case Luxon made 70,000 untaxed dollars because of the removal of the brightline test. He didn’t need it. He’s sorted, but he’ll take it anyway.
The housing market was slowing (or slowed). The Nats screwed that.
The phrase Lux has used to justify getting more and more is in fact one that justifies taxing more.
They are sorted. But those needing healthcare aren’t. Those needing a school in their local area aren’t. Those fearfully watching rates and interest rates aren’t. Those fearfully watching rents aren’t either. And good news- their landlords don’t even have to ensure their homes meet basic standards for live ability. That was too much for those that are wealthy or sorted.
A clear issue here I think. He's wealthy, sure, fine, thanks for telling us. Removing the tax on property capital gains and selling a few months later and getting a $78k windfall. If nothing else he should pay tax on that gain. More than simply property, an example why we should have a CGT. Luxon has made a good case for one, even if he doesn't realise it.
I think the current Government deliberately fires off so many "issues" that we peasants can only manage a few outrages at a time. And thus only a bit of each corner of the population can coalesce into a good sized protest. Good therefore to see the Dunedin shambles, but tomorrow a new "issue."
Add to that the arrogance from the CoC MPs who show that they just ignore the outrages. Missed the bus? Never mind. Another one soon.
CoC have adopted the Blitzkrieg tactic of attacking on all fronts-sod facts, evidence and respecting process.
They have well funded expert disrupters lurking in the shadows-WTF-state schools turned into Charters…Hospitals rented back to taxpayers!
It’s part of it for sure.
Overwhelm
Mr Luxon ought to replace Mr Monopoly in the McDonald's ads.
They both represent corporate ripoff outfits.
The last PM to understand being young and buying a first house was …
Ardern
But who was the last PM to feel financial pain?
Muldoon as a boy?
Mike Moore as a boy?
https://www.nzherald.co.nz/business/business-reports/mood-of-the-boardroom/mood-of-the-boardroom-chief-executives-rank-government-ministers-and-labour-leaders/6RXK5735GRHC5AZCUJH5MGZ5YM/
"I'm unpopular, I get that…"
Luxon has taken a huge pay decrease to be a politician and PM. He could probably go out tomorrow and get a higher paying job if he wanted to.
Not sure the same could be said about any of the Labour MP's (and definitely not about any Greens or Maori party).
…but he doesn't want to, and there lies the root of the matter.
We're not all bound to bless him for his self-sacrifice. He is where he wants to be. Being a politician or PM is not just about the pay. There are other satisfices, not least being the networks, that only a PM can get and which can be appealing when you have 'faked it' for long enough to have made all the money you could want.
If you see the link in my earlier comment, you'll see that even the consensus of NZ Chief Executives only rank Luxon 6th out of government ministers, which would make me, if I was Luxon, start feeling blessed for still being allowed to remain in the role.
Dunno about the decrease really – he just passed a law that made him an extra $70,000 on one house sale. Do that a few more times. He passed another law that substantially reduced his tax rate. All these things to benefit himself as he nears retirement.
Anyway I have no doubt his fellow rich mates would give him a job – he's given them billions of dollars in tax cuts………..
You forget about the Directorships and other little perks he will get when he eventually heads back to the corporate world.
National MP's don't take bribes, they wait until leaving Parliament. Well, they used to.
Fake it, till you make it
If you have
Ostentatious wealth, but understated – no brazen wearing of brands
https://en.vogue.me/fashion/fashion-stealth-wealth-quiet-luxury-gwyneth-paltrow/
If you have not
Wear brand copies
https://www.etsy.com/nz/market/fake_brands
High end stuff at second hand (designer clothing) shops,
Poshmark marketplace etc,
google best clothes second hand shops for those in the local region.
Stand out in the crowd, look like one of the wealthy, well to do, rather than one of a downtrodden precariat.
Or no fashion style capability – get fit and look good in anything, till someone wants to dress you up and be seen with you when taking you out.
Now, if there was somewhere one could dress up (not yet closed) without shaming others who cannot/will not.
https://www.stuff.co.nz/society/350437254/verity-johnson-why-do-we-shame-people-not-dressing-trash
Not forgetting the pollies who shoplift at high end stores…
Why have we not had headlines “You might be wealthy, but you don’t get it.”
35k march in Dunedin. Privatisation is their goal. The South Island is betrayed.
The police will no longer attend mental health call outs where there may be significant danger to everyone involved and urgency. Many, many ‘criminals’ have head trauma from their young life. They simply can’t function the way someone who’s been nurtured. Many need assistance on and off their whole life.
This is a healthcare issue that needs support. Nah scratch that.
Many are addicted from a young age. More will be addicted because of the policy of your government and Minister.
Benefits are cut. Again fine if there is support. If you can live with your parents, you can have a poorly paid job. If you are young and strong you can live in a moldy house for a while. If you can go home on the weekend and get a food parcel, income can equal rent and half a week’s food.
You don’t get it 100 Lux. You’ve never got it. You don’t care to try to understand. Otherwise you wouldn’t lie to attempt to enrich your mates. Privatisatiom will harm healthcare in New Zealand and it wasn’t voted for.
Interesting to see the REAL Chris Luxon revealed.
The Chris Luxon before the election made great efforts to show voters how he was really just an ordinary bloke, pretty comfortable of course, but essentially just a normal Kiwi, one of the boys who had made good with hard work, someone to be respected.
Now he has won power the act is unnecessary.
He is basically telling us: I was just pretending to be one of you. I am really one of the 10% and I actually don't give a f.. about the rest of you but I got what I wanted – your votes – ha ha ha! suckerssssssssssss!
The final words of the Denis Leary video “I’m an a….e and I’m proud of it…”spring to mind.
Reminds one of Samuel Alito of SCOTUS (a before and after the GOP majority picture).*
He was known as fairly prudent, and advocate for religious freedom, till then*
https://www.rollingstone.com/politics/politics-features/samuel-alito-supreme-court-justice-recording-tape-battle-1235036470/
https://www.theguardian.com/us-news/2024/sep/13/alito-supreme-court-far-right-ties
PM's comment brings to mind a great song by Glenn Frey (co-founder of the Eagles) called "I've Got Mine".
Check out the lyrics.