Lets talk about tax policy

As we reach the business end of one of the most fascinating and most unpredictable election campaigns on record it is becoming increasingly clear what the last couple of weeks will be all about.

National and its proxies will be pressing every button possible to suggest that Labour will indiscriminately raise a number of taxes.

This is the fall back position for right wing parties throughout the world.  If things are going rough then target base greed and use ridicule to turn enough people around.

National has shown three attack modes:

  1. If Labour is too specific with its costings of its policies then National will misrepresent the figures and suggest that Labour does not know what it is doing and there is this big hole.
  2. If Labour does not provide a plethora of data and figures then National makes all sorts of outlandish claims that Labour is not being straight up with New Zealanders and will tax your grandmother’s farts and why won’t they deny this.
  3. And keep claiming Labour is the tax and spend party, although more and more people are realising that our country needs to increase spending to fix some pretty massive holes.

The first mode has worked well in the past with a pliant media accepting National’s claims at face value.  This time things have been different, with Joyce’s claims being ridiculed by everyone with access to a spreadsheet, apart from the Taxpayer’s Union.  Although if some of the pundits are right and the recent Reid Research poll is accurate we have a lot to worry about the health of our democracy.

All approaches demean the body politic.  The problem is that when people become disgusted with politicians they become disgusted with both camps, so there is nothing for National to lose.  Meanwhile their core supporters celebrate the attack on the state and the verification of their selfish ideology so this is a veritable win win.

And so we have the current National’s onslaught, aimed at turning some swing voters’ prejudice and ignorance.

And as I survey the current campaign my initial response is an incredulous “you have to be freaking kidding” to their claims.

Firstly the claim that Labour is not being straight up with Kiwis.

Here is the really silly thing.  Labour is proposing a Tax Working Group to look at our system and in particular see what can be done about our housing crisis.  It has a couple of bottom lines.  The family home and the land associated with the family home will be protected.  And the bright line test period, introduced by National, will be extended to five years.  Otherwise it wants the experts to consider and make recommendations and then the Parliament will have to decide what to do.

What is this Communist inspired Tax Working Group you ask.  Well National set one up without telling anyone this would happen.  Then they increased the rate of GST and the take by $1.6 billion despite promising during the campaign not to do this.  And they lied claiming that the tax cuts would be fiscally neutral when it is clear the cuts would be anything but.

So Labour is promising to review the tax system and try and do something about the housing crisis and is being attacked for it. Yet National also had a working group, told no one about it, and broke a campaign pledge not to raise taxes.  So can someone tell me why Labour should be vulnerable on this issue?

Secondly the assertion that Labour is going to raise taxes on all sorts of activities.

Labour has announced the following policies:

  1. Cancelling the currently programmed tax reductions.  Please note everyone this is not a tax increase, it is maintaining taxes at their current levels.
  2. A visitor tax.  This will affect no New Zealanders, the money will be used to improve infrastructure and address environmental damage caused by excessive numbers of tourists.  I bet that if National is returned a similar tax will be put in place within six months.
  3. A regional fuel tax.  This is because Auckland is screaming for an income flow that it can use to fund badly needed infrastructure.
  4. A water tax.  I recently bought a bottle of New Zealand water in China for 60c.  A similar bottle in New Zealand would have cost $2.50.  This is absolutely crazy.  Of course we should be collecting a royalty from overseas corporate entities including Oravida.  And again wait for six months and see if National in power introduces something not too different.
  5. Increasing the bright line test from two years to five years.  This will capture more land speculators and make them pay their fair share of tax.

As for a capital gains tax well in April 2015 John Key said that a CGT was not the answer to New Zealand’s housing crisis.  Nek minnit, in May 2015 we had a two year bright line test CGT.  And National complains that Labour may introduce a CGT?  They did it themselves and they never told anyone they would do this.

And just to keep this debate honest here are the 18 taxes that National never talked about but introduced.  They suggest that Labour has all these malign dishonest plans for tax increases.  From National’s history they clearly have had very malign dishonest plans to increase taxes, at least for the poor citizens of this country.  Here are some of them:

  1. GST increase from 12.5% to 15% (after promising not to do so)
  2. The bright line CGT that is not a CGT
  3. The Border Clearance Levy
  4. Increased taxes on KiwiSaver
  5. Compulsory student loan payment increase from 10% to 12%
  6. Increased tertiary fees
  7. The 2012 ‘Paperboy’ tax
  8. Civil Aviation Authority fees rise
  9. Additional fuel tax increase of 9 cents with annual CPI increases locked in for perpetuity
  10. Road User Charges increased
  11. New annual student loan fees introduced
  12. Massive unnecessary ACC levy increases
  13. Prescription fees increased by 66%
  14. New online company filing fees imposed on businesses
  15. Creeping expansion of the scope of Fringe Benefit Taxes – National tried to tax car parks and plain-clothes police uniforms
  16. Lowering of Working for Families abatement threshold and increasing the abatement rate, taking money out of the pockets of families
  17. Imposing a $900 Family Court fee
  18. GST on digital purchases

And perhaps they can answer this question.  They claim Labour is going to introduce an inheritance tax. So under the current law if a beneficiary is transferred the former family home, transfers a share to their partner and they then decide to sell it one year after it was transferred to them, do they pay Capital Gains Tax under the bright line test?

Finally the incompetence allegation has already been disproved by expert after expert after expert.  Joyce could not even name a taxi driver who supported his claims.  As a question, why should we even tolerate the thought that someone so incompetent and so dishonest should be returned as our Finance Minister?

It is a worry if our democratic system can be affected by transparent lies that the liars may be returned to power.  Any functioning democracy should be able to rely on political parties having a respectful debate based on truth.

Update: in a smart tactical move Labour has promised no new taxes will be introduced until after the next election.

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