The family: Anne Mason and David Hall welcome the income tax cut and the GST-free fresh fruit and vegetables: “Every little bit helps because prices have gone up outrageously”
They calculate that they would save $10 a week from the GST policy on top of the $20 a week from their two income tax cuts. $30 a week, nothing to be sneezed at. They own an investment property and are a bit worried about the capital gains tax on that. But the simple solution is not to own an investment banking on the capital gains, which is a form of speculation anyway. If the investment doesn’t generate a revenue stream that makes it worth owning in its own right, you need to look for a better investment.
The landlord: David Whitburn says that he will never pay any capital gains tax on his investment properties “That’s because I’m not selling, ever. My children will inherit these places,”
Let me say this slowly: That’s fine. Labour’s policy is not anti people owning capital assets including rentals. It is anti people making a living off capital gains and not paying a cent in tax while people making their income other ways have to, which effectively means the capital gainers are getting their public services subsidised by everyone else. And it creates a mis-allocation of capital where capital gain is favoured over investments that generate a viable profit stream.
If Whitburn never plans to realise any capital gain from his investments, then he will have run his investments on a profitable basis, probably by valuing his properties lower (unless you believe he could charge his tenants higher rents but just isn’t now out of the goodness of his heart). If Whitburn is running his investments for a profitable revenue stream and not for capital gain, that’s a good thing.
The working mum: Mele Peaua who works as a cleaner on the minimum wage and is thrilled by Labour’s tax package “I need to get them to eat more healthy food. How can we have a better life if the children are not healthy children? I work two jobs and have no time at home for the children. I have to keep looking for more jobs and I am not at home for the children. Ten dollars more per week would give me great joy.” The removal of the 15 per cent GST on fruit and vegetables would be a great help, she said. “The price will go down and I will be able to afford the fruit and veges. My family will have a better life, better school and be healthy too.”
People like Mrs Peaua are the backbone of this country. They have been screwed over for the past 3 decades. Add in Labour’s $15 an hour minimum wage and there’s a big gain for Mrs Peaua’s family in line if a Laobur-led government gets elected.
The high-earner: Lawyer Casey Plunket doesn’t want to pay an extra 6 cents in the dollar on that part of his income over $150,000 “Such a tax rate would make it more attractive for people to work in Australia. Most of them will still be paying tax in Australia at higher rates but they will be earning much higher incomes. We need every advantage we can over Australia to keep our higher-earning and more-productive people in the country.”
Leaving aside the question of whether or not high earners are really more productive than low income earners (I wonder if Casey works as hard as Mrs Peaua, I doubt it), Casey’s got a fundamental problem in that he would pay a lot more tax in Australia. Labour’s tax package materials include this graph, which shows 98% of people paying less tax under Labour than National and 78% paying less tax in New Zealand than in Australia, including anyone on an income over $150,000.
Casey, all hysterical over a small tax increase on the top few dollars of his income, is, ironically, opposed to a tax cut on his fresh fruit and vegetables: “The crazy thing about removing GST on fresh fruit and veges is that people like me also get that break. I am happy to pay the GST on fresh fruit and vegetables. I don’t need that tax break.”
Again, Australia has GST off food (and CGT!) so these people who are threatening to ‘flee’ there are in a dream world, or, more likely, trying to bully and trick us into keep on subsidising them.
The rich guy who isn’t a selfish prick: Sellwyn Pellet made $8m on a business and didn’t have to pay a cent in tax and says “Clearly, it you go to Otara, Waitakere, or Whangarei, or any of these hard hit communities with low income it looks really bad [that they’re paying tax and he isn’t]. So i think it’s time that people like me stepped up to the plate and paid more tax”
Like the Morgans, Pellet is proof that you can be wealthy and not be a sociopath who is devoted to hoarding every cent they can get for themselves. In fact, that’s true of all the great entrepreneurs. It’s only those that are driven by pure greed that have a problem with paying their fair share.
As for National, I think this cartoon tells us the truth, and explains why National has been unable to generate a coherent line: