CGT complicated, complex and costly

Prime Minister John Key floored David Cunliffe last night when he couldn’t answer whether or not Labour’s capital gains tax would apply to homes owned by trusts.

After the debate he said it wouldn’t but that’s not what the policy says:

David Cunliffe’s inability to answer the most basic questions about Labour’s proposed capital gains tax underlines key problems identified by successive tax reviews, National Party Finance Spokesman Bill English says.

“David Cunliffe’s failure to explain how he would implement a new capital gains tax, which has now been Labour policy for more than three years, will leave many thousands of New Zealanders confused and uncertain,” Mr English says.

“Nowhere in Labour’s capital gains tax policy does it exclude family homes owned by trusts. In fact, Labour actually says: ‘We will ensure trusts are not used as a means of avoiding a CGT’. David Cunliffe cannot have it both ways.

“And now Labour is trying to say the test for whether a capital gains tax applies is not whether a trust owns the property, but who lives in it. That would require Inland Revenue to confirm the living arrangements of householders in deciding whether the tax would apply.

What if there are adult children paying rent?

What if there is a boarder?

What if the boarder is a relative, for example an elderly parent?

Would it make a difference if the relative lived in a granny flat?

Would it make a difference if someone living in the granny flat wasn’t a relative?

What if there’s more than one family in the house?

“This latest confusion follows Labour previously making contradictory claims about whether the KiwiSaver accounts of 2.3 million New Zealanders would be exempt from their new tax. They now claim they would be exempt, but this is not reflected in their policy or their costings.”

Mr English says Labour’s proposed capital gains tax was already full of holes, applying only to only a quarter of the housing market, but to every New Zealand business and farm.

“All of this underlines what tax experts and independent reviews have said over the past 20 years. Implementing an extra capital gains tax would be much more complicated and confusing in practice than it appears in theory.

“By contrast, National’s clear economic plan is successfully supporting higher wages and more jobs. It is steering New Zealand back to surplus this year and ensuring government spending is invested wisely to deliver better results.

“The five new taxes promised by Labour and the Greens would stall the New Zealand economy and cost thousands of jobs.”

People who trade in property or shares already pay taxes on the capital gains.

Introducing Labour’s CTG CGT would add cost  and complexity to the tax system which wouldn’t be justified by the money raised.

Labour wants to introduce a CTG CGT and  four more taxes for the worst reason – so it can spend more.

The best way to increase the tax take is through economic growth which enables businesses to make bigger profits, increase jobs and wages.

The worst way is to increase tax rates and add new taxes which add complications, complexity and costs and put a hand brake on economic growth.

27 Responses to CGT complicated, complex and costly

  1. Angry Tory says:

    Who cares what the policy says. Labour can only “form” a government by an illegal, unconstitutional rorting of the election against all precedent. The fact that the MSM refuse to announce this from the hilltops doesn’t make it any less true.

    A Labour-led govt that will be considered illegitimate by essentially every business and nett taxpayer in the country is a much more serious problem than any of their stupid policies.

    NZ now has only one major party, and only one party that can form the next government. Anyone who says otherwise is simply exhibiting their own leftist bias.

    Like

  2. TraceyS says:

    CTG – is that a typo or deliberate…I’m not sure!

    Capital Tax Gain is about the guts of it.

    Like

  3. Andrei says:

    Gee AT, there is an election to come as you know.

    And if Mr C can create a coalition that consists of sixty one or more MPs then he will legitimately lead, like it or not.

    I voted to ditch MMP myself, but nobody listened – well not enough to matter anyway 😦

    Like

  4. Mr E says:

    Andrei,
    You have had an anti voting stance. Do a sense are slight change in that sentiment.

    Frankly I think your vote is important, regardless of who you vote for.

    We all have an equal right.
    Some people will vote based on who has the prettiest name. It seems a shame if they have more influence than someone like you that seemingly studies politics.

    Like

  5. Andrei says:

    You have had an anti voting stance. Do a sense are slight change in that sentiment.

    Frankly I think your vote is important, regardless of who you vote for.

    My non participation is a vote of no confidence Mr E – I could spoil my ballot but though that is recorded it is not noticed, whereas voter turnout is.

    Three of the candidates on my ballot are going to parliament regardless of what I do or do not do so my vote is actually an exercise in futility and I refuse to allow anybody to claim that I have given them a mandate for whatever depredations on humanity, decency and human dignity their tiny little minds can come up with.

    The utter abomination of gay “marriage” was the last straw – a vile perversion of a sacred human institution vital to the continuation of our culture and species. Anybody who voted for that is clearly unfit for office regardless of other qualities

    Like

  6. Angry Tory says:

    And if Mr C can create a coalition that consists of sixty one or more MPs then he will legitimately lead, like it or not.

    no, he will have stolen the election and his government will widely be considered illegitimate. These are not matters of “liking it or not”; these are matters of fact.

    The leftists try to import precedents from Germany or Scandinavia into NZ’s constitutional law. This is nothing less than an attempt to undermine NZ’s constitution – and NZ has a constitution, just one that is not written down in one place. NZ takes constitutional precedents from the UK, not from Germany.

    In the NZ and in the Commonwealth Country that has the closest thing to MMP – Scotland – there is absolutely no precedent for the largest party not being in government. That is a fact.

    Legitimate electoral outcomes including:
    – National majority government
    – National minority government
    – National led “Grand Coalition” with Labour
    – National coalition with parties on the right or centre

    A Labour led government where National is the single largest party would be constitutional unprecedented — lawyer-speak for illegitimate. It is likewise a fact that such a government would not be recognised by a large proportion of NZ businesses and taxpayers.

    Like

  7. Dave Kennedy says:

    AT, National got 47% of the vote in the last election but when you consider the 25% who didn’t vote, it was actually only around 35% support of eligible voters. Hardly a strong mandate to do much that they have done. You cannot place a FPP philosophy onto MMP.

    If the single party with the most votes always got to govern we would have the sort of nonsense where Party A supported high taxes and parties B, C & E all wanted lower taxes. It could mean (under your theory) that Party A would govern if they only got 40% even though the all parties wanting to lower taxes collectively won 60% of the vote and were willing to form a coalition.

    Like

  8. [deleted – just was I was going to stop the moderation you leave an off-topic comment. there was nothing untoward about what you said except that it had nothing to do with the topic.]

    Like

  9. TraceyS says:

    Where’s the light switch Dave? By your methodology, the Green Party got 8% of eligible votes.

    If 35% is not a strong mandate to do things then 8% is an even stronger mandate not to do things.

    92% of eligible voters “voted” not to give the Green Party a mandate.

    Like

  10. Mr E says:

    Tracey!
    The concept of democracy is wasted of Dave. Dave believes in the tail wagging the dog.
    The greatest irony is Russell Norman discouraging the creation of the internet party. They didn’t want a minority under them impacting their effectiveness. Or ineffectivness as it may be.

    Like

  11. Ele. Your keeping me in moderation is cruel and undemocratic. you should be ashamed of yourself. One day, we will meet face to face and you will be uncomfortable. Remove your authoritarian yolk. It reflects very badly on you. You know it does. Don’t be frightened any longer.

    Like

  12. Ele. Keeping Stock did this to me also. He ended badly. Can you not see that you are acting undemocratically? At last night’s candidate meeting at the Federated Farmer’s building in Invercargill, Russell McPherson behaved better than you, in saying that he would accept comments from the floor, which I provided. Russel showed true generosity and understanding of democracy. You are doing the opposite. I am sad for you. You will not feel good about yourself when you reflect upon this time. Ele. Change your mind. Release me from moderation. It is unfair. You are corrupting the convention of freedom of speech. You should be ashamed of yourself. I forgive you. I don’t expect you to publish this message, but Ele, don’t act badly. Your Party has, you don’t have to.

    Like

  13. TraceyS says:

    Mr E @7:02 pm…Dave and his party don’t like to see a wealthy individual ostensively buying himself votes. It doesn’t fit with their values at all. Oh wait, unless he can do what they (frustratingly) couldn’t, and dent the National Party’s lead!! What values?

    Just like Labour, who through frustration with (most) of the unions’ failure to negotiate decent pay rises on behalf of members in the deregulated labour environment, spat the dummy and did the job for them with WFF. Gosh that was successful wasn’t it? NOT. To this both left and right agree.

    And now they (Labour and Greens) want to put a tax water because of their frustration (they won’t admit) that the RMA fails in its purpose. They’ve already been told that the tax will push intensification. This will push the failing RMA even harder.

    But hey, we all know money alone doesn’t fix problems. Spending it usually makes one feel better though…and the more taxes there are the greater the spending.

    Like

  14. Yolk! Ha! Yoke.

    Like

  15. Paranormal says:

    RG, build yourself a bridge and get over it. this is Ele’s place and her rules apply. Democracy has nothing to do with it.

    Mr E – I think you missed some of the real dirty politics. The Greens didn’t mention all that happened in their meetings at the Coatsville Mansion. It’s pretty clear they’re in donkey deep with the dirty politics thing. Not only did they visit, they also supported Dotcom by providing their staff member to deliver Green party policy and political nous to the internet party. How deep does it go RG? Anything to achieve the ends aye comrade RG.

    Like

  16. robertguyton says:

    The Greens are completely clean and you know it.You struggle to accept that it could be the case but that’s because Key and co have made corruptuion and dirty politics the new normal. The public knows the Greens are clean. You are merely trying to tar them with Key’s filthy brush but it won’t work. Yes, Mr E, pdm and jabba will crow to your cracked tune, but that’s all we can expect from those flunkies. The Greens, you know, are clean. They have not been part of the festering scabby politics that mark the John Key-led National Party’s reign. National are riddled with it. All you can do now is try to smear those who didn’t take part. Yours is a sad and desperate position.

    Like

  17. Mr E says:

    Robert you have missed the point. In any democracy there are rules. Rules to discourage bad behaviour. You have been warned repeatedly and even now continue to get deleted.

    Acting like a cry baby does nothing for your image Robert. Unless of course that is the image you wish to portray.

    Ele, owns this blog, and she has the most liberal standards for blog commenting that I have seen. Indeed, she allows unregistered commenters to contribute, where your own blog restricts this activity.

    Robert, you have been blocked from other blogs, now you are in moderation here, don’t you think you should contemplate your behaviour?

    I’d hope that blaming Ele, will do little for your circumstances.

    Like

  18. robertguyton says:

    She also allows anonymous commenting from people such as yourself, Mr E, too frightened, too lacking in backbone, to use their real names. If we were to meet in the real world and you failed to announce that you were in fact, Mr E, I’d be disgusted by your cowardice. Imagine standing there, hiding that. That would be despicable. Your thoughts, Mr E?

    Like

  19. Ray says:

    “Keeping Stock did this to me also. He ended badly.”
    No he did not.
    KS is a man willing to risk his capital and much more to start a business and advance his and his family’s prospects in this life. He provides employment for others, and there is much to be admired for this, and his approach to the welfare of others.
    He closed his blog for business reasons and with dignity, it did not “end badly”.
    There is nothing to be admired in your contributions anywhere, Mr Guyton, and you flatter yourself if you think anyone, including KS, cares about your perceived “unfair” treatment.
    You present as a bitter individual without wit or intelligence, who seeks revenge on those who fail to recognise your genius.

    Like

  20. Mr E says:

    “Dave and his party don’t like to see a wealthy individual ostensively buying himself votes. It doesn’t fit with their values at all. Oh wait, unless he can do what they (frustratingly) couldn’t, and dent the National Party’s lead!! What values?”

    Tracey – I couldn’t agree more. In my eyes the left have lost nearly all of their so called ‘principles’. Greens and Labour won’t rule out a coalition with the IMP party. A party that is formed on the finances and basis of fighting extradition for one man. A convicted criminal that has moved from country to country, and now hides here from foreign accusations. In my view, it is quite simply, bribery of politics. A disgrace.

    But somehow the likes of David Cunliffe thinks that politicians communicating with bloggers represents the worst political behaviours ever. He accuses National of dirty politics on the basis of circumstantial evidence, even hearsay.

    The simple truth is, the dirtiest of all politics is coming from the left. They’re open to an obvious perversion of politics in considering Kim Dotcom’s bribery, and they’re spewing out promises of policies they know they just can’t keep. It is abhorrent in my opinion.

    Like

  21. robertguyton says:

    [Deleted – off-topic. I hesitated about allowing your comment @ 7:13 last night, not for what it said about me but because it would open the door for your continuing vendetta against someone else which is what this deleted comment was.

    With any freedom comes responsibility. This is my blog and my rules. I tolerated your trolling, spam and off-topic comments for far too long. Much of what you write isn’t discourse but diatribe. Too often it’s not conversation but bile. I allow that and I allow people to use pseudonyms leaving it to readers to draw what conclusions they will.

    But I am not going to tolerate trolling, spam, side-tracking discussion and using this as a vehicle for personal animosity against someone else.

    Moderating your comments is a pain because it means I have to think about them rather than ignoring them but I will continue to do it until you show you can abide by my rules.]

    Like

  22. Mr E says:

    My thoughts Robert?
    I’d guess at least 90% of commenters do it anonymously. Your own blog, riddled with anonymous commenters – last time I checked. Cowards?
    You even come here promoting the views of other anonymous commenters. Those ‘cowards’?!!!!
    I also wonder if you chastise BSprout when he comes here? Your leader, Coward?
    And I’m wondering it I am speaking to Robert, or Sandfly? or Goliath Frog as you are also known as? Cowardess in your eyes Robert?

    Chucking stones at those that using pseudonyms is going to keep you busy Robert. I’d imagine it would also mean a broken mirror.

    But go for your life. Don’t let me stop you.

    I’m here doing my best to abide by the rules. Un-moderated.

    Now where were we? CGT – that is right.

    CGT – Shameless tax on the family. Imagine all those that have invested their entire lives expecting to retire on those investments, now Labour will take a good chunk of that away.
    But that is fine – rather than being self supporting as many can be – The Government will prop them up, with state houses….
    Wait a minutes – isn’t that an endless circle of government interference?
    Such is the left. A self perpetuating disaster.

    Like

  23. Paranormal says:

    Yes Mr E, back on thread, CGT is a disaster waiting to happen.

    State radio had an interview with the founder of Scope Industries yesterday on 9 to noon. It was a fascinating view of industry in New Zealand. He painted the picture of the unintended consequences if a CGT is introduced. RG et al on the left you would be wise to listen to it if you value New Zealand based productive industry. It will cost us jobs, revenue and IP for a start and have a huge long term detrimental impact on the economy.

    As for the Greens RG, they’re involved in the filthy game of politics. You are incredibly naive (or perhaps not naive but willing to dissemble for the cause) if you think they are able to waltz across the mire and remain lily white. There’s been enough come out already that has proven they’re down in the dirty under the new leadership.

    Like

  24. TraceyS says:

    It frustrates me getting patted on the head and told condescendingly “it’ll all be fine – we’ll look after the family home”. David Cunliffe is good at doing this but he is unconvincing as he peers out from under his eyebrows like a critter stuck under a rock. The trouble is Labour asks us to believe that they pull all the strings when they don’t. So there will be carnage, most definitely, because they don’t control the reactions or behaviour of people.

    Whatever anyone thinks of the parties on the right – they’re the only ones that understand this!

    Like

  25. TraceyS says:

    complicated, complex, costly, carnage

    Like

  26. Mr E says:

    David is trying to take us for fools Tracey. And perhaps that explains some of his last dwindling support?

    David thinks he can run out policy without detail, and people will gobble it up and following the pied piper. But John Key called him out. And good on him. Turns out that David doesn’t know the detail, such is his condescending entrenched view of constituents intelligence.

    Perhaps I am wrong, perhaps he simply doesn’t have the intelligence to retain such information?

    Regardless, it is a sad indictment of a wannabe country leader. Helen was well informed to keep him at arms length. Or was it a barge pole?

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: