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Election Promises
It will be intersting to see how this all plays out come election time.
Labour’s tax plan sends ‘perverse signals’ – accountant
Published: 5:47AM Friday July 15, 2011 Source: ONE News
Labour maintains it has struck a fair balance with its new tax plans despite criticism it will encourage people to dodge paying, and lead to an exodus of the wealthiest New Zealanders.
Phil Goff announced his party’s tax plans yesterday which will target high earners and introduce a capital gains tax, if it wins the election.
The new tax threshold for high earners under a Labour-led Government would be 39% and will kick in for people on incomes of $150,000 or more. That’s up from 33%, and will affect about 2% of the population.
Labour’s plans also include a proposal for people not be taxed on the first $5000 they earn.
“Under this plan we hit surplus in the same year as National, we pay debt down to zero but keep our assets and promote growth by getting the tax incentives better for business rather than just property speculation,” Labour’s Finance Spokesman David Cunliffe told TV ONE’s AMP Business.
“Only about 1.7% people will be in the top tax rate, most people will get an improvement in their tax position,” he said.
Wealthy targeted
The Chairman of Accountants Price Waterhouse Coopers, John Shewan told AMP Business the plan unfairly targets the better off.
“To me this package sends a signal that if you’re in the top 10% don’t hang around,” he said.
“We talk about fairness, it’s probably not well known that half of New Zealand households pay no net tax at all, the top 10% pay about 60% – 65% of net tax and the top 2% pay over 20%. In terms of fairness we’re saying that very top group needs to pay more? To me that sends some very perverse signals.”
He said Labour seems to have ignored most of the advice it was given by the Tax Working Group and believes its strategy would get a mark of “three out of 10” if it was to be reviewed by the OECD.
And Prime Minister John Key said Labour’s proposed tax strategy will encourage more people to rip off the system.
He said high earners could get around paying by putting some money into family trusts, which are taxed at 33%, and declare lower incomes.
But Cunliffe said Key seems to be scared of any new tax, and is even out of step with his finance minister on the issue.
“Some critics like Bill English say the problem is it’s not comprehensive enough – it doesn’t tax everybody,” he said.
“(But) John Key uses the Chicken Little argument ‘the sky is falling in, he’s never seen such a big bad tax’, I think the Government needs to decide which side of the argument it’s on.”
Cunliffe said he was not afraid of wealthy Kiwis moving away from the country.
“You might go to Australia where the tax rate is 46 cents in the dollar, not 39 as we’re proposing, or where the Capital Gains Tax is 33 cents at the marginal rate not 15 cents… I don’t think so.”
“We think we’ve hit a fair balance here. Most people won’t pay the (capital gains) tax, probably only 8% of New Zealanders in a given year. There’s no retrospective component, the family home is exempt and personal property is exempt. We’ve even got Canterbury out of the net for the next five years after the election.”
Goff said the capital gains tax rate will be 15% – as revealed last week by ONE News – and will cover property, shares and business investments including farms with an exemption on all real estate, land and buildings in the Canterbury quake zone for at least five years.
The tax would raise $26 billion over 15 years, Labour said, and would be introduced from April 1, 2013. It will not be retrospective, meaning people would pay tax on any gains after the introduction of the tax. To find out more about Labour’s tax plans click here .
Labour is pitting its tax plan against National’s state asset sales policy ahead of the November 26 election.
Goff said the tax changes would tackle the country’s debt and state assets would not be sold off.
Good News!
NZ property sales pick up in June
Now this is good news for those on the market or about to put their home on the market!
RAY WHITE RICHMOND SUPPORTS OUR OUTSTANDING YOUTH
RAY WHITE RICHMOND SUPPORTS OUR OUTSTANDING YOUTH
Aside from various charitable trusts we donate too, such as the Ronald McDonald House, The Cancer Society, Hospice and the Epilepsy Foundation, at Ray White Richmond we acknowledge that there are some outstanding young athletes with so much potential trying to get to the next level in their sport.
The majority of these young people do not recieve financial assistance from their sporting codes, yet they show such commitment, passion and enthusiasm for their chosen fields, with the genuine potential to advance.
In order to ensure they reach their potential, we at Ray White Richmond are constantly on the look out to sponsor young athletes with the desire to succeed.
So far this year our office has sponsored several up and coming school age athletes.
Tom Nicolson has been selected to ride for the New Zealand Junior Road Cycling Team in Canada.
Laura Wehner has been selected to compete in Brisbane in a high level Tennis Tournament. At just 15yrs old Laura has won the Wellington Woman’s Club open category for two years running. Flying to Wellington on a weekly basis to compete.
Tom Filmer has been selected to represent New Zealand at the Junior World Mountain Biking Championships.
We have also sponsored Joel McMillan who is cycling for a team in France, and we continue to sponsor George Bennett.
George in now riding for Team Livestrong in the U.S.A and has recently competed in Europe with some very good results. Team Livestrong is a development squad of young riders to feed the Radio Shack Pro Team that is currently competing in the Tour De France.
It is inspiring to see that our community is fostering such great talent, athletes that are representing our country. Well done to you young athletes as well as to those parents who give support. It’s a satisfying feeling to be able to assist these young athletes in any way possible.
Good luck to you all… remember… ‘the harder you work – the luckier you get!’
Brent
