Taxpayer Update: Nosey Parker's envy tax report 🤑💰 | Scrap the Ute Tax 🏹🛻 | Ruth Richardson on 'no solutions' budget 📰🎙️
Nosey Parker's Pet Project: The envy tax report 🤑💰
Last week, the IRD published its much anticipated report on high net wealth individuals. Their research project looked at the level of tax paid by just over 300 of the wealthiest New Zealanders. They carried out this project thanks to new investigatory powers handed to them by the Government that were snuck through under urgency a couple of years ago.
The report purports to show that these high wealth individuals pay half the level of tax on their income when compared to the average Kiwi. But the way the IRD defines 'income' in this report is very different to how you or I would define it. Most of us would think that this covers our salary and perhaps capital gains from selling an asset.
But the IRD have used the widest possible definition of 'economic income'. It suggests that all capital gains should be included even if they are unrealized. For example, if your house increases in value but you don't sell it, by their logic, you should pay tax on that increase. But you can bet you wouldn't get a rebate if the house price fell. Even more strangely, this measure of income includes things like 'imputed rents'. In other words, if you own a house and live in it, your taxable income should include the rent that you would pay yourself to live in your own home. Keeping up? 👀
Stretching the definition of income this far is what has allowed the report to magic up the figure that high net wealth individuals pay only 9 percent of their income economic income in tax. And in doing so, it has served David Parker's real purpose: To fuel the politics of envy and provide a justification – however misleading – to introduce some kind of capital gains tax or wealth tax.
The Prime Minister is being just as slippery. While he has ruled out such measures for this month's budget and the rest of this 'parliamentary term', his careful choice of words signals that something is on the horizon.
In short, the Government has essentially wasted over $5 million to produce a report that tells us something we already knew: We don't tax capital gains here in New Zealand.
Careful what you wish for: Killing the goose that lays the golden egg 👋🇳🇴🛫
In completely unrelated news, Norway recently increased its wealth tax (applicable to net wealth above NOK 1.7 million – approximately $250,000 NZD) from 1.0 percent to 1.1 percent and has seen an exodus of, well, the wealthy. According to that well known right wing newspaper, The Guardian:
A record number of super-rich Norwegians are abandoning Norway for low-tax countries after the centre-left government increased wealth taxes to 1.1%.
More than 30 Norwegian billionaires and multimillionaires left Norway in 2022, according to research by the newspaper Dagens Naeringsliv. This was more than the total number of super-rich people who left the country during the previous 13 years, it added. Even more super-rich individuals are expected to leave this year because of the increase in wealth tax in November, costing the government tens of millions in lost tax receipts.
That's right: The tax increase has actually resulted in less tax being available for public services. Given that the top 10 percent of New Zealanders already pay half of the total income tax take (not to mention the investment, jobs, and entrepreneurship we all benefit from), a wealth tax right would simply serve to wave goodbye to even more Kiwis across the ditch to Australia.
Is Labour credible on tax? Government tax hikes hit low and middle income New Zealanders hardest 💵🔺
It seems that some Cabinet Ministers didn't get the memo about 'no new taxes'. Within 12 hours of Chris Hipkins leaving the country for the King's Coronation, Transport Minister Micheal Wood hiked the Ute Tax!
To make matters worse, either Transport Minister, Michael Wood, isn't on speaking terms with the Finance Minister, or Mr. Robertson lied when he said just 12 hours before the Government hiked the Ute Tax that they would not be hiking the Ute Tax... Have a listen:
Scrap the Ute Tax: Government's reverse Robin Hood tax won't even cut emissions 🏹🛻
This tax will now set you back up to $6,900 to buy a new ute or up to $3,500 to buy one second hand. This will hit tradies and farmers hard, particularly those in flood-affected areas like Hawke’s Bay, East Coast, Northland, and the Coromandel. At the very least those needing to replace a ute due to flood damage should be exempted.
This reverse Robin Hood tax sees the money raised on hard-working low- and middle-income Kiwis used to fund subsidies for the wealthy who want to buy the latest Tesla.
And the worst thing is that – for all the virtue signalling – the policy does not actually achieve its own objective of reducing emissions. New Zealand's "cap and trade" Emissions Trading Scheme means that any reduction in transport emissions will simply free up New Zealand Units to be emitted by other sectors. So no net gain for the environment.
We are calling on the Government to scrap this unfair and ineffective tax. We are asking our supporters to register their opposition by signing the petition here.
Ruth Richardson: New Zealand set for a 'no solutions' budget 📰🎙️
Taxpayers' Union Board Member and former Minister of Finance, Ruth Richardson, has been doing the media rounds following the publication of the Nosey Parker report and suggesting that Chris Hipkins's 'no frills budget' in two weeks' time might better be described as a 'no solutions budget'.
Ruth spoke with Ryan Bridge on TV Three's AM Show about the hostile economic environment that this Government has created and the excessive levels of state spending. In the On the Tiles podcast with Thomas Coughlan of the NZ Herald she tears into the methodology used by the IRD's research project on high wealth individuals and warns that the report will be used to justify future tax hikes. And she spoke with Heather du Plessis-Allan on Newstalk ZB Drive about the problems that New Zealand has with a lack of earnings and capital, which will just be made even worse by a wealth or capital gains tax.
Starting them early: Youth Parliament costs increase fivefold 🗳️💸
Taxpayers’ Union recently received a tip off about how much the Ministry of Youth Development was spending on New Zealand’s Youth Parliament. With the honourable exception of Epsom, unlike most parliaments, these ‘representatives’ are not elected, but rather are hand picked by Members of Parliament.
Back in 2013, the cost for a two-day sitting of the Youth Parliament was $90,464.78 or about $112,000 in today’s prices. But 2022’s political shindig cost a whopping $451,500 to cover travel, food, accommodation and photographers.
As a former youth parliamentarian myself, I don’t begrudge a little being spent on engaging young people in our democracy, but a fivefold increase in the costs is simply unnecessary and inexcusable. Sadly it seems that the current model for the Youth Parliament is just as wasteful as the House of Representatives itself.
We previously uncovered spending by the Ministry of Youth Development of almost $300,000 on rather odd anime videos that seemed to have no point to them whatsoever. Given all this wasteful and unnecessary spending, it make you wonder what the point of the Ministry itself is.
If you know of an example of bureaucratic buffoonery from a government agency or council, send us a tip on our confidential tip line here.
Thank you for your support.
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Newstalk ZB Former Finance Minister predicts Labour's no-frills budget will present no solutions
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