Absolutely great read from Bernard Hickey on Hipkins’ wealth tax announcement and the treasury report released yesterday:
That’s it. It will now be almost impossible for a wealth or capital gains tax to be implemented within the next decade or two.
The future of Aotearoa’s political economy will now remain frozen in its stagnant, unequal, unjust, unproductive and unhealthy state for the forseeable future. That’s what our leaders, and ultimately the only voters that matter, have decided. Those hoping to change that frozen landscape should now look after themselves and their families, and/or hope and work for an electoral miracle that gives parties who want such taxes dominant positions in any post-election negotiation.
That seems to be his thing, yes but there’s a lot to it. Capital gains tax and inheritance tax would fit the bill of taxing the earnings.
But really the end goal is to not allow enormously concentrated wealth to accrue in the first place because it completely fucks up society and the power that comes with it makes it self-reinforcing.
The only serious proposition for wealth taxes right now are very small rates (the wealth tax labour was apparently kicking around was 1.5%) and would only kick in at amounts above what the vast majority of people will ever see in their entire lifetimes.
The fact that would provide massive amounts of desperately needed funding for schools, hospitals and other public services shows how fucked up the balance of wealth in this country is.
Inheritance tax isn’t taxing earnings, it’s more like taxing a gift. Someone has built that wealth, paid tax on those earnings, and now that they want to pass that onto their children, the government wants another bite.
It’s wrong, in my view. The underlying principle is wrong.
That’s true to a point. The solution is to make it kick in at amounts above what most people will pass on and as a result you prevent dynasties forming that damage society and over time, amass so much wealth that eventually mean others can’t build up anything to pass on to their children.
Being against inheritance taxes outright is actually worse for the outcomes you want.
I’m also not a fan of this type of thinking either. If it’s wrong to do, it’s wrong to do it to anyone. The whole “it’s only x% of the population” argument just makes me uneasy.
It’s literally how our tax rates work
What percentage of the population pays some form of income tax, would you say? I’m not sure how you think the two are comparable.
They’re comparable because they’re both applied progressively. Income tax rates scale at higher income points. Wealth tax, inheritance tax, whatever it is. If they’re set to kick in at a certain threshold everyone pays the same amount up to that point - zero.
If only 0.whatever% of the population paid income tax, you’d have a point.
When I earn money I pay taxes on it. When I spend that money the business takes money that I already paid taxes on and also pays taxes on top. Apparently there is nothing wrong with double taxation.
Those are two separate transactions, of course they are treated differently.
They pay taxes on the profit, unless you’re talking about GST.
Just like inheritance.
That too. Let’s put that in the mix.