When ‘paying your fair share’ becomes theft.

Leighton Smith hits a nerve with his latest article. What exactly is fair about taxation? All tax policy ends up hitting those in the middle the most. They are the ones who pay most of the income tax, a fair chunk of GST, and most of the taxes on investments and superannuation. They are the ones that own lifestyle blocks and holiday homes, including family baches. While the mantras about the rich paying the lion’s share of taxation always exist, really wealthy people can often structure their affairs into other entities, possibly offshore, that can give them worthwhile tax breaks.

So don’t believe the claim that it will be very rich people who will be paying the bulk of the proposed capital gains tax. It won’t. quote.

Why is it that tax systems must be rearranged so frequently? You would think that those “experts” with a handful of degrees in economics, history, physics, politics, and yes, communications, would by now have been able to establish a system reliable and flexible enough to last, if not forever, then for a lifetime or two.

There is a rule for interviewers that is considered golden. Never ask a question you don’t already know the answer to. Transfer the principle and you get “appoint the members of the Tax Working Group” according to the results you are after. So with Michael Cullen always wanting a capital gains tax, you can bet the house on the recommendation. You can then count on social taxes like congestion charges, and emission tax upscale. end quote.

Appointing Michael Cullen as the head of the TWG predetermined the outcome. A capital gains tax is recommended because the TWG claims that it will make the tax system ‘fair’. quote.

What on earth does that mean, “pay your fair share”? It means nothing, and there is nothing stopping any individual, ultra wealthy or not, from giving Inland Revenue however much they want.

In the US the richest 20 per cent pay 87 per cent of all income tax. The bottom 40 per cent end up getting money from the government. It is not dissimilar in New Zealand.

So, back to the question of governments and tax systems. The best is a simple, uncomplicated regime that is difficult, if not impossible, to avoid. With serious consequences for miscreants. The reason we don’t have such a scheme, I suggest, is because of politics and greed. Governments have a voracious appetite for both money and power, and the former can buy the latter. Every election involves bribery.  end quote.

Yes, and sadly, socialist governments always end up increasing the tax take, whether they need the money or not. This government is no different, but they are determined to introduce a CGT because it is part of their ideology.

The biggest problem that you have with taxation policy is watching people’s eyes glaze over. In spite of how much taxation affects all of our lives, people know remarkably little about it and do not take an active interest. This makes getting the arguments out against CGT very difficult. There is a general perception that it will only be very rich people that pay CGT, so that is okay then. This belief is fundamentally wrong. Many people think CGT is fine because it won’t happen to them. This is also wrong. quote.

Unfortunately, we in New Zealand could be returning to the ideology of the politics of envy. The introduction of any tax policy that enriches the accounting industry is bad policy.

A Newspaper end quote.

Capital gains tax is the politics of envy. Those that have worked hard and built up assets (with tax paid money in most cases) deserve to be taxed again, and the money redistributed to those who do not work. How exactly that equates to ‘fairness’ is totally beyond me.

Leighton refers to Robin Hood in his article, but this overlooks one thing. Robin Hood robbed from the rich to give to the poor. Capital gains tax will rob the middle classes and give to the indolent. The politics of envy will never make a country richer in any way, shape or form.