Examples of Coalition government?s ‘Fairness’

Bob and Jim

By Owen Jennings

Brothers Bob and Jim are left $25,000 in their parents’ will. Bob goes on holiday, spending his inheritance offshore to no one?s benefit but his own. Jim starts a business, employs staff and pays them well, grows the business into a medium-sized company, donates to local causes, pays company tax every year and then decides to sell. Capital gains taxes take a third of his proceeds. Yep, that sounds fair.

Spend it ? don?t invest it.

Pam & Jean

Pam and Jean both work in a professional office in the city. They earn above-average salaries and both pay tax on their income. Pam enjoys the good life, parties most weekends and rarely has any accumulated surplus. Jean lives comfortably and is a good saver. She buys her own apartment and then buys a house in the suburbs because her parents needed rental accommodation. Her parents pass away and Jean sells the house to a young couple seeking a first home. She loses a third of the proceeds to the government. Yep, that?s really fair.

Live it up and forget about helping your family.

Jack is a bit of an inventor. He spends hours trying to perfect an idea that will improve wheelchairs for the disabled. He needs capital to launch the idea. His uncle is well off and invests in the deal for 60% of the shares. The business is a success, sales take off all around the world and profits soar. A large international company buys them out but Jack and his uncle get hit with capital gains tax. A third of their reward from the ingenuity and hard work building the business goes into the government coffers for the likes of cabinet ministers to buy themselves votes at the next election. Yep, you gotta say that?s fair.

Don?t bother being an entrepreneur ? the state doesn?t want innovation any more.

Mary and Alan are sharemilkers. They work long hours and save hard. They own a couple of herds and keep expanding. Then later they buy a farm. They are smart. They set aside some wetland and native bush into a covenant for the good of the community. They plant up the stream through the property with manuka to stop leaching and provide honey for sale. They use natural fertilisers and win awards for good practice. The farm grows in value through their efforts and desire to do the right thing. Then Alan has a motorbike accident. They are forced to sell the farm to help with Alan?s health issues. The government helps themselves to a third of the sale’s proceeds. Yep, that sounds pretty fair?

Forget hard work and trying to be a leader in your profession ? the government will whack you.

Terry started saving when he was at school. With help from his family, he bought his first rental home at age 18. He was very careful with his money, understood leveraging and set about building a strong relationship with his bank. At age 22 he bought his second rental unit, moved in for a few weeks and did it up, renting it out to a needy but reliable solo mum. By age 30 he had six rentals. He was a hands-on landlord, priding himself on having the best tenants and looking after them well. When he hit 40 he had doubled his holdings and paid down a heap of debt. He prided himself that although his tenants all had issues that meant renting was their only option he was committed to helping them.

Single men with a strong asset portfolio don?t stay single forever. Terry married a horse loving woman and they decided to shift to the country. Selling his rentals was the obvious way to go but he was shocked to find a third of his carefully built savings went straight to the state. Yep, Jacinda, that is really fair isn?t it. Doesn?t even deserve a conversation.

Just label all landlords as ?rich pricks?.

The nub of the problem is the socialist?s notion of fairness.
There is a whale of difference between fairness and equity. Any government?s primary role is to enable its people the maximum opportunity to pursue their own happiness and well being. It is not the state?s role or the elected representative?s business to impose its own interpretation of happiness and wellbeing on its people.

Socialists want everyone to finish life?s race at the tape together ? that is their definition of ?fairness?. To do so requires penalising the ambitious, the entrepreneurs, the creators, the innovators, holding them back by taxes and regulations so the slowest and least motivated can maintain the pace.

It is more equitable for all ? go getters and the least privileged ? if the state focuses on everyone having equal opportunity to start the race. Its equality of opportunity not equality of outcome that produces the most happiness for the greatest number. Fairness occurs because the fastest pull the slowest along, even without trying ? something a socialist can never get their mind around.

Sadly, ?fairness? is the smokescreen. It is projected as a panacea for all economic and social ills. James Shaw, whose understanding of basic economics is embarrassingly absent, proposes that CGT will fix all the Coalition’s problems. Such inane puerility should be ignored.
The smokescreen is used to cover the expanding tax grab, the lust for more revenue and the overwhelming fire of envy that consumes the left.

A reasonable government would begin its management by seeking ways to reduce expenditure, clear debt and lower taxes, not hunt for new and suspect ways to raise new taxes.

Maybe Cullen, in his haste to attack ?rich pricks?, has done us a favour by overkill. We are now in Winston?s quixotic hands. Will he simply water down Cullen?s viciousness and claim himself the king of compromise leaving us a tangled web of regulations and exemptions at a lower rate or does he have a remaining vestige of courage and common sense to kick the whole devastating package into touch? Now that would be ?fair?, yep, really ?fair?.

Postscript: The examples used are based on real life situations known to the author with fictitious names and predicted outcomes.