Say ‘No’ to Labour’s CGT

Chris Trotter really is opposed to Capital Gains Tax. Although a socialist, he made the valid point that the Kiwi way of life is one of the deferral of reward. We all work hard and expect the benefits to come later. CGT will take care of that attitude, and therefore will do a lot of damage to the kiwi psyche. I think he is right about that.

On his Bowalley Road blog, he says that Labour needs to drop the subject like the politically hot potato that it is, and accept that they have got it wrong. quote.

WHY CAN?T LABOUR take ?No? for an answer? When the party first offered voters a Capital Gains Tax (CGT) in 2011 they responded by giving Labour 27 percent of the Party Vote. Undaunted, David Cunliffe and his team doubled-down on the CGT in 2014. Labour?s Party Vote slumped to a risible 24 percent. Point taken?

For a while it looked as though Labour?s ears had started working again. Cunliffe?s successor, Andrew Little, moved swiftly (if unilaterally) to take the twice-rejected CGT off the table. Which should have been the end of the story. But, it wasn?t. Within Labour?s caucus there remained a tight little clutch of CGT supporters who simply refused to let the policy go.

That tight little clutch: led by the current Finance Minister, Grant Robertson; which recoils in horror at the very suggestion that Labour should tax the incomes of the very wealthy without mercy; remains absolutely convinced that taxing the local dairy owner?s capital gains will produce nothing but sweetness and light.

end quote.

Chris emphasises the point that I have already made, that with art collections, boats, mansions and racehorses exempt from the tax, a lot of wealthy people will be making tax free gains, while a small business that is sold for a relatively small capital gain will have to pay the tax. If that makes no sense to you, believe me, you are not alone. quote.

Jacinda Ardern?s unopposed election to the Labour leadership provided a huge fillip to the CGT promoters? club. With Little out of the way, the great crusade to tax the family bach could resume in earnest. 

What does it say about the Prime Minister and her Finance Minister that the very first thing they did following Little?s very own ?captain?s call? 
was to rush outside, pick up the discarded CGT, dust it off, and replace it reverently on Labour?s table? Clearly, Ardern and Robertson are not the sort of Gen-Xers who enjoy being told that they are wrong! end quote.

Jacinda’s startled reaction to the negative response the TWG’s report provoked tells you everything you need to know about our prime minister. It never enters her head that she could be wrong. She just can’t believe that so many people are not falling for the fairy dust this time. quote.

The Greens, however, are much, much worse. Co-leader James Shaw has declared that, if the 2020 General Election arrives and a CGT has not been enacted, then his party does not deserve to be re-elected. The problem which he and his party may be forced to confront is that if the CGT proposed by the Tax Working Group is enacted next year (effective in 2021) then the electorate may feel moved to give the Greens exactly what they deserve! end quote.

Oh please, let it be so! quote.

Which leaves the responsibility for demonstrating plain, old-fashioned common sense to the politician who has spent 25 years insisting that only he and his party possess it.
Winston Peters.

Bowalley Road end quote.

Time will tell with Winston, but my gut feel is that he will not throw it out all together. He may water it down, particularly for the benefit of his own support base, but he won’t get rid of it entirely. The only way for that to happen is for the Coalition of Losers to lose the next election.

Many supporters of CGT see it as a way of taxing the rich, which Jacinda tells us is ‘fair’. Making the rich pay more tax may well be ‘fair’, but please explain to me why a wealthy person in a Herne Bay mansion can sell a Rita Angus painting for a $100,000 profit and pay no CGT, whereas a florist who has earned about $40,000 a year from her business must pay CGT on the $30,000 capital gain she makes when she sells it. If that is ‘fairness’ in action, then I have misunderstood the definition of the word my whole life long. I’ll bet you have, too.