Labour tax policy

[cEvin]

Key points:

* The top tax rate goes up to 39 per cent for those earning more than $150, 000

* A capital gains tax at a rate of 15 per cent

* It will not apply to the family home. The main residence on a farm will be exempt but not the land

* Personal use items like boats and electronic goods will be exempt as are collectables like jewelry or antiques

* Withdrawals and payouts from retirement savings funds like Kiwisaver are exempt

* Real estate in the Canterbury Earthquake Recovery Authority zone will be exempt for five years

* Small businesses held by over 55s and held for more than 15 years will be Tax free for the first $250,000 of capital gains

*The first $5000 earned is free from tax

* GST will come off all fresh fruit and veg

[cEvin]

Most of it actually seems pretty decent to me, i'm not usually a huge labour fan. I'm down with the 150k tax and the gst off fruit/veg~

[Waldo]

Originally Posted by cEvin

Most of it actually seems pretty decent to me, i'm not usually a huge labour fan. I'm down with the 150k tax and the gst off fruit/veg~

I think the GST off fruit & veg is more troublesome than its worth. I would like to read more on the farm land tax brief as well.

[Cyberbob]

GST-free particulars would be a nightmare IMO.

Rest sounds very good to me.

[CCS]

What is the top tax rate currently?

[blynk]

I like the sound of GST of Fruit & Vege, but agree it will be an interesting one. The implementation, & what defines Fruit & Vege. And if they are doing that, why not fresh meat & seafood as well?

I think they wimped out on the CGT at only 15%, but do like how they added somethings around the Small Businesses & Farms.

I don't care if this takes time to build up before a money starts flowing into the government. It builds for long time gain, rather than just short term gain from selling assets

[BoyWonder]

Originally Posted by CCS

What is the top tax rate currently?

33% for 70k +

[Lightspeed]

Originally Posted by Cyberbob

GST-free particulars would be a nightmare IMO.

Rest sounds very good to me.

Yeah, pretty much.

[^BITES^]

Originally Posted by CCS

What is the top tax rate currently?

Shit. :P

[TD]

The capital gains tax isn't retrospective (someone correct me if I'm wrong) so it won't bring in any significant amount of money for years to come, and very few people earn over $150,000 a year.

With the first $5000 income of all people tax free, Labour is basically offering tax cuts at a time when NZ has its biggest deficit in its history.

I can't believe they spun this as an alternative to selling assets. Their tax policy doesn't replace selling assets to pay down debt at all, it will increase debt and take many years before the CGT catches up to their tax cuts.

[Juju]

Originally Posted by cEvin

Most of it actually seems pretty decent to me, i'm not usually a huge labour fan. I'm down with the 150k tax and the gst off fruit/veg~

So what about frozen veg? Frozen chips? For some the only processing they get is cutting into chip shapes - but they are still vegetables.
What about vege smoothies like at those juice bars?


You can see why excluding GST from certain items can get very messy in a legal sense.

[Juju]

Originally Posted by NZH Article about the Tax Plan

He said under National, New Zealand was "drifting without a plan" with debt out of control, a poorly performing economy, and record numbers of New Zealanders leaving the country for good.

Originally Posted by another NZH Article

New Zealand's economy kicked off 2011 with a bang, growing at twice the forecast pace and the fastest since December 2009 as a resurgent manufacturing sector drove the nation's revival in the face of Canterbury's earthquakes.

Yup, that economy is performing pretty poorly.

[Deadmeat]

The GST on fruit and veg is daft, it'd be a nightmare.

15% CGT seems kind of half hearted.
TD: From stuff article:
The CGT will exclude the family home and is estimated to raise $78m in the first year rising to $2.27 billion by year 10.

[xor]

Originally Posted by TD

With the first $5000 income of all people tax free, Labour is basically offering tax cuts at a time when NZ has its biggest deficit in its history.

Yes, but that coin will go into circulation which is good yes?

[Ab]

If having coin in circulation is so good, why not cut taxes on everything?

[xor]

Originally Posted by Ab

If having coin in circulation is so good, why not cut taxes on everything?

Why not indeed?

[cEvin]

Originally Posted by Juju

So what about frozen veg? Frozen chips? For some the only processing they get is cutting into chip shapes - but they are still vegetables.
What about vege smoothies like at those juice bars?


You can see why excluding GST from certain items can get very messy in a legal sense.

personally i would say anything fresh/unprocessed and made in nz should be exempt. not tinned, frozen, juiced. hopefully the makers of those products could pass on some sort of savings though?

[A Corpse]

Because rich people don't spend as much of that coin. Only poor people do.

Fuck the GST exemptions. Pain in the arse.

So few people earn over $150k/year that that 39% bracket won't pull in much at all. Especially since many of those people will just have accountants that make all that money magically not exist and avoid the tax anyway.

[blynk]

Originally Posted by Juju

So what about frozen veg? Frozen chips? For some the only processing they get is cutting into chip shapes - but they are still vegetables.
What about vege smoothies like at those juice bars?

You can see why excluding GST from certain items can get very messy in a legal sense.

An independant body/agency, that defines what food is, and what food is not.
The other option is to add a location to it. Supermarkets, food markets etc, yes.
McDonalds selling some crappy little bag of apple slices. No.

[Juju]

(In reply to cevin) Problem is - what is "processed"?

Washed potatoes could be considered processed.
As could strawberries in a punnet. If you disagree, then I would imagine that the vacuum sealed corn on a cob I bought the other day would be considered processed - yet it's gone through the same ordeal as the strawberries?

Not having a go at you - just highlighting that when it comes to food... there is a lot of ambiguity which is hard to define in a legal aspect.

[chubby]

as a resurgent manufacturing sector drove the nation's revival in the face of Canterbury's earthquakes.

Originally Posted by Juju

Yup, that economy is performing pretty poorly.

so whats next for our disaster economy?
white island?

[cEvin]

Originally Posted by Juju

(In reply to cevin) Problem is - what is "processed"?

Washed potatoes could be considered processed.
As could strawberries in a punnet. If you disagree, then I would imagine that the vacuum sealed corn on a cob I bought the other day would be considered processed - yet it's gone through the same ordeal as the strawberries?

Not having a go at you - just highlighting that when it comes to food... there is a lot of ambiguity which is hard to define in a legal aspect.

ok then lets say:

more than 1 ingredient - no good.

packaging - doesn't matter.

food that has been cleaned - fine/normal.

refined food - might start to get difficult with this, but mostly no good (can't think offhand of something acceptable but there probably is).

[crocos]

Originally Posted by cEvin

refined food - might start to get difficult with this, but mostly no good (can't think offhand of something acceptable but there probably is).

Flour? Breadcrumbs?

[cEvin]

fruit and vegetables

maybe potato flakes or something like that, but surely they're have additional ingredients.

[Furry Crew]

iirc
79% of tax collected in NZ is payed by the top 10% of income owners.....this will push it even higher.

Some say that's fair, some say that's not fair at all.

Think about it.....the truely rich people in the 150k++++ tax bracket do not even pay 33% after all the creative accounting is done and still they're paying 79% of tax in the country. It's all about owning a business and or being in a partnership/firm of some sort.

The only people that's going to get taxed more are people like high level specialist doctors in our public heath system that are given more incentive to bugger off overseas and get paid $$$ more for their skills.

How do you tax Multinational companies local CEOs when they're paid overseas and in stock options to a Cayman Island bank account?

Hey atleast the PM and half the MPs will have to pay the higher tax LOL....that's about the only funny thing about hiking the upper tax bracket

[Furry Crew]

As for no GST on fruits and veggies how about this.

I Open a fish and chip shop....I advertise as selling raw potatoes but if you buy more than $3 worth I cook and prepare it for free....I've just dodged GST on buying fried chips.

Or how about this.
I open my orchard up for people to come pick fruit and sell @ X $$$. Now I run a promotion that if you bring X number of buckets to the counter of the fruit you just pick, you can pay for the fruit (without paying GST) but I'll swap you for some home made jam! Yet again I've dodged GST.

Exception just create loophole like that for all sort of people to abuse.

[leadinjector]

the gst thing is a fucking stupid idea designed to appeal to stupid people. look at aussie if youwant to see why selective GST is a horrible mess, its all lobby group bullshit and at the end of the day its small businesses that end up getting the fuck in the ass. no thanks.

as has been said the top tax rate hike is only going to affect people like doctors, as if any CEO pays much in tax anyway. again, pandering to the "damn them rich fuckers takin all ur munnay!" when THEY are the ones who fund the country, not slack jaw mcgraw on 20k a year whos contribution is sweet fuck all in comparison.

oh, and

* Small businesses held by over 55s and held for more than 15 years will be Tax free for the first $250,000 of capital gains

can someone explain what the fuck this is?

[Rocket]

Lead: protecting early retirees?

there go ya cheap vehicles

[JP]

About fucking time. Closing loop holes is also vital, no point in raising the tax on the rich if they already paying far below that rate anyway (which most will be).

The attitude of the rich is that taxes are for the poor (which includes the middle class most certainly).

[Deadmeat]

Originally Posted by leadinjector

can someone explain what the fuck this is?

Throwing small business owners a biscuit so they don't fell completely reamed by a CGT and immediately flock to n/act is my guess.

[Golden Teapot]

It's sad to realise that there are people who suppose that the removal of GST will result in lower prices.

[cyc]

Originally Posted by Golden Teapot

It's sad to realise that there are people who suppose that the removal of GST will result in lower prices.

Haha exactly. The "passing on" theory has been old news for ages. Look at how well the predictions on the proliferation of cash discounts went after the Commerce Commission settled with Visa and the banks and banned contract terms prohibiting retailers to charge for the use of credit cards.

The GST free veges idea? Retarded and pointlessly adds complexity to the ONE tax that's almost impossible to dodge.

First $5,000 tax free? Another stupid idea when there's a huge budget deficit and zero plan to reduce it. Both parties need to get off the bandwagon of using reduction of tax as a carrot to fool people that the pie which never grows will actually get bigger. The reason why we don't have money to spend is because this country earns shit fuck all. Do something about that instead.

The capital gains tax? Good idea in theory but absolutely doesn't go far enough. Why exempt small businesses and why specifically protect babyboomers' assets? Also, why not specifically target the residntial property wetdream for some socking to direct money to, for example, the capital markets instead? Still, at least someone is waking up to the fact that we need a CGT. Credit to Labour there.

Increases in income tax? I support it in theory but Labour has shown zero ability to close tax loopholes in the past. Look for the accountants and lawyers to be busy at work -- very few people will pay at the top rate. More show than anything else.

All in all, the policies are a big, fat fail.

[fidgit]

Originally Posted by cyc

The reason why we don't have money to spend is because this country earns shit fuck all. Do something about that instead.

Hear fucking hear, but... suggestions?

The capital gains tax? Good idea in theory but absolutely doesn't go far enough. Why exempt small businesses and why specifically protect babyboomers' assets? Also, why not specifically target the residntial property wetdream for some socking to direct money to, for example, the capital markets instead? Still, at least someone is waking up to the fact that we need a CGT. Credit to Labour there.

Ha! This was a Green's policy long before it was picked up by Labour. That's why some of us keep voting for them, 90% crazy shit, 10% what the country actually needs. They're small enough to not do much damage, but loud enough that the good ideas eventually seep into the Big Two. (Ok, sure, they didn't invent CGT, but they pushed for it when Labour wouldn't go near it for fear of scaring away voters).
The reason they won't touch small businesses or baby boomers assets is surely the same reason nothing of any use will change in the next 20 years - the baby boomers control the votes. Do too much to upset them and you don't have a shot at anything.

All in all, the policies are a big, fat fail.

Sure, but they're not going to get voted in without a lot of other things changing first. This at least gets people talking about the idea out loud and actually considered, rather than just brushed aside as a wacky Green's plan to fuck rich people.


Also fwiw, the anti-removing-GST brigade here has managed to persuade me that that's a stupid idea. Good work on your rational arguments

[TD]

Originally Posted by xor

Why not indeed?

Have you heard of a country called Greece? They spent money they didn't have and thought taxes were optional. So far it isn't working out to well for them.

[fixed_truth]

Yep their CGT does lack a bit of bight (moar taxes please lol) but if the BERL projections are correct then it will balance the Govts books without having to 'partially' sell assets. (& if the theory is right there will be movement away from property investment)

Half the revenue from the new taxes will fund the new tax cuts so that's no biggie though I would like to see Labour release how they're gonna close tax loopholes as they've gone on about tax avoidance and evasion in the past.

Capital Gains Tax vs Asset Sales oversimplifies things but it'll probably play out in public (general) like this before the election.

[Lightspeed]

Originally Posted by JP

The attitude of the rich is that taxes are for the poor (which includes the middle class most certainly).

Yeah, I think it's that same attitude that thinks its sad or laughable that people don't have the elevated level of understanding they do. An attitude that is very apparent amongst some on this forum (and very page even!)

[Ab]

Originally Posted by leadinjector

can someone explain what the fuck this is?

Baby-boomer bribe.

[Ab]

And again from the "looking after your core constituents" department...



Income from gambling is exempt.

[MrTTTT]

CGT sob story #1

http://www.nzherald.co.nz/business/n...ectid=10738564

Millionaire disgusted by nasty tax!!!!!!

[blynk]

Originally Posted by Ab

And again from the "looking after your core constituents" department...



Income from gambling is exempt.

Thats good. You can't be taxing the Lotto.