Labour tax policy

[CCS]

I think the only reason it's complicated is because of your insistence that tax on an asset and income tax are intertwined as well as this idea that you need to tax the profit on the sale of an asset based on how it appreciated over time. I see no need for either of these. Remove these ideas and you remove the complication.

Originally Posted by Charismo'

I'm not a tax academic either

Then why am I talking to you?

[Golden Teapot]

Originally Posted by CCS

Why tax at the top rate?

It's a simplification that mostly works. It would be very complicated to achieve a level of equity that works in all situations.

There are many problems one of which is that really you should attribute the amount of the gain to each income year you hold the asset. But then what do you do? Have the person pay tax on an unrealised asset or carry forward a debt with interest are two options.

Typically the latter option is chosen and tax payment is deferred until the asset is sold. In a sense this is like getting a loan and so a margin over the normal tax rate is fair since this is a bit like interest on the loan.

You do have a point though and the solution often taken is to allow gains under a given threshold in any tax year to be free of tax. This isn't perfect but it is simple to calculate and this somewhat works for most people.

I guess the important thing about tax scheme design is that its best when tax is very easily calculated in most situations. It would be terrible if an ordinary tax payer needed the services of an accountant to work out how much tax they have to pay.

[Charismo']

Originally Posted by CCS

I think the only reason it's complicated is because of your insistence that tax on an asset and income tax are intertwined as well as this idea that you need to tax the profit on the sale of an asset based on how it appreciated over time. I see no need for either of these. Remove these ideas and you remove the complication.



Then why am I talking to you?

Not sure, I forgot that you need a career in tax to discuss tax regimes? By your own logic you should basically stop posting.

[CCS]

Now when did I say you need a career in tax?

[Charismo']

Oh, I'm sorry - you said "tax academic" which implies someone who works with or studies tax, and therefore would most likely have a career in tax.

Which is really rather absurd considering that you thereby exclude a large portion of people who will certainly understand tax issues quite well (consider: economists, accountants, lawyers, finance professionals, and people working in human resources and other related fields).

If you simply wanted Golden Teapot's answer, why didn't you just PM him?

[CCS]

Originally Posted by Charismo'

Oh, I'm sorry - you said "tax academic" which implies someone who works with or studies tax, and therefore would most likely have a career in tax.

That's not at all what I meant and you know it.

If you simply wanted Golden Teapot's answer, why didn't you just PM him?

Well how the fuck would I do that?

[Ab]

You shine a searchlight into the clouds with a silhouette of a big teapot.

[CCS]

Hot idea!

[Golden Teapot]

Gold not tin...

[Ab]

And from the "oh yeah, we forgot to mention one little thing..." department:

http://www.nzherald.co.nz/business/n...ectid=10741923

Work from home? You just made your family home subject to CGT.

Thanks Labour. Making telecommuting less attractive is a win for everyone involved. I'm sure the country will thank you.

[Golden Teapot]

People who have jobs are not the mainstay of the labour electorate. And, labour holds the view that everyone who doesn't vote for them should be paying to support the lifestyles of those that do. Collecting some more money from those who don't typically vote for labour is thus not surprising; in this case it's even delicious since this was likely the desert to be served after the election.

[Lightspeed]

*yawn*

[fixed_truth]

Originally Posted by Ab

Work from home? You just made your family home subject to CGT.

Thanks Labour. Making telecommuting less attractive is a win for everyone involved. I'm sure the country will thank you.

Correct me if I'm wrong, but we're not talking about much money here are we?

If your business is 10% of the total house floor area then you're looking at 1.5% off the capital gain. So even if you make a $100,000 gain you're only paying $1500. And I assume people aren't gonna be selling their house that often either.

[Golden Teapot]

Well it's nothing at all from most labour voters. And it's quite a bit of money from many others.

[Ab]

Originally Posted by fixed_truth

Correct me if I'm wrong, but we're not talking about much money here are we?

If your business is 10% of the total house floor area then you're looking at 1.5% off the capital gain. So even if you make a $100,000 gain you're only paying $1500. And I assume people aren't gonna be selling their house that often either.

Whatever amount it is, it is infinitely more than Labour is claiming:



Or is this another instance of "we haven't really worked out how this will work, but an Expert Group will probably sort it all out"?

I can't wait for the knots Labour will tie itself in the first time this is described as a "Telecommuting Tax".

[^BITES^]

Originally Posted by Ab

Whatever amount it is, it is infinitely more than Labour is claiming:



Or is this another instance of "we haven't really worked out how this will work, but an Expert Group will probably sort it all out"?

I can't wait for the knots Labour will tie itself in the first time this is described as a "Telecommuting Tax".

Expert group should totally start up a party imho.

[fixed_truth]

Well arguably this isn't part of your family home because you're claiming mortgage interest as a business expense.

But I agree that there should be an exemption for these types of businesses as it's not worth the effort for the minimal amount of tax here.

[Ab]

Originally Posted by fixed_truth

Well arguably this isn't part of your family home because you're claiming mortgage interest as a business expense.

And of course in a hypothetical world where Labour gets elected and passes this policy as law, every person who works from home will instantly stop deducting perfectly legitimate business expenses for fear of jeopardising the tax status of the family home (aka "small businesses will be fucked by this"), or complex home-ownership/lease/trust/business arrangements will be constructed by accountants to make this all go away (aka "more money to the tax avoidance industry, no money to the government").

Made of win.

[fixed_truth]

Originally Posted by Ab

every person who works from home will instantly stop deducting perfectly legitimate business expenses for fear of jeopardising the tax status of the family home (aka "small businesses will be fucked by this")

Why would they when what they get back each year from business claims (rates, insurance, power, phone, mortgage interest etc) is significantly more than a small CGT liability later on when they sell up?

[Ab]

Originally Posted by fixed_truth

Why would they when what they get back each year from business claims (rates, insurance, power, phone, mortgage interest etc) is significantly more than a small CGT liability later on when they sell up?

Is it? How would you know? You'd be paying an accountant to work that all out, right?

[fixed_truth]

Well 10% back on rates & power alone would be at least $350 p.a. - ie the same as a 1.5% CGT on $100000 after 4 years (btw a gain this huge would be highly unlikely).

A $100,000 mortgage = $600 mortgage interest refund p.a, $200,000 = $1200 etc etc

So yeah maybe if you have a low/no mortgage and expect to make a huge short-tern gain on your house then sure ask your accountant.

[fixed_truth]

Labour may be struggling in the polls, but its proposal to introduce a capital gains tax is proving to be a winner.

A 3 News Reid Research poll has found it is considerably more popular than National’s plan for asset sales.

Voters were asked which they prefer; partial asset sales or Labour’s capital gains tax.

53 percent of respondents said they preferred capital gains tax
31 percent said they preferred asset sales
16 percent said neither, or didn’t know

http://www.3news.co.nz/Kiwis-prefer-...3/Default.aspx

[fixed_truth]

Interesting commentary on the dim-post

So people want Labour’s policies, they just don’t want to vote for the Labour party. What’s going on?

Labour’s theory is that this is a case of false conciousness – the public has been tricked by Cosby/Textor, the right-wing corporate media, tory bloggers like Idiot/Savant and that evil and slippery John Key. But if that was the case then why haven’t the public been tricked into supporting National’s policies?

Here’s my theory: policies are important. But voters have a Maslowesque hierarchy of needs when it comes to supporting a political party, and policy is some way up that hierarchy. More important are factors like competence, trust and party unity. If voters think that a party or its leader is lying to them, or that the party is riddled with warring factions then no amount of popular policies will save them, especially when their opponents seem trustworthy, competent and united.

http://dimpost.wordpress.com/2011/08/24/fundamentals/

[crocos]

Seems pretty accurate IMO. I've often been a swing voter in the past, but the consistent, regular incompetence and inability to keep their house in order of Labour over the last few years makes me want to relegate them to the back benches.

[Saladin]

So vote Green. They're not going to win, so you don't want to worry about the looney element that's still there getting any power, but it'd be hilarious to see them get more votes than labour, giving them leader of the opposition title and seeing Phil Goff even further relegated.

[fixed_truth]

Originally Posted by crocos

Seems pretty accurate IMO. I've often been a swing voter in the past, but the consistent, regular incompetence and inability to keep their house in order of Labour over the last few years makes me want to relegate them to the back benches.

I think that both Labour and National have been pretty substandard this last term and it would be extremely difficult to quantify if there is any significant difference in administrative performance.

Policy is what determines outcomes (ie peoples lives) and so it's right up there on my hierarchy of importance.

[pxpx]

How do you get from "People prefer CGT over Asset Sales" to "People want Labours Policies"

I support a CGT, but I sure as f.ck dont support Labours proposed version of t, mind you I dont think national would do much better either.

[Ab]

Originally Posted by Saladin

So vote Green.

You fucking class traitor! You'll be first against the wall when the revolution comes.

[Fx.]

oh labour.

[Saladin]

Originally Posted by Ab

You fucking class traitor! You'll be first against the wall when the revolution comes.

Based on my income, if I'm a class traitor it's probably more for not voting National :P (Probably not in the ACT class given I'm not a billionaire)

[cyc]

Originally Posted by Ab

You fucking class traitor! You'll be first against the wall when the revolution comes.

Every time Clare Curran expresses a thought, the world becomes so much more stupid.

[fixed_truth]

Originally Posted by Ab

You fucking class traitor! You'll be first against the wall when the revolution comes.

You're just being misogynistic!

[cyc]

Originally Posted by fixed_truth

You're just being misogynistic!

This bitch also needs to go back to school. Her grammar and sentence construction is simply atrocious. Seriously, stuff like "It won't do either Clare or myself any favours but I will admit meeting Clare. In that short time I haven't seen so many true believers in the Labour cause. A more tireless worker towards the Labour cause. Someone who has put the Party at least on a level with her own life and family." is just appalling.

[IoriDyson]

such a fucking grammar nazi...