this post was submitted on 14 Sep 2023
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Economists' analysis rubbishes National's foreign buyers tax numbers (www.rnz.co.nz)
submitted 1 year ago by [email protected] to c/[email protected]
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When the details of this policy were released, it really didn't pass the sniff test. It seemed to rely on a huge increase in foreign buyers, above pre-ban levels, and ignored any potential reduction in sales due to the tax itself.

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[–] [email protected] 3 points 1 year ago (1 children)

There's something really icky to me about drawing a line in the sand, and saying "this is enough to own, but no more". It's something that has led bad places when it's been tried elsewhere.

I also feel tax should be paid on earnings, not what you own, but at least the start point means most retirees won't pay it.

[–] [email protected] 2 points 1 year ago

I actually hear you on both points. Here are my counter arguments:

  • It isn't a "you can't have any more" situation, because they do not take 100% of everything above the threshold. A better way to think of it is "you have so much we ask you to contribute a bit more to society to help everyone". Or perhaps "you are so privalaged you can afford a little extra to improve the society you benefitted from". Remember it's 2.5% on assets above the threshold only.
  • I actually agree with you, I prefer a CGT for this reason. Capital gains are a form of income, and the fact they aren't taxed like regular income is, in my opinion, criminally unfair. However, it is not because of some fundamental philosophical position that only income can be taxed, it's more practical. I can imagine a situation where someone loses their income, but has inherited an expensive house. In this case they may not be able to pay the tax. But the Green's proposal is better than nothing for now.

Most people will be better off under the Green's proposal. Only the top 0.1% will be affected, and I think we can all agree they can afford it.