Tax Options

Colin Espiner writes:

Top personal tax rates could fall but homeowners may pay higher rates under the latest proposals from the Government’s advisory group on changes to the tax system.

In its final deliberations before reporting to the Government, the Tax Working Group says the current system is “not sustainable” and there are “major growth, fairness, and integrity issues”.

Good to hear strong language, as that makes it harder for the Government to do nothing.

TAXING TIMES: THE OPTIONS

* Cut top personal tax rate in line with corporate and trust tax rates

* Cut taxes on capital income and remove ability to offset wage and salary income

* Close tax shelter loopholes

* Raise property taxes and/or GST

* Adjust tax rates on interest payments for inflation

* Increase rates to push down property prices and ring-fence losses on rental properties

* Make income on capital investments tax-free until money is withdrawn

Also good to see this comment:

Labour’s finance spokesman, David Cunliffe, said Labour agreed the current tax system was unfair. The party was opposed to a capital gains tax on a first home but would enter in “good faith” discussions on any other proposals.

National and Labour may not be able to agree on what particular tax rates should be, but it would be good if they could agree on the basics such as better to tax immobile stuff such as land rather than labour and capital which is mobile and can move offshore.