Parker v Little on CGT
The Herald reported:
Labour’s leadership contest has turned into a showdown on the party’s capital gains tax policy, with Andrew Little and David Parker at loggerheads over its future.
At the first of three hustings meetings in the critical Auckland region yesterday, Mr Little was stronger than before in condemning the policy, while Mr Parker shifted to more strongly defend it.
Mr Little told the audience of about 300 party members that Labour had now lost support in three successive elections – something that had never happened before.
Been a long time since any major party lost support in opposition two terms in a row.
He said there were a number of reasons for that but two policies stuck out – lifting the retirement age and capital gains tax.
“There are at least two policies I know for a fact have caused people not only to not vote for us but to turn us off completely.”
He said the party and caucus had championed those policies. “But the conclusion I’ve come to now is that those two policies alone are enough to stop people even considering what we have to say any more.”
The tax was aimed at property speculators, but Mr Little said it also impacted on those who had scrimped and saved to buy a second property which they considered their retirement savings.
Mr Parker, the architect of both policies, said it remained the best way to ensure an equitable tax system.
“Currently, our system is rigged and it’s rigged to favour speculation, not investment in jobs. We reward speculation and we punish work. If the capital gains tax is not the answer, then what is?”
People don’t like the Capital Gains Tax because it is an extra tax which will punish families and businesses by up to $5 billion a year when fully implemented, according to their former leader.
But if Labour were smart, they’d stick with a policy for a CGT, but announce they’d give families and businesses reductions in income and company tax to match the increased revenue they’d pay overall with a CGT.
It can be sensible to broaden the tax base – but not to increase the tax take by new taxes. If you want to increase the tax take, then you should concentrate on having a growing economy, rather than new taxes.