A rail tax?

David Seymour said:

The Government’s largesse into rail is so big it deserves its own tax, the Railtax, according to ACT Leader David Seymour.

In response to Bill English’s admission Kiwirail may sink another billion dollars [1], Mr Seymour has called for a very simple transparency measure: a separate tax to pay for it.

“One billion is equivalent to the cost of knocking a percent off the company tax rate for the next four years, so let’s make the government’s choices transparent,” said Mr Seymour.

“Of the 28 per cent company tax rate, New Zealand’s businesses will pay 27 cents on the dollar for company taxes, and one cent for bailing out Kiwirail. We should separate out that one percent and call it the Railtax.

“Who knows, the business community may decide that’s a good deal.

“On the other hand, the Railtax would make it clear as day that if we stopped ploughing money into the nostalgia industry rail has become, we could cut the company tax rate by a whole percentage point.

That’s a great idea. Make people aware that their taxes are funding Kiwirail.

I suspect passenger (not freight) rail may end up as a 20th century curiousity. Driverless car in the next few decades may transform public transport.

I’d like Kiwirail to survive, but not at the cost of billions of dollars. We should have never brought it back from the private sector.