Let’s tax everything!

Stuff reports:

A wealth tax, a tax on financial transactions, a broader capital gains tax, a land tax and new environmental taxes will all be options considered by the Tax Working Group, its chairman Sir Michael Cullen says.

If it moves, tax it. If it doesn’t move also tax it!

Cullen gave several strong clues on his own thinking on the direction of the tax system.

Cullen appeared warm to the idea of taxes on environmental and social ills, such as greenhouse gas emissions, pollution and the causes of obesity. 

We already have an effective tax on greenhouse gas emissions through the ETS. And excessive food and drink is the case of obesity so is he saying GST should go up on all food and drink?

“All this means that the possible use of the system to change people’s behaviour in ways which increase the wellbeing of all of us is very much on the agenda at the present time.”

Beware the unintended consequences. Also using the tax system to change behaviour could lead to an incredibly complex tax system. Will we tax food based on how healthy we think it is? Will different building products be taxed based on how environmentally friendly they are etc etc?

WEALTH TAX AN OPTION?

Several continental European countries have wealth taxes, which in some cases exclude the value of a family home.

France: An estimated 350,000 families in France pay a tax at between 0.5 per cent and 1.5 per cent on the value of any assets they own that exceed €800,000, though the tax only kicks in if people have assets worth more than €1.3m. 

Spain: Tax is payable at a rate of between 0.2 per cent and 3.75 per cent on net assets worth more than €700,000, discounting up to €300,000 on a family home.

Norway: A tax of 0.85 per cent levied on net assets exceeding 1,480,000 krona. There is a 50 per cent deduction for real estate and a 75 per cent discount for the family home.

Venezuela has a pretty good wealth tax also.